What’s up guys, Los here. Today, I’m going to be talking about nothing, because I actually have Matt Malby back on the show, and he’s going to be talking about why drop-shipping not only sucks, but it doesn’t work anymore. So stay tuned and check the video out.
Malby: What’s up guys? Today we’re talking about drop-ship funnels. And actually, that’s just a headline of this video, because what we’re really talking about is using ClickFunnels to build ascension funnels in conjunction with Shopify, with an emphasis on drop-shipping and how if you are drop-shipping and you really want to do this for the long term, you’re going at some point have to get your hands dirty and actually start sourcing your own products.
Now before we get into this, huge shout-out to my guy Mo, who is one of, if not the O.G., when it comes to the new way of drop-shipping. Also a shout-out to Cody Winn who posted a video that I watched this morning that got me started on this topic.
Now before we get into it, let’s talk about drop-shipping. We all know the premise of drop-shipping. You go on AliExpress, you find some things, you go build a Shopify website, you take that product you just found for $5, you sell it for $35, and when someone buys it, you send the product from AliExpress over to that person’s home, and then you keep the spread.
Everything is hunky dory, you’ll make millions of dollars overnight, hurray. Now this is old school drop-shipping. This is how it has worked for years, and how people still preach it.
But, in reality, there’s a ton of factors that have changed that make this approach not really as profitable or sustainable as it used to be. Now there’s a lot more moving pieces that go into play.
So, let’s talk about some of these factors.
Now, number one, Facebook’s prices to advertise for the last couple years, have gone up drastically. I’m sure you guys know, there is a finite amount of real estate when it comes to running ads on Facebook.
That’s why they have Messenger ads now, Facebook Story ads, Audience Networks, all that kind of stuff. They’re really just trying to find ways to maximize any channel they possibly can to create more advertising real estate.
The more people that are advertising, the less real estate, the more prices go up. So of course that means when you’re selling your products, you’re not going to get the crazy returns to cold traffic like you used to, and so it makes it a lot harder to just scale regular drop-ship businesses that rely solely on front-end purchases.
Now also aside from that, everybody and their mother wants to launch a drop-shipping store, so there’s copycats left and right, and a lot of people just do this the sloppiest way possible, and you end up with a sea of just garbage that people start to identify quickly as garbage, so if they see your product, they’re clearly used to just seeing this kind of drop-shipping thing, and they’re gonna scroll right past it without even thinking.
Then on top of that, we also have factors like Amazon.
Now personally, I’ve never been a fan of drop-shipping because of the whole customer experience thing. If I’m going to buy something for $40 that was a cool nicknack, and it’s gonna take a month to get here, you bet your ass I’m gonna hard chargeback that, and then I’m gonna go on AliExpress, find it myself, and buy it for $1.
Now, I clearly know what’s going on, so I would do that, a lot of other people don’t in this world, but what people do know is that, thanks to Amazon, you should be getting your packages in the next couple days.
Now I’m a huge proponent of Amazon. Since college, I’ve been running an Amazon store on and off on the side that does anywhere from 6 to 8K a month. I love it because it’s hands off, I don’t have to worry about it, the customers are always happy because it’s all Amazon Prime, so it gets there in two days.
But now we live in a world where we have instant gratification from Instagram likes, and we have almost instant two-day delivery from Amazon, until they get their drones rolling, then it’s gonna be like 10 minute deliveries.
The point is that we have a lot of new factors that make it so that drop-shipping isn’t nearly as profitable as it used to be, and that’s something that everybody needs to understand if they’re wanting to get into this space.
Now the other factor here, also, is that Facebook will shut your store down, they’ll shut your ad account down, shut down your whole Business Manager, if you rack up a ton of negative feedback saying that the products were never delivered.
We have a guy that’s in our Mastermind group that’s doing 10, 20K a day on his e-commerce, or he was, and he was having products drop-shipped to like, South America, which took a very long time to get there, so all of those customers were reporting the Facebook page for not delivering the product fast enough, and his entire Business Manager got shut down.
This is a new factor that wasn’t around when people started preaching drop-shipping and really making a ton of money off of it, is now if you have too much negative feedback when it comes to shipping time, Facebook will shut you down.
There’s really no way to, I mean I guess you can work around this and do like some shady stuff and try to launch some like weird accounts and everything, and try to game the system, but the only way to really fix this is by shipping things out directly.
We’re gonna talk about that in a second, but that would be sourcing your own products.
Now, what we’re really talking about here, is the power of ClickFunnels and ascension funnels with your Shopify in general, and with of course your drop-shipping stuff.
So you guys know that we are big proponents of ascension funnels, meaning that someone’s gonna come in, they’re gonna buy a $30 offer, and then it’s like, oh, thanks for buying, you also want to buy this $50 thing?
Nope, okay, well here’s that same $50 thing for $20. You don’t want that, okay, well here’s the next one. And it’s an ascension funnel because you’re trying to sell them more things, trying to ascend them into more offers.
This is a great way to increase your AOV on the front-end, and it’s also a great way to just sell more products. With supplements, the best way to continue selling supplements through ascension funnels, is sell them the same thing.
You buy a bottle of one, and then, oh, you want another bottle for a discount? What about three, what about five? That works all the time, I’ve done it myself.
I actually am a big fan of good ascension funnels, and if it makes sense I will buy the thing. But that is a power of ascension funnels.
So you can take these bracelets, and you can sell them for $5, and then it’s like, hey, thanks for getting the bracelets, do you want five more? Of course I do, I know I’m gonna break ’em and I’m gonna lose ’em, yeah I’ll buy five more of those.
Then the next ascension on that is, oh, what about some dope shades? I would love some dope shades to go with my bracelets. That is how ascension funnels work.
So if you put this into your Shopify store and into your sequence, this is a really great way to just make good money on the front-end, and then of course this increases your AOV that allows you to spend more on ads and acquire more customers.
Now our favorite way to create ascension funnels is of course through ClickFunnels, because they’re the easiest way to really do that, and you can have your standalone Shopify site, and then just have ClickFunnels pages that are the ascension funnels, so you will always have a Shopify site, but you can also run traffic to these funnels.
We’re doing that right now with our supplement brands that we have everything on Shopify, either just the order form or the regular order page, or a Zipify page, which is like a baby funnel, but Zipify doesn’t really give you a lot of upsells to really play with.
Now ultimately you can use CardHook, and I think it might be pretty pricey monthly, but as far as I know that is the best one to use on Shopify to create a kind of intuitive sales page, upsell sequence, ascension funnel using just Shopify, but I would recommend ClickFunnels for this.
So we’re taking our Shopify products, it doesn’t matter if you’re drop-shipping or just regular Shopify products, you’re putting them into ClickFunnels and creating an ascension funnel, in the attempts to sell people more product as soon as they come in, because we want to capitalize on the buyer’s frenzy that people get in when you get the endorphin rush and you’re like, hell yeah, I’ll buy some more of those things.
We’re trying to capitalize on that using ascension funnels. Now how does this tie into drop-shipping and all that fun stuff?
Well, if you really want to be good at drop-shipping and you really want to make some money and create a long term business and a brand, all you’re really doing with your drop-shipping is you’re proving out a point.
If you can prove your hypothesis and find a product that sells well, then you take that product, you throw it into ClickFunnels and you order inventory of that product so you can ship it out yourself. So you can get the products to customers quickly, you don’t have to worry about Facebook shutting you down because things are taking too long, and ultimately you should be making more money by working out some agreement with the company or the producer that you’re sourcing your products from.
For instance, right before recording this video I just ordered some new inventory from AliExpress and I ended up paying, I think, 800 or so with shipping for 400 products. Now I’m going to sell each of those products for 30-plus dollars, and so I’m going to gross 10, 12K from those items and I’m gonna end up netting probably like six or so, because of Amazon’s fees and all that stuff.
But you see the point here, that I’m getting the products significantly cheaper through AliExpress because I’m buying them directly from the manufacturer, or AliExpress is pretty much going to be the middleman.
I’m still pretty much going to the source when I’m getting these things. So if you’re drop-shipping something, let’s say you’re getting the product for, we’ll say it’s an expensive one, we’ll say $5, and then you’re selling it for $35, well you can probably get that same thing for $2 if you bought it in quantity.
And that’s the benefit to this, on top of everything else, you’re able to send them to the people faster, you’re able to make more money, and you’re able to really keep this train going.
Now of course, at the same time, you should always be building a brand around this stuff, and that allows you to make more products. Now I’ve been super sloppy with my Amazon store, and I just looked last night on AliExpress, and I found at least like five or six other products that I could be selling.
That’s a couple of grand a month right there added on to the store. Now the important thing is all the products that I found are very congruent with my brand. I can get my logo printed on all of them, like I plan to do, and I’m able to grow the brand overall.
So instead of just doing one-off products, which definitely works, if you go the branding route, which I feel that you should, but you can also make a lot of money not going the branding route, you can create the brand around these products, and that helps you with your ascension funnel, and then of course with your retargeting, with your email list, which you have to have an email list in back-end if you want to survive.
You can keep selling these people products that are similar to what they bought that are around the same kind of brand.
Actually, let me grab you a product and show you real quick. Now, perfect example, I got this glove to lift weights and stuff off Amazon, and it was, I wanna say like 37 bucks.
I got it and it arrived and I’m like, damn, this is awesome, I bet I could find this on AliExpress. I did, it took about five minutes, and I found the exact supplier for this glove, or probably, you know, one of a million of them.
But the cost of this was actually $3, and I just bought it for $37, and I didn’t even worry about it. The product arrived, I loved it, I was happy. But, you see the power here.
Now, on top of that, if I were doing a fitness brand, which I already considered doing this last year, I spent like two grand on ordering samples and everything, and then ended up just not doing anything with it, so I have a bunch of samples for no reason.
But, if I were to build out the workout brand, then I could upsell them into some nice leg sleeves that I wear when I’m doing my box jumps, or maybe this massager guy for massaging all those sore muscles you get from working out.
The point is, I would create a fitness brand and I would then be able to sell people more products that are more congruent with what the thing is, because if they bought any of these things, they’re probably gonna want to use the other stuff, and I have more options to show them and sell them, and that makes it a lot easier to fully build and grow a store that has a brand instead of doing the one-off kind of thing.
Once again, the one-off thing works, you just have to have very thick skin and be ready to turn on a dime when things stop working. That is one of the protective features about having a brand, is that when you build brands you can build them to last for years, and you can also sell them off at some point, where if you’re doing the one-off product approach it can be harder to sell a brand.
Now with this stuff, if I decided to launch this thing and get it to be a six-figure store, I could easily just go and flip this to somebody and sell the whole brand and the whole store because it is an entire entity, and not just some one-off stuff.
And of course, like I was saying, it’s more of a protective feature because, if you have some one-off products that are selling really well and they stop, you have to start going right now to find that next product to keep things going, where if you have a brand you can try some other products that you’re already selling that are congruent with the brand, and try to make those carry the weight that you were having carried from the initial products that were selling well.
So guys, that is it. I feel like I kinda just went on a crazy tangent for a while, but the whole premise of this is you should definitely be using ascension funnels to increase your AOV and sell more products on the front-end.
If you are drop-shipping, you should definitely look into finding your best products, creating a brand around it, and then actually sourcing the products and then shipping them out to people directly, or having a warehouse do it for you.
Then, on top of that, make sure that you are using your email list and you have some back-end revenue going, because no businesses really just survive on the front-end.
And I think I’ve said this before in other videos, if anyone is making crazy money on the front-end, it’s not going to last very long. You need to actually build out a structure and a full business and all that kind of stuff.
Coincidentally, that is all the stuff that we teach in the academy. Which I have a convenient link for below! Click on it.. and check out everything we teach you guys throughout this course. It comes with weekly coaching calls from me or someone on our team. We really do guide you through this in a such and easy way!
SVG Academy: http://bit.ly/30k-to-300k