The Simple Path to Shopify Dropshipping Success (Episode 146)

 👉 Ready to start your own online store? Start here: https://dropshipunlocked.com/online-event?el=podcast-146-simple-path-shopify-success

🗣In this episode, Lewis Smith and James Eardley break down the simple, proven path to Shopify dropshipping success.

As experienced e-commerce entrepreneurs, Lewis and James share their personal journeys and the strategies they used to scale to seven-figure businesses. They discuss the common plateaus new dropshippers face and how to push through these challenges.

👉 Prefer to watch this on YouTube? Check it out here ➡️ https://youtu.be/6eENo9X3H7Q

Topics Discussed:
★ Overcoming Plateaus in Shopify Dropshipping: Lewis and James share their experiences of hitting common plateaus when starting and scaling their businesses and how they overcame them.
★ The Importance of Surrounding Yourself with Like-Minded People: Why being part of a community and having mentors is crucial for breaking through barriers.
★ The Right Approach to Ad Spend: How to ensure that your ads are profitable from day one, and why the HomeTurf Advantage model makes it easier to scale.
★ Finding the Right Suppliers and Products: Lewis explains the process for choosing high-ticket products and reliable suppliers to ensure business success.

Links and Resources Mentioned:
 Pick up a copy of Lewis’ book: https://dropshipunlocked.com/book
Get Shopify for £1 a month for 3 months: https://dropshipunlocked.com/shopify
Get a free trial with a professional phone line: https://dropshipunlocked.com/circle

Key Takeaways:
 ★ Push Through Plateaus: In business, growth is a continuous process. Every plateau is just another challenge to overcome as you move toward success.
★ Profit from Day One: With the right approach, you can ensure your ads generate a profit from your first sale. Focus on high-ticket products for better margins and sustainability.
★ Data-Driven Product Selection: Use data and proven criteria to choose products and suppliers that will ensure success in your Shopify store.
★ The Power of Community: Surround yourself with people who are on the same path and can provide guidance and support. This is a game-changer for your growth.

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★★★Dropship Unlocked - Lewis Smith★★★
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Transcript

0:00

Unfortunately, when drop shipping you can easily hit this kind of wall where you'll get stuck if you don't. I still remember that I overcame a business hurdle for me that felt impossible at the time, but it just came down and. I think that has probably been the biggest single decision that I've ever made when facing drop shipping challenges along the way. And that for me is the most simple path to Shopify drop shipping success today. Benefits of a successful e-commerce business are massive, but the truth is. Today we're going to be breaking down the simple path to Shopify drop shipping success. Based on the stories that both Lewis and I have been through, the journeys we've had to go to 7 figure e-commerce businesses, we can see that there are obstacles that will come up along the way. And often they are very clear obstacles that are faced by many people as they build a Shopify drop shipping store. And each time you face an obstacle, it feels like a plateau. But the truth is these plateaus are just a natural part of the process, but you have to push through them to keep moving forward. So Lewis, what are some of the most common plateaus that beginners will face when starting their drop shipping journey? Yes. Plateaus is a great way of putting it and I think this will be very relatable for pretty much everybody listening because it's something like you said that reemerges at the different levels of scaling a business right from when you're first getting started. I mean, arguably the first call it plateau challenge obstacle. Like the first thing you're going to hit is that feeling of like isolation and being left alone to try and figure out all the pieces and, and piece together the puzzle of an e-commerce business by yourself. When you're trying to piece together guidance from different sources, like different YouTube videos and different courses and things like that, it's often going to lead to confusion and you spinning your wheels and then you hit. We hear a lot of people come to us where they're just like audibly when we speak to them burnt out, like they, you can just hear the exhaustion because they're just like, I've tried everything, I've done everything. This guy said to do this, this person said to do that. And so I think that's the first plateau that most people will either be experiencing or have experienced, or that if you're thinking about going into this alone, you will likely experience if if you're looking down the road ahead of you. And I think a lot of people also maybe they've made that first step, they've built their store, but then a lot of people get stuck when it comes to like niche selection. So finding the right products to sell. And even if you've set your mind and you understand the economics of our home turf advantage model and why we advocate for selling higher value, higher ticket products, there then comes a point of like indecision where you feel like you've hit a potential obstacle or a challenge around which products do I sell? How do I find those suppliers that can supply my drop shipping business that will be good quality suppliers that will look after my customers, that will, you know, end up me getting good reviews for my brand. So I think that's probably the next challenge or plateau, whatever we call it, that people will arrive at. And then I think even beyond that, if we kind of keep going down that path. OK, so you've got some kind of clear direction now you're not doing it on your own. Perhaps you're in a community of others doing it with you. You've got the high ticket niche, the products that you want to focus on selling. They're proven, they're in demand. You know there's a good supplier availability. It might then be ads. It might be that you you follow some ad videos on YouTube around like how to set up your Facebook ads account, your Google ads account, and maybe you start getting sales, but your ad spend isn't making you back enough profit. And it kind of feels like you're stuck in the weeds and it's just like a blur of numbers and you're looking at this ads dashboard thinking like I'm pouring money into this machine, but it's not giving me enough back. You're making sales, but it's not profitable enough for it to be kind of a long term sustainable business for you. So I think those are probably the first few examples of of plateaus that you're likely to either encounter or have encountered on your journey so far. Yeah, it's a great overview. So relatable. People struggle to get started, then they'll struggle to find products, then they'll struggle to set up an ad campaign and so on and so forth. And I love laying it out like this because business from my experience has been a it's like a ladder where you pull yourself up each rung and then when you get to the next step, you then need to push yourself on. Also reminds me of this walk I've done in the Peak District called Ma'am Tour. And it's basically not that large of a hill, but it's just steps the whole way, these rocks that they've carved into steps. And it's like that with business where you get to the next step and suddenly you see above the hill and there's a load more steps to get to the top and over and over again, you've got to keep pushing yourself outside your comfort zone and reconnecting with the purpose for the for starting in the 1st place to get yourself to the end. So let's let's dive into this kind of plateau framework that we've created then for the podcast. Lewis, first of all, you mentioned that getting stuck, feeling isolated and not having all the information in one place is a plateau that a lot of people will face when they first get started with drop shipping. So that must be pretty overwhelming for a lot of people when they're getting started. Yeah, I think that's probably the hardest plateau to have to breakthrough because there comes a point where you have to accept that perhaps I don't know what I don't know. There's there's things out there that I can try and educate myself on, but if I don't know what I need to look for to educate myself on, there's potentially huge blind spots that are going to leave me completely exposed when it comes to running this business. Or it just means that the business won't get off the ground in the 1st place. And like I said before, I'd just be spinning my wheels. And it's not a case of being lazy. It's not like you're not putting in enough effort. You could be working, you know, 16/17/18 hours a day, pouring your time into it. But if you're not getting traction, if you're not following a proven model, and if you're not surrounded by a group of people that you can ask and seek advice from and support where people have done it previously, it's going to be a very time consuming and expensive game of trial and error. So that definitely is one of the biggest challenges. I think making sure you get around people who are already doing it and have done it, surrounding yourself with those successful people and mentors who can guide you. And then rather than trying to piece together the information from all kinds of different sources, just having a clear step by step system that's designed to help you succeed and cut through the noise. I mean, there's a lot of conflicting advice out there. It's a minefield on the Internet these days and it's only becoming more so. As you know, there are so many different Youtubers saying different things. And the trouble is a lot of them are like, they work, right? It's not like everybody's lying, like they, a lot of these systems work, but they just conflict and it's like, what's the optimal model for you? What do you want from this business? Where are you based in the world? Are you in the UK? Are you looking to, to create a business that gives you like freedom, a lifestyle, high profit, low admin, low overheads? Because not all models are designed with that outcome in mind. And so you've got to have a system that you can trust that you know has worked for other people who are in your same position. And once you have that, you just got to stay focused on one clear method. And it's easy to get into a plateau or feel stuck if you try and pull things from different YouTube videos, get advice from lots of different conflicting advice. And this is exactly the experience I had when I knew that I had this deep feeling of feeling unfulfilled in my 9 to five job. I wanted to get online income and at first it was like, well, I just want to get online income, however it will come in. So I was just watching lots of different videos. But what that meant is that all these different people had different ideas of how to get to online income, and I was not specific enough. So I was just getting confused and pulled around and setting up Facebook cards for one store, failing miserably with the next store, and just having my head in my hands in my room, thinking, what on earth have I done? You know, because it's quite a lonely pursuit drop shipping when you first get started. But the, the turning point for me was as you sailors to breakthrough this certain plateau in my business was to get around people and just copy what's worked for other people. You know, don't try and reinvent the wheel or think I'm special by trying to pull things together from different industries and put it all into one. Just copy what's worked already is definitely the biggest shortcut to to get into success. So the next plateau that a lot of people will face is making sure that the ads that they're running is actually beating the profit that you're getting back, is beating the ad spend that you're putting into a drop shipping business. And this is something I faced early on when I was trying to piece information together. I would put. A Facebook ad campaign up. Run those ads to a Shopify store and I'd be wondering why my profit wasn't beating the amount of ad spend that I was putting into it. So what are the what are the ways that you would you would help people to overcome this plateau of not being able to make sure they're getting a profitable return on their ad spend? Yeah. So this is definitely a big plateau that we see a lot of people that first come to us have faced or are facing when they're trying to kind of duct tape together different models that they've seen online around how to get the business up and running. Like there are these kind of don't want to call them myths, but like beliefs, I guess in the industry that like, for example, an e-commerce business won't break even on the first sale, you know, So, and then that comes from like a low ticket, low value kind of approach whereby, you know, if you're selling some kind of like consumable subscription products like coffee bags or whatever, for example, you might spend £50 to acquire that customer and only make a £10 sale. But it's because you know, that customer will come back and buy at least five of those bags, you'll eventually break even. And then beyond there you have profit and that's the lifetime value of that customer, right? Hopefully they stay with you for many years. That's different in our model, we don't, we don't have the prerequisite of people coming into our programme to have huge pools of capital that they can put into a loss making ad campaign in the hope that one day they'll break even and eventually start to build profit upon it. Like we're dealing with people who have well paying, respectable full time jobs, careers like the situation that you and I were in. But you know, they maybe they've got 10s of thousands, but they don't have hundreds of thousands stashed away necessarily or certainly not that they're going to allocate to this business and risk on it. So we need to like with this model, the home turf advantage model, we want to break even on the first sale, if not make a profit and, and ideally be making a good profit on that first sale. And the numbers just allow you to do it right. So I think when you are selling a 2000 LB product, we talked about this before, a high end BBQ, a luxury home sofa, a treadmill for the gym at what you know, anything like high end, if you have a 30% profit margin from your supplier, you're netting £600 profit on that sale. Now the likelihood of it taking more than £600 in AD spend for you to get that sale, I mean you'd have to be doing something wrong with our model for it to be that expensive to make a sale in all honesty, like you should be making a sale for less than that, therefore making a profit on that first order that you get through. So it's profitable from day one is cash flow positive. The money you put into ads is more than covered by the profit that you make back on every sale with this model, which isn't true of most models by the way. However, what I'm not saying is that you only make your profit in the first sale. You can absolutely then cross sell, upsell, be like you've bought the treadmill. Do you now need the weights bench? Do you now need the rowing machine? Do you now you know you've then got that e-mail, you've acquired that customer. So absolutely go for the upsells and try and increase your average order value, increase your lifetime value, you know, see if you can build in kind of recurring revenue subscription on the back end of that that sale. Like there's so many ways you can do it, but it's not a prerequisite from day one. So I guess the reason I share that context is because when you're stuck with ads not performing, it's hard to see the bigger picture. You've got to be able to zoom out and see a community of people who are doing it with this model where they're making a profit on sale #1 but then they're also increasing their customer order value and their lifetime value of getting further products purchased. Like I see on my stores now, I'm getting customers that first purchased from us in 2017 come back and make their like 3rd, 4th, 5th order now. I didn't think that with high ticket products like this, customers would necessarily purchase more than once from the store, but they do. It just sometimes takes a longer life cycle. It's not like they purchase the next week that they'll they'll come back. You know, someone buys a tread treadmill from you today. Who's to say they might not need five more in, you know, a few years time if like it was for their home gym and now they've got a bigger studio or they've got you have opened a business or something, right. So they'll have that trust there and you'll be front of mind if you've done your e-mail marketing and your kind of post sale retargeting, right? So these are all the kind of intricacies, right? We can get deep in the weeds on this stuff. But I guess the point is, don't just throw money at ads if it's not working. Like if you're making sales but it's not profitable, the answer is not necessarily just more ad spend if it's not working, you've got to adjust your strategy. You've got to analyse the return you're getting and focus in on what you see and are around is working in a community of other people. That's why it's so valuable to be around a community like ours because we're doing this everyday. Like we're talking about this non-stop where on the Q&A course, chatting about this on the live sessions, you know, at our live meet ups. So you're not kind of left in isolation guessing like how do I turn around this ad campaign that's only a break even or, you know, I'm getting a one point O4 Roazon or something Like it's, it's not worth running a business for that right? If that's the model. But yeah, you can absolutely make a profit on sale #1 and then go on to increase that LTV beyond. That exactly the the economics just makes sense. It's all sacked in our favour. The margin forever is there when you choose high ticket items and it was mentorship from yourself, Lewis that taught me that because I was having this not profitable ad return from my low ticket items. And what I thought was the issue was that I wasn't creating the campaign in the right way or I hadn't done my conversion rate optimization right on the Shopify store. When really what I needed to do was zoom out and realise that the whole model that I was trying to build, even if my ads were were working and the Shopify store was great. I was building a low ticket business by myself. It was going to be loads of admin, It was going to be loads of returns to deal with. It was going to be tough work as a brand new e-commerce business owner to run this kind of business. And what I wanted to build for myself was a, was a lifestyle business. And that's what you, you taught me how to create with the home serve advantage and the rest is history. Hence why we want to spread the message with podcasts like this. But it that was a big plateau for me. I had to change my complete model to get to a point where I've got profitable, I've returned so I can keep investing and keep selling profitably. Now the next thing that we see a lot of newcomers struggle with is actually finding the right products. So say they've gone through the same life cycle as I have and they realised the ads weren't working, but that was because of the products that they were trying to sell weren't in demand or weren't high ticket enough. How do you help people to break past this stage where they just don't have the right products to sell before they obviously join drop ship unlocks? Yeah. We, we just do it with data. Like we're very kind of data-driven. We try and remove all emotion from the equation because I think emotion clouds are, are rational judgement when it comes to a business decision like this. And there is a place for emotion later. Like don't get me wrong, we're not kind of cold heart this emotionless people. We can, you can also be passionate about the business that you're building, but we want to know that it's fundamentally built on strong numbers because then it's something I can get emotional about and like bought into later when I know that the foundations are solid. I don't want to be led by my gut instinct on a product where the numbers don't stack up because it doesn't matter how passionate I am, how long hours I work, how good at ads I am. Like you just said, if, if I'm a world renowned media buyer, I'm like the best in the market, the best in the world at running Facebook ads and Google ads. And I've got the top creative. I've got the best converting website. If I'm making 510 lbs in profit per item, like you said, it's going to be a lot of admin to hit a target monthly profit that I'm going to be excited about. It's going to take a lot of returns. It's going to take a lot of e-mail, customer service. Like there's just problems that emerge when you have to make that volume of sales for it to work out. So this, this model kind of removes all of that. You don't actually have to be that good at ads because you could spend 2, three, £400 on as getting a sale if you're making £600 net on the sale. And by the way, we've had sales in our programme recently, people making sales for like 7000 lbs, you know, up. I think we had one recently didn't mean for £180,000 for a single sale, right. So, you know, imagine the margin on something like that. You can be fairly and liberal with your ad spend if that's going to be, you know, your sale value. So I think the first thing when it comes to selecting a niche is we have our nine different niche validation criteria. So these are all based on numbers. So just to give you an idea, you're looking for things like the level of market demand, How many people are searching on the Internet every month for the kind of parent group of products that you're thinking of purchasing, right? But then from there, how many are being sold via the direct dispatch, IE drop shipping route? So are there already brands in there that are happy to drop ship items to your customers? You know, And then we go through kind of the other 7 criteria as well so that by the end of it, you have a list of what we call finalists. You might have 10 finalists, and these are different ideas right? Within those, then you can start to be like, OK, what excites me? What can I get behind? Like what do I want to build a business around? And that's when then it becomes something that you can kind of get passionate about, you know, and like with a lot of the suppliers that we work with, I'll go and meet the suppliers. I know you go and meet your suppliers. Like we'll go and speak with them. I got calls with supplies later today and like we're kind of friends with, you know, business acquaintances, friends. Like we'll chat, we'll talk about how business is going, how the markets going. They'll tell me like deals they've got going on at the moment how we can increase our sales me what other retailers are doing to increase their sales. We, you know, there's all these things that it's kind of. A partnership that you're. Building, it's not that they are doing you a favour and like letting you make them money, you are also a source of revenue for them. So when it's kind of reframed like that and you have a niche selection criteria that has our suppliers already drop shipping as one of those criteria, you end up at the other side of that data machine with a list of different niches, many of which you can get passionate about or become passionate about. It's surprising what you can become passionate about when you realise how much money it will make you as a business owner. And then from there you can start to figure out, well, like what do I want to spend my time doing? And yeah, these suppliers are not like faceless, nameless directories that we pay a monthly subscription for and like forward a few CSV files to and then they export the orders. Like these are real people. I'm, I know the directors, the owners of most of the brands that we work with and could pick up the phones if I need to. Luckily I don't need to that often fairly like low admin, but but yeah, that's the level we're talking about. And that's the benefit of the home Turf Advantage model. It's that you're not dealing with Apple and Sony and Samsung trying to like get in touch with some huge dealer portal, you know, on the other side of the planet. They're just here, they're like, I could jump in the car and drive to them within an hour. And so these brands are kind of a little bit smaller. They're a little bit more, you know, and even if they are a global brand, we're dealing with the kind of a local UK distributor of them so that we can get next day delivery to our customers. And so yeah, that's I think how you breakthrough that supplier like I I can't find the right suppliers. I don't know what needs to sell plateau. It's just following a proven process of data-driven. Validation, that's the key definitely, and that there's thousands of suppliers out there in the UK in different niches that have their. Products and are. Looking for different routes to market to sell and we are that route to market as a drop shipping retailer. We will market the products, we'll look after the customers and we'll ask them to send their products directly to the customers. So it's a win, win situation when you find the right suppliers and there's so many out there if you know where to look. So what I think that my biggest takeaway, Lewis and the conversation things you've been saying is that it all comes down onto taking action, following a proven path and also persevering and pushing through plateaus by engaging with people essentially and being able to keep stepping outside of your comfort zone. From a mindset point of view, do you think that's the most important lessons to take away about how to keep levelling up with any kind of business, including drop shipping? Yeah, I think so. It seems that every plateau that you reach someone over in your community, if you're in the right networks, will have already reached that and gone past it and, you know, surpassed that plateau, which tells you that it's only a limit in your, from your perspective. You're looking at it from the perspective of like, oh, that seems like the ceiling, but oh, there's someone that's broken straight through it. So it must be possible. Now my beliefs been shifted around that. Now I just view it like you said, there's another rung on the ladder like I've got, I've got to just know the process of getting past that. So yeah, every plateau is a test. Growth is only going to happen when you step outside of your comfort zone. And that's, you know, that's just something that you get used to again and again. Like as soon as it starts to feel uncomfortable, you're probably doing the right thing because you're pushing past that fear. And I think every time you hit a plateau as well, it's usually it's because there's some kind of fear of something holding you back from taking the next step. A lot of the time it's mental. So you have to become comfortable just pushing past it, even if it is uncomfortable by nature. We talked as well about it's not that people are lazy. It's not that they're not working hard or putting in enough hours. Like unfortunately, I see a lot of people pour their time and energy and money into this, just without the right strategy. And, and it's kind of misguided strategy that they then end up just kind of running it into the ground. So I think one of the things that I would be very, very aware of coming into this is making sure that I was continuing to learn, continuing to improve, but self, self improvement and also like the improvement of my business. And that could mean like investing in new training or looking for mentorship or just simply testing and trialling new strategies or all of the above. One of the things that helps you do that is the people you surround yourself with. If you can make sure that the other people you're around are also on that personal development journey and they're levelling up both in themselves and their own, their businesses like their leadership ability in their business. You're. Very quickly going to come unstuck because you'll realise that like there are people passing me here, that we're in the same plateau that I was in and have now broken through it. So you realise what's possible. So I think that's one of the biggest hacks. If you can keep surrounding yourself with motivated, successful people, you are stacking the deck in your favour. A. 100% I think a lot of people understand now just naturally that whoever you surround yourself with, that's who you're going to become. And the amount of times I have conversations with people now in Q&A calls or one to one sessions and they tell me that they are feeling quite scared outside of their comfort zone when it comes to this next part of the business growth, whether that's running ads or you know, how to set up their first ad campaign. Whether it's Sally or Verdi, who I've spoken to recently, it's always just a case of being open to learning from somebody who's done the exact same thing before, following the exact same process. And then you'll get the same results. And don't overthink it beyond that. Just find somebody that's already done the same thing that you want to achieve, follow that same process. And it's the it's a proven path to success and it removes the need to to guess. All the guess works gets taken away from it. So something that we've done as well as obviously this episode today about getting through plateaus and understanding that that is the path to success. We've also created another episode recently called The Full Guide to a 1,000,000 LB E-commerce Business in 25 Minutes, and that is episode #124 so if you want to queue up another podcast after this one, that's the one to do episode 124. And I think that's the best resource, one of the best resources that we put out there on the podcast for how to get past these roadblocks and take your business to the next level. Yeah, exactly. And if anyone is ready to just stop getting stuck and start making real progress and you think, yeah, I'm in, I want to do this. Head over to Drop. Shipunlocked.com/start and we'll be able to help you get out of the plateau and start levelling up today. 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 dropshipunlock.com/podcast. If you found a value in any episode of this podcast, please could you take just 10 seconds to leave us a quick five star review on your favourite 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 had in from a listener of the podcast. So remember, if any questions have come up while you've been listening or watching today, then simply leave a comment beneath the YouTube video version of this episode and it will get answered in the comments and it may also be featured in an upcoming episode. Now this week we have a question that's come in from Safer and Safer is a member of the Drop Ship Unlocked Accelerator community and so we've taken his question from there. It's a good question. So I'm going to put it to you now. Lewis, Safer has asked, I recently got a response from one of my suppliers that I'm trying to sign. They arranged a call meeting with me and I learnt that they have a drop shipping programme for partners already. So should I ask for this programme or avoid mentioning drop shipping at any cost? Thanks for your question. Safer. And yeah, I mean that's good news. I think sometimes people are almost a little bit unprepared for a supplier to have such a direct positive answer like. Yeah, absolutely. We drop. Ship we have a drop shipping programme like here's the form. And I think sometimes, almost sometimes people freeze because they think that they need to like make up some elaborate story around like, you know, bending the truth. But the reality is, yeah, many suppliers have existing drop shipping programmes like this supplier that you mentioned safer and they just allow new retailers like yourself to easily get started. So it sounds like this kind of thing would be designed for retailers to sell their products on their website with minimal set up and then them just fulfil the orders. So absolutely, when you have your call, explain your business model clearly, use the supplier contact script that we give you, personalise it and adapt it to your tone of voice and just tell them that you'd like to deliver directly to your customers. And then this kind of sets the stage for them to put you into their drop shipping programme if it aligns with their system. And after explaining the model, the suppliers probably then going to have a look at your website, make sure everything's in place, which is why we build our MVS first. And yeah, they'll put you into their drop shipping retailer pool and it's a very straightforward progress. You can start them running, adds to the products and once you make sales, send them through the orders. And it sounds like they're well set up for it. So congratulations, safer on getting this far. And yeah, it's a very positive step in building your business and you're going to be working directly with what sounds like a great supplier. Yeah, Echo that. Congrats. Safer, That's a new supplier in the bag. Soon as you've had that call, I'm sure they'll put that you into their drop shipping programme and you can start making sales for their brand very quickly. So thank you very much for your question. Now it's time to also highlight a recent review that we've had for the podcast. 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