I'm following this thread and I decided to get into ecommerce myself. At this moment I don't have experience with exactly e-commerce and this method in particular, but having experience in some other things and being on this forum for a while, I would like to share with you some thoughts:
1. Traffic
Although paid traffic (FB ads, PPC, etc.) is a great way to get visitors to you site, but if you don't have money to invest at the start, don't limit yourself and go with free sources - social networks. There are loads of other threads how to sell through pinterest and instagram. The only drawback - it will take more of your time and effort if you don't have bots.
Btw, in addition to FB ads I saw few dropshippers advertise also on Instagram Ads.
Some of the dropshippers do special promotions on their pages on FB. They offer a "lottery", the winner gets a free item from your store. To participate in the lottery you have to leave a comment, tag 2-3 friends, share the post, like the post, etc. you choose what they have to do. This way you pay only for one item which will cost you only few bucks. But instead you get a good boost in facebook without spending on ads. The bigger your page is, the better results.
2. Prices
Someone above wrote that there is no way this can work. I did some research, and you know, one of the dropshippers sells sort of electronic devices for 25-60$ that on Ali you find the same for 5-10$. It's not even double price, it's huge mark up!! However he's got a good looking branded shopify store (but not the product!), with his own pictures, description etc. He's got ˜150k followers on FB, active. Gets a lot of likes and shares. I'm sure he keeps growing. He's got only positive reviews both on his website and facebook. Why wouldn't a happy customer come back if he was happy with his purchase?
3. Retention
In addition to the written above, you guys probably forget that you are collection emails from every single customer that buys something. Some of the visitors will optin without buying if you have an optin form and possibly will buy later. I see a huge potential in email marketing in conjunction with ecommerce. Special promotions, new merchandise added, national and international holidays - these are just the basic reason to send an invitational email to your list. Few of them will come back and buy again. And again. And again.
So in my opinion this model of the business can be viable long term as well. You have to approach it accordingly.
However of course having your own branded product is way better and has more potential. No doubts about that.
Also, what is good in email list, that even if you open the new shop or launch your own brand, you will already have the list of buyers that you can send an invitation to your new shop.
4. Free item+shipping vs. Free shipping worldwide
I will have to test it myself, but I believe if you will market a cool product to the targeted audience for an affordable price (˜10-20$) + free shipping, it will also be attractive. I believe this way you will have lower CTR, but you will not have so many carts left. Another good point is that you will get less complains "why does it take so long to deliver?" Cuz when a client signs up for free shipping, they don't have reason to complain.
This way also you will attract more of real buyers and not freebee hunters which is good for the future of your business.
5. When I was making a research, some of the shop were getting serious complains from the clients on their social network pages (literally few clients were spamming to death that that shop is a scam only cuz they haven't receive the item within 2 weeks), on other scam-busting websites. So that particular shop with about ˜200k now has pretty bad reputation overall. And I found the reason.
They claim in the "about us" section that they are a family business located in one of the biggest US cities and it makes you think that they have the warehouse also there. Since huge part of the clients are from the US, can you imagine, being in the US yourself you order a small item, pay for the shipping and it doesn't arrive the first week, the second, and on the third your start panicking. They also can't provide the tracking nr. cuz some of the retailers on Ali don't provide it.
So conclusion out of it is the following:
- Point out that you ship either from the manufacturer or from your international warehouse
- Be open and say that it may take few weeks time to deliver the order
- Point out that the tracking nr. is not always available
That's it for now. Now I'm going to build my own shopify store and apply everything that I just shared lol
P.S. Thanks to OP for the great guide!