More people need to start @Shopify stores and dabble in making passive income— Khallil (@kmx411) October 16, 2019
I did this with a ~$500 upfront investment, and a few hours.
Today I spend ~1-2h/week supporting it, almost everything is automated by combining FB ads, Shopify, a 3PL, and a virtual assistant
I found a thread on twitter recently about making passive income through Shopify stores. It’s an AMA about @kmx411’s experience actually running the stores.
It’s insightful but hard to follow on Twitter. I’ve reformatted the thread into a Q&A blogpost.
Hope you enjoy. All credit goes to @kmx411
- Find interesting products on AliBaba, and buy a few pieces for bulk pricing
- Make a good landing page on Shopify
- Test various copy / pics / videos against some audiences on FB
- If profitable, scale until audience taps out Repeat with new audience or product
Let me just get this straight..
- You buy stuff from Alibaba
- Send it to Amazon fulfillment center for them to store
- Add the items to shopify and then connect it to the item in Amazon fulfillment (?)
- User buys on shopify then Amazon automatically delivers
Basically - except I don’t use amazon
Nice! What is it you're selling?
Mostly wireless chargers, AirPods cases, etc. Things I would actually buy, don’t wanna sell gimicky stuff I wouldn’t want myself
Where do you source the stuff? Alibaba??
And it sounds like you have a generic site and switch up the products/landing page periodically based on what you find on alibaba and whatever demographic you find for ads targeting? Are all products tech related?
Yes all tech related
Make a new landing page for each product and customize the HTML a bit. Super generic home page. Ads go to landing pages which basically do all the work.
Have you explored other storefronts? GoDaddy/woocmerce etc? Any opinions?
Just Shopify and it covers everything I’ve needed so far. I honestly just use the default theme too. Tried Click Funnels last year for some stuff and hated it
Do you offer discount codes? The sales I’ve made dropshipping have primarily come from that
Abandoned cart email flow has a discount code and Wheelio app spits out discount codes, but that’s about it for codes
Sales vs. # units implies avg selling price of $129, sound right? How / through whom do you coordinate 3PL?
Yes high average product value but also bundling to get people to buy more than 1 thing. 3PL is in china
Average order size of $128 on phone cases and chargers? How?
Bundling & not all chargers are just 1 coil - some bigger more premium ones
You think it’s difficult for non techie to get started?
No - I don’t think any technical skills are needed, you can do everything with the shopify app store
Any good resources you'd recommend for understanding how to optimize FB ads for higher engagement and lower CPC?
The http://Julian.com guide on marketing is amazing
What was your upfront investment used on and how long before you saw ROI?
A few pcs of inventory, photography, and fb ads. Ideally profitable within a few days of starting ads
Curious about your profit margins too
This is the right question ~20% so far but I think by selling a 2nd or 3rd product to past customers it’ll be higher
Is this gross profit per item sold? What is the true net income margin after factoring in the costs of the VA, 3PL, marketing expenses, etc.?
True margin is 20%
Traffic source is predominantly driven through ads, or do you get any organic? Also don’t those products have very high CPC for ads? Is your CAC still lower than what an average consumer spends? Also, amazing job
Basically all ads, no SEO effort CPC is about 40c. Yes profitable, so CAC is lower
What would you do if you couldn’t advertise on Facebook?
That would be hard. Advertise anywhere else people buy - maybe Reddit, Snapchat, etc.
How much inventory did you need to start using the 3PL to fulfill?
I was lucky to find a 3PL that was just starting out so we kinda grew together - IIRC it was like 10pcs to start testing
how do you deal with quality control and returns?
If something is shit quality don’t sell it. If it is broken or breaks make sure your supplier replaces for free (easier when you’re ordering from them often). 2 week return window after delivery
Are you just drop shipping?
Not dropshipping, I prefer to buy small amounts of inventory to get better pricing which gives me a few extra $ to outspend dropshippers on ads
How does buying "small" amounts of inventory get you better pricing? Wouldn't you have to buy larger amounts to do this?
Surprisingly no, even 5-10pcs can be 30% cheaper than buying on aliexpress
Do you have a preferred method for handling fulfillment/delivery?
3PL in china for fastest turnaround time, and smallest required order quantity from suppliers
What do you do about packaging/labeling? Returns?
At first no custom packaging but now that I make bigger orders it’s custom. Return window is within 2 weeks of delivery
How'd you choose what products to sell? Just stuff you like/would buy, or did you research demand in any way?
Didn’t research any demand, just found what I’d buy and then tested the market. Only need few a winners to get a decent thing going
Is this your first store? If not, how many hours did you spend learning and doing this until you got to this point? 20 hours to learn how to source Alibaba, make landing pages, fb ads, 3pl, etc?
No, it’s my 2nd - for sure reaping the learnings from the first and my wife runs http://samarabags.com for a living so I basically just copy her
What does your virtual assistant do for you that's genuinely useful? Do you pre-populate it with questions about delivery times and return policies etc? Or is it populated with answers about specific products?
VA is a real human - she responds to basically every customer email, manages shipments with the 3PL, coordinates with supplier, etc.