This is the third part of the three-part series of posts that I planned to write on dropshipping. The first post explained what dropshipping is. Second part highlighted our scaling strategies, and the third part explains the final trick that boosted our sales by 837% as we handled over 10,000 orders everyday.
By mid 2017, we were successfully running 3 e-commerce stores. I was extremely busy running day to day ad-ops for our company. Fulfillment had been automated completely. But Saad, my co-founder, still had a few things outside of our core business ops that kept him very busy.
We were doing nearly 2000 sales a day, and posting growth month over month. I was happy with the progress but also very busy launching new ad-sets and optimizing existing ones. We were constantly trying to scale globally. We were extremely proud that we had a major portion of sales coming in from Brazil, Mexico, Portugal and Australia. Combined, this was bigger than US.
Meanwhile, Saad tried to crack an altogether different code. If you remember, I mentioned in my last post the #1 trick to scale a dropshipping business. I said I can’t stress enough it’s importance. That is exactly what Saad was busy with. He hired a team of developers in Ukraine and we ended up with what we internally call hypersonic. A product spy tool, only to be used by us that gained us leverage against every other dropshippper. We scrapped every single dropshipping store in the world, and found winners in real-time.
This helped us find 3 more winning products within 4 weeks, allowing us to eventually scale 8x. At the moment, we only privately use this tool because of the kind of leverage it provides us against others and haven’t decided to offer this as a service. However, I highly recommend serious 7 and 8 figure dropshippers to develop something like this internally to ace this game.
This is the second post of the three-part series that I’m publishing on dropshipping to help create awareness of what it is, and scaling strategies that we use in our company to rocket-fuel growth. This post is not for beginners and will make more sense if you have already started your dropshipping business or have some sort of digital marketing experience.
Since 2016, our company has been running several dropshipping stores in 3 different niches. Most of the growth comes from paid-advertising with majority budget spent on Facebook, Instagram and influencer marketing (also on FB & IG). We also spend about 20% of our ad budget on Pinterest and Google Ads. There is no reason why we spend less on the latter, we’re just more comfortable advertising on Facebook. It’s possible other dropshippers find more success on Google. So by all means I recommend that you explore it. Below I’ll list the top strategies we use in our company for growth.
#1 Product Hunting
I can’t stress enough the importance of product in your dropshipping business. Without a good product and creative, your chances of winning would seriously suffer no matter how good your ads are. I recommend that you spy other stores, AliExpress, Wish, Amazon and everything else that you can to get access to products before others. Most dropshippers use some kind of product spy tool which is often a paid subscription service. You can also search for products on social media platforms where they are being advertised.
#2 Influencer Marketing
Influencer marketing is often always an easier method to find success with dropshipping. To some people it looks more complicated because it involves reaching out to many people, testing their audience and sometimes losing money to less-engaging audience. You may also end up finding accounts with large amount of bot followers, causing total capital loss for the campaign.
The reason why I say it is the easier option is because once you make connection with the right influencers, this is basically an on-going, long-term money making opportunity. You can keep trying new products in the same niche with the same influencer and you can continue to get sales.
Influencer marketing is often also lesser competitive compared to the platform ads where everyone is competing, whether in a dropshipping business or not. This also means that once you have right influencers, you’re likely to have a much higher profit margin compared to running ads on any platform.
#3 Pixel Training & PPE Ads
Without pixels installed on your store from Facebook, Google (and any other platform you choose to advertise on), you’re never going to be able to run successful ads. In short, pixel is a small snippet of code provided by ad platforms that you can install on your stores. Once installed, the pixel establishes a connection between the store and the platform. For example, FB pixel will exchange data between the actions committed on your store and FB ad platform.
The pixel fires whenever a user initiates any action on your store whether it is view content, add to cart, initiate checkout or purchase etc. All user behavior and action data is stored in your pixel. As long as the pixel keeps getting fired, it continues to create an audience profile for you. The more sales you have, the more easily the pixel can help you find better audience. Without pixel training, your campaign is unlikely to do well for you.
First strategy that we commonly use to train pixel is running influencer marketing campaign to get quick, cheap sales. These sales help pixel understand our audience.
The second strategy that we use is running PPE (Page Post Engagement or simply Engagement ads). Engagement ads are cheaper than conversion ads. You get quick social proof, you get quicker, cheaper clicks and this can be a nice way to train and prepare your pixel for your actual campaign.
#4 Horizontal Scaling
After generating a few sales from influencer marketing and PPE ads, we start running website conversion ads. We create a large number of ad sets with a unique targeting angle for each ad set.We generally run these ad-sets on a small budget. This allows us to scale our campaign through many targeting angles. We also end up testing many targeting options. Setting a small budget for each ad set means you’re not trying to win all bids and so you don’t over-spend. Instead you scale horizontally, running many $20-$50 ad-sets. This way you can continue to lose bids (save money) as well as spend more budget (scale) your ad campaign.
#5 Vertical Scaling (with Manual Bids)
Once we have found our top winning ad-sets we also want to scale them vertically. What that means is we ideally want to increase budget for these ad sets. There are generally 2 methods of how this can be done.
Using the first method, you can increase budget for winning ad sets by 10-20% every 2-3 days. This is obviously a slow process and can sometimes not work as expected because ad-sets try to re-optimize every-time they are updated.
The second method is scaling through manual bids. This means that the budget can be exponentially and immediately increased. But we put a cap on what we’re willing to pay for each sale. If the ad-set fails to get a sale, it stops spending. We have had success running $5000/day ad-sets using this method. So this is a fool-proof method to scale vertically. You win, or you don’t spend.
#6 Lookalike Ads
Lookalike is a magical AI technology by Facebook which allows you to run ads without any targeting options. Once you have generated more than 100 sales from a single country, you are eligible to create lookalike audience. This is the quickest, dumbest, simplest way of scaling your ads by letting Facebook do your job.
The simplest explanation of retargeting is not leaving money on the table. A lot of clicks to your website are going to result in missed sales, abandoned carts or simply window shopping. You can reach these high-intent buyers again. Just run retargeting ads, emails & SMS to convert these missed leads for almost negligible price.
A lot of this information is going to sound tough especially if you’re a first time advertiser. But who said running a 7-figure business was going to be easy. The good news is, you can simply start with influencer marketing and learn your way up. The better news is, this is a very low cost business to begin with. You can start with as little as $2000 and make your way up to 7-figure. And the best news is, we have seen it happen first-hand.
I was asked by one of the readers of this blog to write in detail about our dropshipping business. This is the first part of the three-part series of posts that I plan to write on dropshipping. Since this isn’t a how-to blog, I can’t get into too many specifics or step by step guides which there are many on the internet. A simple Google search will lead you to many tutorials. However, I’ll try my best to give you the birds-eye view of what dropshipping is, it’s several advantages, and the top strategies we use to scale this business.
Dropshipping is only a fulfillment method but has many advantages over standard fulfillment. In short, it’s a retail business where you keep no inventory. Instead, when you receive an order, you have your wholesaler or manufacturer ship directly to your customers. Today, over 20% of all e-commerce fulfillment happens via dropshipping making it a $700 billion industry. Below I’ll elaborate the several advantages of running an e-commerce business with dropshipping fulfillment.
Since a 3rd-party ships orders on your behalf, you never have to maintain inventory. This saves warehouse costs, dead-inventory risks, and you only buy what you’ve already sold.
No Stock Investment
This is a very obvious advantage of running a dropshipping business. Since you only buy what you’ve already sold, it means you never have to invest in inventory or stock. This saves serious capital as most businesses end up spending a large percentage of their entire investment only on product, leaving very little to nothing for marketing. As a marketer, I believe this is missing out on everything.
The founder of the 2nd largest e-commerce store Jeff Bezos started Amazon by selling only books. Although Amazon is an “everything store” today, it was started with books for only 1 reason: the large number of titles available. He said
Books were great as the first best because books are incredibly unusual in one respect, that is that there are more items in the book category than there are items in any other category by far.
My takeaway from this is that he focused on listing large number of titles from single category. With Dropshipping you can do that, and more. You can list virtually unlimited items from any amount of categories you like. Essentially, you only need product photos.
Almost 90% of your total capital can go into marketing since you don’t have to invest in product giving you an opportunity to run your marketing campaign on steroids. As you get a sale, you can use that money to buy the product.
Business Structure & Taxes
Your business can be structured in a way where you may not be paying sales taxes on your orders, and the burden may also not be passed on to your customers. While in some cases, customers may have to pay customs duties as packages arrive from overseas, generally that will not happen on smaller cheaper products that are invoiced by wholesalers at the wholesale price. Please do your own research on taxes and structure as different rules will apply with different countries involved in the chain.
As with any business strategy, there are obvious disadvantages too. The single biggest disadvantage of dropshipping is long-shipping times, as items often ship from different countries, and primarily from China. But this varies on case to case basis. Once dropshippers figure out their best-sellers, they start to keep inventory and stock at 3rd-party-logistics (3PL) in the destination country. The other disadvantage, also linked to the first one, is customer experience. The delayed shipping times can result in bad customer experience. However, experienced dropshippers can address this issue too using 3PL, providing real-time email / phone support, and by being up-front about their shipping times.
In the second part of the series, I’ll talk about the strategies we use to scale this super lucrative business.
Money is a really strange concept. A lot of people do not understand it very well. I’m actually willing to bet that there are more people in the world who don’t understand money than those who do. Unfortunately, they don’t teach you money in schools, certainly not the way I want to talk about it.
I often encourage everyone in the developing and emerging markets to work on the internet, reach a global market and earn a foreign exchange. I go on to the point where I believe and preach that it’s often even better for you to be positioned in an emerging market to unleash and hack the full power of money. Here’s what I mean.
It is ten times easier to live on $3000 in Pakistan, Indonesia, Thailand, Vietnam, Turkey, Bulgaria, and so on than it is in US, Canada, Australia etc. It all comes down to purchasing power in the end. With internet, for the first time in the history every individual has been given an opportunity to hack money in a way that you can absolutely earn an equivalent of what you can earn in US, without physically being in US. The equivalent might be equal in the number, but it’s even more valuable. Which brings me to my point, that money needs to be measured in the purchasing power terms.
Some of you might argue that the quality of life is not good in these emerging countries. I’m again willing to bet that there are dozens of countries with better quality of life than in US, that are 10 times cheaper, with lesser taxes, often complete tax waivers on exports and foreign exchange, and allow you to earn (online) an equivalent of what you’d make physically in US.
Great entrepreneurs not only work on yielding high gross revenues, but also on cutting expenses. For bootstrappers, reduction in expenses is the survival game. So use this opportunity to set up your company anywhere in the world with the right infrastructure and ecosystem while positioning yourself anywhere else in the world where you have the best and most affordable lifestyle and have a distributed team to run your business.
In the end it’s your choice whether you want to to live like a millionaire, or be a millionaire, or both. I’d go for both.
In 2013, I and Saad were invited to the bay area by a large seed accelerator. The business was doing great. We were posting not only insane revenues, but equally great profits. We were also posting decent growth month over month. In a way, we didn’t need the seed funding. But we did need the acceleration. And our goal was to get the right mentorship to grow our business beyond what we were doing already.
But we were rejected. They said no and we didn’t understand why. This is the email they sent us
I’m sorry to say we decided not to fund you guys. We were very impressed by your numbers so far. But what deterred us was that this is basically an arbitrage business. You don’t have users in the sense that e.g. Dropbox has, and thus no lock-in with them. Which means you make money for a while, perhaps a lot of money for a long while, but then conditions change and your revenues dry up.
Over the next few years, it started to make more sense to me. As the business did go down, the revenues actually did dry up, and I tried to see the things that they had said.
They were right and I was wrong and unless I acknowledge that, I can not be right in the future. I learnt a great deal from this experience. I understood the importance of having a lock-in with users as opposed to simply having users. With this knowledge, I can finally build businesses that will last longer.
In 2010, a blog post was published on one of Socialoholic’scontent websites titled top intelligence agencies in the world. The goal of the blog post was to initiate a marketing effort to honor the sacrifices made by the agency by trying to brand them as the #1 intelligence agency in the world. We genuinely believe that the rankings were done professionally with proper journalistic values after collecting & analyzing data, reading the literature & conducting a quantitative research.
The content was then pushed on the social news websites by our team such as Digg & StumbleUpon. We performed Guerrilla Marketing tactics to create a unique, thought-provoking buzz. Since this was in the early days of the social networks with Facebook just emerging, and Whatsapp almost non existent, we honestly didn’t expect it spread like wild fire, but we are insanely proud that it did.
It was picked up by all local news channels, print media such as The News, Express Tribune, international media (The Atlantic). There were hour-long shows hosted on local entertainment channels, including on Aag by Geo. It was picked up by ex-DG ISI, Lt. Gen Asad Durrani who took the message further, and also published it in a book The Spy Chronicles that he co-authored which was published in 2018.
On-site, the article was read over 1,234,475 times while the major impact happened off-site which we can not measure accurately. Our estimates suggest that the message was heard by over 85 million people. We have made these estimations by only including data from the known sources where we know it was published/broadcasted and by taking in account their estimated readership and audience at the time it was published or broadcasted. This doesn’t take in account, the discussions done in independent forums which we estimate further add about 10 million readers.
We published the content using a generic “Smashing Lists” website. The content was not published under a pseudonym but by the original name of the writer. The theme, over-all design, domain name didn’t imitate any popular publication. We created a genuine experience and maintained distance with fake-news and InfoWar tactics.
Just 2 days ago, Vice Media unearthed a report of a shadowy Indian company that used 265 fake websites operated in 65 countries that mimicked news outlets by using similar names of popular publications like Times of Los Angeles, New York Morning Telegraph & Times of Pyongyang etc. The goal of these efforts is to confuse the user into thinking that the news that he’s reading is being published by a genuine trusted news agency. As per Vice, the larger goal of the campaign was to influence European lawmakers in favor of Indian interests in Kashmir.
We are proud of our efforts for publishing professionally researched content, using authentic distribution channels, and creating an over-all safe and genuine experience for the readers. This is the least we can do in the times when others resort to fake news to set the narrative for the readers.
Disclaimer: We are not affiliated with any organization or agency. This was an independent marketing effort for which we independently generated advertising revenue. We thank the writer of the post for her efforts.
Where does Bitcoin get its value from? It is an ever confusing question with no single correct answer because Bitcoin means different things to different people. Some say the scarce fixed supply which makes it rather rare to own is what gives it value. Some say the value comes from the event of halving of mining reward every 4 years making it even harder to obtain. And then there is bitcoin mining cost incurred due to computational power and electricity bills to keep the bitcoin network secure, which sets the floor selling price for the trading market. The average cost to mine 1 bitcoin at the time of this writing is $5,200. I think the value comes from all of above, and more.
In 2013, we had a large scale influencer marketing business running. We worked with 300 influencers and used their social media’s influence to drive traffic to content websites and e-commerce stores. The problem was it was difficult to run this business from Pakistan. Influencers were spread in different parts of the world. We had to make weekly payments (300 x 4 = 1200 transactions a month) to stay competitive in business and the banking infrastructure in Pakistan wasn’t just easy to run this kind of business at least in an automated manner.
While speaking of these issues at a conference in Mountain View, CA , I got advised by someone who had come from Germany to attend the conference. He asked me why do I not use Bitcoin to solve this payment crisis. That was the first time I heard of Bitcoin and had no clue what it meant. After looking it up on Google, I was blown away by the value this new invention offered.
Although we never used Bitcoin to solve that payment crisis, it made me believe that the value of Bitcoin also comes from utility like the one mentioned above. It solves a problem and that’s also Bitcoin’s value proposition.
Will Bitcoin trade above $100,000? I think so. Can I be wrong about this? Absolutely. I think there is a higher chance of me being wrong than right. Despite that, it still makes it an interesting risk/reward play.
Disclaimer: This is not an investment advice and should not be taken as one. I accept no responsibility for any loss, damage, cost or expense incurred by you as a result of any error, omission or misrepresentation on this site.
Starting 2011, our publishing company Socialoholic launched a large number of content websites mainly concerning humor and entertainment verticals. Most websites were social media driven with traffic from Digg, StumbleUpon, Reddit, Facebook & Pinterest.
A lot of our websites eventually became throwaway domains as the social media hype died down on them. We pulled off the plug and stopped editorial operations. The websites had served their purpose. We had already generated revenue and we weren’t thinking anything long term with them.
As we had previously monetized all of these websites, they had one common feature: all our throwaway domains were approved by some of the top ad networks, DSPs and RTB platforms and there was a buyer looking just for that.
The buyer was in the content arbitrage business which basically means that his core business was acquiring traffic on his content websites by the means of advertising. He would then display ads on his content websites in order to earn revenue. He was spending hundreds of thousands of dollars a day in traffic acquisition and needed instant access to domains with top quality advertisers. As part of the agreement, no other assets including content, ad accounts or anything other than the domain was sold.
This was a perfect opportunity to sell something to someone at any price we found reasonable and we seized it. A lot of success eventually comes from being in the right network and knowing the right people at the right time. It is how we accidentally got into selling throwaway domains, and made $15,000 per piece.
We are under an NDA with the buyer and can neither disclose domain names nor his identity.
As part of angel investing, I get to meet many interesting entrepreneurs. My general investment mantra is that I need to understand the line of work, I need to have some sort of experience in it and the founders that I’m investing in offer talent which is miles ahead of our own team, of course.
If they have shown the ability to execute that business before and failed for whatever circumstances, that’s even better. I try to help them avoid the circumstances and let them execute the business again. I have had some sort of success with this strategy so far and I have been able to meet my investment goals with it.
In addition, one important quality that all founders should have is integrity. Lack of integrity, even if only outside the work, is a stage set for disaster. As a general rule, I would avoid investment in a team with lack of integrity even if they fit all other investing criteria making integrity a more attractive attribute over intellect.
I have met few people who are financially literate and do not use spreadsheets frequently both in their personal and professional lives. I love spreadsheets and use them to track my day to day expenses, taxes, donations and just about everything.
Just as you can’t run a business without tracking revenue, costs and making projections, I feel it’s reckless not to do the same in your personal life. Because in the end the fundamentals of money are the same. If the expense is higher than the revenue, whether its business or your personal life, the result will be the same.
I recommend everyone to create spreadsheets for their household expenses. This will help you project what your annual spending is going to be like. Once you have your annual expense projection, you can set your income goals accordingly. You can plan savings, project wealth generation and eventually plan retirement. It all starts with a spreadsheet.
Financial freedom is often misunderstood as people equate it to really high salaries. Most middle class people who start working by 25 can retire by the latest at 40. I’m not kidding. It is the only truth I know, and without any generalization. For now, how about you simply track and ensure that you’re earning more and spending less and once you’ve done that, you can head over to MMM to learn how the rest works.