Full Dropshipping Breakdown - Interested?

Florian Thompson

Aug '24 • General discussion

Do you want me to create a full analysis of how to build a great dropshipping store?

I get the occasional message asking whether the tips also apply to dropshipping.

I don't know who made dropshipping sound like this mysterious thing.

It's actually simple.

Only step 1 (finding a product) is different.

But I think it would be a great example to demonstrate how important the fundamentals are.

Vote below if you're interested in an analysis like this.

To make sure you're not buying into the "Dropshipping is complicated" myth, here are some truths:

If dropshipping was so hard, how can 16-year-olds do it so well? (I guarantee you that running your brick-and-mortar business is WAY harder).
Getting sales is easy—it might feel impossibly hard now, but that's probably because you haven't assembled all the pieces we need to make sales (product, store, ads).
It's not about whether we can get sales, it's about the economics behind that sale—when testing products, it's not about whether or not it will sell, we test whether we can find a way to sell at a high enough AOV (average order value) to give us a high enough profit margin to scale.
The main issue with dropshipping is everything that comes after you find your winning products when you're scaling your brand (scalability of supplier, dealing with customs, getting certifications, customer support, lawsuits, trademarks, etc.).

The best brands are aiming for an exit or a retail partnership—build a brand large enough to either get a retail store like Target to carry your products or to sell them.

Here's a very short guide on how to know if you have a good product for e-commerce:

Can you have a profit margin of $20+? (That's why t-shirt companies like TrueClassics are selling bundles + subscriptions—we need this to scale our ads).
The more emotional value attached to the product, the better—that's why weight loss/health will always work, the same as high-end fashion.
Find a product you can expand on—i.e., if you're selling a vacuum, what will your next product be? Probably something in the cleaning space. Can you find other products that would allow you to build a brand around it? Take Esembly—they start with reusable diapers, then they add reusable wipes and other products perfectly in line with their hero product (diapers).

What's the shortcut to a winning dropshipping brand?

Treat it like you're building an actual business.

Think about it—All that dropshipping is is selling products someone else produces, like almost any brand.

The Nike CEO is not sewing their shoes.

Once you find a niche you're passionate about, treat it like a full-on brand.

Instead of asking yourself, "What product do I want to sell?" ask yourself, "What brand do I want to build?"

That level of extra care is what's going to make you successful.

Happy selling,

Flo

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