Ep 55 | Dropshipping In The US Versus AliExpress

Now with that being, I got to read the questions off of my computer. So, the first question for today is by Simeon Nava – Simone said,

Hi Fred! I start having lots of chargebacks from customers requesting a refund because they did not receive their products. I am paying even more to Shopify charge $15 extra. How can I stop keep happening and would like to stop using dropshippers from China as it takes so long for customers to get their products? What companies or dropshippers from United States do you recommend?

So, first thing first I would have to tell you the reason why I think that you’re getting a chargeback it’s because you did not open like a line of communication with your customers. This is very important. You did not open a line of communication with your customer because if all your customer inquiry is being handled, you will not actually have a lead to having a charge back. Now another thing is you wanted to make sure that you are shipping with epacket. I just got an epacket shipment a couple days ago and I ordered it a week ago and I’m all the way in Canada right now and I still got it in one week time.

So you have to make sure that you are using apacket and not any other shipping sources because it will take a much longer time if you cheap on not basically paying extra for the epacket.  So, I’m going to adjust that first, now for those of you that are wondering well drop shipping for in US versus in China or in AliExpress, there are definitely a lot of companies and even myself, I have several of my product lines actually dropshipped from United States at the same time. I do both AliExpressand United States because I want a good mixture of products in my store that I can actually sell.

Now, when it comes to actually dropshipping in United States, there are several things that I need to bring up with you and be honest and upfront with you about things or what you’re going to encounter. First thing first, when you’re dropshipping from the United States, your margin is going to drop drastically. So, the profit that you make it’s going to be far less then you actually dropshipping from AliExpressand from China because all these companies either they actually have labor in the United States or North America or they simply need to actually buy in products from the manufacturer at a wholesale price ship it right to their US warehouse, so that’s why at times US will cost you a little bit more money.

Now, obviously the good side of actually having a dropshipper in United States is that you’re going to basically get your customers are going to get your products a lot faster. It’s going to be 3-4 days or 5 max and they will actually get your product. Again, when you’re looking for a dropshipper in United States one thing that when you have the first point of contact with them, there’s two scenarios that’s going to happen : (1) is that you are going to actually be charged in arm and leg because they don’t know you and they want to make the most out of you. So, you’re going to be charged a lot of money right up front when you’re getting an account and what you got to do is to really show them your volume and to negotiate a lower price. During that time, it will cost you more money. You may be losing money when you’re basically running ads because you’re not getting the lowest cost possible for the products.  (2) You may simply get ignored because they never heard of you and you’re not able to provide information to them on how much volume they can expect from you because that’s what people in United States or in North America wants. They want to know what your volume is. How much volume can you push on a daily basis.

When they know that you can actually push a decent amount of volume on a daily basis, then at that point you can actually start a conversation with them to start working with things out. But again, right out the gate when you’re working with a United States vendor, you’re not going to get the lowest cost possible. You have to show your results before you can actually go into negotiation. Unlike AliExpress, you’re basically just going with the lowest cost possible and you’re selling right away without any of the worries and everything. So, really it depends on which route you wanted to take but what I say, the best thing is get your feet with of AliExpress and when you know what you’re doing and when you’re able to actually produce volume, let’s say 50 to 100 orders a day, then at that point you can use that as your asset to your company and go and poke all other dropshippers in United States.

Now, there are several dropshippers that I can recommend you in the United States one is Doba.com. It is a lot more expensive when you’re buying your product. At times, you may lose money or times are not going to get that profit margin, but if you want to actually have a dropshipper in United States Doba.com is one solution. The other one is actually Salehoo;  Salehoo is a directory of all the wholesalers and dropshippers. You pay like $47 a month and you get access into their whole directory on knowing who the suppliers are and still have to make individual contacts, you still have to negotiate with them and all those other stuff. So, these are the two.

The last method is basically you doing a Google search on finding out what products you want and really reaching out by blind emailing these people saying that I want to actually see if I can become a wholesaler or dropshipper that is another route for you to take as well. Again, just told you the pros and cons and assure of you guys what strategy you can use.

So moving on to the second question right now by James Anania.

Which works better as a marketing strategy, higher product and free shipping or lower product price and separate shipping? Thank you, Fred.

Great question that you bring up. Higher product or lower product, free shipping, no free shipping. First of all, the answer to your question is both works. I use both strategy. I actually use all three strategies free plus shipping, high-priced product with free shipping and lower price product with shipping separated. Here’s the deal, you are the person that needs to make a decision based on the data that is coming back from your advertising to see what makes sense.

I can tell you that yes you are going to make a much higher profit margin when you’re selling a higher price product plus free shipping however will that pan out when you are advertising, because you cannot be in an assumption stage on thinking that I think this strategy works and you just run with that one strategy. Your goal is to simply let the market tell you through ads, through data, which strategy works.

Let me repeat that, you got to basically run ads to let data tell you what strategy works and at times you’re going to have all three that works but it’s going to be 3 different products, you will never know and at times you may have that one single product that works better when it’s actually lower cost, charge shipping versus free shipping at a higher costs. But you won’t know until you let the customer tell you what works and that’s why we are definitely in a golden era of entrepreneurship and advertising right now. If this was 10 years ago you have no way in heaven on identifying and knowing what strategy works because you’re not going to actually have all these data that comes back to you to tell you to share with you what works and what doesn’t work.

For you guys, very important test it out. All these strategies all work – both strategies work great James but again it all drills down to the product and your customer demand and what your customer think at the same time.

Moving on to the third question of the day is by Don Roberston – Don said,

I started my e-Store now. I’m trying to find vendors but we see none with diamond or crowns just stars so, so kind of confused on what vendor to choose from.

So AliExpress made an update. They basically hid all their crown, diamonds, medallions on the stores information. So in a bird’s-eye view, make sure that you look at the rating make sure it is 95% and above for all three of the rating now if you actually go into the store and go into their information, you will actually find a rating at the same time. Again you don’t really just want to actually have those rating with just the gold, medallions, diamonds and crowns tell you if it’s a good vendor or not, you want to go more specific. You want to go into basically looking at the feedback score, quality of the products and everything and you start as a judgment. But if you want to actually find the rating you got to actually go in into the shop and go into the information to actually look for that.

Moving on to the fourth question of day is by Antonio Coniku.  Antnoio asked,

Don’t you think it is better to run PPE peeve for free plus shipping product ads?

The answer to your question and based on what I’ve been sharing with you guys all the time and based on my test is NO. Again when you are setting up your Facebook marketing objective to tell Facebook that hey I’m advertising because I only want engagement, that will be the only thing that Facebook will do. Facebook will just get your reaction, share, likes and that’s it or interact with your ads they’re not going to actually go a step further and go an extra mile on getting you the sale. When you choose a website conversion Facebook will basically find people that will most likely through their network to make a third party or basically up slight transaction and that’s what you want to do.  You want to tell Facebook straight up. Please optimize my ad to get my sale or please optimize my ad to get a lead you don’t want Facebook optimize your ad to get engagement.

That doesn’t work shit. I have to say that because a lot of people have been asking me this question likes, shares, comment doesn’t turn into money. What turns into money is basically getting a sale or getting a lead and when you’re advertising on Facebook on telling them that you only want engagement you are basically shooting yourself in your foot right now. I might as well throw those money into the ocean or donate it to charity or something. You don’t want to do that because again you want to tell Facebook specifically that you want conversion. You want sales and you want Facebook to optimize your ads to get conversion, not to get engagement.

I hope that really helps you out. Moving on to the last question up today is by Juancho Valconcha.  Juancho said,

Hey Fred! What if I create a three Facebook account and I have to run ads on the first account and I plan to run ads on the second account on different niche. How would affect running ads in Facebook since you recommend to have only one Facebook account and create a Facebook Ads manager and business manager for direct at account suspension? What’s the smart thing to do?

So, the smartest thing to is to have your business manager account own 3 of your ad accounts that you have. That is the smartest way. Now, in each of the ad account, you will have a Facebook pixel. Facebook pixel – you only have one tied into one ad accounts and whatever you do in that account one, it’s not going to affect ad account two given the fact that you are not putting the same pixel in the store. So, you’re not putting ad account one and ad account two pixel in your store or website. If you do that then you’re going to cause some confusion and a lot of problem. What you wanted to do is to make sure that and here’s the rule of thumb, when it comes to not confusing Facebook pixel and making sure that it’s optimizing correctly. One website, One Facebook ad account which gives you one pixel, it’s one-one-one, if you want to use a 2^nd ad account, what you want it to do is to create a new store or a new website and have it only install the 2^nd ad account pixel then it won’t cause any confusion or basically having any problems or affecting any of your ads when you are running it.

So, I really hope that these answers really helped you guys out especially for the five that have submitted to me. If you want your question to be featured and want me to actually give you the answer to the question that’s in your mind, make sure you go to www.fredlam.com/ask and fill in that form and I’m more than happy to actually get your question addressed so you can continue to move forward for your business. With that being said, let me know in the comment box what you guys think about today’s daily huddle I know that I haven’t been coming on for the longest time. I know that a lot of you guys anticipate and actually look out and wait and want me to be actually in my daily huddle out of the daily basis.

Llisten, if you guys are trying to actually get social media to work, Instagram is the chisel that you definitely want to focus on right now.

So with that being said, we’re not even done yet. We’re going to basically move on now to our next session of the day which is going to be the most anticipated part. Our kickstart 500 grant. Put in the number ‘500’ right into the comment box if you guys aren’t excited to see if you are going to be the winner for me to invest $500 towards your business so you can actually run ads, grow your business, test new products and all those other fun stuff. If you guys have not applied to actually win my kickstart $500 grant which I give out every single week, you got to go to www.fredlam.com/500, there’s an application form that you have to go through and I will go through it, read it and then once you basically are selected I will give you $500 cash.

I’m asking nothing in return and I’ll even give you a to-do list on things that you actually have to get accomplished. Since the day that you received that checklist, I’ll give you 30 days to get it accomplished and be accomplished in 30 days, I can jump on into a one-hour consultation call with you to actually you look at your business, to give you reviews and to basically share with you exactly what I would do if I were in your position.

With that, let me actually pull out our winner for today’s kickstart $500 grant. Alright I actually have it right here and I’m going to use my funny little clapping sound. The winner to our kickstart $500 grant today is Yana Palziva. Yana Palziva said I would like to thank you for first for the inspiring videos on YouTube. You gave me more than my business school and previous working experience. That’s excellent! Every time I watch your video, I find something new and convincing for me finding replies to my questions and enlarging my view on business.

I am a Ukrainian immigrant in France struggling to own some small businesses. I don’t want you to use some. You want to focus – very important I am okay to earn at least enough money to cover my rent and utility bill. Today I am obligate to work for someone else and even work alone when free okay she has very long – my dream project alternative medicine blog. Exciting stuff!  Basically I’m writing a book about old Russian method of health care. That’s very interesting! And I’m hoping to make quick money from my Shopify store and quit my current job as soon as possible. Excellent!

So, obviously you have a greater purpose. You want to actually share to the world through your store and through your business on simply educating people about traditional medicine, alternative medicine, that is amazing. Again congratulate Yana for winning our kickstart $500 grant. You should be receiving it very, very soon and I look forward on seeing you can actually accomplish your 30-day checklist and if you do, exciting, that’ll be fun.

Now, I did have a lot of people asking me if I’m going to be going to the 10x growth con that Mr. Grant Cardone is hosting. It’s one of the most anticipated events this year. The answer to the question is YES. I am going to be at Vegas next week for Grant’s10x growth con. So, if you guys actually see me at 10x don’t be scared, I don’t bite, come up, say hi. If you want a picture, we can take a picture together. Come talk to me if you guys want. Just don’t be surprised on my height. I’ll be short and I’ll be looking up to you guys like this. But I’ll be there, so if you guys want to basically come by and say hi, let me know and if you guys could actually see me in the hallway or something, I don’t know what’s going to happen there, but I am going to be there.

Other than that, listen I actually have an amazing time I love my daily huddles, love spending time with you guys. Again in the comment box if you love it, hate it, dislike it absolutely thrilled, let me know write in the comment box make sure you actually share this video to other people that you think that can inspire them to actually create their business and giving them the knowledge that I am basically extending to you guys.

I hope that you guys extend the same thing. My goal is to keep inspiring people like you guys to really build your business to really move forward and to most importantly, be empowered to do that.  Other than that, listen my final words to you is keep hustling and go- go-go, you got to keep moving. You got to keep chasing your dream. You got to keep turning your thing your dreams into reality and that’s where you will actually flourish in your life. Other than that, I’ll see you guys tomorrow in our daily huddle. Bye now!