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Just Sold My 4th Dropshipping Store! (Dropship Partnership Case Study)

Last december I had this crazy idea to start a bunch of new dropshipping stores with the goal of selling them off one by one at the end of the year. The idea came about after I sold my second one while traveling through Bali and I realized, hey, this is nice...spending a few months building up a store, collecting the monthly profits, then having a big windfall of cash from the same after I've optimized it and proven the success over a year. The only problem? I no longer wanted to deal with the day to day customer service of running an ecommerce store. Two years ago, I loved the idea of being able to work online, check emails, fulfill orders, and deal with the occasional shipping issue. I didn't even mind having to wake up super early or stay up late a few nights a week to catch my suppliers during U.S. business hours. It was worth it, and I don't regret it at all. But it was still a job. An awesome, location independent job that I could do from Thailand, that often only took a few hours a day, but it was still a job.

So instead of starting one or two stores on my own and having to run them throughout the year myself while they gathered data and proved their worth, I decided to partner with a bunch of guys to do it together. I would help them start the store, optimize it for sales, lay out the game plan to sell after one year, and then let them take care of the day to day. I partnered with a bunch of guys who all flew out to Chiang Mai, Thailand to do it together. It was fun, it was a lot of work, but it was a great experience. And this morning, I got a message from one of the partners saying that another one of the stores have been sold. Unlike my other stores, I didn't have to sign a non-disclosure agreement, so here's everything about how we chose the niche, what items we sold, how much money it made, and where we listed the store for sale.






Choosing a Niche:



Everyone always asks, "What are the best products to dropship?" and I always give people an answer they don't want to hear. Instead of telling them the exact products we sell, mainly due to not wanting competition, or not wanting to violate a NDA (non-disclosure agreement) I just say "Furniture" which can pretty much mean anything. But the other reason why I'm always vague is because the worst thing someone can do is get an idea stuck in your head where you base all other ideas on. When I started my first drop shipping store, my friend was selling Egg Chairs, you know, those ultra modern looking chairs that are now in every hotel lobby?

Well the problem with that is ever since he started making sales, I thought, my niche sucks compared to his. I kicked myself in the butt for not thinking about it first, and it almost froze my progress. People with less of a conscious even even more of a scarcity mindset may have even secretly tried to copy his niche, driving up advertising costs and lowering profit margins for everyone. Luckily, I stayed course, and at the end of the 2 months it took to build the store, I made my first sale, and built a store that ended up selling for close to $60,000 a few years later.






Our Secret Niche:



But since this store sale didn't require an NDA, I can tell you what we sold. Just promise not to copy it directly as it doesn't help anyone, especially yourself. Just use it as a way to expand your niche selection, and choose your own from there. We chose to sell something you may have never heard of before, Ceramic BBQ Grills. You might be asking, what the heck is a ceramic grill and how did you come up with that idea?

Well aside from Tyler and I both being a fan of grilling meat, there was a hole in the market for websites selling Kamado Ceramic Grills. There were plenty of places selling common Gas, Charcoal, and Electric BBQ Grills, but very few places that had a big selection of Kamado grills, which are round ceramic Japanese charcoal cooking vessels that lock in the moisture by grilling at a constant temperature.



Kamado Ceramic Grill


Building the Store:



If you want to know more about how it all came out, listen to episode 139 of the Travel Like a Boss Podcast where Tyler and I talked about how we started the store, and how we made our first sale. Tyler and I both learned how to dropship by following Anton's course and are both members of his course.







Selling the Store:



After almost 10 months of having the store up and running I got a message from Tyler telling me that he had sold the store. The original plan was to ramp up the sales, optimize the store as best as we could, turn it profitable like our other stores, then flip it for 27X monthly profit and each cash out with $30,000. But it didn't happen. As with most of the partners, they all got busy with other projects, their other stores, or travel and life in general. I still have one store with one of the partners that is actually doing extremely well, so keep an eye out for updates on that one, but most of them sold prematurely for a lot less than we were hoping for.

Here's what Tyler messaged me the other day when the store sold. 






Lessons Learned:



I think we all had big dreams that ended up taking a backseat to our other priorities. Even though I made it pretty clear before the partnership started that they would be doing all of the day to day work, and I was just there to help launch the store, I'm sure it would have been nice if I took more of an interest in them after they were up and running and spent more time optimizing them, and helping out when I could. I dropped the ball by not doing as much as I could have. 

But I think at the end of the day, it was a positive benefit for everyone, it ended up being a free mastermind for everyone, which most of them actually ended up making at least a few thousand dollars from. It was a fun experiment and we all learned that spreading ourselves too thin and taking on too many projects or opening too many stores at once is a terrible idea. We've learned that it's a much better idea to focus on one store at a time and sell it for for $60,000 like I did my other stores, than to open 10 stores and try to juggle them along with doing other things at the same time. But overall, it was still a mild success. We made $37,172.72 in total sales over the 10 months or so it was running. Huge thanks to Tyler for running the store during that time. You can follow his blog The Life of Ty and his journey if you're curious what he's been up to. 




The Store Metrics:



Our average order size was $675 per unit sold, and we made just around 5 sales per month. Even though the actual profit margin per item was pretty good at around 20-30%, we lost money a few months by overspending on ads for products that were either out of stock, or otherwise not selling. Our best month we made close to $700 in net profit after all of the expenses, and the last month before selling we made $511 in net profit, and if we had kept it up without any of the bad months, the store could have sold for a lot more.

But the reason why we were both happy to take $6,000 for the store was because neither of us had the time or energy to focus on building up the store or work on it. At the end of the day, it was a fun experiment that we both profited from. Here's how we sold the store using the new Shopify Exchange Marketplace! 







Buying a Store:


If you go the route of buying someone else's dropshipping store, I would make a few recommendations before you do.

Vet the store: 


Whenever you buy a store, you want to do some basic due diligence. The gross revenue numbers will be correct as Shopify's backend can't be altered, but as far as net profit, before you purchase a store ask to see their credit card and bank statements to see how much they spent in advertising, product and shipping costs, and match that against their profit and loss statements.

Barriers to entry:


The biggest problem with most of the stores on the exchange is the fact that anyone can just copy them as most of them are using Aliexpress to fulfill orders, so they don't have actual relationships with suppliers. The nice thing about following Anton's method is that he teaches how to find and get approved by U.S. based suppliers who are picky about who they let sell their products. When I sold my two stores for $60,000 each, those buyers were also buying my supplier relationships.







Building a Store:



If you're not too busy with other projects or are basically in the position of where I was 3-4 years ago  when I first wanted to find a way to make money online, this could be a great opportunity for you. Especially with the new Shopify Exchange Marketplace, you can now pretty easily make a few thousand dollars a month by learning how to build dropshipping stores, then flipping them for a quick profit after a few months. Or you go the route that I went when I started and build a proper store that cash flows $700-$5,000 a month in profit and then sells for a large multiple at the end.

Option 1: Build a store with U.S. based suppliers and sell it for 27X monthly profit after 1-2 years. To do this, follow Anton's method and be ready to dedicate at least 2 months to build the store, and up to 4 hours a day to run it afterwards. You would want to sell this store using Empire Flippers or a private broker when you do sell the store. 

Option 2: Build an aliexpress based store where you can cash flow monthly profits straight away by following something like Dropship Legacy then flip the store using Shopify Exchange Marketplace

Option 3: Use either of the options above to build template stores using Oberlo to import products and then sell the store on the exchange even before making any sales. Although I would never recomend anyone buy one of those template stores, for whatever reason, people still buy them for $250+. 

When starting your store, you can use my Shopify coupon to get you 20% off all plans to help you get started. Or download the PDF below for discounts on everything I use to start, optimize and run my dropshipping stores including the ones I've sold! 





Hope this helps! Feel free to ask me for more help in the comments below.


Warm Regards,

Johnny FD


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  1. Congrats johnny! Think i'm on my 8th hahahaha. When you sold your first store for 60k I think that was when I first sold mine as well.

    ReplyDelete
    Replies
    1. Wow that's awesome to hear that, huge congrats! How much did you get for each store and in total now?

      Delete
  2. Great post! I am actually getting ready to across this information, is very helpful my friend. Also great blog here with all of the valuable information you have. Keep up the good work you are doing here.

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