Olivier Truong

How Dropshipping Works

Website: MosquitoTrapX.com

  • 500k in first two months


Revenue: $570,000 Returns: $19,000 Cost Of Goods Sold: $164,000 (18,230 units x $9/unit) Ad spend: $312,000 Profit: $75,000

5 steps to a profitable store in 2019

  1. Finding a winning product
  2. Making a professional website
  3. Writing emotional copy
  4. Creating an engaging ad
  5. Using an effective FB ads strategy

Finding a winning product

4 traits 1/ High profit margins

  • High perceived value. Allows product to be priced 3-5x original cost.
  • People will buy multiple of e.g. mosquito trap for multiple rooms

Price x Avg traps per order = Average Order Value $40 x 1.7 = $66

Price - Cost = Margin Per Unit $40 - $9 = $31

Calculate max ad spend limit (spend more, lose money. spend less, make money) Price ÷ Margin Per Unit = Break Even ROAS (Return On Ad Spend) $40 ÷ $31 = 1.3 OR Average Order Value - (Cost Of Goods Sold for AOV) $66 - ($9 x 1.7) = $50 (1.7 is the avg traps per order)

Note: Facebook ads cost are rising so you want to aim for products with AOV of $50 or more.

2/ Big audience size

  • At least 50M interested people
  • Bigger audience = Better potential
  • Generic appeal = Big audience 3/ Solves a problem
  • TBH any product solves a problem when framed the right way
    • Fidget Spinners were marketed to solve fidgeting and boredom even though they didn’t do anything 4/ WOW factor
  • Product should seem unique and only available from you
  • Will generate impulse purchases without price checking

How to find a winning product

  • Find them on Facebook
    • Seeing the ads multiple times in your news feed is proof that the product must be making some money otherwise money wouldn’t be spent on ads
    • Check number of views, comments, shares
    • Optimize news feed by clicking/liking drop shipping ads and FB will automatically surface more of them in your feed from other drop shipping stores
  • Once you find a product on FB, check Alixpress
    • Only use Alixpress for testing
  • After you’ve proved that a product will sell, find a private supplier before scaling ads

Make a converting website

  • Focus on credibility

    • Make people feel that their money is safe
    • Make people feel that the product works
    • Make people feel that the product belongs to your brand
  • Use a secure checkout badge with list of credit card providers

  • Include 30 days money back guarantee so people trust what you’re advertising

  • Customize images to match brand theme

    • The whole website should feel coherent
    • For MosquitoTrapX, the brand color was blue so blue was used in the images
  • Include customer reviews and testimonials

  • Images should be for selling

    • Use images to explain how your product helps buyers
  • Optimize the user experience

    • Easy to navigate
    • Don’t make the customer think too much
    • Example: MosquitoTrapX
      • Only 2 pages: landing page and product page
      • Not much to read
      • Easy link from landing page to product page
      • On product page
        • add to cart button
        • Product details are always summarized with a header (or two)
        • *
  • Make the site load fast

    • Use website speed loading tools like Pingdom
      • Compress images
      • Use themes like Turbo (loads fast) Write copy that sells
  • Target the customer’s emotional reasons for buying your product

  • Start with an emotional hook

  • Maximize emotional response while still explaining how the product works

  • Make your copy across different surfaces consistent

    • If your ad copy says 60% off, your website should say 60% off

Create an engaging ad

  • Photo: good for apparel
  • Video: good for gadgets and items that consumers aren’t familiar with Winning Video Ad Formula
  • Emotional Hook / Attention Getter
    • Caption: Say goodbye to mosquitoes
  • Animated clip that showcases the product
    • Caption: Powerful suction
    • Caption: Mosquito killer
  • Benefits
    • Caption: Safe for human & pets
  • Features
    • USB power supply
  • Closing - Show Now or Limited Sale text
  • Find clips from Youtube videos and make matching captions

Use an Effective Ads Strategy

Interest targeting —> Lookalike Targeting —> Broad Targeting

Phase 1

Goal: find winning interest, find winning creative

  • CBO $100

  • 1 Campaign. 5 Ad sets. 3 ads per set.

  • Minimum spend per ad set: (CBO ÷ 2) ÷ # of ad sets (i.e. min ad spend is 50% of the budget)

    • If CBO = 100 and # ad sets = 5, min spend = $10
    • Min ad spend is the minimum spend per ad set before FB starts allocating the rest of the budget to the ad set it think will perform best. This essentially controls how much data you want to collect before letting FB make a decision.
  • For MosquitoTrapX, interests were mosquito, insect, mosquito nets

  • Locations targeted: epacket countries

  • Language: English (All)

  • Placements: auto

    • Restrict placements once you get data that shows which placement works best
  • Each ad/creative is testing a unique 3s intro

  • Run campaign for 1 or 2 days

    • If after 1 day, still can’t tell which creative wins, let it run for another day
  • If nothing is profitable after 2 days, start over with different interests and new creatives

Phase 2

Goal: take winners from phase 1 and get more data

  • Take the winning interest and use it for all ad sets
    • Use the same creative for all ads
    • Keep the same strategy: same CBO, same min spend, 5 ad sets, 3 ads per ad set
      • Each ad set will have slightly different results because of auto bid. Sometimes the bid will be too high or too low, leading to poor results. If you only run one ad set, it may seemingly perform bad. Running 5 ad sets at the same time lets us collect data from the best performing ad set.
  • If campaign performs well on day 1, double budget on day 2. If it performs badly after 1 day, let it run another day. If it still performs poorly, kill it and start over.
  • After campaign spends $200, kill if unprofitable.
  • Budget for running Phase 1 and Phase 2 is $500
  • After Phase 2, keep profitable ads running and move on to lookalike audience targeting.