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[METHOD] 6-Step Guide to dropshipping ecommerce business with less than $200

Discussion in 'Making Money' started by GiorgioB, Oct 24, 2012.

  1. GiorgioB

    GiorgioB Supreme Member

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    [METHOD] 6-Step Guide to an easy and successful dropshipping ecommerce business for less than $200



    DISCLAIMER:
    Part 1:This method is not for quick cash but for the long term, don't expect to get significant ROI before 2-3 months unless you are an ecommerce wonderkid.
    Part 2: This is not a guide on Magento, although you can download some great guides such as official-magento-user-guide(01-13-2010).pdf or The Definitive Guide to Magento - A Comprehensive Look at Magento Dec 2009.pdf (I wanted to attach them but they are too big) for in depth use of Magento.

    Introduction:
    Hi guys, I have been lurking around the forum for some time adding my 2 cents here and there but I think it's time for me to share my own method, my way of giving back for all I have learned here. After seeing a couple of threads like "I have $1K.. how to invest it?" and the likes, I thought I would share this. I currently own an ecommerce website which I launched in early April 2012, and this October I have just achieved my first target of 1000 euros net profit / month, and I've still got 7 days left in this month :D OK, enough with my bragging, now read this:


    HOW TO CREATE AN ONLINE SHOP WITH LESS THAN $200 START UP CAPITAL

    Step 1 - Build your shop.. on an excel file

    What we're gonna do here is select some hot selling products. For this, you can find most of your dropshippers on eBay or Alibaba, or something like that, why not even local shops around your flat, whatever, think outside the box like a boss. I started out with about 600 different products, and have since uploaded another 400.

    :biggthump Tip: Amazingly, the hottest selling products are really not the ones I first expected.. and this is the first golden rule: PICK NICHE PRODUCTS THAT HAVE LOW COMPETITION.
    Imagine you are a shark, swimming in the ocean. There is one spot with lots of food, but it is full of other sharks, most are much bigger, faster and stronger than you. There is another spot, there is not so much food, just a bit.. but there is just 1 other shark, same size as you. You are much more likely to get more food (aka money) from the second spot than the first one, even if there is not much demand. At the end of the day, its still about ranking for low comp keywords.


    When I select my products, I save this information in my product master file:

    SKU - Link to my supplier's product - Photos (in a folder named by SKU) - Cost (including shipping) - Price - Keyword/title - Description

    This is probably the longest part, as you have to write a lot of information, edit a lot of photos, remove watermarks, do a lot of price research, etc.. The most important here is to do your keyword research, and optimize your product titles and descriptions for your targeted KW.

    Once you are happy with the number of products you have selected, build yourself a nice clear category tree and then you are ready for step 2.

    INVESTMENT - $0, but lots of time


    Step 2 - Build your shop on Magento

    Magento is not only totally awesome, but its also open source, free and SEO friendly, which makes it my favorite shopping cart platform.

    You will want to purchase some hosting and a good domain name, and install the latest version of Magento on your server. This is very simple and fast. After you've installed Magento, your shop is ready to be set up. You will need to go through all the configuration options in the backend, but that is quite easy and there are lots of tuts and ebooks about that available. The most important is linking your Paypal account to the shop, as well as your moneybookers account which processes credit card payments very easily.

    Get yourself a nice template, there are some very professional ones available from about $70 and I highly recommend not getting a free one, cos this is your money site, you gotta take care of it and make it unique.

    Install the template (ridiculously easy), and then your shop is ready for step 3.

    INVESTMENT - $153.40
    $83.40 for 1 year hosting + free domain name with Siteground (there is much cheaper but I like them for their customer service since I am still a noob at technical stuff. If you want a discount with them, PM me)
    $70 for a magento template off theme forest for example.



    Step 3 - Upload your products

    There are 2 ways to do this. Manually, if you have less than 50-100 products, its ok and very simple.

    In bulk. In this case, create manually 1 product, then go to your system tab in the backend, click on import/export > dataflows and export your manually created product. You'll then get a template, which you must use as a model. Fill in the template with all your other products (price, descrpition, SKU, category code etc...) and put your product images (each in a folder named SKU1, SKU2, SKU3, etc..) into your import and media files in your directory. You can now re-upload to your shop through the same dataflows tab. I personally hate this kind of stuff, so I just paid a freelancer to do it (he did a great job and still helps me out when I have stuff to fix, let me know if you need his contact info).

    INVESTMENT - $183.40
    $30 for freelancer to bulk upload products (optional)



    Step 4 - Drive traffic

    This part needs no explaining here. Once your Magento store is fully optimized, start building links, articles, social bookmarks, etc. etc. You know the story. I also use some offline marketing techniques such as flyers because my target customers can easily be concentrated in particular areas/events.


    Step 5 - Fulfilling orders

    If you are a pure dropshipper or affiliate seller and your suppliers ships the products directly to your customers, then you can just notify him of any orders and your job stops there. If you're like me and want to see what you are selling, then the next step is going to be a big investment in time.

    I don't have any stock, whenever I receive payment for an order, I then purchase the product myself. This is great if you don't have any money to invest, but will increase your processing time. I simply inform my customers that processing time is 2-3 days, this is your private website, its not eBay, so you can do whatever you want. Once I get the product, its not rocket science.. Check it the size and color is OK, check if it is in good condition, package it, fill in the invoice and ship to the customer. Then update the tracking number in his Magento account, and he should be happy!

    BALANCE SHOULD START TURNING GREEN AFTER 1-2 MONTHS HERE


    Step 6 - Invest profit in more marketing, and possibly employees once you are getting regular business

    I am considering employing a part time staff now as I have a 9 to 5 job and have a lot of work when I get home. Once you reach this step, my advice will only be speculative as I am not there yet, but the idea is to keep scaling it up, growing the business, etc. I currently have a conversion rate which fluctuates between 1.50% and 2%, which I am happy with and as I said, this month hit my first 1K EUR after 6 months, which is pretty much what I was aiming for. My goal now is to X5 that in the next 6 months, and try and create a few jobs... for now I'm not getting tired of making up and seeing 3 orders during the night and my paypal/moneybookers stacking up :D :D


    Having your own private shop is IMO more beneficial then selling on Amazon or eBay. Why? No fees, no feedback issues, no disputes, just payments coming in and products going out. Although it takes some time to build up, it is really worth it I think. Also, having an ecommerce shop, especially if you're fulfilling the orders yourself, is very broad and requires a lot of general skills, not just IM skills (ie. pricing, supplier assessment, organization skills), although your success at first will largely depend on your ability to find a low-comp, high profit niche and rank for it.


    I hope this guide will be helpful, maybe for some newbies since to be honest when I started out, I only knew the very basic white-hat stuff and it has worked well for me. I will share one more secret with you, and this has been the real key to my success. Go for countries where there is not much competition, and particularly non-English markets. South America, East Europe/Russia, Middle East, those markets are totally untapped and have loads of customers dieing to buy cool stuff online but not knowing where to go.

    To sum up, in a nutshell:

    1. Prepare an excel file with your (hot) product info and category tree
    2. Buy hosting and a domain name
    3. Install Magento and configure your store
    4. Upload your products
    5. Receive orders, purchase product and ship to customer (optional.. can also sell affiliate products or your supplier dropships directly to your customer)
    6. Re-invest profits into SEO tools and employees.


    If you have any questions, don't PM me, I will not reply. Post them in this thread, so that maybe others who have the same question will benefit from my answer too!

    Happy e-selling!
     
    • Thanks Thanks x 23
  2. danizdeman

    danizdeman Regular Member

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    Nice method. Also you just found me a new affiliate program ;)
    Repped.
     
  3. GiorgioB

    GiorgioB Supreme Member

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    Thanks, indeed this can totally be affiliated and/or sold to small businesses!
     
  4. mike330

    mike330 Regular Member

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    Can you go more details about step #4 (driving traffic)? Which methods were the best at generating traffic for an e-commerce site?
     
  5. Cas87

    Cas87 Regular Member

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    How do you take the payments on your magento store? paypal? etc..

    What are the fees involved with what you use?

    Great info, bookmarked it, thanks

    Also, do you bother with an SSL Certificate? not really needed if your using a third party for payments but just curious
     
  6. GiorgioB

    GiorgioB Supreme Member

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    This really depends on what you are selling. I generally go for long tail keywords since I have lots of products, and this has been fairly effective for now. Then its slow and steady, quality link building, adding new products (new content), building a facebook/twitter fanbase, etc; email marketing can also be very effective although at the moment I'm not doing any; but I plan to later.


    In your magento configuration, you have a little tab called paypal, here you put you paypal email address and boom, when someone orders, the money goes straight into your paypal account. Same with moneybookers.

    Fees are same as usual on Paypal and Moneybookers, about 5% I think, and no, I don't bother with a SSL certificate because the transactions don't take place on my website (redirected to Paypal and moneybookers for payment).
     
  7. kismat

    kismat Newbie

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    This is like the coolest thread i read till now in BHW. I am going to give it a try. And if any problems occurs, i am going to contact you brother :D
     
  8. hrimata

    hrimata Newbie

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    Do you ship worldwide or just to a specific country?

    Thanks for sharing! :)
     
  9. GiorgioB

    GiorgioB Supreme Member

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    Thanks bud, good luck to you and if you have any questions, just post them in the thread.

    I can ship worldwide, but focus on low competition countries (aka languages)
     
  10. yuuzokun

    yuuzokun Jr. VIP Jr. VIP Premium Member

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    I'd like to start this buisness but I prefer to directly ship products to my customers.
     
  11. yayman

    yayman Registered Member

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    Great thread man, my ultimate goal with all this seo is to eventually get into ecommerce.

    I have a few questions:
    1. If you target non-english speaking countries, are you writing your website in that language?

    2. For the products that you sell, how niche are they? Are you competing with sites like amazon and walmart? What are some signals that the products you're targeting are profitable?
     
  12. GiorgioB

    GiorgioB Supreme Member

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    Yes, absolutely

    Keyword research + marketing instinct. Actually, this methods lets you put hundreds of different products. You'll see some sell well, others not. Just focus on the ones that sell well and upload more of those.
     
  13. charles20212

    charles20212 Newbie

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    nice method
     
  14. s.cherie

    s.cherie Newbie

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    Step 3 - Upload your products

    INVESTMENT - $183.40
    $30 for freelancer to bulk upload products (optional)




    Hey, In regards to uploading the products would you be able to give me name of this freelancer I would say that I am in your first stages but I am currently uploading products, I am currently hiring my original web designer for $3 per product but with over 200 products this will cost me alot, would you be able to supply me with the freelance details even it would be by PM. I would appreciate it so much

    Thanks
     
    Last edited: Oct 31, 2012
  15. raju1986

    raju1986 Newbie

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    hey bro, you have many product use by dropshipper i am sure. can u give me 10% list from your dropshipper list? bcs if i ask for all your dropshipper list i know no one give his list i just need little 10% list so start dropshipper with magento with small store i have also ebay store & also use drop shipper from aliexpress. if u cant give list in public u can pm me hope you give me thx in advance
     
  16. lobo13

    lobo13 Regular Member

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    Best theard! i ever read no doubt...
     
  17. lobo13

    lobo13 Regular Member

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    Is there any way i can get the info for your freelancer??? please...
     
  18. tnhomestead

    tnhomestead Regular Member

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    Been doing this for a while, I do use osCommerce instead, easier to theme for me and uses less resources. For payments Moneybookers, now called Skrill is easy and cheap, and I always take paypal as well. Make sure to tag pictures, it helps get sales! Opencart is a good choice as well has a nice admin area, but most of the addons cost money. I have customers running it without any issues.
     
  19. djmonster

    djmonster Junior Member

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    very good method .... but are you living in the US GiorgioB ? I'm wondering if you collecting sale tax from customer
     
  20. hassanjamil20

    hassanjamil20 Newbie

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    m doing the same thing but i was stuck in getting traffic.