How I failed in 2018 — and what I learned about Drop Shipping

11:31pm Wednesday

Saint Paul, MN

 

Hey, so earlier tonight I sent an email that said I had closed my Shopify store.

Here’s the quick story and what’s next.

If you’re unclear on Shopify, it’s a website where you can set up a custom online e-store. Some people use it to sell their own products, which is great. Many people use Shopify to “drop-ship” products from AliExpress.com which is like a Chinese version of Amazon.

With drop-shipping on Shopify, you hold no inventory. The vendor (via AliExpress.com) sends the products on your behalf. You’re just the middleman.

In June I visited my tax guy, registered with the State of Minnesota, and began my RockPaperShoot, LLC.

I wanted to be legit.

Because why all the effort if I’m not trying to make a business out of this?

Anyway, I then set up a DBA (“doing business as”) for PersuasionReadingList.com and for my Shopify store, SunShadeClothes.com.

One umbrella company (RockPaperShoot, LLC) with my other projects under it.

I purchased my SunShadeClothes.com domain and set up my first Shopify store.

I was planning to sell UPF Clothing.

Do you even know what that is?

UPF is sun-protective clothing, to avoid sunburns and minimize harmful sun exposure.

This is a personal interest of mine. I was diagnosed with melanoma (skin cancer) about 6 years ago, and I wanted to help people find clothing that would protect them. That desire does not constitute market research.

Most people don’t know UPF, and don’t care.

So anyways, I set up the site to sell UPF clothes. Loaded it with goods. And…

After about 5 months of running *some* ads on Facebook and getting *zero* sales… it’s time to reevaluate.

 

Here’s my current thoughts on it all:

1, Fear is a persuasive motivator, sure, but that doesn’t mean people want to think about cancer. People who have skin cancer generally know, and people who don’t have skin problems (or don’t already know about them) generally don’t care. It’s kinda like the cancer-ridden lungs on a cigarette pack — it’s not going to change people much either way — and my website wasn’t nearly as visceral or visual as that message.

For the people who don’t care about sun exposure, I don’t want to be in the business of educating them. They’ve heard about the dangers. Showing photos of skin problems on my site is going to associate my products with disgusting health problems (and negative thoughts), not with happy solutions.

2, I loaded my site with too many options. “But people like options!” Yes, they think they do… but it leads to decision paralysis. It’s easier at that point for the customer to make no decision and walk away.

I had 8 colors of one denim jacket for women, and 4 colors of another women’s denim jacket. I had 3 colors of men’s denim jacket. I had 4 different styles of hats, in many different colors each. I had surf/swim shirts in 4 different styles.

While it was like a full-fledged store in that regard, I put in a lot of time to build that without any customer feedback that those were desired products.

More:

3, My markup on these pieces of clothing weren’t great. I was marking them up around 2x to be competitive with other clothing stores, leaving me with thin margins.

Most drop-shipped products (I’ve learned) should be marked up around 3-4x to cover Shopify costs and advertising, and still earn a profit.

4, My ads on Facebook didn’t hit a critical number to see how well I was performing. Statistically, 1,000 ad clicks would be a decent way to see how many of those visitors were buyers (more than 1,000 would be better). I didn’t get 1,000 visitors, but of those that I did get, only ONE put an item into the cart. And then that visitor abandoned the cart.

5, My products aren’t exciting or fulfilling an immediate base urge. The price points were too high for an impulse purchase of something that highlights a health issue. I wasn’t selling a “cutsie product” like a necklace or other trinket might be, but instead trying to address a real health concern that most people would rather not think about.

6, Failure is a learning process. Almost every Shopify drop-shipping success out there has started with a handful of failed stores. It takes time to learn how to set up the store, set up ads, and then find out that the market isn’t what you think.

7, Researching the market is essential. I’m not sure the market I chose is a “hot market” that’s eager to buy. I discussed this on Twitter a bit last night with Sarah Jean Gosney (@SarahJeanGosney).  The “rule” of 40/40/20 is that 40% of your sales effort is getting the right offer, 40% is getting that offer in front of the right market, and 20% of sales is the copy, the written word. I wasn’t hitting those first 80% with an enticing offer for the right market.

Checking out Google Trends, anything I put in for “Melanoma” or “UPF” is dwarfed by… pretty much any other term.

 

Looking at my store I couldn’t help but think, “Damn that’s a good looking store.” But really, was it? More likely, I was partial because I put in a lot of effort.

People tend to value things they do or make themselves higher than others do.

The store wasn’t turning a profit, it wasn’t selling exciting things, and regardless of how nice it looked — ultimately the store wasn’t converting.

So, I closed up shop. Lessons learned.

I have other ideas for Shopify stores that (I expect) will fit the Impulse Buy a bit better. Maybe, maybe not.

I’m not done with my Drop-Shipping experiments yet. I’ve picked up a copy of The Digital Marketing Handbook and I plan to try, try again.

In the meantime, I’ve learned a few things along the way.

Stay tuned, PRL reader. More failures are coming.

Jeffrey

PS I’ve heard from  a few email subscribers that you’re interested in Drop Shipping. Has anything I mentioned today stuck a chord with you? Have you been successful in your stores? or are you looking to get started yourself?