How To Scale Your High-Ticket Drop Shipping Business Past Six-Figures in Sales PER MONTH with Dylan
How To Scale Your High-Ticket Drop Shipping Business Past Six-Figures in Sales PER MONTH with Dylan
Trevor Fenner: Let's see. Hey, everybody. Welcome to the eCommerce Paradise podcast. I have a special guest on the show today. He's been doing high ticket drop shipping for quite some time now. He's very successful with it and I wanted to bring him on the show in order to talk about his success story and give you guys the best tips he has for growing your e-commerce business. Welcome to the podcast, Dylan.
Dylan: Hey, thanks for having me.
Trevor Fenner: Cool, man. We first met in Chiang Mai, Thailand. It was through a mutual friend in a mastermind group. That was a lot of fun hanging out and talking e-commerce and stuff like that. Can you talk about maybe what led you up to traveling out to Chiang Mai? Like how your entrepreneur journey began and what led you into this drop shipping world?
Dylan: Yeah. Right out of high school I actually got a job working for an e-commerce company. It was kind of random. One of my friends just hooked me up with it. I just got along with everyone really well. It was still a startup. It was just really cool from the beginning.
Dylan: It kind of was more a drop ship model. We were selling pool supplies online. Just watched it grow. That introduced me to e-commerce. I didn't even really know what it was up until then.
Dylan: Then after a few years there I decided I thought I could probably do it myself. My boss at the time was really cool and helped me get started. Then from there I was doing it as a side hustle. Just doing it on the side.
Dylan: Eventually was able to scale up enough to finally quit my job and then actually start making money. The company I worked for wasn't a high ticket drop shipping. The average order size was probably like $25. Obviously I didn't want to have to sell a thousand orders a day.
Dylan: I just started Googling around and listening to podcasts like Johnny FD, eCommerceFuel, all kind of stuff like that and just picked a couple niches. The first, I want to say, two or three didn't work. Then got into one that started working and it's just been scaling that ever since.
Trevor Fenner: Awesome, man. What made you decide to go travel off to Thailand? What was that all about?
Dylan: Well, you know, with drop shipping and all those e-commerce podcasts, Chiang Mai is at the hub of it. It was just my goal. I always wanted to go there and then when Johnny posted that thing on his Facebook to come out for that mastermind that really was the deciding factor. I thought, "You know, if he wants to do it I'll book the ticket and then just go from there."
Trevor Fenner: Yeah. It was a lot of fun hanging out and masterminding all those times. There was a lot of ups and downs and stuff. It was kind of crazy.
Dylan: Yeah. Yeah. It was super fun, though.
Trevor Fenner: It was. Yeah. I liked Chiang Mai, I liked Thailand a lot. How long did you end up staying out there for?
Dylan: I was there for about a month. Then I came back and I still had the intention to finish the mastermind but my store started growing a little bit crazier and didn't have enough time to focus on multiple stores.
Trevor Fenner: Cool, man. Well, that leads me right into my next question, which is all about your strategies for growth and how you've been able to excel with your store. Now without mentioning your niche and everything can you talk about some of those obstacles you had to overcome in the beginning and how you figured out how to scale your store?
Dylan: Yeah. I think the biggest obstacle is advertising profitably. It's just so competitive and you have to be really careful because you can spend thousands of dollars in one day on Google.
Dylan: It was really just starting with like a hundred products and going through it every week, seeing which products were converting, if the price point was good, if they were still making money. Then just trying to drive more traffic to those products and just adding more products. Yeah, I think adding more products and making sure that they're advertised profitably is the most important thing.
Trevor Fenner: Cool. Where did you learn about advertising in the first place? Courses? Coaching? Was it you paid somebody to set it up for you?
Dylan: It was a lot through just my experience at the job I had. I had a rough vague understanding of it. Then from that it was just researching on blogs, listening to podcasts, all that kind of stuff. I didn't ever really pay or take any courses like that. It was just kind of researching.
Trevor Fenner: Wow. That's amazing. Yeah, DYI in a way. That's awesome. [inaudible]
Trevor Fenner: What's been your biggest 80/20 advertising channel? Is it Google AdWords? Like shopping ads? Or is it different?
Dylan: Yeah. It's Google shopping. That drives like 90% of traffic. We have a couple text ads but they don't really convert. It's more of just a real high level kind of thing.
Trevor Fenner: Cool. Yeah. I'm assuming you have all your email marketing, like Facebook targeting ads setup like that. Are there other channels? Maybe even free traffic channels that are outside the norm that you'd explore that you've found success with?
Dylan: Honestly, most of my traffic is pretty traditional. It is, like you said, Google ads, Facebook retargeting. There's email marketing and also just email signup incentives to get a percent off and then you usually convert better and then you have their email forever.
Dylan: Other than that, Bing shopping can be kind of good. It's not going to have the same returns as Google really but it still worth it to be out there I think. The only one that's kind of weird, it's just kind of weird because the niche I'm in, would be YouTube.
Dylan: A lot of manufacturers that do have videos of their products I would suggest putting them up on your own YouTube channel and using that to put on your site and then you can drive traffic through YouTube but it's not a whole lot.
Trevor Fenner: Cool. Yeah. I agree. I think that improves the conversion optimization of your website as well.
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Trevor Fenner: It can slow it down a little bit sometimes but I think honestly people love video and video and commerce combined are really good. Do you do any of your own sales videos or anything like that or do you just mostly use the manufacturer's videos?
Dylan: We've done two videos ourselves and those have been pretty good for us. Just because mainly it's summarizing the description and showing the product in angles that the pictures don't really capture.
Trevor Fenner: All right. Do you have a process you go through to determine which products you're going to put more advertising spend, more marketing spend, more time into promoting? Is it like just breaking down which end up being the most sellers, getting more clicks, more impressions, or is it more like you ask your suppliers first and then you go from there? Do you have a process that you use that helps you scale more efficiently?
Dylan: Well, that's a great question and interesting timing because before it was like finding the best sellers by going to Overstock and huge websites like that and sorting them by best sellers. Now we actually just onboarded a PPC management company that handles all of our AdWords.
Dylan: They do a scrub of all basically user queries and then they use that to determine negative keywords to really reverse engineer and push the products that are converting really well and profitably and subtract all the wasted spend. We're getting pretty scientific about which products to pump a lot of money into now.
Trevor Fenner: That's awesome. Do you mind sharing the name of that company that you're using?
Dylan: Yeah. They're called Omnitail. I think their website is actually Omnitail dot net. They specialize in Google shopping. They kill it there. They're one of the few companies I've seen that focus on profit to design their campaigns and that charge a flat monthly fee. They don't take a percentage of ad spend. They've been killing it so far.
Trevor Fenner: That's cool. Yeah. I like that model. It sounds really good. There's a lot that has to do with scaling a business obviously. It's not just your ads, it's not just a little bit of marketing here and there.
Trevor Fenner: When you're scaling you run into usually a lot of growing pains. You have to deal with more customer support, more issues and stuff like that. Have you found a good system for dealing with customer service at a higher level? At more volume of customer service and stuff like that, that works?
Dylan: Yeah. Customer service is probably the biggest obstacle I've ever had to deal with. I was doing everything myself and it just got kind of sloppy, especially the niche I'm in tends to have a lot of backorders. It's following up with the same customers over and over again just keeping them in the loop.
Dylan: The thing that I really ... Obviously I suggest having a team in place or a system in place before you grow if you can. Not a lot of people can afford that. But a big thing is just optimizing your inbox and sorting unread first obviously.
Dylan: I use a tool called Boomerang, which connects to Gmail. Basically it'll just resend the email back to you whenever you decide. You can do two days or whatever. Just to make sure that you keep following up with that customer.
Dylan: Other than that, it's really just being there to answer the phone and reply to emails. Yeah. That's pretty much it.
Trevor Fenner: Yeah. It's pretty simple I guess when you just use Gmail and Shopify and stuff like that. Do you have any specific apps that you recommend for dealing with customer service? Maybe live chat?
Dylan: Yeah. We use Zendesk for all of our customer support. It connects to live chat. It has a support email that creates a ticket. Then our phones are actually through it too. It rings through the computer and it combines all of the tickets regardless of which channel.
Dylan: Then that's kind of easier too because then it kicks off with an auto-responder when they first email and then you can by priority assign it to a different team member. You can kind of assign it and just have one person following up with the same customer and then merge tickets and things like that. Zendesk was like life changing in going through 1000 emails just in Gmail.
Trevor Fenner: That's awesome, man. Yeah, Zendesk sounds really good. I know I've used it in the past. Tried to. Then back and forth on it. It sounds like it's working for you, which is really, really cool. Having everything in one platform does sound really nice as well. I might think about trying that out.
Dylan: Yeah. It takes a lot of setup time but it's worth it once that's done.
Trevor Fenner: Yeah. Yeah. There's a little bit of onboarding. Another thing that a lot of entrepreneurs struggle with with scaling is keeping track of the books, keeping track of the accounting, and stuff like that. How do you handle that? Do you use QuickBooks online? Do you use an accountant? How do you manage that?
Dylan: Yeah. I do use QuickBooks online and it makes it pretty easy because it connects to Shopify. That's pretty much where we're at now is QuickBooks and then you can import your invoices and things like that.
Dylan: Usually we have a rough understanding just based on our operating profit from that ad spend. Then it's factoring things like your lease, if you bought shipping supplies, payroll, things like that. QuickBooks is definitely I think one of the easier platforms to use.
Trevor Fenner: Cool. You don't use any kind of spreadsheets? It's all basically in QuickBooks?
Dylan: Yeah. I was using spreadsheets before but it just got kind of messy. I try to keep everything in QuickBooks now.
Trevor Fenner: Got it. Good to know. Yeah. I've tried QuickBooks in the past and had mixed feelings about it directly with drop shipping just because of how many transactions there are. You don't know exactly what the fees were and stuff like that. You have good experience with it it sounds like.
Dylan: Yeah. Accounting still isn't where I want it to be. I'd say it's like 70% there. It's kind of one of those struggles that I think is going to be there for a while until I just have enough time to really focus on it or hire someone to do it.
Trevor Fenner: Yeah. I hear you. Cool, man. Well, that's awesome. The next thing I want to talk about is content marketing. A lot of e-commerce businesses know that it's really important to have content and commerce involved in each other. What kind of ways besides YouTube, you already mentioned, have you been focusing on content marketing to help you grow your business and get more customers?
Dylan: Yeah. My business is in the furniture category. A lot of it is like look book style guides and we're actually still kind of bad at that. We don't put out nearly enough content as we should.
Dylan: Yeah. Look books, even like size guides. Just basic rules of proportions of what size furniture should go where. That's been our number one driving content is just like a size guide and a buying guide. Then from there it's style trends and seasonal stuff.
Trevor Fenner: Cool.
Dylan: That's all just on our blog.
Trevor Fenner: Sounds like what Howes does on their website.
Dylan: Yeah. Yeah. That's their big inspiration for me.
Trevor Fenner: That's cool, man. Yeah. They do a lot of that. They almost focus more on the content than they do the commerce, which is interesting. From my perspective of seeing Amazon for instance.
Dylan: Definitely. I think if I'm not mistaken Howes actually started as a design blog and then kind of switched and pivoted into e-commerce. I think they built up a community really well before they actually even started selling.
Trevor Fenner: They have a whole directory, which is really interesting to see too.
Dylan: Yeah. Yeah. They're crazy.
Trevor Fenner: Yeah. They are crazy. That's cool. Very inspirational. Cool, man. Yeah, content marketing is really important. There's so many different things you can do. Do you do affiliate marketing alongside your drop ship store in the niche?
Dylan: Not currently. No, I don't have really any experience with affiliate marketing.
Trevor Fenner: Okay. What about upsells and things like that? Do you upsell like white glove delivery? Do you do extended warranties? Things like that.
Dylan: Yeah. White glove delivery is the only upsell we have right now. Different shipping methods like that. Then we're actually in talks with this third party company to offer extended warranties. A lot of the warranties too from the manufacturer just cover defects. This would be more of an accidental insurance policy. If your chair rips or something you get a free one or you get it repaired.
Trevor Fenner: Cool. Yeah. That's a great way to make your profit margins a bit higher per order, which is important. When you're growing an e-commerce business it's either you make more money per order or you get more orders, that kind of thing. Working in both directions is really good.
Trevor Fenner: Yeah. That's awesome. When you're trying to grow your e-commerce business and you're selling big products, like you mentioned new furniture, is freight a big deal that you have to mess with a lot of the times? [inaudible]
Dylan: Most of our stuff luckily does ship UPS or Fed Ex. The bigger stuff does ship freight. We were having a problem with it just because it's so expensive, it takes forever, and the tracking is nowhere near what people expect.
Dylan: There's an app on Shopify called Freight Club. It's pretty awesome. It reduced our freight costs in half. What they are is they're basically like a huge Canadian e-commerce company. You apply and then they open up their rates to you. It's a free app and they just pad their shipping costs a little bit. You can go in there and create your bills of lading and everything like that and just send it to the supplier. That's been a work around for freight costs.
Trevor Fenner: That's awesome, man. It sounds really good. Freight Club. I'll check it out. When it comes to international orders do you do internationally or do you do just USA?
Dylan: We don't pay to advertise internationally. The main reason is just the shipping is so expensive. It's usually more expensive than the actual order. Every once in a while we'll get a Canadian order that is doable.
Dylan: Pretty much any time ... We don't have a shipping method setup so we just ask them to call us or email us and give them a quote. Yeah, we haven't hit the international market just yet.
Trevor Fenner: Yeah. I agree. It's a bit more time consuming to do that too. I used to sell big products online. It's not too big that you need a freight company but it's big enough to where you have a big box. I remember making a few international sales.
Trevor Fenner: One of them was to Australia, all the way from Los Angeles, and I had the product in stock at my shop at the time. This is when I had a shop. The whole process to do this was like five pages long. I had to fill out all these different international forms and then I had to do all this stuff, the amount that it's worth, and then doing the code ... I forget ... There's like a code you have to figure out. Harmonized code. You know what I'm talking about.
Dylan: Yeah. A lot of times customers will go to pick it up and they have to pay the taxes and duties on it and they're not happy about that. Yeah, it just seems like there's potential there but that's a whole separate business.
Trevor Fenner: As far as selling from the US to Canada there isn't much of that, right? I've done it before. It's not as complicated as other countries.
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Dylan: Yeah. Shopify will usually calculate everything for you, especially if ... There's another app called Shippo that you can create UPS and USPS international packages. That will create all the codes for you, the tax codes, and basically calculate everything for you. Then it's just the customer paying the duties once they pick it up.
Trevor Fenner: Yeah. It's a lot of work otherwise. Cool, man. I guess one of the last questions here is do you do a lot with social media in your business? Do you do community building in your niche? That kind of thing.
Dylan: Not really. I would like to but at this point I am kind of from the philosophy of I don't want to be spread too thin. Right now we're still maximizing Google shopping to its full potential. Then I'm hoping within the next year or so then we can actually branch out. I'll have a bigger team and ideally have somebody whose entire job is just social media. Probably a little content too.
Trevor Fenner: Yeah. Social media and content really do go together for sure. That's awesome. If you were to recommend one really good direction to go it sounds like to me you would talk maybe suppliers, products, and Google shopping. Does that sound right?
Dylan: Mm-hmm (affirmative) Definitely. Yeah.
Trevor Fenner: For a high ticket [inaudible] specifically.
Dylan: Yeah. The suppliers can really make a huge difference just about the claims process, warranties, if you can actually get a hold of them because all of that is just going to reflect poorly on you. They're going to think you don't know what you're doing if you can't get an answer for them.
Trevor Fenner: I agree 100% on that, man. I just actually posted a YouTube video the other day about why you never want to work with these bad suppliers. We actually got kicked off of Amazon a year and a half ago because we were dealing with one really bad supplier that unfortunately was one of our best selling suppliers.
Trevor Fenner: They just had so many issues with product quality and their customer service team was terrible and their warranty process was awful. We ended up having to take the front of all that. Now we just sell on Shopify, which is fine with us.
Dylan: Yeah. Yeah.
Trevor Fenner: Yeah. You're right, man. Dealing with suppliers is important. Understanding the good ones to deal with and why you don't want to deal with the bad ones. How do you make that decision? You onboard a new supplier. Say, the next month you have some issues. Do you make some sort of a call at some point to take all of their products off your site? What does that process look like?
Dylan: Yeah. I guess the last app I'll probably mention is Duoplane. That's basically an inventory management system. It connects to Shopify and it auto-sends purchase orders and everything like that. They also setup a vendor scorecard so you can select how many days it should typically take for them to process and fulfill the order. That gives you a grade of how good they are at that.
Dylan: Usually it's just hearing customer complaints. If the same customers are calling about the same brand ... We actually had this issue with a brand that was selling really well, the margins were great, the products were great but they were just growing too fast and they didn't have the same resources like back in stock dates and stuff like that.
Dylan: I was on the verge of taking all their products off the site but if you call them and you're just nice with them they'll usually be able to work out a system for you, especially if you have the potential to sell a lot.
Dylan: Now basically we have just an email that we send and receive twice a week with a bunch of orders and products and they update us and we can update the site and customers. I feel like there is a workaround usually before taking all their stuff off the site if it's driving you some good revenue.
Trevor Fenner: That's really smart to do. It's an automatic email you send the supplier? You said twice a week?
Dylan: Yeah. It's not necessarily automatic. It probably could be a lot more automated. It's just using that Boomerang thing. It boomerangs their order confirmation and if it hasn't shipped yet then we send it to them to either see when it's going to be back in stock or why it hasn't shipped yet.
Trevor Fenner: Yeah. That's really smart. It sounds like you deal with a lot of customer service in Gmail even though you use Zendesk. How does that work exactly?
Dylan: Gmail we use mainly for vendors and business stuff, like B to B. Zendesk creates a ticket for everything so it's not really necessary to create a ticket for, "When is this going to ship?" type of things with the vendor. Yeah. It is constantly going back and forth but Zendesk and Gmail integrate really nicely too.
Trevor Fenner: Got it. As far as dealing with backorders because you said you were dealing with tons of backorders all the time, is there a way you manage that process with customers? Maybe is Boomerang the same kind of thing?
Dylan: Yeah. We created a custom meta-field. I'm actually on Store Task right now that this should hopefully be automated pretty soon. There's a custom meta-field on the product page that will display when it's back in stock. That will at least let the customer know. That's such a big thing is the customer doesn't want to feel ripped off. Like you're just taking their money before they even know it's out of stock.
Dylan: We have usually a tentative date or at least a time frame like two to three weeks and then we use an app called Customer Order Status. When it comes in we'll set their order to confirmed. You can select from a drop down menu their order status and that will send out an automated email to them.
Dylan: It's just a lot of emails, trying to be proactive before they reach out to us and ask, "What's going on? Where's my order?" Just keeping them updated along the way. Getting it fulfilled as fast as possible.
Dylan: I feel like so much goes into just being straight up and upfront with the customer and letting them know, "Look, this is coming from China. It can take a month. It's on a cargo ship. We don't exactly know when it's going to be here but as soon as we get updates we'll pass them along to you." They seem to really appreciate that.
Trevor Fenner: That's great. I agree. Just being upfront is usually the best thing to do. Man, you've talked so many knowledge [inaudible] This is amazing. I have a list of apps now to look out. Dylan, you're awesome, man. You're really doing some [crosstalk]
Dylan: Thank you.
Trevor Fenner: This is really, really cool and super helpful. For the audience, you guys watching this, definitely, definitely, definitely check out all these apps. If you're trying to scale your business, again, Dylan was talking about shopping ads are the number one revenue source for the high ticket drop shipping stores.
Trevor Fenner: I couldn't agree more. They definitely are. Backed up by email marketing, backed up by retargeting ads and stuff like that. Have your whole funnel built up. All these apps are wonderful. So many things we went over today from customer service to dealing with suppliers and freight and shipping and, man, that's awesome, Dylan. Thanks so much for being on. Really, really, really cool of you. Appreciate you being here, dude.
Dylan: Yeah. Yeah. No, thanks for having me.
Trevor Fenner: All right, buddy. Well, have a good one. We'll talk later.
Dylan: All right. Thanks. You too.
eCommerce Paradise was created by Trevor Fenner of Seattle, Washington in 2015 to help you, the entrepreneur, to start and scale your own eCommerce business. Trevor owns multiple 7-figure eCommerce stores and is a digital nomad, traveling the world while working remotely with the help of his team of virtual assistants from around the world. Trevor is currently located in Bali, Indonesia, and is a passionate skateboarder, surfer, scuba diver, photographer, environmentalist, outdoorsman, fitness and tattoo enthusiast.
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