Finding Opportunities in a Recession

As an entrepreneur, it’s very important to stay calm even when the world is breaking apart. Most of the time, when there is a world changing event like COVID-19, people’s consumption behavior change. They buy different things compared with their previous spending habits.

While doing product research for our E-Commerce holding company, I got to know that Hair Clippers was one of the best selling products while China was on lockdown because of COVID-19. Who would’ve thought that people would buy Hair Clippers when hundreds are dying because of an extremely deadly virus.

But when barbershops are closed, you still gotta cut yours and your children’s hair. 3 of the fastest growing Chinese companies from January to March are companies which are either manufacturing Hair Clippers or are leading retailers.

Another great example of this trend is blankets, hand warmers and mini electric heaters. Due to control measures of COVID-19, apartment buildings turn off heating and you have to open windows for fresh air. However, temperature in many parts of the world is still too cold. China’s leading e-commerce marketplace Pinduoduo reported that sales of blankets and hard warmers saw 165% increase during the lockdown.

When you find calm in chaos, you can find opportunities like these and benefit from them. Insights like these coupled with lethal digital marketing can create new companies which capitalize on new purchasing behaviors.

This is a guest post by Socialoholic’s co-founder @SaadBassi

Not Killing A Dying Product In E-Commerce

When scaling a dropshipping Facebook campaign, you will feel at some point that despite all your optimizations, your cost per purchase is now more than what you can afford to pay to run your ads profitably.

Most people at this point believe that the product has saturated. That the product has already been sold, profitably, to most potential buyers and reaching out more potential buyers will not happen profitably.

I believe that more than product saturation, the cause of higher CPP and decline in sales is ad fatigue. Hence, my first course of action in this situation is to create and try more creatives.

Before the buyer has received the product, the product is only as good as it’s creative. Hence changing creative can reduce some of the ad fatigue and may revive the life of your product. It’s not often product saturation, it’s the creative saturation.

The second course of section, after the first one stops working, is to scale down the campaigns and ad-sets. You might want to see what will happen if you consumed lesser budget, and hence lost more bids. By losing more bids, you can have a winning campaign.

Once the scale down stops working too, and you’re sure it’s time to kill your dying product, you can consider moving to manual bids with accelerated delivery.

You can set the maximum amount you’re willing to pay per purchase. If Facebook is unable to get you a sale under that price, no budget will be spent. By enabling accelerated delivery, you’re asking Facebook to spend your budget ASAP as long as it can do so by maintaining the manual bid. This ensures that as soon as there are cheap bids available in the auction, you want to spend all your budget to get them.

If you’re unable to spend any budget at all on manual bids either, you might consider killing your dying product.

I’m interested to know if there are other, smarter ways to delay the death of a dying product. Please let me know in the comments.

How Our Dropshipping Business Grew by 837% in 4 Weeks

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.

7 Scaling Tricks To Run 7-Figure Dropshipping Business

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.

#7 Retargeting

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.

Conclusion

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.

In the third part, I’ll reveal the final trick we used to grow our sales by 837%