The Reality of the eCommerce Lifestyle
Hey, guys, welcome to today's episode.
Today I am going to talk to you about the harsh reality of eCommerce. eCommerce is a really cool business model. If you want to get started selling products online and making a location independent income, maybe even becoming a digital nomad and travel the world, you need some sort of income to sustain yourself.
A lot of people choose eCommerce because it's a nice way to not have to create a product yourself unless you do have a product to sell, but particularly with the drop ship business model, you don't have to create a product yourself. You can simply put the product on your website, optimize your website, run some traffic to it, and make some sales. But unfortunately, eCommerce is a bit harder than a lot of people cracked it up to be.
We have to deal with a lot of different things on a daily basis that cash flowing business has, whether it's online or offline. And the reality is that it can get tough at times. So, you know, running an eCommerce business while you travel is not the easiest thing to do, especially a physical product when you have to deal with a lot of things like customer service issues. And luckily, we have a virtual assistant now who handles a lot of the problems for us. But you wouldn't believe the kind of customer deal issues she has to deal with, and the kind of customer she has to talk to. Sometimes it's really ridiculous.
She's told us these kinds of horror stories about people that cut her out over the phone and stuff like that. And, you know, it's crazy. But, you know, I'm sure everybody listening to these podcasts bought something on Amazon.com, and at one point or another, you may have been unsatisfied with the product for one reason or another.
Amazon is one of the top eCommerce businesses in the world simply because they have the biggest selection of products. And they make shipping super fast and super easy for you. They also provide a straightforward return system. All you need to do is log on to Amazon, submit your return request, and if you bought it from Amazon with their prime, it gets entered automatically, and you get to print out a shipping label and drop the package off at the store. And there goes the return. You get paid back immediately. But those kinds of systems are costly and time-consuming to set up and manage, especially when you have expensive products that you're selling. If you're selling cheaper products, if you have one product that gets messed up, it's not a big deal, and you can just refund that product without having to deal with a return shipping slip if you don't want to. But if you're selling expensive products that are, you know, over a thousand dollars and they're vast shipping complexities come into play, and returns can be a nightmare sometimes as far as price and cost of shipping and customer disputes. And the customer is just getting angry that they have to pay money if there's ever an issue that they have with the product.
As an eCommerce business, which is a small business and has only a few employees, we need to have really good processes in play. We have to have really good systems and procedures when things do go awry because they will go awry eventually. If there happens to be a product that arrives with shipping damage, for instance, we have to have a system in place on how to deal with that. And a lot of times, people actually will appreciate it and refer you to their friends more if you just end up eating the cost of whatever it takes to get them something that ends up working out really well.
So we've developed a system where if it costs anything under 100 bucks to fix a situation, that we will just go ahead and spend the money and get the customer taken care of. Because if that customer were not to get taken care of and be really upset about their product and because it was damaged upon arrival in the manufacturer doesn't want to help with that. We have to take the brunt of the negative reviews.
The customer could leave a negative review on our website, on social media, or they could go to the BBB and leave a review there as well. And customers will go out of their way when they feel emotionally upset about a monetary loss that has something to do, you know, with your company. So I'm sure you guys can understand. I mean, I bought stuff online, too, where I was agitated, and I wanted my money back. And that's why I mostly shop at Amazon.com now, because generally speaking, they actually do an excellent job on all their returns processes. And they do an outstanding job of it, even though with their marketplace sellers, they're trained and required to accept returns on all products no matter what we used to sell on Amazon. We had to deal with that a lot. And that's why I don't recommend selling on Amazon. And you have expensive products that you're only drop shipping because unfortunately, with dropshipping in the marketplace, you need to pay the 15 percent fee to sell on there. You will have to pay an additional of forty dollars a month fee, just to be a professional seller. The margins are so slim at the end of the transaction that at the end of the month, it doesn't make sense for all the hassle you have to put up with because Amazon has spoiled their customer base. They'll expect everything under the moon from you. And a lot of the customers, they don't even answer the e-mails. They hardly answer their phone calls. So if they buy an expensive product, it needs to be freight shipped. For some reason, they won't even answer their call. And the freight carrier comes to pick it up. It's crazy. So those are just a couple instances of shipping complexities, shipping damage.
Suppose some product ends up breaking after 20 days or 30 days if it's within the warranty period, and the manufacturer requires you to have that part of the products sent back for inspection before they return before they ship out the replacement. That can be a nightmare too because the customer might feel like, hey, that's not fair at all.
And it's messed up to have, you know, I as the customer spend 50 bucks or whatever it costs just to ship that back to the manufacturer for testing, you know, and I might not even be able to use this product for the next week or two. At the same time, it takes time to ship. It takes time to get tested, and then it takes time for a turn to come out. And what if the manufacturer is out of stock on that part at that given time? That sometimes happens to or, you know, whatever part it is. They can't even ship a replacement out because they're out of stock for like a month or something like that.
These things happen with eCommerce, and you're dealing with dropshipping, and it's just part of dealing with it. If you are selling eCommerce products and you have your inventory, you're going to have to take the brunt for all the returns, all the warranty manufacturing. And you're really going to have to have some major insurance business insurance because of somebody's product ends up injuring them and they decide to take it up with a lawyer. Then they're going to come after you since you are the manufacturer, technically speaking. So being an online retailer specifically with drop shipping, you have less of a liability upfront because if someone wanted to go after you because one of the products that your manufacturer sent out injured, then they would have no land. You have no liability as a drop shipping online retailer. It's all on your terms and conditions that are stated clearly on your website. And they can go towards the manufacturer to try to get reimbursed for the manufacturer. It also has very clear terms and conditions. But you do get that sometimes.
I mean, we got a letter from a lawyer months ago that said, you know, one of your customers was injured or whatever, and they weren't you know, they want your business insurance. And I said, "you guys are crazy." We sent them the terms and conditions. And it clearly stated that we hold no liability whatsoever. And then the lawyer wrote back a nasty message saying that something about our boilerplate terms of the agreement, blah, blah, blah, and just use some b.s. lawyer terms. And then my wife, Julie, sent her back a really funny message. I was just like, provide proof for this. Provide evidence of that. We reject your claim here; we reject this, we reject that. And we haven't heard back since. So, yes, business insurance is a good thing. But you guys have to keep in mind that business insurance only covers you. Technically speaking, if a person gets injured on your property and since then you're an online retailer, only you have no property.
So really, there is no liability that you're even covered for. The only thing it might cover you for, you have to make sure it covers you for, is paying for a lawyer in case someone does end up coming after you for some reason. And even then, it probably is so low that they'd have to go through small claims court and that's expensive. They're probably not going to get paid out for that very much. So a lot of people just decide to, you know, avoid the whole mess in the first place. So, you know, those are some issues, too. There's a lot of stuff you have to deal with. eCommerce is this crazy! And it's tough to deal with on a daily basis.
Let's just say here's another few of them. There are products. To stock all the time, you know. And when you get an order for something online that your website is not linked up specifically with the manufacturer, you have to figure out two things: which product they do have in stock and who has a similar product at a similar price point that the customer would be willing to go with. And it really depends on the customer as to how they react to this. You know, you can send over a nice e-mail and say we're even willing to give you a discount if it happens to be an upgrade or, you know, whatever, we'll make up for it with a gift.
But some people are crazy. Some people write back all nasty and stuff. A lot of you know, some people it's their first time buying online or something like that, and they expect you to have everything, just how it says on the website.
But you have to understand as a business owner that you have to abide by business law, which is a contract. You accepted the money, and you have to fulfill the order unless you don't take the money anymore. So if you just simply refund them in full, there's no contract anymore. The deal is void. The customer can't do anything. So if you happen to make a pricing error on your website, for instance, a customer gets pissed at you about it and wants to get that price, and it's like a few hundred bucks less, or maybe even a thousand dollars less than the product is supposed to be priced out, there's nothing that customers can do to force you to take that order and send that product out and lose the money. You can just simply refund them and say, I'm sorry, but, you know, we can't do business with you and refund our money. And some people are just like that, although, you know, we do have customers sometimes, and I would say it's 50 50. We really good customers that do it, that's 50 percent. And then, you know, doing 50 percent or just kind of crazy people. And it just sucks, you know? The best customers you'll have, they'll buy the most expensive products from that are the highest profit margin. They'll get the product and everything will be perfect. You'll never hear from them again. And you can follow up with them. And you know, in an even better customer than that is the person you do hear from. That's like a supercycle is like a super fan of yours now. And they're coming back to buy stuff, and they're referring all their friends. And they're excited. They're posting pictures and videos to your social media feed, those kinds of people are the best people. But they're the one percent of all your customers, maybe less than one percent.
You know, I would say 60 to 80 percent of your customers will end up getting the product, be happy with it. And, you know, like 20 or 30 percent will, 20 to 40 percent will probably have some sort of an issue, whether it's, you know, out of stock or pricing error or something like that. And you just have to go with the flow. And every single time that something happens with your eCommerce coming, you just have to make a system, some sort of a procedure to follow for the next time that happens. And you got to keep a list. So we keep a spreadsheet with all these different things that happen. We keep canned responses within Gmail, and we keep our Shopify. We keep all of the things that are happening with each order within the Shopify order comments. And we tag each other in it so that we all know what's going on with this order. And we need to you know, for instance, one of the issues we have is if a customer is willing to wait for an order, it's called a backorder. And like, if it's out of stock, they're willing to wait for it to come back into stock. And what if you know, they were told seven to 10 days, and it ends up taking like three or four weeks or you know, all of a sudden. Oh, wait, sorry. The boat arrived, and that product wasn't in the shipment. Whoops. Sorry. It's going to be another three to four weeks, you know, and then you got to tell the customer, and some customers are cool with it all. Some customers aren't. And they're pissed. It just really depends. And, you know, we've had preorders that last like three or four months sometimes or more. It's crazy. And people just wait and wait, wait. And then finally they get their product. We've had preorders that last like three or four weeks, and people wait, wait, and wait until the last second.
And then all of a sudden, like a day before he ships out, they flip out at us and tell us they're finally a chargeback with their bank and all this crazy stuff. And we have to cancel the order last second. You know, we'll charge them a cancelation fee because we had to wait on the order for that long. And the manufacturer, you know, is about to ship it out. And there's a lot that goes into shipping a big expensive product out. You have to call the freight companies, set up the bill waiting. You have to package the product. Right. And get it ready on a pallet. You know, all this stuff. And that's expensive. And that takes a lot of time for a customer to cancel the last second. You see, it's fair to charge restocking or a cancelation fee for that because you're paying for administration costs. You have to pay for your employees. We have to pay for the time it takes to go to the manufacturing back and cancel the order. And whether we're charge restocking fee or not, we charge that cancelation fee because it's important. Like if you place an order on Amazon, they've spent so much money building out their website. It's just insane. Like, they don't even charge your card until that order ships. So if one of their marketplace sellers can't ship it by the date, when they say they're going to send it, the marketplace is forced to cancel that order.
Amazon does not keep backorders. So it's an efficient system on their end. I'm sure they miss out on a lot of orders, but they don't have to deal with all the crazy backward stuff, you know? And that's one thing having a small eCommerce business, drop ship business you can take the backorders, and you can follow up with them, and you can actually make a lot of money that way. Whereas other websites might not even be willing to deal with that because it is kind of a hassle. It's a big headache, and it's time-consuming, you know. But that's one of the ways we deal with stuff.
And eCommerce is just this crazy sometimes at the end of the day. It's cool to have a location independent business, one where we can travel all the time, and we can go to different places. We can do whatever we want to the day. Because being between customer phone calls and e-mails and dealing with suppliers and stuff like that, we're doing what we want to do. You know, we're hanging out and swimming or skating. Julie, you know, is eating her vegan food, and I'm eating her vegan food. And it's amazing. And we get to go to the beach or spend a lot of time in Thailand and Chiang Mai every year in Bali. And we like to go to different cities and stuff like that. And yeah, that's stressful, too, because, you know, you have to figure out what you're doing, where you're going to stay, what you're going to eat, where you're going to work out, where you are going to get Wi-Fi, how you're going to get coffee and stuff like that if you like coffee. But it's totally worth it, right? Because who wants to sit in the same freakin office every day dealing with customers all the time from the same company, making somebody else rich like nobody.
So no matter how harsh the reality of eCommerce is, it's still totally worth it as long as you're willing to do the work it takes. And yes, sometimes I stay up till like 2:00, 3:00 in the morning working. Sometimes I don't work at all during the day. You know, today I got up, and I tried to do some work on the site, and I just kind of got burnt out, and I just decided to skate. I went around, I filmed a video about eCommerce as well for the YouTube channel, for the eCommerce paradise YouTube channel. And, you know, afterward, I was going to work again on the eCommerce site, and I just got into it. I just couldn't do it. I don't know why, but some days are just not as motivated to work on the eCommerce site as others. And some days I get into it. So it just depends like the harsh reality there is that like, yeah, you're going to have to have to figure stuff out. If you don't know how to do it, you're going to have to seek mentorship and figure it out from there.
You're going to have to find people that know what they're doing, that have been successful. And have systems that they've created that they not only designed for their employees, but they've created in a way where they can share and sell it to people that want to do business models like theirs. Which is kind of crazy if you think about it. Like why would somebody go out of their way to make a course that teaches somebody else how to do the same business model? Why couldn't you just take over their business? And I mean, the harsh reality about that is it's true. Like with drop ship being in commerce, anybody can find your niche eventually somehow, right? I mean, maybe not if you do a really good job of covering up your website from other eCommerce entrepreneurs and stuff like that. And people that don't have a business yet and are looking for a business, trying to do a good job at covering that up, people will never find it, right?
But the truth is, if you just do your research, you know, and you find a niche and you find the stores you want to emulate, you can call their suppliers up, you know, and you can get those suppliers on your website. And you just have to know how to make a really good website. You're going to make it pretty and have a good value offering and make a great about page and tell a story, you know, and you've got to learn how to do all that stuff. But if you take the right course, if you find the right inventories, you can figure that out. They'll teach you how to do it. I've got some really great resources. I'm also working on building our own membership site out. And I'm not going to tell anybody the name of it yet. I haven't actually finished it, but I'm building one out right now, too, so I'll be able to help you guys. And it's really exciting for me because I want to help.
I want to help people who want to get started making money online. It's tough, right? Because you just don't even have any clue. And I remember how I was like back when I was, you know, in my late well, early 20s, you know, mid 20s I just didn't really know, like, how it worked. And it's hard because, like, we're not taught any of this stuff in school. We're not trained in elementary. We're not taught in high school, we're not even taught in college. I mean, you can take business courses. You can take economics courses. They teach you, like, really high-level stuff. I mean, you take business one to one, they'll teach you how to start. Like that'll teach you to write a business plan. But the business plan has nothing to do with eCommerce. And even if it did, the stuff they talk about is so high level, that it doesn't really get into the nitty-gritty at all.
So you can take marketing, learn about the four Ps, and you can learn about like the SWOT analysis and stuff like that, all that's important. I recommend if you guys want to get started in eCommerce or you are in eCommerce, but you don't understand marketing completely, take a marketing's fundamental course, either at your local community college or just go online to YouTube and just research, no marketing, fundamental SWOT analysis, transfer strengths, weaknesses, opportunities, and threats. The four Ps, you know: people place price and promotions and all these things are really important, because you got to figure this stuff out in order to have a solid business that is producing profits on a month by month basis. You know, and the cool thing about eCommerce is that it's still pretty fresh. It's still is still the Wild West. And if you can hop in now and figure it out, this is the best time that there's ever been for more people than ever have smartphones. And they're willing to buy stuff on websites that are clean and clear. There are website builders like Shopify.
I highly recommend Shopify use Shopify for all of our stores. That website builder is the best one, in my opinion, to build an eCommerce site because it's clean and it goes very fast and they provide all the support that you need and they have a security certificate for you. You don't have to pay extra for that. You do have to pay a monthly fee, but you get the support. And that's the point. If you go with a free website builder, if you use WordPress or something, you don't get any support. You have to go through forums and ask other business owners and stuff like that how to code your website and you have to deal with all that. So it's a mess. But there's there is easy to use low-cost website builders out now like Shopify, that you can set up an eCommerce site within a few days. You know, and I'm in the process of setting up a new site right now, and it's pretty exciting. I'm having it. I just had a V.A. upload a bunch of demo products to the site and put up a bunch of graphics in the next few days and organize the website, make it look pretty, and then Julianna's going to start calling suppliers. And that's really exciting because, you know, within the next few months we'll start seeing orders on that Web site when we start sending traffic to the product listings. And that's a whole new stream of passive income for us. You know, eventually, we're going to have the same kind of issues. But we've dealt with it with one site already, right? Actually,two sites because we sold our first site and we have a second site now, but we only have one site right now. And it's really, really, really good. But we wanted to expand.
We want to expand into different niches. We also want to create information products like books and courses so that we can. Make income in those ways, but also help more people, because I want to help you guys achieve more. Because I feel like it's just so lonely out here, you know like we have a great entrepreneurial base. But all my friends and family don't understand eCommerce and making money online. And it's just such a strange subject for people, you know, and I don't think it's that well known. That's just not taught in schools. It's not the norm. It's not the normal thing to do at all. And it's kind of the outcast thing. I mean, when people see me on my laptop, they think, oh, this guy is watching a YouTube video or something, you know, or he's doing homework or something. And they don't understand. I'm actually building a business. It's kind of crazy to think about building a website.
I spent a lot of time on my laptop, and when I'm around family and friends, it kind of seems weird and awkward, but that's just how I have to do it. You know, I mean, that's life, that's building businesses for you. And that's a harsh reality, too, is that you're going to spend a lot of time building a website and working on it and doing marketing and networking and figuring things out. You know, like you just got to get into the trenches and figure stuff out. It's tough.
So that's it, guys. I mean, there's probably more to it also. I really wanted to make this podcast more motivating and inspirational than a downer, because even though it's harsh, the truth is that niches are out there that are, you know, that can be taken. And no matter what niche it is, you can still compete if you can learn the fundamental basics of creating unique selling proposition, a really, really good unique selling proposition. Then you can set yourself apart in any niche, and you can become the expert or hire experts to be the expert for you in that niche. And you can get sales. I mean, your company scales as much as you learn. So never stop learning. That's another harsh reality of eCommerce. You have to keep learning stuff. You have to keep taking new courses, learning new ways to drive traffic like Facebook ads. Google ads are always changing. You got to learn new ways to drive in traffic with Google organic stuff, with search engine optimization, with e-mail marketing, with video marketing. I mean, it's just it content marketing. It's crazy. Like, there are so many different things to learn out there. And as an entrepreneur, you might get kind of sidetracked. Sometimes you might jump into different business models. You might think about different niches from day to day. If you have a bad week or something like that, a slow week, you might start giving up or something like that.
I mean, you really have to keep going at it and you just can't give up. You have to keep pushing no matter what you know. And you're going to get people around you. You know, people will want to see you fail, especially your competitors. They love when, you know, their competitors fail. So being a competitor that wins, you know, be the competitor. It takes over the niche and does a better job than anybody else, right? And you're going to succeed. And you can grow, grow, grow. And you can if you do it for long enough, you do consistently and build a business as consistently turning a profit over a month, over a month, over a month you can take that profit and multiply it. And if you take, for instance, with a dropship in business, you take your one month of net profit, that's like after all your expenses before you pay yourself or anything like that. But after a direct business, expenses like, you know, paid advertising and a virtual assistant, you take that net monthly profit, and you multiply it by somewhere between 20 to 30, you'll get the bottom line and the top line of what you could possibly sell your website for. So if you do a thousand, you know, your net profit for one thing, probably at twenty thousand dollars for your website. If you do two thousand forty, if you do three thousand sixty, if you do four thousand and get up to, you know, 80 on average, the low end. And then of course you can take that. And pretty much, you know, if you really make your website good and you get a good mix of traffic sources and you have someone who's doing all your work for you, that doesn't have to. It's basically a turnkey investment.
If you can create a turnkey investor, somebody, you can get up to 30 X. And so, you know, you end up making six figures over one hundred fifty thousand dollars for your website, even if you're just pulling a three, four Zs a month in net profit. So it's a really amazing opportunity to get in these days. And you don't even have to have a business for more than a year before you can sell it. So it's worth it. You know in what any other job, any other business model besides another online business model can you start a business and a year later, sell it for like one hundred thousand dollars or fifty thousand dollars or something like that?
You know, it's hard to go for, you know, I mean, like 50000 boxes is not a lot in the western world. But if you use location arbitrage and you get over to Southeast Asia or something like that or South America, Eastern Europe, you can actually live on, you know, maybe a thousand bucks a month as a single person out there and fifty thousand dollars and will go a long way. And so consider all these things, guys.
And if you're thinking about getting into eCommerce, just know what you're getting yourself into. If you're already any commerce and you want to scale, just know you're getting yourself into before you start scaling your business, because there's always going to be growing pains.
So as you go, you have to be creating systems and procedures, train your VAs by recording screens. Videos yourself doing the work right. And have calls with them all the time and in higher views in the first place, I mean a virtual assistant, the Philippine cost between three hundred to six hundred dollars a month, depending on what they're doing. If they're just like data entry, it's usually around three hundred a month. If they're you know, somebody is going to be doing your customer service for you and only, you know, other stuff, it's usually around six hundred a month. So that's not that much if you're pulling a couple of Zs a month. You know, that's totally affordable. Totally affordable, you know. So I would do it. And then don't delay, because the more you delay on figuring that kind of stuff out, the more likely it is that you'll get burnt out. You know, in the process, I know that you want to save a little bit extra money here and there, but you got to think like, how much is your time worth to, you know, to be dealing with all the minuscule things?
The first thing to do is to outsource all that stuff that you hate doing. I hate doing product listing, so I figure out how to train a V.A., how to do product listings for me. And he goes out and he creates product listings for me. He goes back and updates all the other ones that suck. So it's really cool, you know. Now I have a guy who is making these long-form sales copy product listings that are amazing. And that's what you get. You know you got to think in the future that you need to have a team. The harsh reality is that you can't do it alone.
You know, you cannot do this alone in the long run. You have especially if you on a scale to a point where it's full time or more, you have to hire a team to be managing stuff for you, to be doing things. And you have to be willing to train that team. You have to become a teacher. You have to become a manager. So if you had no managerial experience, watch some videos, written books on management in how to manage people and how to deal with people, because people are people and you got to be friendly with them and you've got to show them.
You got to update them and you got to follow up with them and stuff like that, because, you know, that's just how people are. So we're going on almost a half-hour here with these episodes. I know it's been a long time, but if you're still listening, I really appreciate it. And I hope you got a lot from this. I'll go ahead and ended out here. If you guys definitely please subscribe to the podcast.
Well, I'm going to create content on a daily basis. I'm excited to help the community out more if you guys have any questions. Check out eCommerce Paradise on Facebook. We have a Facebook group,and it's free to join. And just have to press their request button. And I appreciate it if you fill in the answers, too, because it helps me understand the community more and what people want needs so that I can help you guys out better. We're also on YouTube, eCommerceparadise, YouTube Channel, eCommerce Paradise find it, and subscribe.
Watch some videos and should have the online courses up here the next month or so.
It takes a long time because I've got to create slide shows and screen share videos and, you know, along with traveling and figuring things out all the time and skateboarding a lot, you know, to stay active. You know, finding time to do that is tough. And I rather, you know, I like creating free content for you guys. I appreciate being a community because it helps me feel like I'm making a big difference in the world. That's the one thing that matters to me more than anything. I'm the type of person that, like on my tombstone, I want it to say something like, you know, "he made a difference," and those little things like that go a long way.
I hope that you get a lot from this. Subscribe and see others.
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 selling high-ticket products online with the drop shipping fulfillment method so you can make more profit per sale, have a sustainable and evergreen online business, get started with very little upfront investment, and live a location independent lifestyle. Trevor owns multiple 7-figure High-Ticket Drop Shipping eCommerce stores and is a digital nomad, traveling the world while working remotely with the help of his team of over 10 virtual assistants from around the world. Trevor is currently located in Bali, Indonesia. Trevor is also a passionate skateboarder, surfer, scuba diver, photographer, environmentalist, outdoorsman, fitness and tattoo enthusiast.
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