The Dropship Unlocked Podcast

The Full Guide To A £1M Ecommerce Business in 25 Mins (Episode 124)

• Lewis Smith & James Eardley • Season 1 • Episode 124

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🗣In this episode, Lewis Smith and James Eardley walk you through the essential steps to building a £1,000,000 e-commerce business. 

From setting up the basics to scaling your store for massive success, they break down each step of the process with actionable advice based on their own journey.

👉 Prefer to watch this on YouTube? Check it out here ➡️https://youtu.be/1NFkviv201c

Topics Discussed:

★ Building the Right Foundations: Registering a business and opening a bank account.
★ Niche Selection: Brainstorming potential niches and validating them with data. Checking for demand, competition, trends, price consistency.
★ Setting Up and Scaling Your Business: Opening a Shopify account and setting up your store. Selecting suppliers and adding live products.


Links and Resources Mentioned:


Key Takeaways:

★ Start with Strong Foundations: Building your business on solid legal and financial grounds is critical to long-term success.
★ Niche Validation is Crucial: Make sure your niche has the demand, pricing, and competition to grow before fully committing.
★ Optimise and Scale for Profit: Successful scaling requires reviewing your ad performance and making adjustments as needed.

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★★★Dropship Unlocked - Lewis Smith★★★

How to Launch a UK Dropshipping Business Offering Next-Day Delivery...
...Even If You Don't Yet Know Which Products To Sell

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Join Lewis Smith, Founder of Dropship Unlocked, as you build and launch your high-ticket dropshipping business.


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Exactly. So we're gonna cover how we would build a brand new million pound e commerce Store. And for a start, there's something I definitely wouldn't do, which is, this will be a fun exercise. I wish I could have had understood this process fully before I made the mistake that so many people do when they first start drop shipping, and that is, I would have definitely been able to scale my first e commerce Store to a million pounds in sales much, much faster than I did, if I'd made sure to before I started. I was just desperate to have a guide that explained the path step by step ahead of me. So let's make this the conversation so that we can guide people to I think if you can have a step by step process laid out in front of you, rather than do what I did and end up going and doing, welcome to the dropship unlocked Podcast. I'm Lewis Smith, the founder of dropship unlocked, and with me is our client, success coach, James Eardley. Now when we're not recording podcast episodes or running our own e commerce businesses, you'll find us helping aspiring entrepreneurs launch their own high ticket drop shipping stores. So if you're ready to build your own six or even seven figure online business. Then head over to dropship unlocked.com. Forward, slash, start now. Sit back, relax, and let's unlock your potential with the dropship unlocked Podcast. Today we're going to be breaking down exactly how to build a million pound e commerce business, Louis, we both built successful businesses ourselves, and today we're going to walk listeners through each step. So by the end of this person listening to this podcast right now, we know exactly how to go from where they are today to building a million pound e commerce business. But before we go into the steps, to give some context, first of all, why do we know this process so well? Well, first thing is, we've done it ourselves. I think we've got a combined total just in E commerce physical product sales of over 7 million pounds now. So we probably haven't got there purely by luck, although I'm sure some of it was down to that, and there are some things that we've clearly figured out that do that are replicable, because it's not just us that have done it. We've now helped hundreds of other entrepreneurs build their own successful e commerce businesses using the home turf advantage model as well. So this process is what we've used, and what many of our members have used inside our dropship unlocked communities and to find success in in both our businesses and others. So yeah, the idea of this episode is to dive into exactly the the plan to get there exactly? Yeah, businesses boiled down to the principles, are just sets of processes that is repeatable for not just us to complete, but also for everyone else. So if we had to put ourselves in the mindset of building another E commerce business, let's go through the exact steps that we would be taking to take ourselves from nothing, from zero, from no businesses at all, all all the way through to having a million pound in sales generated through that business as quickly as you possibly can. So let's dive right in with this game. Lewis, what would be the first step that you'd take? First thing you've got to have your foundations in place, so things like limited company, making sure you're operating your business through a company for various reasons, legal protections, reasons, tax reasons, things like that, and then making nice and simple from an accounting perspective, tracking profitability by having a separate business bank account. So yeah, those are probably the first two things I do, register a company, set up a business bank account, perfect. And your accountant will thank you for that later by getting that done up front, because they can then make sure that all of your finances to do the business are kept separate from all of your finances that you do for your personal life, so they're not sorting through Amazon receipts to look to see what you've purchased for your business, like Shopify and Google workspace accounts, etc, etc. Okay, so we've got the business foundations in place. We've got a business bank account. We have some form of legal entity, like a registered company to run the business through. Next we need to choose the products that we're going to be selling through our E commerce business, and the way that we decide this is through the niche validation process that you built, Lewis, and that means that we're going to first of all brainstorm lots of ideas of different possible products that we think might work if we're our E commerce business. And the idea with this brainstorming is not to judge those ideas too much, just to come up with 50 ideas of different products, and it's good that everyone does this individually, because we'll all have a different list of 50 and that's how we can be creative and think of different ideas that haven't been done before or not done so much. So once you've got those initial ideas, we're then going to put each idea through the criteria that we've set out, so that only the niches or the possible products that meet all of these criteria, or at least the vast majority of these criteria will make it through and will actually be the products that we build a store around. So I'll just list off those criteria now. So we need to make sure that there's enough search demand, make sure that there's a high enough average price for it to be high ticket e commerce. We need to make sure that there's not too much seasonality, or that the. The niche is trending down in terms of popularity. We need to make sure that there's not too much brand domination, so there's not these big, huge brands that run the market that we can't tap into. We then need to check there's price consistency, so all the retailers in the space are selling the products at basically the same price. We then need to check to make sure that there's plenty of different brands. So again, it's not dominated by just one or two brands that would make it difficult to enter the niche. Then we need to make sure that there is competition already inside, because that's a great proof of concept that it will work for us as well. And then after we've found the niches that meet the majority of those criteria, will then list all of the direct competition and the contact details of the suppliers within that niche. So that's the process that we take then Lewis, and at the end of it, essentially, we've got niches that we've validated that will be successful exactly that. Yeah. And also going through that process, I think the best thing you learn is what you're looking for and why you're looking for it. So it's not so much a case of just a check box exercise, I'll go through and just check for, you know, our number of brands, or are there other competitors in the market? It's the little nuggets of gold that you'll find along your way of doing that discovery, so that by the end of that process, we see members kind of emerge from week two, niche selection of our training program so much clearer on why the business and the niche that they choose to go into will now work. So it's not a case of, you just do this checkbox exercise and you come out the other side and say, Okay, well, I've done the data. You know, I have no idea whether whether it'll work or not, but I've got a spreadsheet now with some checks on it. It's like, no you will understand by the end of that, because it's been intentionally designed for you to reverse engineer success and figure out what's working what are other retailers succeeding on? You know, all of the factors that, all the pitfalls that people we've seen fail because of have almost just been ruled out now as a result of going through those criteria. So it's, it's a very comprehensive process. Takes a bit of time worth getting it right, though, because that's the foundations for your business. So once you've done that, and you've got your niche selected, and you think, yep, I'm confident it's built on data and not just on gut instinct, next is to get your your business fundamentals in place. So this would be things like opening up a Shopify account and setting up your Shopify settings correctly. We guide you through all of that process, you know, detail as to kind of what, what all the different settings you need are choosing a name for your business. Is it a good one? A lot of people overthink it. They think it needs to be too overthought. Just, just go with something simple, easy to spell, and find a domain name. So a website address that that is short and snappy, that people can type in and will be easy to spell something to think about when you're doing this is you don't want to always have to, like, imagine you were telling someone your email, your, um, yeah, email address or domain name over the phone. Would they then say, Oh, can you spell that for me if you have to do that? Maybe thinks right? And maybe try and figure something that is spelt how it sounds. So you don't need to do that. That'll save you a lot of save you hundreds of hours in the future and phone conversations with different companies and suppliers and staff and customers, and the next would be to set up your business email and phone number. So for that, we use Google workspace for setting up the email. And because you don't really want like, a Gmail or a Hotmail or a Yahoo address, right, you want to kind of your name or support or help at your company name.com just looks professional. You can still use that. It still looks like Gmail on the back end, so you can still treat it like you would a normal Gmail account, but it's now your business account and phone number. We use a service called circle loop for that. We'll link all of these tools below, so you've got all of these in the description, but circle loops. Really good phone number service. You can have a business phone number. It can come straight through to your mobile it can go to a desktop app on your computer. And then I'd set up things like my analytics account, so my Google Analytics pages, make sure that's all linked up, set up a Facebook Instagram page, make sure everything's connected up, and then get cracking with building a store, perfect. That's right, yeah, you've got all the fundamentals in place so that you have a name, you have a niche that you know you validated, that will be successful, Facebook page, analytics account, and you're ready to go, because you've really set down solid foundations for a business that can achieve a million pounds in sales. If you skip through any of these points, if you want to get to the sales part and the marketing part more quickly, then you miss out on all of this solid foundation that you're building on that allows for you to grow super high. So you think about when they build skyscrapers, they don't immediately start from the ground up. They start by going down. They start by building the foundations before building anything that anyone can actually see above the ground, above the ground, and that's exactly what we've done so far. Everything we've done really is things that you don't really see, apart from maybe the business name and phone number and email address. But now gets to the exciting part where we really start to bring the business to life, bring it above ground, and that is in the form of the website or the Shopify store that we'll be building. And initially we're just going to be designing a minimum viable store, which is the term you've used list, which means that we're just. To do a basic sort to start with something that can get us up and running as quickly as possible, testing the products and starting to make sales very quickly. So we'll upload demo products initially to a Shopify store within the niche. We're not products that we're yet actively live selling, just so that we can show these products to suppliers. And now we're going to think back to when we were validating the niche. We've already got written down the contact details for all of the suppliers in the niche that we validated. So now that we have a minimum viable Shopify store created, we just use the contact details to get in touch via phone, via email to the suppliers in that niche and start signing those suppliers, at least four suppliers, and then you can upload those products directly to the Shopify store that you've already built the foundations for. Yeah, perfect. So once your products live, you can then remove your demo products, and at that point, you are good to go. You're good to start making sales. So let's then probably create some ads. That's the best thing, because otherwise you're going to have built this amazing site. Have products on there, but no one's going to find you because you're not going to rank. You're not going to rank particularly highly on the search engines for the time being. So we'd create some ads so that we can appear right at the top of those search results as quickly as possible. And I'd set up my things like my Google Merchant Center account and link my shopping feed from my Shopify store with the Merchant Center account, and probably start with a performance Max ad campaign, because that's Google's kind of AI machine learning driven over arching ad campaign type that kind of does a little bit of everything which it can work really well and certainly simplifies things for you. As an entrepreneur, if you're trying to do everything in your business at the moment, that's where I'd start. And I would make sure my conversion tracking is all set up. We recommend an app called the sim process app for submitting your feed. They also help with like pixels and Google tags and things like that. So that's definitely a great app that we'd recommend. Their support is fantastic. Big shout out to them. And then, yeah, I'd go live and set up the campaign, I'd click Publish, and I'd start watching the clicks come in. But I wouldn't watch too hard, because that could because that can drive you insane at the very beginning, you have to, you have to kind of let it, let the clicks come in, and then review and analyze the data down the line, right? That's right, exactly. Easily done, isn't it? When you first start getting a campaign live, because you're starting to get people come to your your website, you start seeing those number of visitors rise, and it's easy to start looking into your ad account, or the amount of traffic on your store every single day. Every single day, but all that's going to do is drive you the same because we just need to look over a week or a month period, and that will give us accurate data for us to make decisions on. So once you've got your ads live, you've got people on the site, you'll be generating sales for that business. What we'll do each month, and then after the first month, every couple of weeks, we'll be reviewing the ad performance and optimizing it based on the performance that you've seen so far. So we're going to all the technicalities, but essentially, we'll be giving more ad spend things that work, and taking ad spend away from things that are working, and constantly nourishing your ad account with more data that you're that you've accrued, and you'll be giving it more clues as to how to continue improving the performance, I will be signing suppliers and adding products the whole time to make sure that our range is really in demand, and we can really push our sales to be and our ad campaign to be as profitable as possible. The next step, once you've got this running and you've got sales coming in, you've got a profitable campaign, we can then look to automate and delegate as many of the day to day tasks as possible. So this is the part I loved when I was building my businesses. Is because I love to think in systems and distill down all of the day to day tasks into repeatable things, repeatable bullet point SOPs that I can give to virtual assistants or other people to manage the day to day tasks. And once you've got that automation and some delegation in place, so that you can take a step back and look at the bigger picture, that's when you can really put the after birders on, put the gas on, so you can really start to scale more quickly when you're not involved in the day to day running of their business. Absolutely, once you have set everything up, you've automated what you can you've delegated the rest. It's time to scale. You can start ramping things up. So you've got to be quite conscious in terms of making sure you're doing this profitably. And when we're talking scaling here, we're talking about scaling up really, your your traffic, your ad spend, to start bringing in more more visitors, more sales, and working your way up to your first 100,000 your first million pounds in sales. I mean, it's definitely possible to do that with a one person business using this model. You really, you don't need any team members necessarily. If you want to free up your time. It might be worth thinking about, you know, as we've talked about, delegating things out to a virtual assistant, but you could do this as a solo person entrepreneur if you wanted to up to that stage. So yeah, work your way up to the first million in sales, and then give yourself a pattern back and know that you're well on your way to having an amazing business that can change the rest of your life 100% Yeah, I think so. I mean, I know it was thoroughly enjoyable for me, that process of going through it not easy, but you can see there how simple is. We've been through that process. Then in a matter of minutes, and that is exactly how you go from zero to a million pounds the time frame it took me. So I did about 250k on my first nine months of running ads, but that was from being a complete beginner, and I didn't have the the experience I've got. Now, I know I could do it much quicker now. So I know that I could do it quicker in terms of the time frame is different depending on how much time you can put into this and how seriously you take it, or how much support you get, I think is a big part to play and how quickly you can do this. And that's a million pounds in sales, in terms of the profit that you'll keep from that in the general gross margin that you'll get from your suppliers would be 30% that we have on average across all of our suppliers that you sign, and then how much of that 30% you keep will be down to how profitable your ad spend is, because really, the actual overhead costs are so low, aren't they? Lewis, in terms of website and everything else, it's really just the ad spend that we would take into account to make sure we're as profitable as possible. Yeah, you can cover the other overheads other than ad spend, usually with one high ticket sale a month. You know, if you sell something for 2000 pounds and make 600 pounds in profit on that sale, then you mean dash should cover. You shouldn't be spending more than 600 pounds on other overheads per month, other than maybe if you then bring in a virtual assistant, but like, certainly not on software or anything like that, it should be well under 150 pounds, really, a month. And so yeah, all of those things should then kind of you make back all of those on the first high ticket sale that you make, then it's a game of ad spend versus the margin that you're getting from your supplier. So yeah, like you say, if you're getting a 30% gross margin, if you can make sales from your like, if you if your cost to acquire a customer is well below the average profit that you make on each item, then you're you're winning. And make sure you account for things like VA T. You know, once you hit a certain threshold in the UK, you'll have to register for VA T, at which point you've got to be careful, because then you've got to charge customers VA T. But you can also reclaim back the VA T from your suppliers that you spend as that you buy from as well. But yeah, just a bit of a balancing act at that point, knowing your target row as knowing what, what return on ad spend multiple you're looking to try to strive for. That means that you, you know you're making good profit with all of your other heads taken into consideration with that level of ad spend. And then, yeah, for example, if you could make sales at 5% of the cost of the item, and you were making a margin of 30 now you're making a margin of 25% but you factored in the cost to acquire that customer as part of the ad spend. And if you can do that, then, then you can continue to scale it up if you want to, if there's room to or if you just want to kind of maintain at that level. And you might say a million pounds per year business is fine for me, at a 25% net margin, that's still a really good income for a lot of people. And actually it might be that you just want a simple life and just just to kind of maintain it at that point, there's no right or wrong answer. Some people say, I want that business to remain nice and profitable. I'm now going to replicate it. Start another one, start a different store, because remember, at this stage, you now have the skills to do this over and over. No one can take those away from you. And that's probably the most valuable part of all of this. It's like, it's not just the asset that you've built by the end of it, where you say, hey, look, here's the thing. It's the fact that you now know how to create the asset out of thin air, out of an idea. That's for me, that's the magic. That's the bit that's like, I think people miss and they and they sometimes want a business handed to them on a silver platter. And I'm like, No, you're missing it, because if, if you had that, you then wouldn't be able to create any more. It's like, you know, if the genie says, What's your wish? Say, I want them. I want to be able to make as many wishes as I want. And that's the point of this. It's like, if you if you have one thing, it's like, learn how to create the thing that then makes you money, because then you can do it over and over and over again. Yeah. That's the real reward from this whole process. Is not necessarily the money, the sales, the business, the actual the person that you become becomes the biggest reward because of the person that you'll have had to go through trials and tribulations. There'll be challenges along the way, so you'll have had to have grown through those challenges, and you'll be so much more knowledgeable in terms of running a business and creating a business that can generate a million pounds in revenue. Yeah, you become a completely different person, and it's incredibly exciting. And the biggest reward from all of this. So we've been through that the entire process that we would take to start a new business from scratch, to conclude this, to help people to really understand where to go, to make this a more seamless process, to reduce overwhelm and to make it more simple, where would you say that people should go to get started? Yeah, if you are ready to start and you want to take it step by step, and you value the support and guidance of people that have trodden that path before you, so that you know where to go and you don't you know, fall into any of the potholes along the way, and then head over to dropship, unlocked.com, forward slash, start. And we've laid out everything you need to get started. And we'll put a link below. This episode as well. Are you enjoying the podcast? We'd love to hear from you leave a comment or a review, and we might feature it in an upcoming episode. And for detailed show notes and resources, visit dropship, unlock.com forward slash podcast. If you found value in any episode of this podcast, please. Could you take just 10 seconds to leave us a quick five star review on your favorite podcast app. It helps us more than you can imagine. And who knows, you might just hear your comments read out on the show. Thanks for being a part of our community. Your support helps us keep delivering new episodes to you every week. Now it's time to answer a question that we've received from a listener of the podcast. So if you have a question that's come up while you've been listening to today's episode, do let us know. Leave a comment beneath the YouTube video version of this episode, and we'll answer it in the comments. But also it might get featured on an upcoming episode. So that's exactly what Sean Catlin 8473 has done. So we're going to answer your question now, Sean, I'll ask it to you. Lewis. Sean's asked what time frame slash estimated ad cost would you roughly be looking at to achieve your first sale? Only a very rough idea is fine. Thanks. Yeah, sure. Great question, Sean. And unfortunately, I can only give you a very rough and approximate idea, because there is no right answer, as I'm sure you know, to that time frames will vary, and it could be the same day you go live, you know, some people will will kind of set their ads live, and then straight away sale comes through, just because the right person was searching on Google at the right time for the right product that you happen to sign from the right supplier, you know, and everything just the stars aligned on day one. Others, it might take a little bit longer, and it might take a few clicks for them to start to get things in, and they might get a few phone calls, and then they can speak to customers and realize, ah, they're not actually looking for that, or are they say that we haven't displayed the product in the same way that some of the other retailers have. So you learn, you refine, you adjust. And so yeah, it could be a little bit longer than that. Could be a couple of weeks. Could be a few weeks. The thing is, ad costs will depend on your niche as well and the target audience that you're going after. So you know, the more competition there is in a niche, and the more people that are bidding on trying to get though their ads to appear at the top of the search results for those search terms. Google Ads operates on kind of a bidding system, so you're entering that auction not It's not like a person with a hammer sitting there and actually auctioning on every search, but like you are part of that now, and in terms of your your your ads that you're serving. And so yeah, it will cost more money if the niche is more competitive, and suppliers that you've signed are going to be the other thing that it depends on, so that'll impact your costs, especially if you are selling products that are quite high ticket from suppliers. We talked about like we had a post in our community the other day from a member that had just made a sale for things like 13,000 pounds on one sale, and had just made a sale prior to that for like 10,000 pounds, right? So some really nice high ticket sales. But if you're Yeah, so if you're selling a product at that level, you're going to make a lot more profit backed but it might take a little bit longer to get those sales to come through, because people are not just like going to be dropping 13k on a product left, right and center. It's going to probably take a little bit of time. Maybe it requires a phone call before they have that sale, or at least an email or some live chat back and forth. So yeah, loads of stuff there. I mean, it very difficult to say sure, and hopefully that's given you kind of a ballpark, rough idea depends on a few different factors. I mean, inside the dropship unlocked program, we teach you how to reduce your ad spend per sale, as we talked about in this episode, to make sure that your ads are nice and efficient and that you're getting your first sale for as low an ad cost and in as short of a time frame as is possible for you to do. Yeah? For more details on that and strategies on ad campaigns and how to approach it all effectively, a good place to start is head over to dropship unlocked.com, forward slash, start, perfect. Yeah. Great question Sean, I'm sure, on the minds of other people as well. So thanks for asking that question, and thanks to Lewis for your answer. Now we shall highlight a recent review for the podcast. So a big thank you to just Jonesy X for sharing your thoughts. Really appreciate it. So they've said great video, guys, it's looking good for everyone. With more UK based suppliers, it makes it a lot less stressful. Yeah, it certainly does. Thanks for your review, just Jonesy, really glad to hear that you've been enjoying the podcast and that, yeah, you're feeling less stressed about the whole concept of drop shipping thanks to the growth that's happening in the UK market when it comes to e commerce adoption. So great stuff. And if this episode today resonated with you, if you found it helpful, perhaps you'd consider sharing it with someone who might benefit from it. Your recommendations help us at dropship unlocked grow our community and continue delivering what we hope is valuable content to you. So a quick share to someone you know can make a big difference. Thank you for joining us on this episode of the dropship unlocked podcast. We hope you are leaving with new insights and inspiration to fuel your entrepreneur. Aerial journey to kick start your E commerce business, head over to dropship unlocked.com forward slash, start. It's the perfect place to start and get access to resources that will help you build your business from the ground up. And don't forget to hit that subscribe button for more episodes packed with strategies, tips and success stories, plus, if you enjoyed this episode today, a five star review would mean the world to us, and you might even get a shout out on the next episode. Thank you for choosing to spend your time with us today. We can't wait to bring you more insights on the next episode of the dropship unlocked podcast. You