James Beattie - Ecom Insiders
In Episode 31, we interview Ecom Insiders owner James Beattie a 20 year old entrepreneur who has sold over USD 1 Million in sales in just over a year through Shopify Dropshipping.
In this episode, James and I discuss where to source products for your Shopify online ecommerce store, how to choose suppliers and most importantly how to go about identifying products that are trending and selling well.
We then cap it off by learning about how to deal with refunds, exchanges and a brief overview on how to learn when you're onto a winner and when to scale your ad.
If you don’t have a Shopify store yet, sign up for a 30-day free trial here.
➤James provided a little bit about his background as an entrepreneur
➤ James shared his approach in finding reputable suppliers who would deliver quality products.
➤ I asked James if there are certain services, abilities or qualities that he looks for in a product.
➤ James shared his way of contacting with his chosen supplier before he places an order and his preferred method in contacting and communicating with suppliers.
➤ I asked James to share his secret on how he gets comfortable and confident that product he is selling is quality and not defective or of poor quality.
➤ James gave his thoughts about how to address a customers' concern on buying from a store that takes 2 weeks for a product to arrive when they can just buy from Amazon and get a next-day delivery.
➤ James shared his product selection process and how he identifies hot or trending products that ACTUALLY sell?
➤ I asked James about the number of products that he typically stocks in his store and how often he tests new products?
➤ James explained how managed to find new trending products.
➤ I asked James about the biggest mistakes that he feels beginners make with product and supplier selection.
➤ James shared how to import chosen the products into yiur store.
➤ James gave an overview of how he handled refunds, returns and exchange policies especially for those sellers who are not US-based.
➤ James provided some tips and recommendations on how to provide good customer service.
➤ I asked James about his guidelines in setting a profit margin for each of his products and how he determines their selling price.
➤ James provided an overview of his e-commerce course that he offers and the results his clients are getting out of it.
➤ James gave his final advice to all the listeners and shared some tips on how to overcome some problems that one may encounter in putting up a business like his.
➤ If you don’t have a Shopify store yet, sign up for a 30-day free trial here.
➤ If you don’t have a Shopify store yet, sign up for a 30-day free trial here.
David De Souza: Today I'm here with James Beattie, a Shopify and eCommerce entrepreneur, and today we're going to explore starting your own Shopify store and finding those first products. Welcome, James.
James Beattie: Thanks for having me, man. It's a pleasure to be here, and hopefully your audience can learn a lot from what I've got to share.
David De Souza: Yeah, definitely, man. It's great to have you on the show. So let's kick off. Why don't you share a little bit about yourself, the success you've had and what you've achieved to date?
James Beattie: Yeah. So I'm James Beattie and I'm 20 years old. I started doing eCommerce just a little over a year now, so I think it was back in June 2016. At that time I was working for Price Waterhouse Cooper, one of the big accounting firms in the world, and I was there, I was working. I'd been there for about a year, went there straight after school. And it was just that nine to five, or I'm sure from you living in London, you know that it's not nine to five, it's nine to nine or nine to one at night.
And I was very hard and working very hard for them, and I knew that wasn't for me, the corporate life. So I knew that I needed a change, and I'd previously done some stuff online back since I've been about 16 or so, I've been. Started off doing some freelance website I built, and their graphic design stuff. Then I moved into… was doing Instagram, was building up these big influencer accounts, and selling basically ad space on them accounts.
And I was still doing that when I was at PwC, but I knew I needed to do something. So that was done, and I decided I've got to make some moves here. I don't want to be stuck here doing this all my life in the corporate world. So I found one of the guys who actually is big in the ecom space, and he came to me to do a promotion on one of my accounts, and he was promoting a webinar he was doing, and I hopped on his webinar.
Long story short, I ended up buying his course, went through and I did it first for a month or two, had no real success at all and I was getting annoyed. Couldn't get any traction, couldn't get any products to work. And I think I see a lot of people now doing the same sort of thing, and it's like if you're listening to this and you're just getting started and you're struggling, it takes time. It's not just going to happen like that. And I think that's where a lot of people miss out, they think that it's going to be instant and they end up quitting.
But it took me about a month and then I hit a product that started to do pretty well. And pretty much since then, we took off, we started to build around that product and started to launch new stores. And I think in total, since about last year, we've done about $1.5 million in revenue since then, and then we've grown our group, ECOM INSIDERS, we've over 25, 000 members in there in Facebook group, and everyone's built a great community where everyone communicates. I share a lot of stuff on my YouTube channel about my journey and how I've got to where I am now.
David De Souza: That's pretty cool. And so that just in little over a year, is that right?
James Beattie: Yeah. So that was… I started in June 2016 and then I left my job in October I think, or end of November, I left my job and I've been at this full-time since.
David De Souza: Yeah, man. I think that's awesome. I've got an accounting background myself, but one, I think it is a really cool point to touch on because PwC, it's a big firm, you easily could've had a career there, but also just the fact that you've done this by the age of 20, and it really shows the doubters that don't need to have 50 years of life experience in order to make a million online. And the fact that you've come from a really credible base to start your career, that this really is a serious thing for you and it's a way to make a living.
James Beattie: Yeah, exactly. I think a lot of people think age really matters, and to me it's like there's no reason I can't do something if someone else is doing it. And age, I didn't really let that set me back at all. And today I see people coming up in my group who are 14, 15, and they're doing this. Maybe they're not making millions, but they're doing $100, $200 a day. And when you're 14, I remember when I was 14, if I had 20 pound I thought I was rolling in money. So it's great to see a lot of younger people coming into the scene and getting into entrepreneurship and learning as they go.
David De Souza: Yeah, 100%. And I've seen that myself, and I just think if I've gotten into this stuff at that age, these guys are going to be monsters by the time they're even 18 or 21.
James Beattie: Yeah.
David De Souza: So you've touched a little bit on this, but I guess before you got to this point, what motivated you to start all of this? Was there a driving force? Were you hurting or were you depressed or were you angry? What caused you to take this massive action?
James Beattie: Yeah, so I mean it's just I was working at PwC and I was working nine to nine and nine to one some nights when we're on deadline projects, and I've always been a hard worker and I've no aversion to working hard, but when I'm working hard and I was being paid very, very little, and I'm working hard for other people and making them a lot of money, I was like, “I'm doing this work, I've got to take this effort and put it into myself so I can go ahead and…” I 100% always back myself and always believed that I could do it, it was just a matter of when.
And when I'd seen this opportunity, it was like, “I've got to go all in this.” And I was working my ass off at nights, coming home sometimes seven o' clock at night and I worked to one. Sometimes I was coming home late and there'd be an issue with a supplier or something and I'd be up all night then get up at work again at seven. But I just couldn't do that or where I was sitting at a desk all my life, and I didn't really have control over where I was going. I didn't know.
I think in the corporate world, if you're not in the right circles or you're not friends with the right people, it's very hard to climb that corporate ladder. And again, the timeline of climbing that corporate ladder is 10, 15 years, where I'd seen other people who were doing this eCommerce thing and they were making a million in a year. It's like, “Why would I bother spending 10 to 15 years doing this when I can go over here and put my effort in here, and work 12 hours days on my own thing and end up benefiting myself rather than benefiting someone else?”
David De Souza: Yeah, no. I love what you've just said. And I think it's really cool to draw out two points, you've definitely highlighted people shouldn't be thinking that that's going to be easy, and that they need to work hard, but also the fact that, and this totally resonates with me, when you start working for yourself, you're actually building your own brand as opposed to going and building PwC's brand, which doesn't really benefit you in the long run.
James Beattie: Exactly.
David De Souza: So let's say you've decided to start a Shopify store, tell us how you originally problem solved deciding what to sell, and before I guess what you decided to sell, did you decide to go for a niche store or a general store?
James Beattie: Yeah, so I mean, this is the golden question I suppose, it's what everyone asks, “What should I sell?” Originally I went for a general store. I have a lot of students and I recommend going for a general store when starting. I don't think that your longterm goal should be to run a general store, but if you're on a budget and you're just getting started and you want to learn as fast as possible with spending the least amount of money, I think a general store is the best option.
Basically a general store is just a store where you keep it pretty broad. It can be something like deals.com where it's super general, you can pretty much sell anything on it. And I have a general store, and I'm selling baby stuff on one end of it and there's survival bushcraft niche on the other side of it, and everything in between. But it's a testing ground. That's where I put, if I have an idea or I want to test a new niche, I'll put it on that store.
And look, conversion rates, they're not going to be as high in the general store as they are in a niche store, but it saves me having to go spend five hours to 10 hours setting up a brand new store, spending all the money for the Shopify plan, all the apps, all the logos, the design stuff, without actually knowing does that niche work? Or can I have success in this niche store? If you've got a general store, it really just allows you to go ahead and test rapidly, so test a lot of products and a lot of different niches without having that five hour to 10 hour building a store, all the money invested in that store, you can just go out there and do it super quick, test it, does it work?
If something really starts to take off, then what we'll do is we'll take that, move it into a general store, start building a product line around it and start really going into that branding phase.
David De Souza: So just to confirm on that last point, would you say once it started to take off, you'd actually move it into you said general store, did you mean niche store?
James Beattie: Oh, sorry. Yeah, so move it in… If something's working in your general store, take that and move it into a niche store, and start to build a brand around it.
David De Souza: Cool. And to sum that up, you'd say, probably as a beginner who's maybe testing the water, you'd say very much maybe go down the general store route?
James Beattie: Yeah. So I think it's just the quickest route to getting some success and getting some traction, but definitely not as a long term play. You want to be thinking about the future. And once you do get some money behind you and things start to work, move it into a niche store, and really start building out a product line, building out a brand. And the thing about general stores is, email is such a huge part of… there's a lot of people ignore it completely, but it can add a huge amount of extra revenue onto your store, and it can be tough to go out there and email your general store's list, there's a lot of segmenting, it's hard to put out content and stuff.
But when you move that over to a niche store, you can really start diving into the content, or content based email system, where you build a relationship and build brand loyalty with your customers rather than just sell, sell, sell, which is very much what the general store is about.
David De Souza: Yeah, definitely. And you mentioned a key word, this word, success. Now did you have any guideline as to when you decided to maybe switch, mainly in profit or sales terms, when you might actually think about switching from a general store to a niche store?
James Beattie: Yeah. So there's a few things to make sure you've got in place before you move over to a niche store, and a lot of people define, obviously when you're starting success is a lot… If you're making three sales a day when you start, you think that's great. But three sales a day is not what you'd call a winning product. You want to make sure that you can scale it to… There's a lot of products that will do well on like a $5 a day budget, but once you go to try and scale it, things go out of whack and it doesn't work as well. So you want to make sure that scalability is there, and you want to be able to push it to at least 30 units a day, I'd say, as a broad guideline.
I don't really have any hard numbers, but if you can push it to 30 units a day, you can start to build a list behind you where you can start to do all of the re-target and the abandoned cart stuff. But yeah, if you're making 30 sales a day, I'd think over a reasonable amount of time, so a week to two weeks, then it's maybe time to start looking at, “Should we move this over to a niche store?” And you want to make sure that products I sell, that they just don't really work in a niche store area, it's very broad products, maybe like a little gadget or whatever.
But you want to move that over to the niche store, and you want to make sure that you have the ability to have a product line. So you want to make sure that there's congruent products that can go alongside this and can be of higher ticket stuff that we can sell, is there the possibility to add a subscription model to the store? Is it a possibility to sell digital products as well? There's a lot of things you won't look at. But yeah, if you want to move it over to a niche store, 30 a day, and then start doing your research to make sure that a lot of those other aspects are there and you're able to do that as you move forward.
David De Souza: Okay, great. And in terms of, we've covered a little bit about strategy, but I suppose taking it one step back, where did you actually go ahead and typically find your suppliers?
James Beattie: Yeah. So I mean the whole sort of… the drop shipping scene right now is Ali Express drop shipping. So Ali Express is a big website in China, it's full of suppliers, and you'd pretty much find any product you want there. So you go there. A lot of my… So initially when you start, I recommend just going to Ali Express. There's a few things you want to look for when you're initially finding that supplier, you want to make sure that they have 95% plus feedback, you want to make sure that they've done… So they've got a rating system on there, and if you go on there you'll be able to see this, but there's like diamond suppliers.
They're sort of the best ones that you want to go for. You want to make sure that they've been around for a few years and they're not just popping up out of nowhere, because there is a lot of people who get burned. And I think when you're dealing with China, that's just a matter of fact. You want to make sure you do your research before you dive in. I know a lot of guys who've started doing volume, they send in all these orders, and then the supplier runs away. And that's just they didn't do their research initially.
So there's a few things you can do, and you can… I think you've got this lined up in the questions here, but you contact your supplier in Ali Express. The first thing I ask for is their Skype and their WhatsApp, so all them pretty much have Skype and WhatsApp. And you can go ahead and you can message them. A good thing to do is, if you're unsure, hop on a Skype call with them obviously to order in a sample, it's going to take a bit of time to get here, or you can DHL it, it's going to take a little less, maybe three to seven days DHL, but it's a little more expensive.
I do recommend doing that if you start doing volume on a product quite quickly, is order a couple of them in DHL, just to make sure that the quality is there. But what you can do is jump on Skype with them, get on a video call and get them to show you the products over video. Obviously it's not as good as having that product in your hand and being able to touch it, but it's the next best thing. Get on a video, ask them to bend it, to twist it, depending on the product, what it is. Just make sure that it's reasonable quality, and that's the best way to deal with it.
And if a supplier isn't willing to jump on a call or isn't willing to communicate with you through these other platforms, it's probably not a good idea to jump in with them.
David De Souza: Okay, cool. And just to confirm there, a lot of people, I guess the gurus and all that sort of thing out there, kind of advertise it as a… you don't have to touch the product and all this sort of model, but you would very much, for I guess a winning product, you'd try and actually order a sample, would that be right?
James Beattie: Yeah. So if something's starting to take off, you do want to order it in. There's a couple of benefits as well, not just check the quality, make sure that's good, but you want to shoot your own videos with it. If you really want to stand out from the crowd and stand out from… There's so many people doing this right now, and you have to stand out and make your product offering a little better than other people, and if you bring it in… I mean, no one's doing it, no one's bringing the products in and videoing them theirselves, so if you go ahead and do that, you're just adding that extra level of work that most people don't want to do.
So bring it in, order a few samples, make sure the quality's there, but then you've got the products to go ahead and create these nice videos. And you can shoot them on your iPhone, it doesn't have to be anything super high production, but you can go ahead, order it in, take your videos and stand out from the crowd a bit.
David De Souza: And when you do do this, do you typically say, try and just deal with… limit yourself to a certain amount of suppliers so that you build relationship and trust? Or do you have an approach where you'll test different products, if they meet the criteria, you'll just go to that supplier, and you're maybe dealing with like 10 suppliers?
James Beattie: Yeah. So initially, once you're just getting started, you can go ahead and do that, just go to a few different suppliers. And you will eventually find through working with them, most of the guys you're talking to can pretty much source you any product if you want, so if you go to them and you are working with someone, and they're shipping everything out on time, they're good quality products, they're communicating with you on time, go to them and say, “Look, can you get me this, this and this?”
So basically now I have two suppliers out in China who can pretty much source me anything I want. There's a few products sometimes if I'm testing, I will just use the old route of just going on Ali Express, finding a decent supplier and going with it, but 95% of the stuff is through these two suppliers. And that's a experience thing, it's through working with people, you'll start to build relationships, and over time you'll figure out who's good and who's not, and who you can trust. So initially, it is sort of just trying to wade through the bad to find the good, but once you do, make sure you have a good relationship with them, and ask them…
The thing… in China, they want to build a relationship with you, and ask them how their day is going, have that small talk with them and not just this whole straight business. Build an actual relationship with them and you'll find that they'll be much nicer to you and much more willing to help you out.
David De Souza: And you're very much doing this through WhatsApp, Skype, and building that relationship there and then, trying to get them onto a Skype call as soon as possible?
James Beattie: Yeah, exactly. So jump on Skype and talk to them, WhatsApp them. It's so, so easy now, the tools are there, just put in a bit of effort, jump on a call with them, talk to them, check out their products over Skype, and then if there's… any issues pop up, you can WhatsApp them and say, “Look, this product hasn't been delivered. Where is it?” And they're very willing to help. And the good suppliers, they're very, very good and they don't want to help you out.
And as well as that, on Ali Express, you'll see the prices listed. If you start talking to the supplier and you start ordering a significant amount of units, they will give you a much cheaper price and create you a private listing where you can go and do all your stuff. Or a lot of the times what you can do is just rather than the whole order process, which I think we're going to talk about here in a minute, but basically at the end of the day now, I just send over a spreadsheet of all the orders and they fulfill them.
David De Souza: Okay. And that's a really cool point you've just raised. So you actually, for want of a better expression, try and get buy in bulk discounts, is that right?
James Beattie: Yeah. Well, I mean it's not as… such as when you're ordering it in bulk, and you're ordering maybe 1000 or 10, 000 units, but if they can see that for the past week you've been ordering 100 units a day, they will be willing to give you a much bigger discount.
David De Souza: Okay, great. And just touching back on one of the previous points, I just want to confirm, going back to a point that you made previously, you said that you tend to use one or two suppliers. Now, is this if you actually have a niche store or if you have a general store as well? You're saying that these suppliers can basically source any product in China?
James Beattie: Yeah. So this is for both, so general store, you'll find that the guys out there, they're not… So a lot of the people on Ali Express are middle men, they're not actually the manufacturers. Rarely you will find the manufacturers, but they can pretty much source any product you want. They'll get you anything, even if they're on general store. But then again, if you're in a niche store, you might find someone who is manufacturing products specifically in that niche, and you can get in touch with them and they'll deal with that whole side of things for you, but you will be able to find these middle men who can source you anything you really want.
David De Souza: Okay. And just to confirm and make it abundantly clear, so then you're not actually… it doesn't phase you or concern you if you are just dealing with middle men as opposed to the manufacturer?
James Beattie: Well, not if… The guys that I work with, I've been working with them for a long time and I know, and I can trust them. You will, if you go… So we do work with manufacturers as well in a couple of our niche stores, but once you go and… With the middle men guys, if you've got a good relationship with them, and I know for a fact that they've been shipping stuff out for the last six months, it's on time, and they can find me any product, it's okay to go with them and I'm not too worried about it, unless you start doing huge, huge volume and you want to cut them out and get a bigger margin, that's maybe when you want to start looking at going direct to manufacturer, or if you want to start private label something, so if you want to add your logo on it or make a change to the product, you will have to go straight to the manufacturer.
David De Souza: Yeah, definitely. And now, I suppose a lot of my listeners will be thinking one of the big objections is… So traditionally shipping from China may take two to three weeks for a product to arrive. Why do you believe a customer would buy from a Shopify store when they can just go ahead and buy Amazon and get next day delivery? Do you have any thoughts on that objection that my listeners might be thinking?
James Beattie: Yeah. So if you use a shipping method or a shipping called ePacket, which is… it's not fast, but it can be anywhere from like seven to 14 days, that's the method that you want to use. There's a lot of other methods which you can use and are going to take anywhere from 30 to 60 days to get there, and you obviously don't want to use that. But people, I find that if you're up front with them… So on our stores it says, “Please allow two to four weeks for delivery,” on all our product pages, and the fulfillment email says the same thing as well.
And you'll find that a lot of people don't mind as long as you're up front with them. Obviously there's going to be some people who are going to go find it on Amazon, but what we're… through Facebook advertising, you're not competing on that comparison search. So if someone's searching Google for a product, it's a very different buying process versus someone seeing a product on Facebook and just going and impulse buying it. It's something they see, and they see a cool video, and it's maybe solving an issue they have, they're just going to click it and go through and buy rather than go ahead and do this price comparison searching on Amazon and all the other websites, and Google Shopping or whatever, it's a very different process.
There is going to be people who email you and say, “Where's my product?” But we just refer them to the product page and say, “Look, we stated it here.” And we also offer them a discount on their next purchase. But again, if you're doing good volume and something's going well, there's plenty of fulfillment companies in the States that you can just ship everything over to, send it to the fulfillment company and just increase that shipping time when you know something's working.
David De Souza: Yeah, cool. That makes total sense. And one other point you've mentioned a couple of times, about the benefits of getting the products yourself and being able to create videos and get that, I suppose, better Facebook marketing going on. Do you have any guidance as to how long or structures towards the product videos that you shoot?
James Beattie: Yeah. So most of the videos that we have are anywhere from 30 seconds to a minute long. You want to highlight the… if it's like a pain problem or whatever, if there's… highlight the pain that people are having in the first two or three seconds of the video, show the benefit in the next couple of seconds, and then you can go through and have these longer segments of showing the product in use, highlighting all the benefits, going ahead and doing that.
So anywhere from 30 seconds to a minute. There's a lot of cool stuff you can do within Facebook, like you can create these audiences of people who've watched 25% of the video, 75% of the video, 95% of the video, and you go ahead and create these audiences, and then you can re-target them people who are… obviously if someone's watched 95% of the video, they have some sort of interest in the product, and you can re-target them. And that's how you get very cheap cost per purchases on video views.
There's ton… Like Facebook, there's so much stuff you can do in there, it's crazy. But to answer your question, 30 seconds to a minute.
David De Souza: Awesome. And you've now touched on a little bit about the products and covered some of the objections. Why don't you tell us a little bit about your product selection process. How do you go about identifying hot or trending products that actually sell?
James Beattie: Yeah. So there's tons of research tools out there now, where you can find exactly what's working. So there's a tool called… I recommend getting it, it's called Which Ads Work, and basically in that tool you can go and set so many parameters, there's tons of stuff, ut just to give an example, you can set… in the last seven days, show me the products that have been posted on Facebook ads that are linked to a Shopify store, and then rank them by the amount of likes they get, or shares they get. And that's going to pull up stuff that's starting to go viral. If that's in the last three to seven days, you can jump on that.
You can see exactly what's working, you can jump on that. And a lot of the times, if you've got budget behind you, you can out scale them guys who are just starting, because a lot of people don't have the budget to scale. So what you can do is find them products and just jump in there, get them going in your store and purse them a lot harder. And you can make a lot of money very quickly just by scaling fast.
David De Souza: Cool. And that was called Which Ads Work?
James Beattie: Yeah.
David De Souza: Awesome. That's a really cool tip. And-
James Beattie: Like there's tons and tons of research methods, like there's literally… I think I've got like five or 10 videos on my YouTube channel going over different methods. There's hundreds of ways you can find them. A lot of the stuff I've actually found is just when I was actually… I was in London just on a holiday, and we're walking around, and you know in London there's all these wee pop up stores with all the gift sort of stuff?
David De Souza: Yeah.
James Beattie: And I found a really cool product in there one time, and went ahead and sourced something similar. And we absolutely crushed it with that product. You have to be, if you're around these stores, you have to always be taking in stuff that's around you and be aware of your surroundings. And you can find a lot of cool stuff just by having an open mind and always be thinking. I never really shut off on… I could be anywhere in the world, I was in Spain in the markets, and you're always looking for product ideas and stuff that think might do it well.
And the more and more you do it, the more you're going to get an idea of… I don't know, but when I see something and I get a gut feeling that I know it's going to work, it usually does. And you'll be able to spot those products instantly when you have that sort of experience and you know what is working.
David De Souza: Let's say you've got some products, your store's up and running, how many products do you typically try and stock in your store? And how often are you testing new products?
James Beattie: Yeah. So like a lot of people get very overwhelmed by this and think you need like 1000 products on your store or something crazy. Generally most of money has been made from maybe 10 products, so that's made up the majority of my revenue. There's obviously a few others that did okay and did smaller amounts, but generally, like one product can change your life. Literally you can go from zero to six figures a month within a month, just with the right product, but… Sorry, I've lost my train of thought. What was the question again?
David De Souza: How many products do you typically stock in your store? And how often are you testing new products?
James Beattie: Okay, yeah. So if you're just getting started, maybe fill your store with 10 products. It doesn't need to be any more than that. I just recommend running ads as soon as possible, getting it up there. And then obviously as you go along, you start to add more products to your store. It starts to fill out a bit. But don't be worried about thinking you need to go and add 100, 200 products to your store before you even start running an ad, that's definitely not the case.
But, like right now, we test at least three products a day. Just test, test, test. That's one of the biggest things, is testing them. If you've got a little bit of budget behind you, you can test a lot of stuff fairly quickly, and you will find stuff that works, there's definitely no lack of products out there that you can sell, or there's a lot of stuff where you'll see that beginners tend to jump on and you're going through these courses and stuff, and people use examples in the courses, and you'll find that all the beginners are trying to sell that same products that they're using as an example.
But you definitely don't want to do that. Go ahead and find something original, or something that, like I mentioned with Which Ad Works, that is just about to go sort of viral, jump on it and test it. But we're testing anywhere from three to 10 products a day, depending on just what we're operating.
David De Souza: Cool. And that is primarily if you're doing a general store, or you'd have that advice for somebody who's actually doing a niche store as well?
James Beattie: Yeah. So it's a little bit different. On a general store, definitely test as much as you can. On a niche store, because you're running ads to that niche, if you've found something that's working, I'd recommend just keep the other stuff on a back burner until that product sort of dies out, otherwise you're going to find like, if you have two products that are going really well and you're trying to really scale them both, the ads will start competing against each other, and your cost for purchase will get higher.
So if one product is working really well on your niche store, focus on it, try and scale it as hard as possible, work on having really good upsells congruent with that product, make sure your back end email sequence is working, and focus on all that. And then when it starts to die out, then you can start to push your other sort of products.
David De Souza: And to summarize that, so with the niche store, it's basically, you push one product and then you use upsells to go ahead and increase your average cost per purchase, and then email marketing, to maybe get additional sales from that customer.
James Beattie: Exactly. And you can also… Like, one of the best places to make more money is re-targeting your purchases, so people who have already purchased with your store, re-target them with your new products. And the email list, once you've got a reasonably sized email listing, it's a really good place to test products. So them products you have on your back burner, you can test them on your email list, see what's working well. And if you see one that has a lot higher purchases than the rest, go ahead, and that'll be the next one that you launch to your Facebook audiences.
David De Souza: Okay, great. And then for the general store, how do you approach that? So say once you've got a winner, what happens next? Are you simply capitalizing on that trend and riding the wave whilst simultaneously looking for new trending products? Or do you try and structure your store to also have some stable products that you can also run ads to?
James Beattie: Yeah. So there's a couple of products that we have that we can never really purse them super far, they'll maybe do 500 to 1000 a day, like pines and seals. So they'll do that a day, but we can never really scale them much further than that without our metrics going sort of crazy, but there's literally a product I've been running, it was my very first product that sold well, and I still run the exact same ads to that product today, and it's still profitable at that level.
But then there's some products that you'll have, that will… It's just, as you said, riding that trend and pushing them as hard as possible, to really just capitalize and make as much money as possible on that product while you can. And then a lot of people miss out on the data that they're getting. So a lot of people think when a product dies, “That's it. I have to go keep testing more products,” which I think everyone should always be testing more products. But if you sold $100, 000 worth of a product, you've got a hell of a lot of data that you can use to use that data to launch congruent products. And that's really where you want to move over to a niche store again if possible, and use that data you've got, the emails, the Facebook audiences, and use them to really just accelerate the launch of a brand in a niche store.
David De Souza: Yeah. That's actually cool, and that makes total sense. Yeah, that's awesome. And I suppose you just touched on one of the biggest mistakes you feel beginners make with that. What other common mistakes do you typically see with product and supplier selection?
James Beattie: So a lot of people, like on their product pages and stuff, they'll upload the products, and they'll just be pulling the images from Ali Express, and they'll like the watermarks over the product. So you want to make sure you've got good images, whether that… Generally you can ask your supplier to send you over un-watermarked photos or take nicer photos. Some of the products just don't have great photos at all. So you want to make sure that the stuff looks nice. Look at it and say, “Would I buy from this website?” And if it's no, then you've got to go back and change something to make it look…
If someone's coming to a website that they don't know, you're going to have to build their trust. You can do that with reviews, trust badges, having good photos and stuff like that. But other mistakes, it's hard to say, because a lot of the products I've sold, it's like I honestly don't understand why a lot of people would buy them. And I think a lot of people can also get… they'll maybe get two or three sales with a product, and they'll get like emotionally attached to it, “That's the only thing I want to sell, and I think it's a winner.”
But really when you're just beginning, if it's not working, if it's losing you money, just cut it off. I'll see a lot of people waste hundreds and hundreds of dollars on one product just because it got a couple of sales in the early stages, and then they'll keep chasing after it. You definitely don't want to do that. If it's not working, kill it, and if it's working, scale it fast. That's sort of my two tips that I'd have for being as tight on a budget as possible, and then making as much money as possible while you can.
David De Souza: Yeah. And I guess some of that just comes with experience I suppose.
James Beattie: Yeah.
David De Souza: And so say you found a winning product, or you've done your selection process and you found a winning product, how do you actually import these into your store?
James Beattie: Yeah. So it's super, super easy. There's two main apps you can use, and you just install these apps in your store, one of them is called Oberlo, the other one's called Dropified now. I recommend using Dropified, it has a lot more functionality, it's a little bit dearer, but it's worth it. If you're on a budget, you can start with Oberlo. They're both good apps and there's no real… The Dropified one has a couple of extra features, that once you start doing more volume and stuff, it'll help you out. It's not that hard to transition from one to the other. So if you want to start with Oberlo, that's fine, but it's literally… These apps have Google Chrome extensions.
You just go on Ali Express and go to the product and you click a button, and it will import all the photos, it'll import the descriptions, but you don't want to use Ali Express descriptions. Make sure you're writing your own descriptions and making it a little more interesting, and take out the spelling mistakes that are inevitably going to be there, change the title. But it imports everything for you. And then once you get an order, you just go into the Oberlo or Dropified app, and you'll just click a button. It inputs the address, it inputs all that stuff into Ali Express, and does the order for you, and it's very hands off. It takes like 30 seconds to a minute per order once you get an order.
So it's super quick, super easy to install and it's not complicated at all.
David De Souza: And let's say you've made the sale and you've imported the product, you've made the sale, what sort of refunds, returns or exchange policy do you tend to offer? Do you have any set strategy for that?
James Beattie: Yeah. So obviously we ship worldwide, so if it's like a low priced product, we generally just let the customer keep the product and we'll refund them. Our refund rates actually pretty low, just because we do try and pick good suppliers and try and pick good products. I would say avoid clothing, especially from Ali Express, the clothing on Ali Express generally never looks like the photo, the sizes are all messed up, and you're going to get a lot of people asking for returns. So you want to totally avoid that.
If it's more higher priced products, we do ask them to send it back to our offices in the UK. If it's like in the States, obviously the shipping cost for them is a bit higher, so we offer to pay out 50% of the shipping cost. In the UK there's a lot more strict laws around consumer rights, so generally we just ask them to ship… if it's in the UK, and obviously we're based in the UK, so they can just ship it back to us fairly easily. But again, a lot of the stuff we sell is like lower priced items, like $10 to $20, so… And generally that product maybe costs us $4, so as long as we're not getting a lot of requests for refunds, we'll just refund that product, or refund that order, it doesn't really…
It's just another expense line, and as long as the percentage isn't crazy high, which if you do your supplier research and you do your product research, and order it in to make sure it's good, you shouldn't be getting that many returns.
David De Souza: So do you offer an exchange policy then, or you don't tend to really do that?
James Beattie: Yeah. Well, if they want to exchange for something else in the store, we're happy to do that. But again, if it's some sort of random… Like, we sell to a lot of different countries, and obviously it just doesn't make sense for them to ship the product back to us, it's going to cost them a lot of money, so we generally just let them keep the product as long as, again, it's not some of the higher ticket stuff. With the higher ticket stuff, we generally stay away from the whole… the worldwide target, and then we do base it in the US and the UK, but the lower priced ones, we will.
If they want another product sent out or whatever, generally we just give it to them, because there's so much issues with like PayPal disputes and stuff like that, and everyone gets shut down, because a lot of people doing this just don't refund their customers and don't have any customer support in place, which is a huge, huge mistake, and then they get their PayPal accounts shut down and stuff like that. So we generally just try and keep the customers as happy as possible, to keep… It's much more beneficial for us to not get that $4 product back, but keep our PayPal accounts and our Stripe accounts clean from disputes.
David De Souza: And so say you sell to a customer in the US, and they want to return it, are they typically sending it somewhere in the States or directly back to the supplier?
James Beattie: So it'll be somewhere in the States. We'll just have an office there where we can send stuff to. But sending stuff back to the supplier, again, it's going to cost the customer a lot of money and it's not usually worth it. And if it's like a defect with the product, or the product's broken, if you just send that, like the order number to your supplier, the supplier… If you're ordering through Ali Express, you can file an Ali Express dispute type thing and you'll get your money back anyway on your end, so that's a good way to… Obviously, maybe the customer's not sending it back to you, you're not getting that product back, but if it was broken, then the supplier has to take that hit, not you.
David De Souza: Okay. And you've just mentioned a few different… you've said an office in the US, and I guess customer service as well, that's a big one. Are you very much building teams to do all of this or is it a case of you've chosen good products, good suppliers, so you've been able to manage a lot of this yourself?
James Beattie: Yeah. So you definitely want… the first two things you want to hire for are customer support and your orders. So when we didn't have volume back before we did the whole spreadsheet thing, we were ordering through Oberlo and Dropified, and we still have this with some products, but if you're doing 1000 orders a day, and if I was trying to order it all in, I just couldn't do it. So you have to. There was one stage where I had someone in the UK who was working for me, and they were doing orders all through our day, and then had a girl in Philippines who was doing it like all through the night.
Because we had so many orders in, we had to have someone full-time on the orders. So we had that going. So you definitely want to hire out order fulfillment and your customer support as quick as possible. Really hiring a team is how you scale, so now we have the customer support, we have two girls on it, we have order fulfillment, there's only one person does it now, just because we can use the spreadsheets. And then we have like product research, so we get sent over products every day that we can test. And I run all the ads. So the Facebook ad side of things is what I'm good at, it's what I like doing, and I enjoy it, so that's where I spent most of my time.
But yeah, you definitely want to hire out a team, and I think you should do it as fast as you can. Like hiring people in the Philippines, they're super good, super loyal. It may take one or two people before you find the right person but, and again, get them on Skype, ask them to jump on a call with you and talk to you, make sure they're good at communicating, and you can get them sort of like $4 to $5 an hour in the Philippines is like a good rate for them, so it's totally worth it to have someone else doing your customer service or doing your orders, because that's time you can spend doing activities that are going to generate you more revenue, whereas customer support is very important, but it's not going to build your top line revenue.
And fulfilling orders is just dead time really, where you can definitely want someone else doing that.
David De Souza: Yeah. I totally agree. You've hit the nail on the head when you say you want to spend your time doing revenue generating activities, just rather than maintenance, as I like to call it.
James Beattie: Yeah, exactly.
David De Souza: So just finally, in terms of guidelines, what sort of gross profit margin do you tend to aim for in your products? And how have you approached determining an appropriate selling price for your products?
James Beattie: Yeah. So it really varies. If you look at our total… Generally net revenue, the bottom, or net profit, we want to be making close to 25%. You'll see a lot of people throw around numbers, like 60% and stuff, but generally I've found that that's not realistic in the drop shipping model. If you can get 25%, that's where I want to be at the end of the month, that's what I'd want to be hitting. Some months it'll be higher, some months it'll lower. Pricing products, it's a tricky question, it very much depends on the product itself, it depends on…
There's some stuff that you can mark up quite a bit, like you want it to have high perceived value, but you can get it fairly cheap, like jewelry, you can get a lot of good quality jewelry for fairly cheap, and you can mark it up quite a lot because jewelry has a higher perceived value, whereas the stuff you're going to buy for $5 and you're going to struggle to sell it for $10. So it's really just about finding them products that you can source low enough, but they have that high enough perceived value, that you get a decent margin.
And I don't really work on like a percentage basis, it's, “What is our margin? What sort of cost per purchase do I think I can hit on Facebook? And what's our average order value going to be when we add in the upsells, upselling on the back end as well?” So that's what you want to look at. And you want to see, “Can this be a profitable product?” And a lot of the times you can play around with the price, so like a $5 increase in price or decrease in price can change your whole ad metrics, like if you decrease the price by $5, but get a 50% increase in sales, then you've really just got to play around with that price a bit and see what is the sweet spot to define that.
And sometimes you'll find that you'll price a product at $20, and it might get many sales, but when you put it to $35, more people buy it.
David De Souza: Yeah, right. Okay. Mate, you've clearly demonstrated your expertise and knowledge. Now, I understand that you have an eCommerce course, why don't you tell us a little bit about that?
James Beattie: Yeah. So I have a course called Ecom Domination. Basically we take you through from start to finish on getting started, getting your store set up, how to pick the right suppliers, and then we go through a couple of different marketing methods, so we go through the whole Facebook advertising thing, which Facebook is crazy, like how much they know about you is insane, and the stuff that you can target is really, really crazy. And we go through that whole process, and it does get quite deep and quite complex, but we start right from the beginning and take you from zero to hero as we like to say.
Then we go through a bit of Instagram stuff, we go through a bit of Reddit marketing stuff, then we talk about email on the back end. And it's really just a broad overview of the whole drop shipping model, and it allows you to go from not knowing anything to having your store set up and starting to make a lot of sales. And we've over 200 students in there at the minute. One of the… like the best student, he's doing over $400, 000 a month, but them results are not typical at all. But we have a lot of guys doing very well. We've probably more than 25 people doing over $1000 a day.
And again, there's a lot of people who aren't getting results, and a lot of people don't do the work. I wouldn't recommend joining or doing anything if you're not willing to sit down and do the work, and go through that ground period where results aren't going to be great. You are starting a business. Like a lot of people will expect it just to be instant millionaire overnight, it takes time and effort to really make this work. And if you're willing to put in the time and effort, I do truly believe that anyone can do this.
I'm 20 years old, I started with about 1000 pound, and we've built up to over 1.5 million in sales. So the possibility is definitely there if you're willing to do the work.
David De Souza: Crazy. And just from your own journey, how did you… Would you recommend that a course is the best way to go? Or to find mentors? Or the information's out there? Do you have an opinion on that?
James Beattie: Yeah. Well, I took a course, I'm a big fan of taking course. Can you find all the information out there? Yes, it's out there, but is it going to be up to date? Is it going to be… There's so, so much of it, and so many people doing different things, is it complete information? It's just probably going to take you a lot longer, and you're probably going to lose a lot more money through testing and playing around, trying to figure out what works, instead of just going through something that is working.
I would highly recommend joining Facebook groups. I've got my Facebook group, there's tons of Facebook groups out there, and tons of great guys doing awesome stuff and giving out lots of free content. So you definitely check them out, see if it's something that you're interested in. But if you're serious and you want to accelerate your learning, I do recommend taking a course.
David De Souza: And just finally, for my listeners that would want to enroll in your course or even join your Facebook group, what would be the best way to contact you or get access?
James Beattie: Yeah. So if you want to join the course, just go to ecominsiders.co/course, that'll take you direct to the page, and you'll find out all the information about it. And if you want to join my Facebook group, just go to Facebook.com/groups/ecominsiders, and that'll take you straight to the group.
David De Souza: That sounds really helpful, mate. And look, I'll just echo as well, if anybody's wanting to get started with Shopify, I also have a free email course, which you can access through my Facebook group, Ecommerce Guider, as well as a 30 day trial period so that you can sign up for Shopify and try it risk-free for the first 30 days. But, James, just as a final question, one common trait I've noticed from the successful entrepreneurs that I interview, is that they actually tend to problem solve in different ways.
So let me put this to you, say you have something that's not working in your business, is there any person, place or resource, or even method, that you look to get a solution?
James Beattie: Yeah. So I seen this question when you sent them over, and I was thinking, and of the best places I like to just relax and think, and I think if I've got a problem, sitting in front of the computer isn't going to help me solve it, it just… I go round in circles and just wreck my head, and I like to get out and just relax. So I like to go for a massage. I don't know why, but it just puts me in a place where I can think freely, and just, that's where a lot of my biggest problems have been solved, just chilling out, totally relaxed, and a lot of times ideas will just float to you. So yeah, that's what I like to do.
David De Souza: No, that's actually quite interesting. Like on a personal note, randomly, I actually seem to get a lot of good ideas in the shower, but then it's like I have no pen and paper or phone near me to write them down, but I-
James Beattie: Yeah.
David De Souza: … like I definitely echo the whole relaxation perspective.
James Beattie: Yeah.
David De Souza: James, that does bring us to the end of today's Business Hacker session. Thank you very much for coming on the show. It's been a big pleasure having you on, and a big thank you to all my listeners. If you found this useful, please, please, please leave me a review on iTunes.