Dropship Madness

Dropship Madness
Watch closely and learn as I walk you through
step by step on how to make CRAZY sales in 2
weeks by drop shipping on Groupon.
TABLE OF CONTENTS
1. Introduction to Drop Shipping
2. Platforms to Drop Ship
3. Introduction to Groupon
4. Market Research, Getting Ideas
5. Finding your Product
6. How Groupon Works
7. Listing on Groupon
8. Campaign Results
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Introduction to Drop Shipping
If you know what drop shipping is and you’ve done it before, then you can
skip this chapter. No harm refreshing your knowledge though it’s only two
pages long anyway.
Drop shipping is a supply chain management technique in which the retailer
does not keep goods in stock, but instead transfers customer orders and
shipment details to either the manufacturer or a wholesaler, who then ships
the goods directly to the customer. Majority of retailers make their profit on
the difference between the wholesale and retail price but some retailers earn
an agreed percentage of the sales in commission, paid by the wholesaler to
the retailer.
So why is this good news for us internet marketers?
Because it’s an awesome LOW RISK & EASY way to sell
products on the internet.
Just think about it, you don’t have to risk buying an inventory that might not
sell, you don’t have to pay to market the products (at least with my method)
and you make a nice profit per product sold. What more can you ask for?!
The benefits of drop shipping:
Lower Capital Requirement –
With drop shipping, you don’t need to invest thousands of dollars in
inventory (like I mentioned). Instead, you only purchase a product when you
have an existing order to fill.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Wider Product Selection – When you don’t have to pre-purchase all the items
you sell, you can offer a significantly larger number of products to your
customers.
Reduced Risk –
Without thousands invested in inventory, the risk involved with starting an
online store is dramatically reduced. If things don’t work out, you aren’t
stuck with thousands in inventory you have to sell at a loss. (Duh. This is the
best benefit in my opinion.)
Location Independence –
Because you don’t have to worry about fulfillment or running a warehouse,
it’s possible to run a drop shipping business from anywhere with a laptop and
an internet connection. (Yay for internet marketers!)
Highly Scalable –
Because you don’t need to manually fulfill each order, it’s relatively easy to
scale a drop shipping business.
‘Nuff said.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Platforms to Drop Ship
So, now that we’ve got the problem of the product settled, how are we going
to market our products?
Well, these are the most common ways of marketing your drop ship product:
1) Listing on eBay
2) Listing on Amazon
3) Listing on Craigslist
But today, since you are one of the lucky purchasers of this eBook, I will
share with you one uncommon, extremely lucrative AND FREE platform to
market your products.
You guessed it. GROUPON!
People go to Groupon to do one thing and only one thing, that is TO BUY.
We’ll get more into that in the next chapter. For now, let’s discuss the pros and
cons of the other platforms of marketing our drop ship product.
Ebay
eBay is popular because it receives high daily traffic and it is often full of
customers looking to buy specific products. Multiple selling options mean
that you can use a regular auction, a Buy It Now auction or set a reserve
price. This gives the seller flexibility and control over how the product is sold
while providing customers with a standardized method of purchase that is
comfortable to them. In addition, some suppliers include direct integration
with eBay. There’s a listing fee should you choose to list on eBay.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Here’s what a typical drop ship listing on eBay looks like:
Amazon
Amazon offers a slightly different way to drop ship online. You first send the
objects you want to sell directly to Amazon. Once Amazon receives your
products, they store them and list them on the site where they will be seen by
thousands of customers each day. If one of your products is purchased,
Amazon packages and ships your product directly to your customer. This
means that you do not have to report the sale. There are fees to pay as well.
(I personally do not like this method. It defeats the purpose of drop shipping
if I have to purchase inventory!)
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Drop ship listings on Amazon:
Craigslist
Craigslist gives the seller the most control over exactly how to drop ship
online. This is because Craigslist allows the user to sell a product in nearly
any way he or she wants. For instance, you might choose to list a set price or
have a prospective customer contact you for pricing information. You might
even consider posting a Craigslist listing to advertise your sale on eBay and
draw increased traffic to it. However, from my experience, the traffic on
Craigslist is too diverse for drop shipping. I don’t like the user interface as
well. But listings are mostly free.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Drop ship listings on Craigslist:
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Introduction to Groupon
Groupon is a deal-of-the-day website that features discounted gift certificates
usable at local or national companies. Groupon was launched in November
2008, and the first market for Groupon was Chicago, followed soon
thereafter by Boston, New York City, and Toronto. By October 2010 Groupon
served more than 150 markets in North America and 100 markets in
Europe,Asia and South America and had 35 million registered users.
The idea for Groupon was created by now ousted CEO and Pittsburgh native
Andrew Mason. The idea subsequently gained the attention of his former
employer, Eric Lefkofsky, who provided $1 million in “seed money” to
develop the idea. In April 2010, the company was valued at $1.35 billion.
Groupon serves 500 markets and 48 countries, the many major geographic
markets internationally include cites in the United States, Canada, Morocco,
Ukraine, Taiwan, Brazil, Germany, Greece, Finland, France, the Netherlands,
Belgium, the United Kingdom, India, Indonesia, Ireland, Israel, Italy, Poland,
Portugal, Spain, Puerto Rico, Japan,Turkey, Mexico, Peru, Chile, Colombia,
South Korea, Sweden, Argentina, the United Arab Emirates, Norway,
Romania, Singapore, Malaysia, Hong Kong, Mainland China, Russia, South
Africa and Thailand.
Chances are your country will be one of the countries listed above. But if it
isn’t, fret not. There are alternatives to this, every country has a deal-of-theday
website.
Some examples:
1. Woot.com
2. HomeRun.com
The methods I teach in this book apply to ANY deal websites.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Now here’s what listings on Groupon look like (if you’ve never visited them):
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Market Research, Getting Ideas
Now that we’re well acquainted with all the terms, let’s do some market
research! Market research is one of the most important steps to a successful
drop ship campaign. Heck it even applies to every other business.
So what can we sell to this crowd of hungry buyers? Let’s find out!
1. Head over to your country’s Groupon site and spend some time
browsing through the “Shopping” or “Products” section (since that’s
where we’ll most likely be listing our product). Pick out some of the
best selling deals that catches your eye.
Here are the deals I picked out:
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Let’s list down the details of each of the above deal:
Deal #1:
• Swarovski
• Jewelry (Earrings)
• $27.90
• Was $169.90 (don’t ever trust these numbers by the way, they’re never
real it’s always exaggerated)
• 84% discount
My conclusion on why this sells well:
• The brand
• The discount percentage
• Groupon’s customer base is made up of more females than males which
is why jewelry sells well
Deal #2:
• Power Bank
• 12k mAh capacity
• Ultra Slim
• $18.90
• Was $56.70
• 67% discount
My conclusion on why this sells well:
• It is a technological item (technological items seem to be selling well
on Groupon generally)
• It is a useful and productive item
• Prices for a 12k mAh power bank are higher elsewhere
• It’s attractive features (it’s slim and it has nice colours)
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Deal #3:
• Goggles
• $9.50
• Was $39.90
• 76% discount
My conclusion on why this sells well:
• It is below $10
• It is a sporty item (There’s a fitness craze trend going around)
Got some ideas yet? You should! That’s the purpose of market research.
Now that we’ve got some ideas, let’s go look for our product!
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Finding your product
There’s literally LOADS of places where you can get your dropship products
from. Do a simple search of “dropship suppliers” on Google and you can pick
one of the many websites that come up.
Here’s a list of some good dropship websites where you can get your supplies
from:
1. Worldwide Brands
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2. Doba
3. Chinavasion
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4. Tmart
These are just some of the many dropshipping companies that are out there.
Spend some time browsing through the websites and pick one that you like!
Most of these websites offer Free Worldwide Shipping.
That is just AWESOME! Customers love free shipping.
So let’s browse through these websites and find some potential products we
can sell that fit our market research criteria!
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
1. Potential Product #1: Zircon Necklace
This is the first item that I found while browsing. It fits two of our product
criteria!
1. It’s a jewelry item
2. It has a low price (Would probably be able to retail below $10)
But unfortunately it doesn’t fit the last criteria: It does not have a brand.
Okay… not too bad. Let’s keep looking.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
2. Potential Product #2: 20k mAh Power Bank
Cool, a power bank! Just like one of our market research products. What’s
more, it has a higher battery capacity of 20, 000 mAh!
It fits two of our product criteria as well.
1. Is a technological item
2. Is a useful item
Kinda pricey though, not sure if we could make much profit from that. Let’s
keep looking.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
3. Potential Product #3: Juicy Couture Perfume
This looks pretty cool. It fits some criteria:
1. Has a brand
2. Is a female item
We’re getting there. Let’s look for one last product before we make a decision
on which to choose.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
4. Potential Product #4: Gym Rat Drawstring Bags
Another cool find. Looks like an attractive design.
The criteria this fits:
1. Is a sporty item
2. Is below $10 (retail price)
Not bad we’ve got some cool finds. I hope you guys are getting the hang of
this. So which product will I choose?
I pick… PRODUCT #4!
Gym Rat Sporty Drawstring Bags
I personally love the design. I think this will sell well.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
How Groupon Works
This is Groupon’s Dropship model:
1. Send an inquiry to Groupon
2. Groupon will reply seeking your business particulars
3. If everything is okay, your account will be approved
4. You will then need to send a sample of the product to their sales
associate
5. You will need to sign a contract (basically some refund terms and other
stuff protecting their customers in case they don’t get their product or if
they are defective etc.)
6. Confirm deal features
Once all that is done, the deal will be featured. Here’s what happens from the
moment the deal is featured.
• Day 1 – Deal is featured
• Day 2 – Customer purchases item
• Day 4 – Groupon sends manifest report with customer’s address
• Day 5 – Send tracking number to Groupon within 2 working days
(might differ for individual country’s Groupon branch)
• Day 6 – Groupon sends customer their tracking number
• Day 13 – Groupon pays merchants commissions (Groupon takes
roughly 30% commission from the retail price.)
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
A few things to note from their dropship model:
1. Depending on which country you reside in, Groupon might only work
with you if you have a registered company. It’s not difficult to register
for one if you don’t have it. Does not cost very much either.
2. You will need a website. Groupon will ask to see your website where
you are selling your item. Just a simple website to display the dropship
product you chose will be fine. But DO NOT give them the link to the
website where you chose your dropship product (e.g.
worldwidebrands.com). This will just get your account disapproved.
3. You will need some capital. Groupon only pays merchants 7 days after
sales so you still need to purchase the product first to send to the
customer. Also, you need to send a product sample to Groupon so you
need to purchase one of your dropship product to send to them. This is
still extremely low risk because you only pay when you receive an
order.
4. Groupon gives you only 2 working days (depends on your country of
residence, as I mentioned Groupon in different countries have different
policies) of lead time upon receiving the manifest order to produce the
tracking number for the item so you have to make sure that your
dropship supplier is able to do this. Liaise with your supplier and see
what they can do for you.
5. Groupon takes a 20%-50% margin from the RETAIL PRICE of your
item (normally around 30%) so you have to plan your price model
properly in order to profit.
For example, I plan to retail the bags for $9.90, Groupon will take 30%
x $9.90 which is $2.97. My cost per bag is $3.30. So my profit per bag
is: $9.90 – $2.97 – $3.30 = $3.63
That’s more than 100% in profit margin for me so this is okay.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
So now that we’ve got all that covered, let’s go ahead and list our
product on Groupon!
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Listing on Groupon
Step 1:
Head on to Groupon.com (or whatever your country’s Groupon link is).
Scroll all the way down and click on “Run a Groupon deal”.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Step 2:
Click on “Local Deals” once you come to this page. Fill up the
application form with all the necessary information.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Step 3:
Wait for Groupon to send you a reply on email. Once you get it,
it should look something like this. Give them the necessary
information (we’ve discussed this in the earlier chapter).
(I blurred my email and my company name for obvious reasons)
Is the company registered?: Self-explanatory
Warehouse address: Liaise with your supplier and get this information from
them.
Intended promotions (More than 1): For this part, put your main product
first, then just pick another product from your supplier and put it in as well,
but indicate to them that you are more interested in featuring the first product.
Title (Position): If you registered your own company just put this as
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
“Managing Director” or “Owner”. Either one is fine. If you are already in a
company then just put whatever your position in it is.
Company Website: We discussed this earlier, you will need to show them
something. This is what I did, a simple ten minute WordPress setup:
Facebook Page: This isn’t very important once you have a website. I told
them I didn’t have a Facebook page.
Images and Specifications of product: Self-explanatory
Company manpower: They’re just concerned on whether you can handle
huge orders. Since we’re drop shipping, there is nothing to handle lol (but
they don’t need to know that).
What I told them was:
“We are a start up company of 4, however we work closely with a delivery
courier company so there will be no problem managing big orders.”
It’s up to you to come up with something creative that will give them
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
assurance. They won’t check up on you so don’t worry, a white lie won’t hurt.
Once all that is filled up, send your reply!
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Step 4:
Wait for your account to be approved.
Hurray! My account is approved!
Step 5: Send a sample to their sales associate
Step 6: Sign the contract
Step 7: Confirm deal features
Step 8: Deal is featured!
Congratulations! Don’t forget to submit your orders to your
dropship supplier!
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Campaign Results
Didn’t hit the thousands like our market research campaigns,
but hey I’m good with 474 orders!
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
My profit:
[$9.90 – $2.97 (30% Groupon’s margin) – $3.30 (Cost per bag)]
x 474
= $4692.60 (Revenue) – $1407.80 (Groupon’s margin) – $1564.20
(Cost of bags)
= $3284.80 – $1564.20
= $1720.60
Not bad for a 2 week campaign.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.
Conclusion
Well I hope you have found this case study useful and informative. Case
studies are the best source of lessons which is why I am sharing this with you
today.
Take action and don’t give up even if you fail on your first few tries. With
each failure you grow stronger.
I wish you the best of luck.
To your success,
Sufi.
© 2014, Sufi Yusof. Except as provided by the Copyright Act no part of this publication
may be reproduced, stored in a retrieval system or transmitted in any form or by any
means without the prior written permission of the publisher.
Dropship Madness. © 2014 Sufi Yusof – All Rights Reserved.