April 29, 2020

What I learned drop-shipping £54k in Incense burners

February 2019, I'd recently left my job of 6 years at Ohh Deer, I'd left after being inspired by my employer at how they just "did" stuff, and seeing company growth. After about 3-4 years there, I was already thinking of starting my own business - the delay of leaving was the "pedestal" effect - as an employee I always used to business owners on a pedestal, a different breed, the fearless, etc.

Cut to March 2019, and I'm sat in this empty office at Loughborough University - it's a new scheme set up by the Uni to assist local start-ups, and I was one of the first to enter into it (hence the empty office). I was consuming so much content, anything YouTube business related, books, audiobooks etc. I had some work in the form of WordPress websites for some local businesses, but nothing life changing - I was grateful for any business at this point.

I'd used Facebook ads at my previous job (Ohh Deer) but never understood the inner workings at a 'specialist' level, as I was also over-seeing the technical e-commerce side of the business, and worked with the in-house analyst on Facebook ads.

At this point, I probably had around £1500 in my current account (and some money in an isa to fall back on) and I'd just finished the book 'Rich dad, Poor dad', as well as continuously watching YouTube videos by people such as Chris Waller. Chris W. made a video about "how to find winning products on aliexpress" - Winning makes me laugh, because it essentially means you're piggy-backing onto something that already 'works'. The Rich dad, poor dad book made me feel like I had put money on a pedestal - I'd been in the 'rat-race' for the past 8+ years, where people seemed to pin their worth on their salaries across a plethora of industries (although it felt super prevalent in the 'Dev' culture).

Taking my escapades to aliexpress, I scoured the website for what felt like weeks. Then one day, I saw it - this incense burner product with something like 5000 orders and hardly any reviews (an indicator of dropshipping at scale). So I decided to try it - using the video from the aliexpress listing. I set my adsets live, my mother was always into these kind of products growing up, so I targeted interests like 'wicca, paganism' etc.

As I walked to my car at the end of the day, I heard the Shopify 'cha-ching' sound for the first time, which is an addictive dopamine rush (this gimmick alone massively grows Shopify, imo). The next day I'd had something like £100 in sales, and fulfilled my orders via Oberlo (an app that connects Shopify to Aliexpress, you just enter your card and click pay).

Meet 'Charls'

Checking over the figures, this was profitable - I was making around 20-30% net profit daily consistently, my Facebook ad was gaining momentum in terms of likes etc. I took to some shady sounding group with 30k members in on Facebook called something like 'Aliexpress sourcing agents', and after speaking to about 5-6 people in China, I met this guy called Charls. He told me WhatsApp was only possible via VPN for him, so I installed wechat and began to speak with this guy. He seemed legit, but I was very conservative about this, I'd purposely not scaled my operation to avoid getting scammed this far.

Charls sent me a sample of the product, it got from Shanghai to Loughborough in 8 days, the return address had some UK address on it, I assumed he had access to a forwarding network. The product was great, no flaws and well packaged.

I put this incense burner in the kitchen and lit one of the cones, it was pretty hard to get the flow, but quite relaxing as you had to stay still to get the 'waterfall' effect in action. Filmed on my Huawei p20 pro, I exported my video to Adobe Premiere and chopped together an ad - the premise was simple, the waterfall effect invokes discussion - Facebook loves engagement. This exact video ended up with around 1M views and 3000 comments by the end of it all, crazy!

Anyway, I'd struck gold with this guy - his price was good, and all I needed to do was send a csv of my orders daily, he'd then PayPal invoice me, and once paid he'd return a csv full of tracking numbers - which I'd import back to Shopify using massfulfil app. After a weekend of sales, I recall sending this guy over £1k in PayPal, which was so weird as I'd never met him before.

Customer Service

This is the worst part of Dropshipping, and makes you question what you're doing (and ultimately why I stopped) - I'd say around 5% of People weren't happy with the 8 day shipping time, in this amazon generation I was getting 2-3 emails a day asking where the order is, refund requests etc. Which made me start to question myself - do I know where this product is being made? No. Can I see the working conditions of the factory? No.

How you make your money is more important than how much you make

Gary Vaynerchuck quote ^. He's right, you can earn a tonne dropshipping and drive a Lambo etc, for sure. But it's not sustainable - There's a lot of folk out there taking peoples money and not fulfilling the orders, or just using the cheapest aliexpress order method, which can take up to 30-40 days to deliver. This ruins the whole dropshipping model - and when I say dropshipping, I mean China -> UK with the long delivery time, not drop-shipping from a UK warehouse which can work, but eats into margins heavily.

The light at the end of the tunnel

Now I'd stopped running my ads, I was at around £22k on my best month, bearing in mind I had to fund the purchasing of stock and Facebook ads, Shopify doesn't pay out until a few days after payments received. I left this experience having spent around £16k on Facebook ads with a £56k revenue, which felt like I'd invested in myself to not only learn Facebook ads better, but better understand business operations and how consumers 'tick'.

I applied similar strategies learned on this site to Cotton Clara (an awesome embroidery kit business in Loughborough) and it worked! Cotton Clara saw phenomenal growth over the past 16 months using my Facebook ads management and creative direction in terms of what works for ads.

With Facebook ads, there's no "one fits all" solution, it's really about understanding how your customers tick, and finding an angle on your best selling products to help sell it at scale. My easiest way of saying this is "if you tried to sell your product to a stranger in the street, how would you sell it?" - because if you can figure that out, this will super-charge when targeted at interest-based audiences of people already passionate about your businesses niche.