WANT TO CHANGE THE WORLD WITHOUT GOING BROKE?


Download the Business Changemaker’s toolkit & We'll Show You How

We'll Also Email You Inspiring Audio Case Studies of Successful Entrepreneurs
Who Are Changing the World Through Purpose, Passion & Profit

[E4C16] Travel the World on a Drop Ship Lifestyle – Anton Kraly

I’ve met all kinds of cool, inspiring, and super smart entrepreneurs as a digital nomad these past 16 months. One internet entrepreneur whose footsteps I’m inspired to follow is Anton Kraly.

Anton is a 29 year old guy from New York who has been making a full-time income online for the past eight years while being 100% location independent.  He got started after purchasing an offline business in 2006, which he quickly transformed into an e-commerce company. He’s been creating profitable online businesses ever since.

Another colleague from the Dynamite Circle community – Johnny FD, the host of the Travel Like a Boss podcast – followed Anton’s online course about how to start a dropshipping business, and went from total noob to $80K in sales within his first 4 months. Anton’s inspired numerous members of the Chiang Mai’s co-working space PunSpace to follow his dropship lifestyle path to abundance, freedom and adventure.

In this highly-detailed interview, Anton shares with us:

  • How to create an e-commerce store that dropships high-end products on autopilot.
  • What kinds of products are best for a dropshipping business, and which ones you should avoid.
  • The number #1 deadly, time, money, & energy-wasting mistake people make when starting a dropshipping business.
  • How to do market research and find the right suppliers.
  • How to compete against other e-tailers selling the same products if you are just starting off.
  • Low-cost traffic sources you can tap to increase product sales.
  • And much, much, more.

 

Mentioned in this Podcast

Where to Find Anton Kraly

FULL EPISODE TRANSCRIPT

2:59 Lorna: Anton, I’m so excited to hear all about your dropship lifestyle. Especially getting a glimpse of it in Chiang Mai, Thailand, where we met at PunSpace. So let’s kick it off by sharing with our audience who you are, what your company does and how you got to where you are right now.

3:21 Anton: Okay, sure. So, my name is Anton Kraly. I mainly own dropshipping businesses now. I’ve been in e-commerce since 2007. That’s when I first got involved. I actually started by owning an offline business that I transitioned to online once I found out about ecommerce. Actually, like a lot of people that are out in Punspace, and Southeast Asia, and got started, I read ‘The Four Hour Workweek’ when that book first came out.

3:46 Lorna: And we all did.

3:47 Anton: Yes, everyone did. It’s so funny, you hear the same story over and over, but it was amazing because it kind of simplified everything, and it just introduced me to ecommerce and how you could start with not really that much money. I always thought back then that if you want your own website, it was like hundreds of thousands of dollars that have someone build it. I didn’t know it was the kind of thing you just kind of do yourself. That kind of got me started. I built my first website. It did well. And I was selling less expensive products back then but I decided, okay, if I could sell cheap products maybe I could sell expensive products, and I just kept moving up the scale in terms of pricing since then. I’ve been doing that since I graduated from college back in 2006.

4:23 Lorna: So were you always dropshipping or did you actually warehouse hard goods?

4:26 Anton: No. So when I said, I started with an offline business, I actually owned a delivery route in Brooklyn, in New York. I’m from New York. So that was my first business. I bought it right after college, and my plan was to build it up, sell it and then invest my cash into another offline business. And just keep doing that, rolling the money into bigger and bigger businesses, until one day hopefully I could sell them and retire at 45 years old. Retire young; that was my plan. But I owned this first business. This delivery route for a bakery.

I read the Four Hour Workweek, and I thought, okay, ecommerce, what can I sell online? I already have wholesale pricing. I have access to suppliers. Let me try to sell these products. So my first ecommerce venture was actually setting up a website which was targeted as a New York bakery shop for people that had moved out of New York, or that wanted fresh New York bakery products. I built it on Yahoo Stores, which is what Tim Ferriss recommended in the book.

The website looked terrible but it worked. I started getting traffic with Google Adwords right away. I started making sales, and I actually started – within a very short amount of time – I was making more money for my website than I was from driving around to all grocery stores, delivering these products for my actual business that I paid a lot of money for. I started making more money with the business that took me a couple of hours a day to manage. I immediately saw the potential with ecommerce, and I sold that business in the transition period: I’m making money now; I have my route; I’m selling the products online. It’s going well but not expensive – they’re bakery products. I was selling in between like $10 and $20, which is okay but I thought, “If I could do these, let me sell more expensive items”.

So I started researching different niches where items were around a thousand bucks. I put up a website – same process, Yahoo Store, used Adwords, and started selling them. Right away I sold my other business and I stopped with these higher price niches and I was not dropshipping even then. This is still back in 2007. I didn’t even know what dropshipping was. I actually went on Alibaba, which is a popular global sourcing website. For anyone interested, there are a lot of scams, so you have to be careful, but that’s how I found my first supplier in China, and I actually began importing items in bulk back then.

So that’s how I started and what happened, the transition from importing to dropshipping; so first it was my route, ecommerce, then it was importing, and then once that newsletters up. Actually suppliers in that niche started finding me by Googling my niche keywords and they started contacting me and saying “We see you selling these products, do you want to sell our products? We have them in stock in the United States and different warehouses. Here’s your wholesale price list. You can sell them whatever you want. And you pay us wholesale, we’ll ship it to your customer.” And that’s how I found out about dropshipping. I didn’t even know what it was, and I was in ecommerce for like, I don’t know, a year and a half, two years and I was introduced into this business model through people that were dropship suppliers that did this. That’s how I got started, I said, “That sounds good”.

All I have to do is upload products and get the traffic and if I get sales, I make X amount of dollars per sale, whatever my markup was. So I started selling for the dropship suppliers, and immediately my sales went up in a big way. It almost double the first year I started dropshipping. They doubled from that the next year and they went up a huge amount of money the year after. By that point, I just completely stopped importing. I thought, why put up a capital, why pay high insurance cost – because I’m liable for everything when I’m importing – so I completely switched to the dropship business model and it must have been, I’d say, by late 2009, I completely stopped importing and since then it’s just been dropshipping.

7:59 Lorna: How many dropship stores you currently have in your portfolio?

8:04 Anton: I have about 10 right now but I’ve started dozens. What I do is I usually build to sell. So I build them up for about a year or so of profitability. A good 12 month trailing net profit and then I’ll flip them. I built dozens of them, right now I have around 10.

8:18 Lorna: Okay and so, how long have you been location independent? Because I recall, when we met at PunSpace, you’re sharing with me your desire to go to South America, and I see that you’re there. So excited to hear about all of this but let’s start with, how long have you been on the road?

8:36 Anton: I’ve been location independent, technically since I sold my original delivery route for that bakery. Since then, when I was even importing, I had my products from China shipped to California because it’s less expensive, that’s obviously closer when you ship to the ocean freight and also it’s a shorter delivery time. If you ship to the ocean freight from China to New York, it takes about four weeks, and China to California is about two weeks. So shorter lead times, and it was cheaper, so I shipped there and I used fulfillment centers. In California there’s tons of them because so many people do this. So the way that works is they accept your container deliveries, they store your items, they send you a list of it to make sure you know what you ordered actually came in, and then when you get orders, they ship to your customers.

It’s kind of like dropshipping, obviously, it costs a lot more. You put up a lot more cash but that’s how I was doing it. So even when I was out in New York, I was location independent because I wasn’t managing my inventory. I was working from my computer and home office.

Back then, I wasn’t traveling abroad as much. What I’ve always done since back then is use rewards credit cards. I have a Southwest Rewards Credit card from Chase, which is my main one and Southwest Airlines flies everywhere in the States, so I’ve been to every major city. I traveled around America a lot, trying to find one city that is really like, that I wanted to settle down in. I love New York but the winters got old for me by the time I was 21. I did a lot of travelling but I didn’t find… everywhere in the states, I think every major city, they have their own little differences but it’s kind of very similar. My first major abroad trip for an extended amount of time was actually when I met you in Asia. That was about eight months into it, and when I first arrived there, I showed up and I thought maybe I’ll do like three weeks, maybe a couple of months and see how I like this. I ended up staying for nine months.

10:21 Lorna: In Chiang Mai?

10:22 Anton: No, no, no. I was all over. I did most of my time in Chiang Mai but most of the first two months I just traveled around Thailand a week at a time. I spent one month in Cambodia, spent one month in Vietnam. I spent a few weeks in Bali. I was mainly based in Chiang Mai but I did a lot of traveling while I was there.

10:39 Lorna: Yeah, I have some friends who are in Bali right now and as much as I would love to be based in Ubud, the internet in Bali just sucks. It’s terrible.

10:47 Anton: It’s terrible.

10:49 Lorna: I mean, even PunSpace, it’s okay. When there’s a lot of people here in this co-working space, it just really drags, and it’s kind of crowded. But there are cool events that happen here and there’s free beer tonight!

11:01 Anton: Yes, nice, nice. I know.

11:03 Lorna: So tell me about Buenos Aires because I’ve always wanted to go. It’ s been on my radar but when I was in Brazil for six months this past year, I really thought about going to Argentina, and I just kept hearing weird things about it like, some kind of issues around the Argentine government wanting to preserve their foreign cash reserves, and all kinds of restrictions in terms of people being able to take out US dollars. I think even Argentines were traveling in the United States is being limited to take out US dollars in the ATM. So tell me about Buenos Aires, how is it? Is it like, edgy Latin American crime thing happening? Are people stressed out about the economy, or is it pretty easy to live in? Do you feel safe? Do you feel like thriving? What’s it like?

11:54 Anton: I’ve been here for three weeks now and I have to say I feel totally safe. I’d say yes, it’s more edgy than a place like Thailand but I never feel threatened – but at the same time, you can kind of tell something is a little bit — I don’t know, maybe on the dark side compared to like Southeast Asia, because let’s like, PunSpace, we are right now, right… you could show up 24 hours a day and just use your thumb to scan in, and you have complete access, and I’m working out of a co-working space here now, which is one of the major ones, and there’s so many of them which is great, but I’m working out of one that’s only open for, I think it’s 10 hours a day, and when they close, they put like huge metal gates down over everything. So every storefront is like, at night, when things closed, it’s totally different.

12:38 Lorna: Wow, they’re locked down, bolted.

12:40 Anton: Right, like I went out to the bar and stuff, whenever I went out to dinner and walked home late at night, and I always feel safe but at the same time, when you see everyone doing this kind of stuff, like shutting things down and bolting it up, you know there is this side maybe I’m not seeing. So, I live in Palermo right now, which is one of, like the main expat areas. It’s big for shopping and restaurants and stuff. I’m sure in one of the safer locations, and I went on day trips to explore around. During the day you don’t see the bad side but where I am now, it’s 100% safe.

Regarding the money thing, like you said, it’s really ridiculous. It’s good that things are cheap because when you go to an ATM and you want to take out money, you can’t take out US dollars. You have to take out the Argentine pesos but they limit you to take out to 1000 a day, which is equal to about 150 US dollars. So it’s just like, ridiculous, you know. It’s so low so it’s a good thing the place I’m living in now, I got an AirBnB so I don’t have to pay cash. I use my debit card on the website. If I had to take out a big amount of cash, it would take me weeks!

13:40 Lorna: I know – you have to like go every day. I was doing that in Brazil where I had to visit the ATM days in advance just so I could hit it up enough times to get the amount of money I needed to make a major payment!

13:55 Anton: Yes. I do find that annoying and I haven’t really looked into why… it sounds like you know more about why they’re doing that. But yes, that’s one thing that’s kind of frustrating. And then you always hear from the other expats that I’m meeting, there’s like – I’m gonna get it wrong – but there’s like the blue, I think they call it, the blue label or black label markets… or blue market and black market, and, it’s how you get money. So there are people that actually, they’re technically like — well they’re not businesses but they’re people that you could wire money to and then they’ll give you pesos at some kind of crazy exchange rate that’s much better than you get at an ATM. I’ve never done this. It seems kind of shady but I know a lot of people that do it weekly and it’s a way for them to get a much better exchange rate of their money.

If I was here long term maybe I’d consider it but I don’t know why the ATMs… I think it’s some kind of a government thing.

14:43 Lorna: It is a government thing.

So, what is the cost of living there? I mean, what does it cost to live a good life in Buenos Aires, where you’re living in a place… like for example in Chiang Mai, I stay at a service department which is considered on the luxury end, and my rent is about $600 a month for one bedroom. It’s spanking clean. Everything’s new, the mattresses are comfortable, and it’s just lovely. It’s cleaned once a week. So I’m living a really great lifestyle here for about $1000-$12000 a month, that includes eating out for every meal, massages, fun trips. So what does it take to live a good life, where you’re not like limiting yourself as to what you can do, how often you can eat out or where you can travel in Buenos Aires?

15:36 Anton: That’s what I really miss about Asia. Just the fact that everything cost nothing, and you get quality. It’s like you said, you’re paying around $600 a month and you’re living in a really nice place. Here, from what I’ve seen on realtor signs, you can get some good deals maybe around $700-$800 a month. Since I didn’t know where I wanted to be, I booked one month through an AirBnB rental. So I’m in a one bedroom apartment now. It’s in a great part of town. It has a kitchen with everything you need and it’s a nice place. I don’t know but I’m paying $1200 per month at a time. Obviously it’s more than Asia. I paid less in Chiang Mai; I was paying $400 a month, and the place I was living in was, in my opinion, nicer than this. There was a gym, there were two pools, one on the roof, on the 15th floor. There was a restaurant, room service.

16:24 Lorna: Where were you staying?

16:26 Anton: I was in Hillside Condo four, right on Huay Kaew. I actually rented it from a guy who used to work at PunSpace but now he has a home office he works out of. He owns a few properties throughout Chiang Mai but, yes, it’s Hillside Condo Four. The building was built in like, the 80s so every condo, they are privately owned. So you just have to find one that’s renovated. And some of them are so nice inside. You know the ones that have been redone? And his is… it’s awesome. That was a good place. Other costs here like meals, well I found, when you go out to eat, it’s on par with like the States. There’s no really good deals when you are on a restaurant or what not. You don’t save money by going out to eat.

As far as grocery stores go, I don’t understand the difference there. Because going out to eat right, comparable to the States. Grocery shopping? Maybe like, a quarter of the price in the States. I guess you pay for service, I don’t know, but going to the grocery store here is so cheap. You can do a week’s worth of grocery shopping for $30. So that’s really good.

Other expenses, one thing that I don’t like is, I was looking at ‘plane tickets right, because there’s so many great places to go and see around South America and every flight here, somewhere within South America, it seems like it’s $500+ to go anywhere, to take a three hour plane ride. There are some better deals if you book in long advance but I’m used to now, nine months in Southeast Asia, where I’ve gone AirAsia a day before and pay, $150 to fly to Vietnam, $200 to fly to Bali, which is much further than these trips here. So travel is definitely more expensive when you want to travel around South America. That’s the big thing I’ve noticed.

So, how much you can get by in a month? I think if you stay long term and you find a place, you sign the long term deal for it, you’d pay a lot less than I’m paying. If you want to go out to eat a few nights a week, a co-working space I work at is like $250 I think, so maybe around $2000 you could spend. You can get by with not too much money at all. It’s definitely cheaper than New York, or any other states. I’d say $2,000 to live a good lifestyle.

18:26 Lorna: Okay, that’s really good to know. So what is your day to day like? What’s your typical day?

18:32 Anton: I’ve been working a lot. I set a pretty big goal for January for myself, for my businesses; so I’ve been going to co-working space at 9am, when they open every day, and I usually stay there until around six. What’s good about that is, the way I met most people when I was in Thailand was through co-working spaces. It’s a great way to connect with other entrepreneurs, so that’s what I do here. I basically get in there, usually around 9am. I talk to the people that I’ve met already, see what they’re up to, tell them what I’m up to, and then work, go out to lunch with a group of people there. And then at night, everyone always goes to dinner somewhere, and there’s so many good restaurants. It’s hard to compare because there’s so many good restaurants in Chiang Mai too, and in Thailand as well. I love the food there also.

I go out to dinner with a group of people, and then on the weekends, that’s when I kind of explore out a little bit, take the subway around. The public transportation is great here. The buses are awesome. The subway is really good. No one has motorbikes here – they have an actual winter! So it’s not like you can go, like in Thailand walk down the street and just rent one for a month for $80. So yes, I just use public transportation to get around. I’m finding it easy. Just as easy as in Manhattan.

My normal day is like a normal life, I guess. It consists of work and networking, and then on weekends, I’m just going around and seeing all the architecture here. It was just amazing. There’s something really, really cool stuff. That’s what I do on the weekends, trying to live a normal life. I’m not constantly going out all day and exploring because I’m still running a few businesses but yes, it’s good. I like it here.

20:01 Lorna: So work-wise, what is your typical day-to-day schedule? Do you spend most of your day trying to drive traffic? How do you drum a business?

I mean, rumor has it that you’ve started a dropshipping craze in the PunSpace community! So I can imagine you can drum a lot of business by inspiring people in the co-working spaces where you are, to get into the drop shipping game, but in terms of you, are you building new stores? Are you doing Pay Per Click advertising? What do you do?

20:35 Anton: Well, with stuff like that, with my ecommerce program, that one has pretty much been automated for a while now. What’s good about that is it’s been up for 15 months now, so people that had signed up in the beginning when I first launched it, who started doing well, now they also promote it as affiliates, and they send traffic to me, so I don’t do anything with that one. I have a forum, so I go on my forum once a day, and probably spend 20 minutes or 30 minutes answering questions that no one else can answer.

That business, I’m not really working on. What I’m doing now is I have a few e-commerce stores that I’m still in the process of building. The rest are pretty much automated. So my day is, wake up, go to the office, go on my forum, respond to any posts that people can’t answer, check my emails. I usually answer emails within 30 minutes, so about an hour of like, managing stuff from the previous day that I hadn’t attended to since the last morning – I do it only once a day – and from there, what I’m really trying to build out is a supplier directory, not just dropshippers but it’s dropshippers, wholesalers, manufacturers, importers, and I’ve been working on this thing for a year. This is what I really want to take my entire business forward but it’s so difficult because I’m working with millions and millions of cells of data. And I’ve tried to outsource it so many times and every time something’s wrong, I’m stuck at this point feeling like I’m the only one that can get this to the point that I feel comfortable charging money for and having my name on it.

I’ve personally been going through all this data, and just trying to perfect my CSV before I upload it to my site and really launch it. So that’s what I’m working on now. Basically, tedious work that I would tell people to outsource but I know from experience now that this just isn’t happening, and something that needs my personalized attention. That’s what I’ve been working on, basically, analyzing data for hours a day – doesn’t sound fun but got to do it sometimes, you know.

22:22 Lorna: Yes, I know someone’s got to do it. I mean, seriously, outsourcing, that’s a thing that; there’s some things that you really can’t outsource. I’ve been outsourcing for a long time, and at the end of the day, no one seems to be able to do the job as well as I can or as fast as I can.

22:38 Anton: That’s exactly what it is. And even if looked like some things are so easy to outsource. Let’s say you have one website designed and you want someone to make a new website for you that looks similar to the old one, okay fine, here go that. I’ll check on you in a week and you know it’ll be done. That I can outsource. Things like customer service and order processing, I could setup standard procedures, and say “Here, do this”, and then someone could do it for me, and I can just check up and make sure they’re following the procedures and make sure that customers are still happy. So there’s some things that I find just very easy to outsource. But this is like, I’m actually trying to rewrite some content. I’m trying to make it very user-friendly. Like you said, some people, no one’s going to care about your business as much as you do. So if it’s not some kind of like mundane copy and paste task, I really feel like I’d like I have to do it myself.

I have a couple difficult months in front of me, staring at the computer screen but I think it will all be worth it. That’s part of being an entrepreneur. You can’t just work a couple of hours a day every day. Sometimes you got to put the work in. I’m in that phase now. I’m in the hustle phase!

23:35 Lorna: So is your online course is the generating the most revenue for you, or is it one of your dropshipping ecommerce sites?

23:42 Anton: My ecommerce stores definitely make the bulk of my revenue. The course, it’s done better than I ever thought it would but my main money maker is my e-commerce stores. With the course, it’s funny, because like I said, it’s surpassed my expectations so far. The way I came about, I was living in North Carolina, not this past November, November before this, and it got cold down there, I had nothing to do, I was bored, and I started posting on forums – just public forums – about internet marketing, about e-commerce, and I was answering people’s questions about dropshipping, even about importing, creating your store, getting traffic and just all kinds of questions. People really liked what I had to say because they knew I knew what I was talking about. And I said, “Okay, let me make a blog about this”.

Back then I started a blog that was all text, and I wrote up tutorials like, this is how I choose niches, this is how I build a website, this is how I find suppliers on my niche, this is how I get traffic, this is how I automate certain tasks. And like I said, it was all text, some images, and started getting a lot of traffic. People kept asking questions about it. So I thought, maybe I’ll just record videos, PowerPoint presentations with me talking, explaining everything more in detail, so I don’t get this same questions over and over and over.

I spent about a week, probably – it’s a membership site – and I’ll put it up and see what happens. It blew up from day one. I got great feedback and it’s been growing ever since. So this is kind of like an accidental surprise success. It definitely led to a huge extra income stream for me. But yes, it was never my goal to have this as my main business but it’s turned out to make me pretty good amount of money.

The main thing that I like about it is networking. I’ve actually JVed with a few people from it, and it’s cool because some people I’m even friends with have gone through it and found success. It just makes me happy to know that, like, it actually affects people. The way I think about it, you know, like I told you, I read The Four Hour Workweek, right? And if I hadn’t read that, I would have kept building offline businesses, and my whole life would be like probably stuck in New York somewhere, working 80 hours a week so I could try to retire young. But Tim Ferriss wrote a book. He shared the information. I read it. I started, and now my life has changed completely. I’m in Buenos Aires right now, doing whatever I want pretty much. I don’t have to go the office if I want to. And that was thanks to him for sharing information. I’m sharing information, and it’s actually helping other people to do the same thing as me.

So, yes, it’s awesome!

25:58 Lorna: You know it’s interesting; I met Tim Ferriss at South By Southwest a few years ago, and I nabbed him as like, “Okay, Tim, spill the beans here. How long did it take you to get to The Four Hour Workweek?” And he confessed to me that it took him four years of working 80-100 hour weeks. So that he got to the place where his business was kind of like more automated. He was only working four hours a week, and even attributed to the fact that it took him four years rather than two years because he had a relationship.

So tell me, help me understand – starting a dropshipping business, can you share with us how long it takes to get a viable dropshipping site off the ground, and at what point? And what do you need to do to get on auto pilot?

26:51 Anton: Obviously it’s different for everyone. If you have no experience it’s going to take you a lot longer. I’ve done it for so long now that.. let’s say I wanted to build a new dropshipping site, I could get to the point from having my niche idea to building my website, to getting approved by suppliers, to getting traffic, sales… personally, I’d give myself – if I wanted to really push it – I’d say, three weeks, I could be making my first sale from having the idea.

If you don’t know what you’re doing at all, and everything’s totally new to you, who knows? It could be three weeks if you’re a quick learner, or like most people who delay a lot of things and keep putting it off, you’re scared to call suppliers, or worried about putting your website then maybe a couple of months, a few months. And then from there, to get to the to the point of automating, I never, even when I build new websites, I don’t want anything automated in the beginning.

To give you an example of things I automate, like, customer service, I use a call center. They answer all my phone calls that come in, and they can either answer them themselves – they have basically the biggest FAQ list ever at this point, or they can email me a question if they don’t know the answer, if they need help with it. That I would never outsource when I first launched a site; the reason being is because I don’t know the answers to the questions myself yet. I need to get comfortable with the suppliers. I need to learn this niche, and I want to know the answers – so if I’m paying a call center to answer questions, so that they actually have the answer, so they have the best answers. I wouldn’t start automating things until maybe a few months in, depending on how big the niche is, how many suppliers you have.

The other thing that you could automate that I do is order processing. So, you have an e-commerce site, someone comes on, adds to cart, they check out; normally this order is just emailed to you and stored in the back end of whatever CMS you’re using – I use Shopify – and what you can do is use certain apps. The one I use is called eCommHub, and you integrate it with all your suppliers. So let’s say I have 10 suppliers on my website, call them Thunder 1, 2, 3, 4, 5, whatever, up to 10. I can assign each product to what vendor it’s from, and then if I use eCommHub, when someone places an order for vendor 3, that order confirmation will come to me but it will also go to my supplier, so obviously it has the item number, the SKU, and where it’s shipping to, so that automates the flow.

29:04 Lorna: Okay, so eCommHub, is it fairly easy for suppliers to use? So even if you work with a supplier that’s not really tech savvy, you can just get them to sign up and it’s not really a problem at all? Because that’s one of the biggest questions I had around dropshipping. Like, what if you’re trying to work with the supplier and they don’t really get how to automate the order processing delivery system, and so, then you get sucked into a custom web development project, trying to integrate your site with their site.

29:30 Anton: Yeah, so here’s the thing with that, not every supplier is going to want to have it automated, and that to me is not the worst thing in the world. I only sell items that I make a really good profit margin on. Part of the reason is, there are a certain things that had to be done with each order. Let’s say if it’s not going to be automated, right, so here’s what happens then; the customer places the order on your website; you will then get the order confirmation email, and then someone either has to go on the supplier’s dealer portal and place the order on their website, or they have to email that order as a purchase order to the supplier.

This is very easy to automate as well. I personally use one person that does all this for me. So all of my suppliers that don’t want to have things automated, let’s say they want, supplier A, B, C, let’s say ‘Anton’s Business’, we’ll approve you for an account but when you place an order for us, we want you to email us with the subject that says, ‘Anton’s Business PO (for purchase order) whatever the purchase order number that you make up for that business’. So okay, that’s fine, I’m not going to work with a supplier if they’re not willing to integrate with some kind of automated system.

So what you do then is if you’re first starting – I would just do it myself then – you do it yourself; you get an order and then you send the purchase order to the supplier, they ship the item, and it’s still a few minutes process, it’s nothing major. And then what you eventually do is hire someone that’s going to do it for you. They’re going to know which suppliers need to get emails, and they’re going to send those emails for you.

So like I said, it’s nothing difficult to even do it yourself, it will take you – if you do it once a day – a couple of minutes per order, so that’s what I would say. It’s nothing to not start a business over. I wouldn’t try to force any suppliers to work with an automated system if they’re not willing to. There’s a million ways to do it differently but it’s the easiest, and a lot of suppliers are willing to get those kind of automated POs.

31:14 Lorna: Okay, so going back to the nitty gritty of starting a dropshipping business, help us understand what kinds of products can we dropship. Can you start dropshipping business around supplements, furniture, clothing? Are there any types of products out there that can be dropshipped that are eco-friendly, or ethical and fair trade? What do you know about the dropshipping sector?

31:39 Anton: From my experience, pretty much anything can be dropshipped. I’ll say the biggest mistake people make is, let’s say you wanted to dropship eco-friendly products like you said, what most people would think to do is go on Google and search for eco-friendly dropshippers or something like that. And whenever you search for your niche plus dropshippers, you’re going to get the worse results possible. These companies are all usually middle man suppliers. Meaning, they’re not the brands. They’re not the manufacturers, and they’re not going to leave your for profit margins. So I always tell people if they want to join a dropship, never search for your niche plus dropshippers, plus dropshipping, or anything like that. It’s the worse way to find suppliers.

The way that I test my niche ideas is I pretend that I’m a buyer – and let’s say I want to buy eco-friendly products – this is probably the most difficult part. The most time consuming part is really doing this market research. But what I would do is go on Google and type in eco-friendly products. And then I would go to as many different websites as I could and I would look on their ‘about us’ pages to see if they have a physical store or a warehouse. Now hopefully they’re online only. If they’re online only then I’m going to assume, and one more thing, if they sell for multiple brands, if they sell for multiple brands or online only then I’m going to assume that their brands are dropship suppliers. So the reason I assume that is because they don’t have an offline presence. So chances are, they’re online only, and chances are, they’re not storing their inventory.

What I do at this point is then look for the brands on their website. So let’s say, (let’s stick on this eco-friendly thing) I Google eco-friendly products. I find the website. They don’t say anything about having a store, they don’t say about having warehouse, I then look for a page on their website that says brands or manufacturers or something similar. And I find all these names for the companies they sell for, and I Google those company names. And there’s a really good chance that if I contact those companies they’ll work with me as a dropship supplier. None of these companies will probably advertise themselves as dropshippers. They probably won’t say anything about dropshipping anywhere on their websites but there’s a good chance if I contact them, and tell them I own a store in the niche, tell them about what I’m planning on doing with it, how I’m getting traffic, that they’ll work with me and let me sell their products on a dropship basis.

So that’s how to dropship profitably, and how to find niches that are dropship-friendly. You just have to find those future competitors who are online only, and then find what brands they sell for.

33:55 Lorna: Okay, what’s the likelihood of getting a supplier or manufacturer who has never worked with a dropship company, or purely virtual e-commerce retailer, to actually agree to establish a dropshipping relationship with you?

34:11 Anton: I’ve done it before that way. Usually, they are familiar with it but I don’t even say dropshipping. I call my program like dropshipping because people know what dropshipping is. But when I contact these suppliers, what I say is I’m an internet retailer. Do you work with internet retailers? And then I’ll work out pricing – I don’t try to negotiate my price, they usually have wholesale pricing – but I work out like, I’ll pay you on pre pay basis. I’ll get an order and then I’ll pay you, then you ship to my customer. It’s never been difficult, honestly. Some companies don’t want to work with online only retailers but it’s very rare you come across that. It’s usually older companies that have been around forever that are not willing to transition to online. And like I said, it’s very rare that you’re going to find that. If you present yourself the right way, tell them that you’re an internet retailer, that you have a website in their niche, and you’re really planning on doing a huge launch and getting a lot of traffic to it, and become a new authority in that niche, it’s not likely that they’re going to say no and not give you a wholesale price list.

35:04 Lorna: So what comes first, the website or the dropship store?

35:08 Anton: The website.

35:11 Lorna: Okay, let’s say you’ve never dropshipped before, and you try to find a dropshipping supplier, what do you recommend? Do you recommend building an ecommerce store first to let them know that you’re serious?

35:21 Anton: Yes, definitely.

35:23 Lorna: Okay, but then what products do you list if you don’t have any suppliers?

35:27 Anton: Demo products. So you don’t want just one supplier. If you’re going to put up a website, you don’t want one dropship supplier. I think that will be a really bad move because you’re limiting yourself in a big way. So I usually want at least 20 possible suppliers in any niche before I build the website. I have some niches that I have 500+ suppliers in. So it shows you just how wide the spectrum is. But what you do is you build your e-commerce store just as it will look once it’s actually live.

So you build your store and you upload demo products. And what this demo products are basically just like generic products for your niche. So if it’s going to be eco-friendly products, just find some stock images of different items that you would sell in that niche, put them on your website, make up fake prices, put a description in. You’re not going to enable check out so no one could go and buy them from you but you’re doing this so when you contact your suppliers, you could show them your website and they could see what it will look like once their products are uploaded as if it’s a fully functional website because they’re not going to approve just anyone that contacts them, like, “Yeah, I thinking of selling this. Maybe I could start a website.” They don’t want to hear that. They want you to have a website. They want it to look professional, and they want to know that you’re serious. So definitely build that website first and I call them demo products, but basically just placeholders. Make it look good. The only thing that I recommend doing at this point is not adding merchant account, or not linking your PayPal, just so no one can check out. But just so the supplier can go to your website and click around and see the functionality. So it will look exactly the same as before it’s live.

36:53 Lorna: So you have to have a certain level of confidence that the kinds of products that you are uploading to your site is demo products, you will be able to find a dropship supplier to fulfill. Or can you just pit it? So let’s say, I decided to target the raw food market, and so I have an idea about the different types of products I’d like to sell. I want to sell high end blenders, I want to sell high end juicers. Maybe some alkaline water purifiers that retail for a thousand – two thousand dollars, all the kinds of products that someone who’s really particular about their food, where it comes from, whether it’s organic, and the quality of their water, what that consumer is going to care about. So I could put together a store that targets this particular target demographic, but let’s say for example, I couldn’t find a single supplier that would be willing to supply any of these products, so can I just pivot that and turn it into lighting store, for example? Or do you think that it would be highly probable that I would be able to find at least one supplier per product category?

37:59 Anton: Right, and that’s why market research is so important because if you do your market research right, then you don’t have to worry about not finding suppliers. So, I put more time into niche selection and into market research than into anything else I do, like creating my website, which to most people sounds like the most daunting task, is nothing compared to niche selection and market research. I don’t just build websites hoping that maybe I could find a supplier. I spend weeks researching different niches before I invest anything else into them. That would be my response to that. Do your market research right, then you will find suppliers because you already found them prior to building to your website. You haven’t contacted them yet but you already found them.

38:39 Lorna: So what kind of products should a prospective or aspiring dropship marketer, focus on marketing? I dived into your online course which I love, by the way, and I can’t wait to really dig into it some more. I think you might have a new dropshipping devotee real soon. Clearly you don’t want to spend time marketing low end products because it’s the same amount of work to build a store marketing cheaper products than high end products. And of course, high end products have a much bigger profit margin. So what other considerations should an aspiring dropshipper make?

39:15 Anton: That’s my biggest, as far as having the pricing being right. And then another thing that I really look for is who the niche appeals to. Obviously there’s so many different ways to break down target markets and demographics and what not. But I want to have all my e-commerce businesses as automated as possible. Not just my e-commerce but all my businesses. I want it automated as possible. So you want to sell in niches that are less costumer service intensive. You’re going to have low return rates and that you’re not going to have a million questions to try to presell to someone. And that you’re not going to have customers calling to follow up over and over after the sale. A good example you gave about juicers and items like that, I personally would stay away from that because I feel like, any electronics kind of leads to the possibility of higher return rate and also more questions post-sale. Because let’s say if someone buys something and it’s not working the way they though it would, even if it works right, maybe they don’t understand how to use it, they’re not going to call the supplier, they’re going to call you. So I wouldn’t want to sell anything that customers might have post-sale questions on.

Obviously, you’re always going to get some but I try to keep that limited as much as possible, so that’s one of the big things I look into when doing market research. And another example of this would be apparel. I would never sell clothing online. Another example would be bedding sheets, and the reason that I just put those two together is because those are very personal items. You might think like, I’ll go online and buy a shirt or buy new sheets, or something like that. Or a mattress – I wouldn’t sell that either. But there are things that people, even though they don’t think about it, they really do have to see them, feel them and touch them before they get them. And the new mattress comes in, and maybe it doesn’t feel the way they thought it would. The description didn’t match what they are expecting. They’re going to return it if the sheets aren’t the same feel they had envisioned, they’re going to come back to you. Same thing with clothing, if it doesn’t fit right, it’s going to come back. So I try to stay away from things that are personal to a customer that require touch. There’s a million examples of it but basically that’s one thing I always think about when I’m doing my research. Like, will a customer really want to see this, feel it, touch it, before purchasing it?

41:14 Lorna: So are there any niches that you would recommend off the top of your head that would have a high profit margin but low return rate?

41:21 Anton: There’s a lot but I don’t share those! I’d have people research on their own. I don’t do that!

41:27 Lorna: Alright, like one thing that I could possibly imagine might be furniture. It’s just such a hassle to return it. But who knows?

So let’s say you don’t want to burn your precious entrepreneurial time by trying to build your own online store, realistically, how much does it cost to build a store and what platform should we use?

41:50 Anton: I’d recommend Shopify 100% now. Like I said, I started with Yahoo Stores back when I first got into this. Since then I’ve tried BigCommerce who is great too. But I had some problems with them, and the customer support, I didn’t think it was great. I’ve tried basically every one out there. Magento is a great one but it’s really hard to customize. So what I found out of every one that I’ve tried and built big stores on, I think Shopify is by far the easiest to use. They have the best customer support. They have the best tutorials if you ever get stuck on anything and they’re so easy to modify and edit.

So my advice, like, what’s the cost? I would say get started with Shopify. You could get on at $29 a month plan, and they have tons of free templates which look really good. It’s similar with like WordPress or anything. You find the template you like, you click install, and your site looks right that right away. Then in their back end, everything is basically drag and drop. You can change all the color settings. You could upload new image banners and what not. You can just change like everything from their back end, and it doesn’t take long. It doesn’t even cost money; if you can make yourself a logo in Photoshop or Pixel or something, it doesn’t cost any money, honestly. Unless you want to outsource, then you can start getting pricey. But I personally would recommend you do everything yourself the first time. You’ll build a really nice looking store.

43:06 Lorna: Alright, so build it and they come. Not. Once you’re store is up, how do you drive traffic? How do you get customers? Do you have to have a budget set aside for online advertising, and how much?

43:18 Anton: I’d recommend paid advertising because that’s what makes me the most money. I really am big into Google PLAs, also Google Shopping. So you do a search on Google for a product, that’s what comes up on the top right box – the sponsored product results – that’s really CPC but it’s really cheap compared to normal Adwords text ads. And they convert at a much higher rate. So that’s like just an easy way to get extremely targeted traffic that converts. So I highly recommend Google PLAs.

Then there’s so many other things that I do.

Amazon product ads, that’s actually would replace the advertise. You think of someone on Amazon, they’re looking to buy something. Amazon’s a retailer but they also have an advertising program, so if I’m selling a computer keyboard and someone’s on one of their computer keyboard pages, it will show related items in the sponsored ads sections. So I can have a picture of the keyboard that I’m selling, with a link to my store – if someone clicks it, it’s Cost Per Click (CPC), and then they go to my site and buy from me. So it’s another really highly converting source of traffic because you’re getting buying traffic to your site, and they’re clicking on the image of your item so they know what they’re going to. So I recommend that.

And SEO, I’ve never been big into. I tell everyone never even consider like outsourcing it. I’ve wasted tens of thousands of dollars on SEO. I’ve got some results. I’ve ranked some keywords but they don’t convert. So this is my thing about it. If you’re using SEO, let’s say you’re going after a niche keyword, if your niche is eco-friendly products, and you want to rank for something generic like eco-friendly products. That traffic is going to convert so much lower than ranking for the actual product names that you’re selling, for the SKU names that you’re selling. Because if someone is searching for a specific product and manufacturer or SKU number, they’re looking to buy that. They’re not just looking to shop around and see what’s out there, so I don’t do any SEO any more besides on-site SEO. All of my product pages are optimized with display information, brand name, product name, SKU number, and I use meta tags to really like stand out in the organic results – so that’s what I do and it works well. Rank for the product, not for the niche.

45:23 Lorna: Okay, so how can you compete against other e-tailers who are selling the same or similar products who might have websites that have been around longer, that have more authority, more established search engine rankings, or even more advertising budget?

45:37 Anton: The way I think of it, obviously there’s always people who are bigger than you. There’s always going to be Amazon. There’s no way you can beat this massive companies. You don’t need all the sales to make a lot of money, especially if you’re selling expensive items. You just need a couple of sales a day, a few sales a day. It can equal a lot of money if you can do it across enough stores.

So the way that I brand organically, like I’ve said, I use this meta tags, and it’s amazing to see how many people don’t take advantage of that. Like when I look through, so many of my products rank in the top five, top three – even like one or two for a lot of products – and I don’t do anything. Like I said, I just optimize my meta tags and Google picks that up. Organically, I rank very well as far as the paid campaigns, I would never use Adwords traditionally any more. When I first started I could but most of my niches, they cost like a tenth of the price they are now for click., so that’s just out of the question – I can’t have it be profitable any more, but Google Shopping is still very cheap, and it converts. When I build a new ecommerce store, I’m not trying to take down or put everyone out of business. I’m just trying to take a piece of the action. If you sell expensive products, and you do your market research right, get into niches that sell well, then it equals a lot of money.

46:49 Lorna: Okay, so let’s say you’ve got these products, you’re dropshipping them, and you’ve got the wholesaler price and other e-tailers are selling it at the same wholesaler price… you’re offering the same product at the same price point, what would entice the customer to buy from you, and not from Amazon.com?

47:10 Anton: I do some things like, I personalize my websites a lot. Many ‘about us’ pages like Amazon’s, “We’re a corporate company with 100,000 employees”. It’s very like, it’s more of a personal experience. I also do some marketing gimmicks to get customers to purchase sooner rather than later. But when you build a niche site as your own company, you can really brand it any way you want to. The customer gets a different experience than if they’re on one of these giant retailers. Like I said, they do get business. It’s not going to be a billion dollar company if you build a couple of websites but if you build it right, if you personalize it to yourself, and kind of give the customer a unique experience, that’s what I would say is big. Give them a unique experience on your site, then it will convert into sales.

47:55 Lorna: Should every e-commerce store have a content marketing strategy, such as a blog, for example?

48:02 Anton:
I don’t like to tell people what exactly to do. There’s a million ways to do things right and wrong. So I personally don’t use blogs on my websites, my e-commerce stores. But then to give you an example, my sister, she just went through my e-commerce course like a year ago, and she’s passionate about her niche so she put up a blog. And for her, it’s doing really well. So obviously, it can work if you are passionate about it. If the content is good, it can bring in more traffic. It can bring in more sales. It shouldn’t be necessary but if you want to do it… it’s personally something that I don’t do but I know it works also. So that’s really something that you’d have to think about. Whether if you want to outsource it, or if you’re passionate enough to write your own topics, then create the blog yourself.

48:39 Lorna: So are there pitfalls or traps that aspiring dropshippers need to be aware of before entering the dropshipping industry?

48:45 Anton: Yes, definitely. One thing that people do that, like I mentioned, that you should never search for your niche plus dropshippers and apply for those companies. That’s the biggest mistake most people make. They find the people who advertise themselves as dropship suppliers, and get themselves in a situation where they can’t make any money. Another thing to really look out for is if you’re approved for a supplier and your niche sells like, 800 products ,and they send you a CSV – which is how most of them do it – which is your price list. It opens in Excel, and it’ll have the product name, link to the product images, your price, the MAP price – which is the price you should sell it for, product description… it has all that information. Some people just get that and upload it to the website without actually reviewing the information. It’s important to always double check your pricing, or triple check your pricing before you list anything. You don’t want to put up items that you’re really not making that much money on, and not even know – some people just keep uploading and uploading. Yes you should have a lot of products but make sure your margins are right before you are actually taking orders because a lot of people get into it and start selling like they try to compete with the bottom of the barrel sellers, and end up making 5% margins when there’s really a lot more money to be made. So that’s a big thing I’d say, triple check all your profit margins before you start taking any orders.

50:01 Lorna: What’s the biggest mistake you made in you entrepreneurial journey that you would do differently if you have the chance?

50:05 Anton: It’s not even related to online. So I was making a lot of money from early on, like I did well right away when I switched to the niche of expensive products, and I never really saw online like as a real way to make money. I don’t know – I was making all my money but I was like scared. I was 21-22 years old and I’m like, “Is this going to keep going on? What should I do?”

I took a lot of money that I’d made from my ecommerce stores, and I rolled it to an offline business. And I had four business partners in it, and we put up a lot of cash, and within a few months I realized, “What am I doing?” It was a marketing company that we installed digital signage displays in high-traffic locations in New York, and we sold advertising space on them. So we had a sales guy, we had the guy that installed in the locations. We had me to handle the technical back stuff on the server to get the ads out to the screens, and I was working so hard, and I put up so much cash to make like a small amount of money. And I was like, “What am I doing?” I’m running these e-commerce stores that are making me all of my income, or 90% of my income, that I’m managing in like, two hours a day… and I put up all these money and now I’m committed to this business, and I’m like, “What am I doing?”!

So that was a big mistake. We ended up, none of us really like got that much into it so we ended up selling it within a year, which was good; I got my money back out of it. But I basically wasted a year trying to build a business that I had no interest in just because at that point I still thought offline was real. I thought that was the real business plan. That was like, I’m happy I did it. I had my little offline business taste in a bigger scale than my route, was a big deal. But I’m happy I got out of it without losing everything. Since then, I’ve dealt with e-commerce and online only and I haven’t looked back. No more offline for me.

51:41 Lorna: Great! So tell me, is this business your life’s purpose if not, what is?

51:47 Anton: I don’t know. I don’t know my life’s purpose is. I love my business. I love networking. I really love just travelling right now. I’m just meeting really cool entrepreneurs from all over the world. That’s what makes me happy now. There’s such good groups of people that are doing exactly what I’m doing, what you’re doing all over the place. And right now, that’s my purpose. That’s what makes me happy, travelling around, networking, hearing cools stories, sharing mine. That’s what I like right now. That’s what’s making me happy.

52:10 Lorna: Okay great. So we’re about at the end of this interview. How can we best stay in touch with you, Anton?

52:16 Anton: I have a blog, my business travel blog, createtravelplay.com

52:23 Lorna: Okay so people can message you through this website? Do you have a Twitter profile that you want to share with us or is it pretty much it?

52:33 Anton: I barely use it.

52:36 Lorna: Awesome. Thank you so much.
[END OF RECORDING]

Hire Me to Increase Your Online Visibility & Grow Your Tribe

I am available for one on one coaching to help you improve your online visibility and grow your tribe. I also provide “done for you” agency services for changemakers that have the budget to entrust their online marketing to experts.

Ask Me Questions or Share Your Feedback

Please Connect with Us!

Connect with Lorna

Twitter: @lornali
Facebook Page: Lorna Li

Connect with Entrepreneurs for a Change

Twitter: @entrepreneurs4C
Facebook Page: Entrepreneurs for a Change

Please Review this Podcast

If you enjoyed this episode, please leave us a 5-star review in iTunes & a 5-star review in Stitcher!

This will help us reach and inspire more people with stories of entrepreneurs who are changing the world.

In Gratitude

Eric Smith of Monster Beach Studio for creating our Entrepreneurs for a Change Theme Song

Disclosure

This post may contain links to products or services with which I have an affiliate relationship. I may receive commissions or bonuses from your actions on such links.

podcast-on-itunes[powerpress]

Join the Movement of Changemaking Entrepreneurs

Get the FREE Business Changemaker's Toolkit

Tell Us What You Think

Comments

  1. Hi Lorna,

    Great episode! I recently signed-up for Anton’s course. And I can honestly say that he has an amazingly simple way of explaining many of the intricate components that he mentions on your podcast. Each lesson is video, and has easy-to-follow ‘homework’ assignments, so that you don’t get overwhelmed. With the forum too, it just makes it even easier, as everyone is there to help answer each other’s questions; and to bounce things off each other. I highly recommend it to your listeners.

    Great interview too, btw. You really squeezed a lot out of him. 😉

    Robb

    • @gorringe:disqus So glad you enjoyed the episode – yes, I am a great knowledge extractor! I am also genuinely interested in each and every podcast guest. Feel free to share this episode with other folks you think it might help!

Leave a Reply to Robb Gorringe Cancel reply

*