Starting a New Drop Shipping Store

What’s up everyone out there in blog-land. So I’m finally getting around to posting (6 months late) about my first drop shipping store and the progress I’ve had so far. I’m super excited to share my results…good and bad.

I know many of you are looking for a location independent job and/or thinking about starting your own drop ship store and could use the inside scoop.  So below I’m gonna try and share my personal experience and maybe a few cavorts in relation to if I think they will apply to the average store owner (aka you).

So for the record, before we get started, please understand that I will NOT be disclosing my specific niche to you the reader. Its not that I don’t want to, its simply that setting up a drop shipping store / business is quite a simple process.  Copy-cats have a way of following success (success comes to those whom work hard and keep up the hustle) and I’m not trying to attract competition. Hope you understand.

So lets get started!

QUICK NOTE(S): A few things to keep in mind…

  • This post covers the past 6 months (Aug ’15 thru Jan ’16)
  • If starting on a tight budget, the expenses below could be reduced by 65% (more on that later)
  • *Totals below exclude the cost of the course I used to learn drop shipping
  • I took multiple extended breaks during this time (took me longer then most)
  • turned out to be seasonal…ooops (more on that later)
  • I currently have a full-time job and am doing all work in the evenings & on weekends

July 31, 2015 (month 0)

1% Complete - Drop Ship Project Progress Bar
0
Days Since I Started
$ 0
Total Money Spent*
$ 0
Profit

I purchased the drop shipping course on July 31st.  I chose drop shipping largely because its a legitimate, proven business (think Amazon, Wayfair, Hayneedle…) that is here to stay.

I also chose it because it can have a VERY low startup cost (under $400), is relatively quick to set-up (under 8 weeks) and it is quite conducive to someone who wants location independence (I plan to move overseas soon).

July 31

August 2015 (month 1)

10% Complete - Drop Ship Project Progress Bar
0
Days Since I Started
$ 0
Total Money Spent*
$ 0
Profit

The first week of August I spend watching the first module of video(s) on niche selection (deciding what to sell).  This is probably the most important step.  I also spent the first week going around town looking and making a list of

Second week I set up things like a business mail box. This is a unnecessary expense if on a tight budget (your home address is just fine at first). I set up a custom 800# and phone system.  This also is unnecessary expense if on a tight budget (Google Voice is free and adequate at first).

MailBox Rental Receipt

MailBox Rental Receipt

I applied for my business license and other related required documents (cheap and not a big deal) and started designing my logo (simple is better…trust me).

My Business License

My Business License

Employer Identification Number

Employer Identification Number

Reseller Permit

Reseller Permit

The third week I watched all the remaining videos in the course and I set up my Shopify Account (Free 21 Day Trial & 10% Off), chose a domain (URL) and compiled a list of suppliers to contact.

I Signed Up For Shopify Account

I Signed Up For Shopify Account

During that time I also researched and purchased a premium Shopify themes (Retina Theme).  Remember this is a business and you get what you pay for. This is technically a ‘optional’ expense so if your completely broke, its possible to use a free theme but not recommended.

The last week I built out my demo site so I had something to show the suppliers when I called them.  Note: Simply having a demo site, any site, will help you get approved. Shows your serious.

COST BREAKDOWN: (total this month: $314)

8/10       $77.00  Mailbox West Rental (3 months)

8/12       $56.46  Grasshopper set-up phone number charge

8/12       $24.06  WA Business License

8/13       $13.00   Shopify Charge

8/18       $160.0   Shopify Charge (Theme)

8/27       $23.20  Shopify Charge

TIMELINE:

August 1

  • Watched first batch of videos on .

August 2 -7

  • Made list of 100+ potential niche products I could sell
  • Researched competition online
  • Looked to see if suppliers (manufactures) drop shipped
  • Picked niche with little competition and many suppliers that drop ship

August 9 – 10

  • Designed multiple logos using Gimp (free image software)
  • Sent logo ideas to friend & family to get feedback
  • Everyone picked simplest logo (aka bigger isn’t always better)

August 11 – 12 

August 13 – 17

  • Watched remaining training course videos
  • Signed-up for Shopify
    • Purchased a Domain Name $13 (store URL)
  • Researched premium Shopify store themes (tough to decide)
  • Created list of suppliers / manufacturers I hoped to get approved by
  • Studied my competition’s websites for ideas to use on my own

August 18

  • Chose a paid Shopify theme over free because they offer a lot more features (optional)
    • Premium Shopify Theme $160

August 19 – 31

  • Compiled graphics, descriptions, etc
  • Built out Demo site product pages (to show suppliers)
  • Built out pages: About Us, Contact Us, FAQ, Returns, Guarantee…

September 2015 (month 2)

30% Complete - Drop Ship Project Progress Bar
0
Days Since I Started
$ 0
Total Money Spent*
$ 0
Profit

NOTE TO SELF…procrastinating is a bad thing! Confidence is a good thing!

I basically spent the first 2 weeks of September putting off calling suppliers.  I was simply afraid I’d get rejected (trust me…its all in your head).

The end of the second week I broke the ice by emailing all my suppliers (should still have called but…) requesting approval to be a retailer.  Great news, most responded favorably and half approved me without ever speaking on the phone.  The other half set up phone interviews which I aced!

Bottom line. Just pick up the phone and call. Period. Most suppliers, as long as you act professional and have a website…any website (no really…any at all), are happy to approve new sellers.

Weeks three and four I worked 75+ hours a week at my day J.O.B. and had no energy to work afterwords. I usually don’t recommend allowing an excuse like ‘i’m tired’ from accomplishing my goals BUT 80 hrs a week (including commute) is brutal.

COST BREAKDOWN: (total this month: $61, includes mailbox)

9/13       $18.24   Grasshopper Charge

9/26       $23.30   Shopify Charge

TIMELINE:

September 1 – 13

  • DID NOTHING (tinkered with site)
    • I delayed contacting suppliers out of fear of rejection (STUPID ON MY PART)

September 14 -16

  • Emailed suppliers asking to be approved as a re-seller
  • Sent documents requested by suppliers
  • Spoke with a few suppliers via telephone
  • Was APPROVED by most of my suppliers…it was that easy!

September 17 -30

  • TOOK 2 WEEKS OFF
    • I was working 75+ hr weeks at my day job

October 2015 (month 3)

75% Complete - Drop Ship Project Progress Bar
0
Days Since I Started
$ 0
Total Money Spent*
$ 0
Profit

Now that I was approved by most of my suppliers, all required paperwork sent over to them (business license, reseller cert….) and I had received product images, specs and a price list; it was time to start building out the real site.

Week one and two I spent building out the real site and had it complete (minimal tweaks, adding apps…).

During weeks three and four I again put the drop ship site on hold because I went on vacation.

Galapagos Islands Equador

Galapagos Islands, Ecuador

I’ll admit this wasn’t an ideal time to go on vacation due to the momentum I had built up pushing this project forward but I had no choice.  Basically this was the only time my lady friend could go…so be it. Off to South America!

COST BREAKDOWN: (total this month: $64, includes mailbox)

10/13     $21.89   Grasshopper Charge

10/26     $23.20   Shopify Charge

TIMELINE:

October 1 – 18

  • Built out my site with actual products that I was approved by supplier to sell
    • AKA built out my real site
  • Tweaked my site with available apps

October 19-31

  • NO WORK PERFORMED – Went on VACATION!
    • South America BABY (Ecuador, Peru, Bolivia)!!!

November 2015 (month 4)

90% Complete - Drop Ship Project Progress Bar
0
Days Since I Started
$ 0
Total Money Spent*
$ 0
Profit

Week one and two were spent finishing up my South American trip.  Due to the fact I was traveling with someone, I didn’t spend any of that time working on my site.

Cusco, Peru

Cusco, Peru

The last two weeks I fit in an hour or two every day making unique product description, optimizing my site so it ranks in google and making more minor adjustments.

Again, my lady friend was staying with me in Seattle for another month so I didn’t want to be a bad host and spend all my time behind my computer

COST BREAKDOWN: (total this month: $61, includes mailbox)

11/13     $18.26   Grasshopper Charge

11/25     $23.20   Shopify Charge

TIMELINE:

November 1 – 18

  • No Work Performed – Was on VACATION!
    • South America Baby (Ecuador, Peru, Bolivia)!!!

November 19 – 31

  • Fine tuned the descriptions
  • SEO – did basic optimization techniques
  • Lady friend was in town
    • She works overseas so when she is in town…not much gets done

December 2015 (month 5)

100% Complete - Drop Ship Project Progress Bar
0
Days Since I Started
$ 0
Total Money Spent*
$ 0
Profit

Weeks one and two I spent an hour or two every evening setting up Google Analytics, Merchant Account, Adwords Account…in preparation for going live with my paid ads.

Google Accounts

Google Accounts

Again, I had company in town for the first two weeks so I was limited to how much time could spend on my store.

The third week (end of week two) I WENT LIVE. Ads were approved by Google and showing online. I made my first sale within a week. Ironically enough though, they found me through Google Images (via the SEO work I did.

I ran my ads for 10 days and then suspended them due to a lack searchers clicking on my ads.  I then fully realized my product(s) are highly seasonal (check your niche via Google Trends) and very few people search / purchased them in the winter.

Google Trends My Niche

Google Trends for My Niche

I figured I would ride out the holiday season and begin my ads again in January (if for no other reason but to collect search data)

COST BREAKDOWN: (total this month: $58, includes 1/6th of mailbox cost)

12/8       $93.00   Mailbox West Rental (6 months)

12/13     $18.95    Grasshopper Charge

12/25     $23.20   Shopify Charge

TIMELINE:

December 1 – 11

December 12 – 21

  • WENT LIVE
  • Google Approved my ads. Started showing December 12!
  • Started receiving traffic to site December 13.
  • Received first sale December 19th!

December 21

  • Suspended Google Advertising
  • Low Click-Through-Rate
  • Realized my niche was seasonal (Spring thru Fall)

January 2016 (month 6)

100% Complete - Drop Ship Project Progress Bar
0
Days Since I Started
$ 0
Total Money Spent*
$ 0
Profit

Week one, (first week of January) is notoriously slow for retail (post holiday) sales so I held off restarting my Google Product Placement Ads.

Week two I started back up Google advertising. I new searches and sales on the product(s) I sell are virtually non-existent in the winter but it was worth it to me to run ads so I could collect data on what products / keywords searchers are searching.

I did this in order to figure out what product pages to optimize (make product specific videos, rewrite descriptions, SEO, create links…)

Weeks three and four I let the ads run. I used my free $100 Google Adwords Credit I received after signing up for Shopify. I spent about $70 on ads and received about $150 in total after the credit.

Note: This is not an adequate amount to spend on ads for a successful online drop shipping store but since my product(s) are seasonal, I’m just collecting data. I will increase my spending in March when searchers are actually going to be buying my products.

COST BREAKDOWN: (total this month: $126, includes 1/6th of mailbox costs)

1/12       $19.05 Google Adwords

1/13       $18.37   Grasshopper Charge

1/23       $23.20   Shopify Charge

1/27       $50.00   Google Adwords

TIMELINE:

January 1 – 9

  • Waiting until holidays are over to restart Google Advertising

January 10 – 31

  • Restarted Google Advertising
  • Collecting data to see which products are most popular (via Google Analytics)
  • Started Optimizing page with most traffic (top 20 product pages)

 

MAIN TAKEAWAYS

  • It took me 4.5 months to be fully ‘up-and-running’.  Keep in mind, 2 full months were spent not even touching the store.  So, 2.5 month (in actuality) only working after work on and the weekends.
  • So, I’ll confirm that a diligent person COULD start a store w/in 2 months…very plausible.
  • While I am technically ‘in-the-hole’ $665 after 6 months…I did subscribe to some services that aren’t needed at first.  You could do the same for about $350 total.
  • I suspect I’ll make sales and be profitable in the spring (when people buy my products(s). I simply started a seasonable store at the very end of the sales season.
  • Bottom line, what other legitimate business could you start that sells real products and after 6 months your only out about $600.  Most business models cause you to be bankrupt making no sales in the first 6 months.
  • I think Drop Shipping is the best home based / location independent / part time business  when you consider the low start-up costs potential for real profits.

Let me know what you all think.  What has your experience been starting an drop ship store or online business? Let me know in the comment section below.

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