All Posts

@kmx411 Shopify AMA

Photo by Bernard Hermant on Unsplash

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

How does it work?

Photo by Camylla Battani on Unsplash
How?
  1. Find interesting products on AliBaba, and buy a few pieces for bulk pricing
  2. Make a good landing page on Shopify
  3. Test various copy / pics / videos against some audiences on FB
  4. If profitable, scale until audience taps out Repeat with new audience or product
Let me just get this straight..
  1. You buy stuff from Alibaba
  2. Send it to Amazon fulfillment center for them to store
  3. Add the items to shopify and then connect it to the item in Amazon fulfillment (?)
  4. User buys on shopify then Amazon automatically delivers

That right?

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??

Yes

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

What do I need to get started?

Photo by David Iskander on Unsplash
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

What results are you seeing?

Photo by Alex Perez on Unsplash
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%

How do you drive traffic?

Photo by Denys Nevozhai on Unsplash
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 do you handle inventory?

Photo by Ruchindra Gunasekara on Unsplash
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

Miscellaneous

Photo by Alesia Kazantceva on Unsplash
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.