01 Apr April 5, 2019 – DropShip Lifestyle Anton Kraly, Very Curious Alex Berg and Exit Planning Ashley Micciche
We go for the long tail keywords. So we get
buyers very late in the buying cycle.
Anton Kraly is the founder and CEO of Drop Ship Lifestyle & eCommerce Lifestyle. He focuses on empowering people through eCommerce and better marketing. Anton and his team are constantly researching and testing to discover what works best in digital marketing and eCommerce. Anton’s story was featured in Forbes, he’s been on numerous business podcasts, and he holds annual retreats for Drop Ship Lifestyle and hosts live events for marketers and business owners. Since Anton was young, he wanted to start his own business. After attending college, he explored franchised gyms but decided to build a business that delivered cookies in New York. He expanded his cookie business, but grew tired of all the problems with a physical business. After reading Tim Ferriss’s “4-Hour Work Week,” he decided to go into eCommerce and discovered drop shipping. From there, he built his first 7-figure eCommerce store. With his success in eCommerce, he was asked by friends and family how he did it. So he started Drop Ship Lifestyle, and after 4 years, he has taught over 5,000 students how to build their own drop shipping stores.
Alex Berg – Curiosity Guru, Driving Revenue Growth Through Insights, Marketing Optimization and Sales Enablement
Failure is only bad when you don’t learn from it. You need to create
an organization that makes that obvious.
Alex Berg has held high level positions at Xerox and FranklinCovey. With over 30 years of sales leadership and direct sales experience, Alex is consistently recognized for navigating complex business scenarios, providing innovative, high quality advice, and for creating a positive learning environment. With degrees in Finance and Psychology, Alex operates at the intersection of human behavior and financialperformance. He created Curiosity Quotient (CQ) Selling, which is based on the belief that a healthy sense of curiosity is the necessary starting point for building relationships and closing more business. Raw curiosity is genetic – you are born with your CQ. However, just as you can strengthen your muscles with exercise, you can enhance your CQ through training and deliberate practice. CQS is dedicated to helping you assess and develop yours and your organization’s CQ to help your clients get what they want so that you can get what you want.
Ashley Micciche – Business Exit Planner, Podcaster, Award-winning Speaker and CEO at True North Retirement Advisors
It is a robust market to sell a small business.
Ashley Micciche is CEO of True North Retirement Advisors. She teaches the 3 must-do steps that are universal to all business exits. Ashley specializes in qualified retirement plans like 401(k)s, Profit Sharing Plans, and Cash Balance Plans, and has earned both the Chartered Retirement Planning Counselor® and the Qualified Plan Financial Consultant® designations. Ashley works with her business owner clients to help build and maintain successful retirement plans that recruit, reward, and retain good employees while controlling costs. Most importantly, her goal is to help maximize the number of employees who retire with adequate savings. In addition to helping our business owner clients successfully exit their business and transition into retirement with financial security, Ashley is a dynamic and engaging speaker. A Toastmaster for over a decade, she has won numerous speaking awards and contests including: 2-time Toastmasters Humorous Speech Contest Winner, 2-time Toastmasters International Speech Contest Winner, Runner-up at the 2016 Toastmasters International Speech Contest (Division level). Ashley has also been featured in the Portland Business Journal, Investopedia, and many other publications.
Highlights from Anton’s Interview
First, you sell a product, then somebody else fulfills the order. Somebody goes to your website and adds something to their shopping cart. They check out, you get the money, and somebody else will ship the item to your customer for you. From a 30,000 foot view, that’s how the model works.
When I first started, I was selling cookies. I was selling them from grocery store to grocery store, with a delivery route for a bakery I had in Brooklyn, New York.
After I read that book, before the end of the work week, I thought I’d try to build an online store. This was back in 2007. I went ahead and set one up; I spent a weekend locked in a room, figuring it out and getting things to work. I got it to work, and started making money.
Then I started to bring in more expensive products from China. It was things like furniture and home goods, but I was importing them at that time. I was bringing containers from China to Long Beach, California, then shipping them to my customers across the US.
I did that for a couple years, and then I started to have different manufacturers reach out to me through my websites. They said, “We see you sell dining room tables. We have dining room tables stocked in our warehouses in the States. You can sell them, and if you get sales, we’ll ship them to your customers for you.”
When I first thought about the possibilities here, I was instantly attracted to it. It meant instead of having to spend tens of thousands of dollars, wait 40 days for a container to show up, ship it, and deal with returns myself–instead of being that logistics person–as a business owner, I became the marketer, the customer support side of it.
My job was now to get people to my website, get them to convert, get sales, and then work with these partners who shipped items directly to my customers. They would take care of tracking numbers. If anyone wanted to return anything, it would go back to their warehouse instead of mine.
It basically removed part of the business from what I did, which allowed me to add in more products to sell more to scale. It allowed me to focus on what I’m good at, and what I like doing, rather than dealing with inventory.
It really doesn’t cost much; that’s a good thing. You can start one of these businesses for relatively low amounts of money. The disadvantage is you’re doing something that other people can also do, which means there is competition. It’s not like you have your own product that nobody else has, which means you need to figure out ways to stand out with your website, you need to find ways to bring buyers in that your competitors aren’t doing. There’s definitely more competition.
Another disadvantage, when you compare it to the model of importing, is that the profit margins are smaller. If you’re bringing in products yourself, you’re rewarded with profit margins that are about 50%. With drop shipping, we try to maintain 25 to 35% margin. So it’s about half the profit. But again, the benefit is that whole side of the business of laying out cash and having a warehouse is gone.
And compared to how it used to be, building websites is so much easier. We use a website builder called Shopify; they’re the biggest ecommerce platform in the world now. It’s something that anybody can learn how to use, and I think we pay $29 a month. That’s something that allows us to build our website and control the back end. It allows us to upload products, accept orders, and even accept payments via credit card, debit card, PayPal, and Google payments. It makes the money side easy, which allows us to do all the design. Again, that’s $29 a month.
Now the other expense we have as store owners is to get the traffic to our site. To do that, it’s a matter of figuring out Google advertising and Facebook advertising.
Step one is to build the store. So go choose whatever you want to call it, you know, Kim’s Candles, get the domain set up. A basic store should take you no more than maybe 10 hours or so. And then you go on Google and type in whatever type of candles you want to sell. For high end candles, you would open up every page you see on the first page results of Google and go through those web pages. What you’re trying to do is click on their About Us pages, their Contact Us pages, and you’re trying to find ones that don’t have physical locations. Try to find who’s selling these things that doesn’t say, “Visit our store here!” or, “We have a warehouse here.” Those are online only stores. What I would recommend you do is reach out to them and say, “Hey, this is Jim calling from Jim’s candles. We recently came across your website. It looks like you have great product; we’re sure our audience would love it. We would love to work with you, where we become retailers for your brand. Is there any way that we could sell your products on our site?”
What I recommend you do when you first build that site is do a search on Google for stock images. You can just click a button that searches for royalty free images. Then look for candles. Find some stock photos, and put them on your site. You’re not trying to get traffic and sales at that point, but you’re setting that up so that when you find the companies you want to work with, and you reach out to them, you can say, “Hey, go to this website. You can see what our site looks like, and what your products would look like on our site.”
What suppliers, especially the good ones, don’t like is people reaching out to them and saying, “Hey, this is Anton. I’m thinking of selling your candles, can you send me a price list?” But when they ask where he’s calling from, they find Anton doesn’t have a website, but is only thinking about building one. They’re not going to take that conversation or that relationship seriously. That’s why we build the site first.
When people go to your website, and they check out that money gets deposited in your account, the way it works with most suppliers is they’ll either take a credit card or a debit card from you on file. And they’ll know that when orders get placed, they charge it and they ship the item out. And it’s just almost automatic, you know, they send you your invoice. But you don’t typically have to go to them, then order. They just go ahead and charge you and ship it, and charge you and ship it, and just keep doing that. That’s high end candles. I don’t know if that’s even a thing.
But for the average order value we want $1,000 or more per transaction. So we’re not selling volume like that. But we’re selling things like different home goods, like office furniture, things that people will spend $1,000, $1,500 for. That way, every time we get a sale, it’s actually profitable.
We could talk about paid traffic if you want. We do like to spend money on ads, and to spend money on ads on a product that sells for 10 or 20 bucks, like how I started with the cookies… It’s possible, but it’s very hard to make real money with that kind of business.
I work about 40 hours a week now, but I’m definitely lucky in the sense that I really enjoy this stuff. Everything that I do, I do because it’s fun. For me, it’s like a hobby. But if I wanted to go travel, then working four hours a week is not an issue. I have things set up with my team and with automation where businesses will still run. But I spend a lot of my day in the businesses doing things like setting up new ads, and looking for opportunities, because it’s like a hobby for me.
Now I said, “Okay, I’m only going to work four hours a week if I’m traveling, and that’s going to be my next two years.” Maybe the business will run the same for the next three months, but eventually things in business are going to change. And if I’m not there to make decisions, and take our systems, our automation or traffic to the next level… you can’t leave automation to handle those sorts of changes. It’s not a long term strategy at all.
When you use Shopify, you’re setting it up so that people don’t know they’re on a Shopify store. You choose what your URL is, what your domain name is, people don’t know that. We do send people straight to our stores. The way we set up traffic is trying to get people directly to the product pages.
If we were selling chandeliers, and someone searched on Google for a chandelier, we probably wouldn’t even pay for that click. But if we did, we’d have to send them to the homepage of our website, then they’d have to click on what type of chandelier they wanted, then they’d have to look at what we have available, then they’d have to choose which one they like, then they’d have to decide if they want to buy from us.
I guess you can call it a trick or a hack. But what we do is go for the long tail keywords. Somebody searching for model names your number, color, size, whatever, and then they search for that, then they see a link to that exact product on our website. We’re getting them very late in the buying cycle, and they already know what they want. It just makes paid traffic a lot easier and a lot more profitable. There’s less search volume, because it’s more specific. The costs are less, because there’re less people competing there. But the intent is very, very high. So the people searching for those are typically the people that want the item. That’s why sometimes people are amazed if I have a website that has a million dollars in sales, and it gets 300 visitors a day, people wonder how that’s possible without tons of people flooding the website. And it’s because the people that come to the website are the people that are ready to buy. So our conversion rates are very high, which means we’re not wasting a lot of money on ads. We’re getting that long tail for very specific searches.
Drop shipping is specifically for selling expensive products online, what I call high ticket ecommerce. And that is DropShipLifestyle.com. Then the more general ecommerce if people are importing. Or maybe you’ll have an established store already.
That is a podcast over at ecommercelifestyle.com. We actually have tons of free content, I do at least one free video a week. So there’s years of free content there. For our paid programs, they start at $1500 and go up to $5000 for a program where we build the site for you.
Typically what I try to get people set up for is making sales within 30 days. That means that if they’re just starting, they’re putting in probably an hour a day, so maybe at nights or on the weekends, but averaging about an hour a day for a month. And if the person does that, if they follow the action tasks that I walk them through in my program, then the goal is to be having sales come in within 30 days.
A big thing is getting reviews from day one. So with the websites we build, people sometimes ask, “Why is someone going to trust the website I build, that literally nobody knows about?” A big reason that people buy online is from social proof and from testimonials. And a lot of times people think, “Well, if I’m just building a website, and I don’t have sales, then how do I get that social proof? And how do I get those testimonials?”
A big thing that we do that I would recommend you do is reach out to the brands that you’re going to be selling for, because many of them have been in business for a long time. Many of them had been featured in a lot of different big publications, many of them already have testimonials, and videos, and all different things from different authorities talking about their products. You just reach out to your sales rep, tell them what you’re looking for, and typically, they could send you different assets you can use on your website. You could take a website that has no sales, and have a whole bunch of social proof, and brand equity built up based on the brands you’re selling for. Do this from day one, you don’t have to wait to get sales to start collecting social proof.
This is going to sound like a simple one, but it makes a huge difference. And it is answer the phone when people call your store and answer emails as quickly as possible. These are lifestyle businesses, but I recommend having a phone number on your site if you’re selling expensive products. It’s amazing, even now, how many people will call into us, and they’ll say, “Wow, I can’t believe it. You guys are the first people that answered the call.” Just doing that will get you sales. And if they want to ask you a question, or they want to order over the phone and you don’t answer, they’re going to call the next company. So pick up the phone.
Everything is linked up off of DropShipLifestyle.com so that’s the best hub for everything.