David: Hey, everyone, and welcome to Start Yours. My name is David Vranicar, I’m with Oberlo, and we have kind of a weird episode for you today. It’s gonna be all about coronavirus and how coronavirus is affecting Oberlo users and ecommerce entrepreneurs around the world.
Before we dig in, let me be real clear that we, at Oberlo, know full well that dropshipping supply chains and customer refunds are not the most pressing concerns when it comes to coronavirus. The situation is scary, everyone has someone who they’re particularly worried about. Everyone has had their lives turned a bit upside-down.
So there are many, many things that are more important right now than ecommerce and scaling and crushing goals, etcetera, etcetera. And we get that, we really do. Chances are, you’re stuck at home just like I am. So, while I think we were able to edit out all of my two-month-old’s crying, let me apologize in advance for any goofy noises that might have seeped into the background.
So for this one, we dialed up four really smart, really successful, ecommerce entrepreneurs and Oberlo users. First, we’ll talk with Emma Reid, who joined us from Australia. Then we’ve got Rodney Zachariuk and Kory Szostak, who run a business together out of Vancouver, and finally, we’ll get Ryan Carroll on the line who joined up from California.
And we just… Yeah, we talked to them about what coronavirus has meant for their businesses, what it’s meant for them, and how they are keeping both their sanity and businesses intact while we wait for things to settle down, hopefully, sooner rather than later.
Yeah, they’re not here to offer advice, but just to let you know that, hey, we’re… This is how we’re surviving and we’re in this together. So yeah, stay safe, stay calm and enjoy the podcast. Now, let’s talk to Emma Reid.
So before the coronavirus outbreak started, you had already shifted from a pure dropshipping model where you were sourcing orders one at a time as they came in, into a model where you were holding inventory.
But that hasn’t stopped you from having some of the same supply chain headaches that Oberlo users and that businesses around the world are having right now. Your products do still come from China, you still rely on a lot of the same logistical infrastructures that a lot of businesses do.
So I’m curious, what you’ve seen since coronavirus forced shutdowns throughout China in late January and what does that look like for you and your business?
Production at a Standstill
Emma: Yeah, I can definitely say that I’ve had a lot of problems with the supply line and logistics. I have noticed an issue with manufacturers. Like, I order directly from a factory and they were completely shut down for over a month.
David: Wow.
Emma: And I couldn’t order any stock. And China is still basically in lockdown. Even though they are returning to work at this stage, my factory is still not back to work and still not able to produce what I need.
David: Yeah, just for the record, it’s March 19th as we record this. And so, yeah, it’s still very much kind of a precarious situation. So, sorry, I just wanted to get some context on the timeline. So, what is going on with your supplier these days? Is it still kind of doors shut?
Emma: Yeah, I’m about to run out of stock.
So, I have until basically the end of this week and then I’m basically sold out of stock. And my factory takes about 30 days to produce it, so I’m here in limbo for about a month. Assuming things are back to normal by then.
David: Right, yeah, and who knows, who knows what will be going on. The official day of Chinese New Year was January 25th this year, and then they said they were gonna extend the holiday a little bit, and then the first announcement was that it would go into February, and then it was February 8th, and then February 10th, and then it’s just kind of never…
As you said, it’s never completely gotten back to normal. Do you have contingency plans or what do you think the next 30 days are gonna look like once all the products that you have in your inventory are gone?
Emma: Well, I don’t really have any way to get stock other than that. So, I’ll basically be spending a lot of time working on planning out the future of the business, planning what I wanna include in the next iteration of the product. Because I am working on improving the product and putting my own custom designs on it and everything like that, so I’ll be doing a lot of work on that.
And I already did a lot of work on redoing the entire website and the branding and the product photos, so I don’t necessarily need to do that. That was when it was initially shut down, that’s what I spent that time doing. But now, yeah, it’s sort of like in limbo, but I will be doing a lot of work on the business. There’s a lot more that goes into it than just making sales.
David: Right. And I think it’s easier said than done to have this attitude of, hey, you can actually take advantage of this downtime to optimize your systems and update your product descriptions and all this other stuff that people might be putting off while they’re making sales. And so, I know that that might be tricky for some people, just given that there’s no immediate payoff, there’s no immediate revenue.
But talk a little bit more about what you are doing that is within your control. ‘Cause like you said, a factory in China getting back to work, that you are not gonna be able to snap your fingers and make that happen. But there is a huge list of things that you can work on. So, what is… What has the stuff within your control been that you’ve been trying to optimize in the meantime?
Emma: So, back when I couldn’t ship anything at all and I was just in limbo, I was working on redoing the entire website. So, from… Like, I’ve had a completely new store theme, completely customized it, and fully branded my site around the ideal audience that I had, the people that were buying the most.
And that has increased my conversion rate now that I’m selling again, as well as that I got an entirely new logo, new colors, everything. Redone my whole social media, planned and photographed two months’ worth of posts for social media.
David: Wow.
Emma: Filmed new ads.
There are just so many different things that get neglected if you’re in this cycle of making sales and then not really going back to optimize all the rest of your stuff.
The Importance of Communicating as a Small Business
David: Right. And so you mentioned your target audience and your ideal customer and I’m curious what sort of communication you’re having with your audience. Are you preemptively warning people that orders might take a while? Have you adjusted the shipping times that you display on your website?
It seems like this communication element would be super crucial right now in both in terms of expectations setting and then also just nurturing relationships and making sure that you stay in people’s good graces. What communication are you having and how has that unfolded in the last month plus?
Emma: Yeah, definitely. It’s super important to communicate with your customers and potential customers about what their expectations are with shipping. Thankfully, because I am shipping or was, like, shipping with an agent and all of my orders were getting out and leaving China and delivering in a reasonable time frame, it was… Like, I didn’t have to give them many delay notices, like horrible bad news that their order will take a few months.
David: Right.
Emma: So most people have been pretty happy with being able to notify them and keep them in the loop, I set up an email flow after they order and it will tell them, “This is how long it’s going to take. But there could be unexpected interruptions, we’re just not really sure at the moment,” like, just prepares them, gets them out of the mindset of, “Wow, I ordered something. It’s going to be here in three days.”
I warn them that we’re a small business and there are supply line issues going around because of the coronavirus and these days, people are aware of that, people are totally fine that there are gonna be issues, because even stores like Apple right now are facing major issues.
David: This transparency in kinda this… The customized email flow that you set up, this has been well received by your customers? It’s not something where they immediately reply and say, “Give me a refund?”
Emma: I’ve only had, like, maybe two or three people out of the thousands of customers that I have, actually be, like, really concerned and not want their package. Yeah, so most of them are fully happy with it.
David: You talked about things, hopefully soon kind of returning to normal on the China side and maybe if everything gets rolling again, then you might be within a few weeks of having a bunch of inventory and then once you have that you could kind of have some normalcy on the supply chain side.
I’m curious, though, if you’re concerned about new problems or new challenges that might be emerging with shutdowns in other parts of the world. And so I could kind of imagine that there’s a scenario where there’s a sense of normalcy returning to China, but then shipping in all of Europe is messed up or that shipping in the United States is real screwy. Are there other things that are kind of top of mind for you right now outside of China?
Emma: Yeah, I was warned about this by my agent. He told me that, basically, there was a big issue with stuff coming out of China in the beginning. But now China is sort of returning back to normal but all the other countries they’re facing lockdowns and cancellations of passenger flights.
And ePacket delivery specifically in China Post rely on passenger flights so there’s like, when there are not enough passenger flights then how are your packages supposed to get to these other countries?
While as other carriers, private carriers such as SF Express and Yun Express, they rely on cargo flights and they don’t have to rely on all the passenger flights and tourists and people traveling back and forth. So they have their own private airlines that deliver the packages to these countries.
Source out ePacket Alternatives
David: So these private shipping options, is this something that you think dropshippers who are relying on AliExpress products, is it something they should be looking for because historically, we’ve always talked about how great ePacket is.
And for those who don’t know, ePacket is this cheap, relatively fast way to ship products coming out of China to, I think it’s like 30 or 40 different countries and it’s been a reliable part of a lot of businesses that use Oberlo. As you mentioned, though, Emma, it’s getting a little bit screwy these days. Should people be thinking about ways to get creative with the various shipping options?
Emma: Yeah, people should definitely be thinking about trying to order their products and get their product shipped with private carriers rather than ePacket. A lot of businesses that are in China are actually being asked to stop using ePacket at this stage because of the massive backlog and slow down while they try to fix the logistics issue of the planes.
So definitely, try to talk to your supplier and get them to use a different method and the ones I recommend are UBI, SF Express, and Yun Express. Y-U-N Express.
You can’t actually choose these methods on AliExpress, though. So that’s a little bit difficult to organize because a lot of suppliers either don’t have a relationship with these carriers, maybe they don’t know who they are and they don’t have an account set up and it makes it a little bit difficult when placing an order on AliExpress. Sometimes you can get them to… Like, you can choose ePacket and then tell them, “No, I want to use this other method.”
David: Mm-hmm.
Emma: And depending on your relationship with your supplier, maybe that will work. Or you could get them to set up like a VIP link where they change the price of the product to incorporate the other shipping method and then send it that way.
Or you can even take your transactions off AliExpress and have a relationship with CSV files and pay them through TransferWise or PayPal.
There are a lot of different options there and you’ve really gotta try to see what works best for you and your supplier.
David: You were on the podcast a few months ago and one of the things that we hit on quite a bit was the stress that’s involved with entrepreneurship and with ecommerce and you had this story of having tons of success but that success kind of ended with this burnout that was… Everything kinda came crashing down right as it was getting really good.
And it seems like the sort of stuff going on right now with ambiguity around product fulfillment and then this kind of maze of shipping options that you just mentioned, this seems like stuff that’s gonna be causing a lot of people a lot of stress.
And so what would you say to somebody who’s like you in this situation where there are a lot of things that are out of your control, there are a lot of question marks both when it comes to China and then now more and more elsewhere in the world. How are you dealing with the stress and what have you learned in your years of ecommerce that might be helpful to anybody else who’s under the same sort of pressure?
Emma: Personally, it’s not really affecting me too much emotionally because I’m so used to having supply issues, well, headaches like this, like things that just pop up and they’re completely out of your control. It is part of being an entrepreneur.
A lot of things are gonna be on fire sometimes, and then you’re gonna have really good days, and then you’re gonna have really bad days. It’s just all part of the journey. I like to say it’s like a roller coaster. You have a lot of fun, but it can be pretty scary at times.
Capitalize on This Lull or Risk Falling Behind
David: Cool. I’ll get you out of here on this and I wanted to double back to something that you mentioned before we started. We’re talking about trying to find silver linings in this and things are shut down, and there’s ambiguity and it’s creating a lot of headaches, but there are things to do and that there’s still progress to be made.
And you talked about this anecdote from Isaac Newton. I thought that was cool and I thought it’s really appropriate. So what are you learning from this 18th-century physicist about how to handle a 21st-century pandemic?
Emma: So, back when Isaac Newton was at university, there was actually a pandemic, the London Plague, and everyone was told to stay at home and self-quarantine. And he actually had his biggest discoveries on gravity and motion during that time, during the time he wasn’t able to go to university.
So, I just wanna say that it’s a perfect time to get out there and learn, and really try to learn some skills that will help set you up for when things come back to normal, because if you’re not learning and preparing and building out things while there is this lull uncertain time where no one’s really doing much, then you’ll be behind when things return back to normal.
David: Alright, Emma, I’ll let you go. I really appreciate you hopping on, and I know this is something that you have been talking about with a lot of other ecommerce entrepreneurs over at your Facebook group, Ecom Explorers, E-C-O-M Explorers. So there’s more cool stuff from Emma over there. And yeah, Emma, thank you so much for taking the time.
Emma: No worries.
David: Okay, big thank you to Emma Reid for joining us from Australia. Let’s keep things rolling and see what Rodney Zachariuk and Kory Szostak are up to over in Vancouver.
You guys were actually in the process of optimizing your supply chain just prior to coronavirus turning everything upside down in China, and that would have been in late January. And so, of course, there’s no good timing on these sorts of things. But it was particularly crazy for you two and your plans for your store.
What were you up to? What were the optimizations that you were doing? And then how have your plans been affected by this all?
Rodney: Yeah. So we were actually moving from dropshipping into more so creating custom products. So, we had a large line of custom products that we were creating and we were waiting for a manufacturer to produce them for a while there, and they were finally created. And then, just as we were getting them shipped over to our fulfillment agent, as they were prepared, Chinese New Year’s happened, so we had to wait.
And then, as Chinese New Year’s was happening, we got word of the coronavirus coming out. It obviously extended it from there on as well so, at that point, we were just running around in circles thinking, “Okay, we’re just waiting on this product, waiting on this product. What can we do?”
And from there, we just started to really completely rework and reverse engineer our whole business model and started to work it from the ground up and go through everything and make sure that everything was now at our next tier of…
Kory: I guess, scalability.
Rodney: Scalability and just the level of quality that we were looking for.
Kory: Yeah. The issue with what we were operating as before was dropshipping with AliExpress. Obviously, the margins just… They’re not there in comparison to when you bulk purchase items. So we really wanted to steer away from that and we were lucky enough to run marketing campaigns that were still profitable with those margins.
However, obviously we wanted to move on to bigger and better things, so the supply chain just wasn’t working for us and we weren’t confident in the shipping practices of our supplier at that time. Leading up to Christmas, Black Friday and I guess Chinese New Year, we ran into an abnormal amount of customer support queries in which we had to get to the bottom of and it all stemmed from our supply chain just not being efficient or to that extent, it just wasn’t acceptable to us anymore.
So, we decided, okay, if we do get these custom products made, we can get ’em into a warehouse or a fulfillment center, and from there we can utilize their couriers or supply chain process and even custom package our stuff as well, and then have it or rely on them as opposed to our supplier.
‘Cause when we were originally doing this, we thought having a supplier also ship our products was the best way to go about it because that’s one less step in the supply chain in getting it to the customer.
But as time went on, we slowly realized we’re getting all these customer support queries, we’re losing money with potential chargebacks and/or people asking for refunds because of delays and issues with packages not moving or tracking numbers not being updated.
So, yeah, the coronavirus hit us at just the worst time because we were ready to have that all planned out and set to go, but then we decided we should probably tread with caution here.
We’re not sure exactly what the shipping channels are gonna be. We had heard ePacket was gonna experience major delays. Some of the special lines had been increased in price by up to 20 percent, I think, for Yun Wang and SF Express.
So, yeah, we just put things on pause and decided to take the time to learn more techniques and skills and invest in ourselves to be prepared for when we can scale and use that actual supply chain.
Employing the Right Mindset to Weather the Storm
David: So, I wanna press you on the learning new skills thing in just a minute. But let me double back to something you said about having to be cautious. We’ve talked before, you’ve been on the podcast before and I know you guys like to move, like to get things done and then test, and then fire away.
Has it been difficult just from a spiritual level for you guys to have to pump the brakes on everything and hit pause? Not just hit pause but hit pause at this moment when you were exactly trying to scale up your business.
Rodney: Definitely. Yeah, it was definitely a mental test. But it ultimately comes back down to our mindset as well. We’ve really conditioned our mindset now where us a year ago, this would have been like…
Kory: Devastating.
Rodney: It would have been devastating. But now our mindset is a lot better now. So we’re in the place where we have this grand vision in our head. Yes, there are gonna be hiccups along the way. But in reality, the grand vision is still being worked on with developing our own skills and developing our website and just improving everything within our business model. So we see that still working towards our grand vision. So even though we’re not advertising, our sales aren’t coming in right now, it’s still progress towards the grand vision.
David: What would your response have looked like if this were 12 months ago? If you had this newbie mindset, when you didn’t have as much experience, hadn’t had the same failures, the same successes, if you were new to the game, what would have been different between that and the way you’re handling it now?
Rodney: I think that last year, well, actually last year around this time or I guess Chinese New Year, we got rocked with that initially, and that was our first introduction of, okay, you’re in business now and you have to play by the world’s rules essentially.
So at that time, we got home or we were in Hawaii and we got that news like, hey, we’re shutting down for the next two or three weeks from suppliers. And we took that experience and brought it to this experience because we knew Chinese New Year was coming up and I guess the coronavirus has just acted as more of an extension to that.
But last year, yeah, we probably would have been running around like chickens with their heads cut off ’cause we weren’t disciplined.
We were flying by the seat of our pants, making adjustments on the fly, just not actively thinking about the systems that we’re trying to create. Instead, we were trying to react to what had happened to us.
Obviously there wasn’t really any prediction of the coronavirus being a factor this year. But we knew Chinese New Year was coming up. So we knew that we were gonna be down for a little while because we hadn’t actually set up that supply chain just yet. We were in the process of it. So I think it’s been a little easier to deal with to some degree. But at the same time, of course not being able to go full in on a project you put so much time and effort into, it sucks.
But actually, Emma, the girl you guys also brought into Oberlo, Emma Reid, she sent us a Facebook post a couple of days ago talking about, I can’t remember what the guy’s name was, but it was essentially a CEO who… Or someone at an agency that interviewed a bunch of CEOs and they were saying that the CEOs who were the most disciplined with the best entrepreneurial mindset and the most motivated to succeed were the ones that were moving forward regardless of the situation at hand here. And that really resonated with us.
When we first got word that the coronavirus had hit, we were pretty shocked. We took at least one or two days off to just mellow out, let our bodies sync up and our minds sync up to what the reality is and then get back to work and actually put a plan in place and not get distracted.
Work on Things You Can Control
Kory: Yeah. I think ultimately, the difference-maker would be the emotional response right now as well. If it were to happen last year, we were definitely just reacting to everything on such high emotions. So we were so quick to react to anything that was happening to us that we weren’t really thinking or processing anything when we were doing it. We were just doing it.
So now we have that mindset of, okay, take a step back, really think about this and process it and the best way to approach it now and what can you work on in the meantime. Because in reality, things like this, like the coronavirus, it’s, unfortunately, it’s out of our control, right? So if we can work on things that are in our control, that’s what we’re gonna focus on right now.
David: One thing I’m curious about, and I know you guys have been thinking about this as well, is if a scenario unfolds where things return to normal in China and you guys get the supply chain sorted out that you wanted and you are able to make the adaptations that you were planning on, maybe a few months late. But it all happens, it all goes through.
So let’s say that that unfolds the way you want it to. But then things get really messed up everywhere else. Like you’re in Canada, Canada’s going through an ordeal right now. I’m from the US. There are a lot of questions there right now, a lot of school closings, restaurant closings, job losses, stock market. Everything’s just really, really crazy right now in North America and in Europe as well.
And so if things are somewhat normal in China, but then everywhere else gets a little bit out of whack, what are the plans then? Do you have a timeline that you’re looking at for when you think things are gonna get back to normal or is this a day by day thing? What does it look like with all this ambiguity, not just in China but elsewhere as well?
Rodney: Yeah, yeah, we definitely have been thinking about this. It’s honestly a day by day thing right now. Unfortunately, it’s something that we can’t really predict. So it’s something that we’re gonna approach with adaptability and we’re approaching with our mindset that no matter what happens, we’re gonna work through it.
So things could completely change in a week. Things could completely change in a month. We could be working in a completely different economy, which we already kind of are, in a month’s time, in a year’s time.
So it’s all about adaptability and just taking each day and gathering the information that we can collect from it and seeing what we can do with it.
Kory: Fortunately, like Canada had said that they’re shutting down borders, so it is a good thing in a sense to help stop the spread of the coronavirus. But obviously, with packages we’re not too sure what’s gonna happen, whether our types of packages will be making it through customs.
Our prime minister had mentioned that I think it was just essential goods would be pushed through. But we’re trying to stay up to date on all of that. But one thing that we talk about constantly is we put ourselves through the school of hard knocks this last year-and-a-half.
The amount of lessons and experiences in self-education that we’ve developed is something that’s never gonna be taken away from us regardless of whether or not this coronavirus takes us down or we work through it, right?
So even if it does force us to pause things for an extended period of time, we have these skills that we can develop or that we’ve developed to build websites for other people, help run marketing for other people. So if we really have to make a pivot, for the time being, it’s not the end of the world. I guess it’s more of just a hiccup or a barrier for us to get through or a hurdle for us to get over before we jump back into regular operations.
Use the Time to Build Yourself up as an Asset
David: Yeah, and I know that’s something that you guys have always been big on is treating yourselves as an asset, and not just the store and not just the products, but that you yourselves are an asset. So you might be running Instagram marketing campaigns to generate sales, but you’re also accumulating really valuable knowledge about Instagram.
Has that approach kind of put you at ease a little bit, knowing that yes, you’re very invested in ecommerce, but you’re also very invested in yourselves, and just kind of having made yourselves a lot smarter over the last… You know, however long you’ve been running your store? I think it’s what, 18 months or 24 months or so?
Kory: Yeah, about that now.
Rodney: About that, yeah. Yeah, definitely, self-education is key to us because we’re really realizing that with self-education, it just compounds over time, right? And with experiences… Even with bad experiences as we’ve learned the most from, I think our failures, right?
Kory: Yeah.
Rodney: So every time we fail at something, or something goes wrong, there’s always a lesson to be learned from that.
So, we always look for those lessons, and we can see how we can improve and adapt for the next time if we fail at something. So, we’re just gonna continue to push on and see where it goes.
But yeah, if you keep learning and keep developing yourself as the asset, then I feel like there’s no real reason.
Kory: Yeah, and it’s a fun term to use. Because the way we look at it is, I don’t know, we were big into video games growing up like I’m sure we mentioned on the podcast last time. But to us, it feels like you know, every time you consume some piece of knowledge, or listen to a book, or read a book, or you know, whatever it is, read a blog post, you’re just adding to those attributes like you do in video games to create that character. And we wanna max that character out eventually, right? The odds are, we’re probably never gonna meet or reach max attribution because we’re constantly learning, the space is always evolving, there are new technologies coming out.
But we wanna be at the forefront of all that, right? So, approaching it in a sense like that has been a lot easier for us because, you know, it’s only compounding. And we’re getting smarter day in and day out.
If Kory and Rodney from right now could go back a year-and-a-half and tell Kory and Rodney of all the potential mistakes we’re gonna make along the way, it would be invaluable to us.
There’s no doubt about it. So, we wanna just continue on, so that we can look back each year, each week, or each day, and say, “Wow, those guys didn’t really know a whole lot.”
Rodney: Yeah.
Kory: In comparison. So it’s cool to always kinda just compare yourself to your past self because you see how far you’ve actually come. And it really gives you the confidence to continue on even though we’re dealing with a situation like this right now.
David: I know you guys, and everyone we’re talking to, you’re using this as a time to optimize things, you know, and things that maybe weren’t totally nailed down before. Or things that you wanted to optimize, but just hadn’t gotten around to, ’cause there were too many orders, or you have too many sales coming in.
These things are a lot less sexy, you know, fewer ka-ching sound effects involved with these, but what are you doing now that’s not gonna be moving the needle today, but that you think is gonna be, you know, foundational and big for you guys down the road?
Rodney: Yeah, so to start, we completely redesigned our whole website like just…
Kory: From the ground up.
Rodney: From scratch, so it looks completely different, and it’s a league above what it was. And just going through every little system that we’ve created, like email marketing, email automation. Going through every little email automation, and recreating that, and restructuring it so it’s in the best way to convert, and to be on brand, and to match what our customers are wanting to see.
Kory: Going through our Instagram and cleaning out posts that we weren’t too happy with in terms of their engagement or performance. Swapping those out with new types of posts, setting up other channels or getting more involved on other channels like Facebook, Twitter, Pinterest, whatever it may be.
You know, revamping affiliate marketing and contacting influencers. Setting up new, I guess, product funnels that we wanna test out. Email correspondence with anyone that we may have missed or customer support that we’ve been, I guess, lagging on for a little bit of time.
We did a whole day where we dedicated just to that. I guess, we’re also trying to think of our plans to get into potential like retail or wholesale accounts in the future. So, trying to structure out a system for getting inbound leads for that, potentially.
Rodney: We have a whiteboard where we break it down into four quadrants, and we do, “next three days”, “next two weeks”, “next three months”, and “six months-plus”, or “long term”. And within each of those, we come up with a list of everything we wanna accomplish, and then we kinda cycle them down the funnel to the “next three days” quadrants.
So yeah, we’ve cleared that board probably two or three times in the last month and a half now. We’ve been getting a lot of stuff done. So, it’s kinda cool. It’s like building a race car, you’re not ready to race yet, but the car is that much better for when you are ready to race. So, we’re optimistic.
Take Advantage of the Downtime to Lay the Groundwork for Your Dropshipping Business
David: Alright, one more question for you guys, then I’ll let you go. And I wanna hit on something that you brought up before we started recording. And that’s that on the surface of things this might look like an absolutely disastrous time to start an ecommerce store, or to get into… You know, to start your own business or to start something new.
And I think there are a lot of bullet points, you know, you could make an argument that this is really a genuinely bad time to do that. But you were saying that’s not the mindset that you wanted people to take away. That’s not how you guys are thinking about it.
So, talk us through why this isn’t a bad time to get started, and then what anybody who’s recently started, or who’s thinking about getting started, what should they keep in mind or remember if they get discouraged by the tumultuous situation that we’re in?
Rodney: Yeah, absolutely.
I mean, as bad as the situation is, unfortunately it’s reality. And it’s something that you have to approach as, “This is happening regardless.” So, it’s how you wanna proceed that’s gonna dictate your future, right?
So, look at it like this, say you wanted to start a dropshipping business or everything goes back to normal in like a month, or two months, or whatever. It’s an arbitrary time frame. But if you start training and start building yourself as the asset now you can develop your skills to the point where you have a month’s worth of skills built up, or you have a month’s worth of work built up.
So when you are ready to go… Or two months. So when you are ready to go and launch your website or your business, you’re that much more, first of all prepared, your knowledge, I guess, basin is built up. And you’re that much more ready to go when the time comes, so.
Kory: We did a live stream yesterday in our ECOM Explorers Facebook Group with Emma, and the point was brought up that a lot of people kinda see it in one of two ways, where you could spend this, let’s say, next month watching Netflix and re-watching Game of Thrones every day, or whatever it is, or you could take that time and invest it into yourself, right?
And like Rodney said, you’re gonna have to do this work at some point or another, it’s gonna be a grind, so why not take advantage of the free time now versus when you are up and running and dealing with all these other fires in your store, right?
‘Cause for the last year and a half, that’s what we’ve had to do and it’s burned us out multiple times because trying to operate and put out all these fires and scale up and deal with customer support, you can only do so much, you only have so many hours in a day and then trying to get self-education in on top of that is very, very difficult.
But right now, having an ample amount of time on your hands is, we’re eating that up, like it’s, although we are, I guess, slow in terms of advertising, we’ve never been busier because we know that what we put in time and what we put in for work right now is gonna pay dividends in the next few months or in the next year.
David: Alright, Rodney, Kory, thanks so much for hopping on and again, they mentioned it, but check out the Facebook group ECOM Explorers, there are lots of good conversations going on over there, a lot of knowledge that they’re sharing over at ECOM Explorers, head over there when you’re done with this, but in the meantime, guys, thanks so much for hopping on.
Rodney: Yeah, thank you so much, David.
Kory: Awesome, thanks a lot, David and talk to you again, soon.
Rodney: Yeah, appreciate it, take care.
David: Alright, huge, huge thanks again to Rodney and Kory for hopping on and last but not least, let’s check in with our buddy Ryan Carroll, who’s in California.
First Indications of Disruption
David: We are recording this in mid-March, and it’s just insane to think about how much the topic of coronavirus has evolved since people started hearing about it back in January. And so, when did coronavirus get on your radar as something that might be a big, big deal for your business?
Ryan: Yeah, I definitely didn’t see the coronavirus being dragged out this far. But it has and it started really right around Chinese New Year, and so that’s when it kinda popped up on my radar, and really it was like, okay, well, this is happening in China and this is gonna delay shipments out.
Nobody really knew what was going on or how long it would take.
But right around the end of January, is when this really popped up and started affecting ecommerce businesses who at least source products from China, that is.
David: Yeah, the timing with the Chinese New Year is interesting. So the official New Year this year was on January 25th, and there are always a few days right before Chinese New Year and right after where it’s still part of the celebration.
And so, businesses who source products from China, they would expect that, okay, if the new year’s on the 25th, then maybe starting on the 23rd or so, and then stretching at least a week, things are gonna be kind of shut down, and this is something that we always talk about inside the Oberlo app and it’s on our Oberlo blog, and we kinda give people a heads up that, hey, Chinese New Year’s on this day, this is what to expect. There’s gonna be a break. People travel and etcetera, etcetera.
This year, though, as you said, the coronavirus, it really picked up during that week and then the official break which causes these delays every year, it was just extended and so they said it would go into February, and then they said it would go to February 10th and in lots of places things are just now starting to re-open in the second half of March.
So a couple of things on this new year topic, what was your plan heading into the new year, thinking that this would be kind of a standard Chinese New Year? You’ve been dropshipping for years, you kinda know how this works. What was the plan before things kind of got off the rails?
Getting on Damage Control
Ryan: Yeah, so usually during Chinese New Year, I’m not even pushing ads, really, I’m actually kinda getting creatives ready and just almost rebooting everything. So when they are back, ready to ship out, we can just pretty much launch all of our ads and get everything going again.
It’s funny ’cause at that time, I had just set up a bunch of new Google campaigns, and I was really excited about them and we did a little bit of testing and they started bringing us some sales and so I was like, I had high hopes for this, right?
And then as soon as the coronavirus broke out, and then it ended up shutting down all of the suppliers, like shipments to the US. And so, at that point I was like, alright, this is gonna get really interesting because I had turned my ads actually back on after Chinese New Year, right?
So we started getting orders, and I didn’t think that the coronavirus would be dragged out pretty much all through February. But it was and so, I turned off my ads again because we obviously weren’t shipping anything out.
We had to refund customers and just send out emails about everything like that, pretty much the standard on how to handle an actual online business, if you’re not shipping anything out.
David: Yeah, so what did the damage control look like? ‘Cause I can imagine that, as you say, if you re-fired up ads and you’re even like maybe investing more in new ad channels, this is the last thing you want to have happen, so what did that look like when the orders were coming in, but the products weren’t going out?
Ryan: Yeah, I mean, luckily it wasn’t anything big. We shut down the Google campaigns pretty quickly, so there wasn’t really too much damage. I think it was more just the scarcity in myself was the real damage where it was like, “Okay, we got this ready to go.” It’s just, “When’s it gonna go?” You know what I mean? I hate waiting around and not doing anything or…
David: And so did you just revert back to Chinese New Year mode and just kinda kept things paused then?
Ryan: Yeah, exactly. I went into re-building two other stores.
So right now, I have three stores in my portfolio, if you will, of ecommerce businesses I’m running and managing. So I’ve just literally worked on all of those and kind of sat around and waited for everything.
David: You mentioned the dropshipping suppliers, and people who dropship and who source products on your level often cultivate relationships with these suppliers. So after you do a certain volume, you have some credibility, you kind of have a rapport and you can approach suppliers and say, “Hey, it’s me, I’m the one bringing you all these sales.”
So there’s kind of this relationship that develops. What were you hearing from the suppliers that you had opened up this communication with? What were they telling you during this period?
Ryan: Well, they really didn’t even know too much either, to be honest. It was… That’s why it was kind of scary, ’cause at first, it was just like, “Oh, we should be reopening within a week, like after Chinese New Year.” So I was like, “Okay, that’s not too bad.” That’s why we’ll start running ads again and we’ll start getting them fulfilled right after Chinese New Year happened, and then at that point, they kept pushing it back and pushing it back.
So really, the communication was weird because I think that most suppliers, to be honest, were not really too much in the know either. They just knew there was a coronavirus, they weren’t allowed to ship out.
Consider Using Other Suppliers
David: Now, one of the creative things that you did during this crazy, you know, the second half of January and then into February, is that you relied on suppliers that were shipping out of the US. And so there are settings inside of Oberlo and there are settings on AliExpress where you can filter out certain products and certain variants that ship not just from China, which is kind of like the, you know, the standard source of a lot of these products, but also from, you know, a handful of Western countries in Europe and also the US. What did that switch where you started sourcing US-based products, what did that do for the business?
Ryan: So actually right when the coronavirus happened and it broke out, we had an actual Chinese supplier. However, the shipping time was pretty quick. But they were shipping from China. And so at that point, that’s kind of when I realized like we need another alternative, and you know, that’s when inside AliExpress I would suggest most people start doing this is finding suppliers who actually have United States warehouses and can ship from the US, if you’re actually… You know, your main demographic is inside the United States. They also do have, like, Europe and Australia and stuff like that.
But the cool thing about shipping from the United States is it’s USPS. So it’s about four to seven business days.
And that’s kind of just like a game-changer because right away, it’s just gonna be so much quicker, you’re not gonna have refunds and everything like that.
So, regardless of the coronavirus or not, I would suggest most people start looking for those suppliers who have the United States as shipping. And then it might be like two or three extra dollars for your product, but I can tell you for a fact that that will be so much better for your business just to have those shipping times.
I highly recommend spending an extra $2 or $3 per shipment to get it out of the US. You know, not all products you can find, but there’s a majority of products if you just are on AliExpress and you toggle that little “Ships from the United States” you’ll definitely find some.
David: We got that “ships from” thing inside of Oberlo too, just for the record. So you can use AliExpress one.
Ryan: Yeah, exactly. I didn’t even realize that. I’m always looking on AliExpress, but that’s good to know.
David: It’s all good. We’ll let you slide on that one. So if things kind of returned to normal, or normal-ish, in China, like maybe I don’t maybe it’ll be months and months and months before it really gets back to 2019 levels of normalcy.
But if things kind of get back to the way they were in China but then deteriorate elsewhere, like so, we were talking about these shipping options out of Europe and North America and Australia. It looks like those could become the dicey ones. Is this something that’s on your radar?
Because it seems like we could be heading toward, like, a pretty unprecedented situation in North America. And you know, things are already very dicey over here in Europe. What will that do to your calculus when it comes to where to get these products from? Is there some bizarre universe where China becomes a safer bet than North America?
Ryan: Yeah, I mean, to be honest, I haven’t even thought about it on the radar. I’m glad that you put it on my radar now. But I mean, if that were to happen, yeah, I mean, I would just go back to shipping out of China. I just couldn’t see it happening, especially with Amazon shipping orders out and everything like that, I mean for them to shut down all like the US shipping. I mean, it could happen, who knows, there are always ways, and I mean, you just have to find it.
I mean, something you could potentially do with products is obviously bulk order them and try to get them to a warehouse, you know, in the US wherever you’re at, that can ship them out if you’re really committed.
And I mean, you could even ship it to your house, you know what I mean, and ship out orders yourself. I’ve done that when I first started in ecommerce. However, if that ever came to a phase where you were needing to bulk order products, obviously dropshipping is beneficial because you can test everything and you don’t have to actually buy the product until it’s actually sold.
Changes to Products and Marketing
David: We’re entering this kind of weird… Well, it seems weird to me, this weird period now where you know, things are getting canceled. Schools are getting shut down. You know, people are discouraged from going out to eat, and it’s just kind of a bizarre moment right now.
And I’m curious how this general atmosphere that we’re seeing, how this affects your approach to ecommerce marketing and just kind of the way that you’re viewing these different stores? Because like you said earlier, you had one store that was rock solid already heading into Chinese New Year, and now you’re kind of in the process of launching two new ones, but it’s a weird time to be launching stores, I would imagine.
So what is this kind of the vibe in the air right now? What does that do to how you’re viewing the marketing and the product testing and all that stuff?
Ryan: Yeah, it’s really interesting right now. I can definitely feel it in the air, and I’m sure you guys listening and you, David, can feel it as well. It seems very scarce online, like everyone’s, you know, buying out all the grocery stores.
It’s very interesting during a time like this because I like to look at how people react, right, and how, like the buying behavior of people as well, ’cause I don’t think in a time like this, people are necessarily going to buy things they don’t necessarily need, right?
A lot of people are spending their extra money on buying extra food and toilet paper and those kinds of essentials right now as we’re kind of in this weird scarce time.
David: So you think the kind of old MO of pushing impulse buy products that are like… They look cool in a Facebook ad, they are utterly non-essential, but nonetheless kind of, like fun. I’m thinking of an inflatable flamingo sort of thing. That’s not the thing to be spending ad money on right now.
Ryan: You know, I don’t wanna say no, because who knows, you know, people might like inflatable flamingos. All I’m saying is from a mass perspective, if you look at, kind of, where most of the money’s going now, most people’s extra dollars are going to buy more food, and like I mentioned, more toilet paper and everything like that, that kind of people are buying on.
So I wouldn’t say that you shouldn’t test products like that. I’m just looking at where the money’s going right now. And I just don’t see it going more towards things that are kind of fun and people might want to use. I think people are gonna start buying things that they actually really need in their household.
David: Cool, Ryan, we can leave it there. Thanks so much for hopping on. We really appreciate you breaking down what you’ve seen from your end, and we’ll catch up with you down the road.
Ryan: Of course, I appreciate it, David. We’ll talk.
David: Alright, that’ll do it for this episode. Again, kind of a weird one. But we’re glad you joined us. We’ve got more content about what coronavirus means for dropshipping and for your ecommerce store and your ecommerce future over at the Oberlo blog.
The Oberlo YouTube channel as well is knocking out some videos about how to navigate this weird period that we’re in. There are ways to get better while we wait this out and we’re going to be there to help you do both of those. As always, feel free to shoot us a note at podcast@oberlo.com and we will talk to you soon.
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