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Jessica: Hey, everyone. I’m Jessica with Oberlo.
Melvin: I’m Melvin Chee.
Jessica: And Melvin’s dropshipping store made $15 million in two years. Now, Melvin doesn’t own a Lamborghini. But he does own an ecommerce business that employs 17 people. It’s safe to say that Melvin knows his stuff, and today, he’s going to share five dropshipping product recommendations that you should start selling with Oberlo right now. Let’s get started.
Okay. So, Melvin, I know that we want to get right into the products you would recommend that they sell. But I can’t get over the fact that, at $15 million in two years, you are the highest-grossing merchant that I’ve ever sat beside. That’s crazy! How did you even start dropshipping?
Melvin: Right. So my entire ecommerce journey actually started back in 2012, 2013 when I got to know about digital marketing, Facebook ads, back then, and just selling things online was just totally unthinkable for me, being back in…
I grew up in Malaysia. I grew up in a small town that knew nothing about online selling, knew nothing about ecommerce, and selling things online just made me feel so fascinated about the entire process of how you could sell a product from your hand to another user’s hand is just totally crazy.
Jessica: And what was your motivation for even getting into ecommerce in the first place?
Melvin: Right. It’s so cliche and so funny at the same time ’cause I started ecommerce purely because I just wanted to make more money off my pocket money because my parents are… I was still back in college and my parents were supplying just a sufficient amount of money to actually live by, but not enough to actually go on holidays and go on… Buy all these kinds of gadgets that I like. So I started ecommerce as a part of something that I just wanted to make more money.
Jessica: You were thinking it would be great if you had $100, $200 extra a month or so?
Melvin: Yeah. At that point in time, I was just aiming for actually $200 a month.
Jessica: That was your goal?
Melvin: Yeah, that was my goal, just… $200 a month was sufficient enough for me to just eat anything I wanted. At that point in time, I’m just being the kid with more money in college.
Jessica: And I know that the last product we’ll talk about today is a single product that actually made you, what, $4 million?
Melvin: Yeah, close to $5 million.
Jessica: Oh, my God. Close to $5 million. But would you mind sharing the dropshipping niche that you got into?
Melvin: I’m just this ordinary Asian dude that knows nothing about female markets, and all the products that I’ve been selling actually have always been in the female markets, beauty products, fashion products, everything’s between… Anything between the 18-to-24-year-old girls’ market, so… Yeah.
Jessica: You’re definitely not an 18-to-24-year-old girl but that’s exactly the market that you found success with.
Melvin: Yeah, exactly. I knew nothing about female fashion, female beauty products, but that was the kind of market I actually made the most success out of in the ecommerce industry.
Jessica: Why do you think that you were able to find such success with that particular market?
Melvin: Right, ’cause I started off on Instagram, and I started hanging around with Instagram pages that are… Most of the pages are actually related to girls that are 18 to 24. And from there, I could actually find out what sort of products that these girls resonate with, and from there on, find what sort of products to sell them to as well.
Jessica: Ah, cool! So you found this marketing platform that was growing. You figured out the type of people who were hanging out there, and then, from there, you started to figure out the kind of products they would want. How did you get from someone who wanted to make $200 a month for pocket money to a 17-person business?
Melvin: Honestly, it just came… Something that I wouldn’t be able to think of ’cause it just started randomly and it just started growing.
And of course, we Asians grow up with this mindset that money makes money, and we just keep trying at whatever that was working.
So, at that point in time, the ads were working. Whatever that was working, we’re just scaling on things, we just… To double down on whatever that was working, and it just scaled on from that point of time, yeah, ’til where we are today.
Jessica: And now, where are you today? You’re still in dropshipping, right, but you’ve grown beyond that.
Melvin: Exactly. So we are still partially in I would call it hybrid-dropshipping. So in a way that we are still dropshipping, but at the same time, we are selling our products, we are producing our own packaging, we have our own 3PL centers that run our entire processes and all. So, in a way, we are still in dropshipping but, at the same time, we are… We have improvised the way we used to dropship back then.
Jessica: Without further ado, let’s get to your product recommendations in the women’s fashion and accessories niche.
Melvin: Okay, let’s do it.
Product Recommendation #1: “I Speak Fluent Sarcasm” T-Shirt
Jessica: Whoa! I speak fluent sarcasm. Wait, is this one of your product recommendations?
Melvin: Yeah, it was actually one of the products that actually made a couple hundred thousand dollars back in 2016.
Jessica: You made a couple hundred thousand dollars selling this “I speak fluent sarcasm” t-shirt?
Melvin: This t-shirt, exactly.
Jessica: I feel like I’m wearing money right now. So tell me why this t-shirt would sell?
Melvin: Exactly. I think anywhere from 18 to 24, any girls that would read this would actually be relatable to them during day-to-day conversations with their friends, actually.
Jessica: So this is something that your customer would actually say to someone?
Melvin: Exactly.
Jessica: Okay. How do you know that?
Melvin: So I hang out a lot around Instagram pages that are like funny pages, meme pages, all these kinds of pages. And I think, back then, they were using a lot of their sentences around it, that I found that if you put it on a t-shirt, that would actually work really well.
Jessica: Some people might see a shirt like this and because it’s just text on a shirt, they think, well, they could just do this with print-on-demand. Why did you choose dropshipping over print-on-demand in this case?
Melvin: Yeah, to be honest, back then, I didn’t know what is print-on-demand ’cause I was just starting out dropshipping back then, and I found this product on AliExpress that has the exact same sentence that the text that I want. And I just started putting out one on my Shopify page.
And at that point in time, I just had one product. So, honestly, just one product with four different sizes, four SKUs, and just started selling it on the next day.
Jessica: Really? So this was even the only product that you had in your store at the time?
Melvin: It was the only product that I had in my store.
Jessica: Was this the first hot-seller that you had?
Melvin: It is. It is, actually.
Jessica: Oh, wow! Does it make you nostalgic just looking at it?
Melvin: It does, actually, yeah.
Jessica: Early days in ecommerce?
Melvin: Yeah, yeah.
Jessica: Now, one of the reasons that I bring up print-on-demand is I know that a lot of people who are trying to choose between dropshipping and print-on-demand are thinking about pricing strategies and margins. And dropshipping usually lets you have better margins.
Melvin: Exactly.
Jessica: But talk to me about how you’d price something like this to make sure you get those profit margins.
Melvin: Sure, most of the time, I think, especially in dropshipping, where pricing is really important, because of the bottom line, we always price our pricing five times the price of the product, most of the time, four to five times, at least. So at least you control your product cost at about 20 percent most of the time, to ensure that you spend…
For example, if you spend 50 percent on marketing and 20 percent on the product, you are left behind with 20 percent to 30 percent in margins, and that’s where the… Every dropshipper is… Aim of having 20 to 30 percent of margins.
Jessica: 20 to 30 percent profit margins.
Melvin: Net profit, that’s right.
Jessica: Okay. So 20 to 30 percent net profit margins is the goal.
Melvin: Exactly.
Jessica: Okay. You just threw out a lot of numbers so I’m actually going to ask if you could maybe hop into a spreadsheet to show us what you’re talking about.
Melvin: Sure, I’ll do it. So, for example, if the shirt is costing about $4, I think, we will at least sell this at about $20, and… Plus shipping, maybe charge say $2 or $3 shipping, and you will end up with about $25.
Jessica: Ah, okay. So you do charge shipping on your products?
Melvin: We do.
Jessica: Okay. So your total retail would be $25, and that would account for the shipping and other costs, perhaps?
Melvin: Exactly, we gotta take accounting to Shopify processing fees as well. If there are any returns or exchanges or lost parcels, at least you have some margins there for you to play around with.
Jessica: Okay, you just rounded up there. You weren’t using fractions or percentages for returns.
Melvin: Yeah.
Working With Instagram Influencers For Product Recommendations
Jessica: Okay. Well, that’s actually pretty simple math once you put it in the laptop like that. Talk to me about the social media sites that you used to market this t-shirt.
Melvin: Exactly. So we started off selling these products on Instagram, on… Through Instagram influencers. So we found a lot of influencers on Instagram that had millions of followers, and we actually reached out to these influencers and asked them if they were available for shootouts and product recommendations, and what their rates were. And we just push all these content to our influencers under the network and to actually just push the products and product recommendations out.
Jessica: Can we actually take a look at those ads?
Melvin: Sure, have a look.
Jessica: Okay. We’re on the computer now, and this is a screenshot because I know this business was from a couple of years ago. I’m really curious for you to break down this ad for me. Why did this work for you?
Melvin: So I think the most important part of an ad is to actually provide a call-to-action on the ad itself. So we actually put it out, “Tag friends you know.” So that’s a way to actually encourage people that have seen the ad to actually continue tagging their friends there.
Some of them could even tag up to four to five to ten friends on the ad. And imagine the amount of organic traffic that we are driving from just one person to… Now you have ten other people that are actually looking at the ad. So that creates the virality in the product itself.
Jessica: Ah, okay. Now, we’re looking at another of your ads, but “sarcasm only” doesn’t sound like an influencer. Was this… Is that the name of someone, or… What is this account?
Melvin: Yeah. So it’s actually… It is actually not an individual. It’s a meme page. Someone just randomly posts funny content all the time. And this is actually one of the accounts that we actually reached out to to promote our content and help with product recommendations and they actually had about 10 million followers at that point in time. So, we reached out to them, negotiated a price point to actually post the content out for a couple of hours, for X amount of dollars, and we managed to get that sort of engagement on the ads.
Jessica: What engagement! 74,000 likes and over 5,000 comments, that’s incredible!
Melvin: Yeah. So that was actually within three hours.
That was three hours of just pushing the ad out. I think we sold at least $20,000 in just three hours.
Jessica: Whoa! One of the things that I love… I think this comment here really exemplifies what you’re talking about when this person is clearly tagging a friend and saying, “Ha ha! I need this,” as a way to start a conversation or relate to their friends by way of your t-shirt.
Melvin: Exactly. Yeah, exactly. We get tons of content… We get tons of comments, actually, just tagging their friends or just telling them that they totally need this, and some… I think the product itself speaks for itself, especially people are so relatable to the product that they start tagging their friends, they start tagging their schoolmates, and everyone’s involved in the network to actually see this product and that helps with product recommendations.
Jessica: Okay. I think people might be putting together the puzzle pieces, though. If you started dropshipping as early as 2012, you were really one of the first movers on Instagram to do this. If someone started a dropshipping business in 2019, what marketing channels could they start to explore that, maybe, haven’t really been as exploited as Instagram?
Melvin: Of course. I think, up to today, I think Facebook and Instagram are still the main platforms to actually push all these products out.
But we gotta pay attention to new platforms like Snapchat, Pinterest, TikTok, especially when all these platforms are so fresh, and at the same time, there are not many advertisers in it, and that’s where you can get cheaper impressions, you can get cheaper clicks, and cheaper… Just lower costs of acquisitions through platforms like that.
Jessica: Ah, okay. So you’re still using Instagram, right, for your businesses?
Melvin: Yes, of course.
Jessica: Okay. So there’s still a lot of power there, it’s far from over.
Melvin: Exactly.
Jessica: And maybe a good strategy would be to be on both, to do more expensive ads on Facebook, and then lower cost of acquisitions for some traffic, and brand recognition on another platform.
Melvin: Exactly, especially on new platforms when cost-per-clicks are so cheap or… It’s a lot easier to do brand awareness. So we can actually do a lot of first-layer audiences from all these cheaper platforms, and then re-target them, re-target a warm audience on Facebook and Instagram.
Jessica: Ah, yeah, really cool. Okay, great strategy. Okay. Well, I’m gonna change out of your bestselling t-shirt, and let’s move on to product recommendation number two.
Melvin: Sure, let’s do it.
Product Recommendation #2: Unicorn Slippers
Jessica: Okay, maybe you do speak the language of female shoppers because I’m freaking out about these sparkly, glittery unicorn slippers. These are incredible! But how on Earth did you find this product and why is it one of your product recommendations?
Melvin: Isn’t this product cute? I think every girl that is between the age of 18 to 24 would fantasize about unicorns.
Jessica: Or older than 24. Sure!
Melvin: Yeah, maybe.
Jessica: But… Okay, how do you even discover something like this?
Melvin: Right. So I actually came across this product on Twitter. Someone…
Jessica: On Twitter?
Melvin: Twitter, yeah. Someone was actually just casually posting about the product being bought from Amazon back then, and just showing it, showing the products on Twitter, so I thought, “It would be a product that would blow up on Instagram.” And so, that’s why we replicated the products and set up our Shopify store within the next day and just started selling it on Instagram.
Jessica: Okay. I’ve got a question about Amazon vs dropshipping. Let me just put these down first. It’s about to get serious. What I wanna know is you see this product and it’s one of your product recommendations today because someone else said they bought it on Amazon. Why didn’t you instantly go, “Oh, well, if you can find it on Amazon, I’m not gonna dropship it”? Why did you decide it would be one of your product recommendations?
Melvin: Yeah. At that point in time, I think I looked it up on Amazon, and it wasn’t… there weren’t many… There weren’t a lot of ratings on Amazon. So that actually tells me that the product wasn’t a winning product back then. So no one actually had… At that point in time, no one actually pushed the product at a scale that everyone has unicorn slippers, so that’s when I noticed that there’s an opportunity there, and that’s when we capitalize on the opportunity.
Jessica: Really interesting. So just because someone has bought on Amazon and talks about it, you knew that’s not the only proof that something is completely saturated.
Melvin: Exactly.
Jessica: You did your research, and you saw, okay, there are not a lot of reviews, so there’s still an opportunity here for these product recommendations.
Melvin: Exactly.
Jessica: Okay.
Melvin: And of course, with dropshipping, we can test any products overnight, so literally just scrape off some content on Facebook, Instagram, or Twitter, and then we just put it together and just push it out on Instagram like how we push every product out. And that’s when we started seeing all these signs of success that we realized that this is actually a winning product.
Jessica: Yeah. Okay, so just because you have a hunch, maybe something is saturated, maybe it’s not, you can always see for yourself.
Melvin: Exactly.
Looking for Reliable Product Suppliers
Jessica: Cool. But another thing related to seeing the product on Amazon, if it’s on Amazon, then you know there’s probably more than one supplier of this product. One thing dropshippers are always asking us is how do you find a reliable dropshipping supplier? What’s your methodology?
Melvin: Definitely. I think, to be honest, even up to this point in time, I think that looking for reliable suppliers is a big challenge to, I think, any dropshippers in the world. They are not too sure about which supplier is actually reliable or honest, or even not honest as well.
So I think one way we… One of the metrics that I’ll look at is really to go on AliExpress and look up, let’s say, unicorn slippers, and then I’ll sort most of them by orders. And just looking at the number of reviews, the amount of orders that actually these suppliers are getting and all the badges that they earn from AliExpress, that actually gives you an indication.
But at the same time, we actually split our orders across different suppliers as well to actually find out who has the best quality of products, who has the most reliable fulfillment processes, or who has the best shipping processes around it as well, so that tells us which suppliers we’ll work on two weeks down the road as well.
Jessica: Wow. Okay, that’s some advanced stuff. You actually test suppliers with different segments of your customers.
Melvin: Exactly.
Jessica: I think a lot of new dropshippers are still hoping for several customers, let alone enough to make a test out of. But I want to dig deeper into some of what you just said. When we’re looking at… Is this what you mean by badges?
Melvin: Exactly. These are the badges that these suppliers earn from AliExpress, to recognize them as a top-seller on AliExpress. So that, most of the time, gives you an indication that they are pretty okay. They’re not here to scam you, or they are not here to give you shitty products because they have these reviews, these badges that they earn as well.
Jessica: So does the number of orders… Does that tell you anything about a product being too saturated and not something that a dropshipper could sell?
Melvin: Not really, ’cause the amount of all this actually gives you a validation that the product is actually selling pretty well. But at the same time, yes, other sellers might be already selling the product, but the market is so huge, so big, doesn’t mean that you can’t be selling these products as well if there are ten other sellers selling it.
It’s All About the Perceived Value
Jessica: Okay, if you want more information about researching the best suppliers on AliExpress, you can check out this video. While we’re in AliExpress and looking at the price, let’s go through your pricing math again. If this is about $10 a pair with free shipping, I would maybe start to multiply that by four. Wait, that would be $45?
Melvin: Exactly.
Jessica: What audience are you finding that will pay $45 for these slippers?
Melvin: Right, ’cause I think… Let’s not talk about price point. I think it’s all about creating… Marketing is all about creating the perception of how much a product is worth. If your content, the content that you’re creating is not up to $45, of course, the perceived value from the other part, which is the user, will definitely not perceive it as $45.
But if you perceive, then you create the value that this product is worth $45 through your packaging, through your shipping time, through all these kinds of features that you have in the product itself. I think, at the end of the day, it’s all about how you make the product to be perceived as a $45 item, rather than someone selling at $20.
Jessica: Okay. And that probably all begins with the ad, having an ad that really shows the value of this product.
Melvin: Exactly, not just the ad, but up ’til the landing page, the product page, the entire checkout funnel as well and all these warranties or all these exchanges or returns that you have in place that actually creates the confidence of consumers as well.
Jessica: That’s interesting because a lot of dropshippers are afraid to write on their websites about shipping times or return policies, but you’re saying: Put it all out there.
Melvin: Exactly. I think it’s better to put it all out there than just to fake it, ’cause end of the day if, say, for example, consumers dispute the transactions, most of the time you’re most likely to lose it if you actually put out all this fake information.
But if you are actually putting real information out there and keeping consumers actually informed, all the way from them buying it to shipping it to receiving it and their reviews after that, I think that itself will enhance the entire dropshipping experience.
Jessica: But to sell this at $45, I would imagine you should hire an agency to really make a really fancy ad with a lot of closeups. Is that what you did?
Melvin: No, we didn’t actually.
I actually got this product in and I got my sister-in-law, who is my business partner, to actually wear it, and she was just dancing in front of our porch, and I was just taking a video of her dancing in front of our porch.
And the villagers went crazy ’cause of the product itself. There are lights on it when you jump on it. So, people get really fascinated with the product, and it just blew overnight here.
Jessica: Woah, so you basically got a relative to wear these, you took up your iPhone, and you said, “Dance.”
Melvin: Exactly.
Jessica: And then you had a product video ad that made you lots of money.
Melvin: Yeah, and it’s even more hilarious when you see the video of it, that I created the video with a free video editing software on the app store, and you still have that logo on the bottom that says, “Made with,” whatever it is, and it just went crazy.
Jessica: Holy cow. Oh, man. So, how much of dropshipping success do you think is about the right product versus the right advertising then?
Having the Right Product vs Good Advertising Skills
Melvin: I think it’s a combination of everything, to be honest. It doesn’t take… It doesn’t mean that your ad has to be good and everything all works out. So it has to be from the ad, to your ecommerce landing pages, to your product page, the entire experience. It has to come hand-in-hand. It doesn’t mean just either one of them works, the entire thing works. It doesn’t work that way.
Jessica: Okay. So you were pricing that at $45, you had a great ad, how much would you make selling these unicorn slippers?
Melvin: I think we made about $90,000 or somewhere less than $100,000 selling these products.
Jessica: And you say that with a disappointed voice because you’re a $15 million dropshipper, so that’s low for you?
Melvin: Yeah, that is. And of course… But we use this product as a traffic driver product because products like that attract a lot of high click-through rates, a lot of consumers. A lot of traffic is actually coming in to just look at a product, and that’s when we upsell them with lower-price point products or push product recommendations around the fantasy.
For example, unicorn or mermaid or whatever it is, that we were just selling a bunch of other related categories around it, to actually increase our average order value and to increase our lifetime value as well.
Jessica: Really interesting. So, maybe if a dropshipper is testing out products and they find that one of their products gets a lot of traffic but not a lot of buys, that could be an argument for saying, “Just keep driving that traffic, but add more products and product recommendations to your store.”
Melvin: Exactly. It’s okay… It’s totally okay to actually break even on your traffic driver product, but improve on your funnels, improve on your upsell, on your cross-sell, and all these funnels actually will increase your average order value, and that’s when you actually make money off it.
Product Recommendation #3: Makeup Bag
Jessica: I think we’re ready for the third of your five product recommendations. So I’m not sure what this is but let’s just unfold it and we see it’s… Expands and it’s just a disc. What is this?
Melvin: It’s actually makeup travel bag.
Jessica: Is it?
Melvin: You can put all your makeup stuff in it, just wrap it up and just pull it up and just pack and go.
Jessica: Ah, I see. Okay, so you can just pile it on in there.
Melvin: Exactly.
Jessica: And then you pull the cords and that actually… Ah, okay, tightens it up.
Melvin: And it becomes a bag.
Jessica: Wow! Okay, and then… That’s a great way, ’cause no woman is actually that organized with her makeup.
Melvin: Exactly.
Jessica: She just dumps it all in the drawer. I get it, this is brilliant.
Melvin: Just like my girlfriend.
Jessica: Does she do the same?
Melvin: She does the same thing.
Jessica: Is that how you got the idea for this particular product?
Get Product Recommendations and Ideas From Your Audience
Melvin: I came across these products on Instagram as well, and I think… I was just browsing on Instagram and I saw someone was posting this product as a consumer, just saying how great this product was and I literally showed it to my girlfriend, and she was like, “I totally need this,” and that’s when I knew that I probably could have found a new winner.
Jessica: Yeah. Okay, I need to know about how you research products and come up with product recommendations. Let’s talk a little bit about that. You were browsing Instagram, sure, but how do you find these Instagram accounts or these blogs that give you all these product recommendations?
Melvin: Exactly. It’s ironic that I actually follow a lot of female bloggers, a lot of makeup artists, a lot of female influencers that are just talking about product recommendations all the time, and I think most of them are talking about beauty products, fashion products, and that’s when I started to have an interest in products that would sell to this group of females, anywhere from 18 to 35, to be honest.
So that’s where my target audience is, and I always work off from… Not just from the product itself but I always work out from the audience that I know the best. So rather than the products that I’m ready to sell them to, I find out products from the audience itself. What are they? What do they need? What sort of product recommendations are there? And I bring the product to them instead of them seeing the product the other way.
Jessica: Okay. So would you advise dropshippers to find a niche and really get to know it first and then look for a product to sell? ‘Cause we sometimes talk about doing it the other way around.
Melvin: Yeah, exactly. I think both ways work. I wouldn’t say one way or the other way works better. It really depends on how well you know the product or how well you know the audience.
For instance, I know the audience better than the product so I figure out the kind of audience that I really know, and then only bring the products that will be relatable to them.
And, in that way, that makes my selling process a lot shorter and a lot easier for them as well.
Deciding on Product Recommendations
Jessica: Okay. So you really know the women’s fashion and accessories market, but you probably get product recommendations all the time. How do you decide on trying out one product versus another?
Melvin: Exactly. I think validating what kind of products to sell is actually very crucial in finding the winning products. I actually use Google Trends to actually find out how trendy the product is. Are there a lot of people Tweeting about it? Are there a lot of people Googling about it? Let’s look it up, “travel makeup bag”.
So, this is the surface of it, so we can actually see that there was a hype about the product here back in November 2018. That was during the Black Friday week. So people actually… And this was also a period of time when people are starting to travel for Christmas, and that’s when you could see the spike in this side of things, and the trend just dies down here, and the projection of the next few months is actually gonna be upward.
So I think we use… I use Google Trends to actually figure out whether the products are… Is it a past winner? Or is it even a winner? Is it a good product recommendation that’s gonna sell or gonna make me money?
Jessica: Do you use any filters here? Would you only look at the US and only in the past 12 months or would you go deeper?
Melvin: I would go… Of course, the past 12 months give me the most information, whether someone has already scaled this product to millions of dollars or not. And I’ll look at small, small indications, like the cities that are actually looking for these products. What sort of keywords? What sort of related topics that they’re actually looking at.
This actually gives you a lot of hints on whether… Where do you look for this kind of audience, and it actually relates you to a lot of different websites, blogs, and all these influencers that are talking about our product and doing product recommendations.
Jessica: Okay. I look at this and I think, okay, it probably makes sense that it’s about to trend upward because you get into spring vacation and summer vacation travel in the warmer months that are ahead.
Melvin: Exactly.
Jessica: What else would tell you that this makeup bag is a winning product?
Melvin: Exactly. I think there are a few metrics that we really look at, especially on Google Analytics. So the bounce rate on Google Analytics, the average duration per session, the add to cart rate, the page views, and all these indications actually gives you whether… It tells you whether… If a user is actually engaged with the product.
So, for example, add to cart rate on Shopify itself. It actually tells you that… Whether… If people are actually adding to their cart.
So any add to cart rate above ten percent, I would say it’s a potential win that has the potential to scale these products up.
And especially on Facebook, we look at the click-through rate. So that’s a really, really important metric that we look at. So if you have a high click-through rate, meaning that people are actually really engaged with the ad that you’re pushing or your product recommendations. And that gives you an indication… Early indications that you can actually scale on this ad.
Jessica: Okay, I’m gonna pause you there ’cause you mentioned three different platforms and analytics.
Melvin: Okay.
Jessica: And I think that was all great. I just wanna touch on a couple. So, first, you talked about Google Analytics and for those who don’t know, you can very easily paste a little snippet of code from Google Analytics into Shopify and then you’ll have access to a lot of Google Analytics data.
Melvin: Exactly.
Jessica: So the Shopify Help Center has all the information you need to do that, it’s free. And then you’ve got all the metrics that you were just talking about. The Google Analytics bounce rate, what is that?
Melvin: Right, exactly. So bounce rate, it’s a… When someone lands on your landing page and they bounce off right away. So that means that if let’s say, you have a 50 percent bounce rate, one in two people that come to your website, actually, without browsing on your website, bounces off to some other websites. So that actually tells you that you need some work to be done on your landing pages to lower down your bounce rate. The lower bounce it is, the better it is for your website.
Jessica: Okay. And then you had also talked about Shopify add-to-cart percentages. And you said anything over ten percent is good. You’re saying if ten percent of visitors add a product to their cart, you’re in a good place.
Melvin: Exactly, that’s the baseline, but of course, if you go into 20, 30 percent, that will be the most ideal. That’s when you realize that you actually found a winning, winning product. But if you see anything above ten, it’s workable. So you just gotta fix your product page, you gotta… You can put in all this kind of urgency on your product page to actually increase the add to cart conversion rate.
Jessica: Okay. And then the last thing that you mentioned was Facebook click-through rates. Is there a ballpark figure that you look for when it comes to click-through rates?
Melvin: Exactly. I think the industry average is about one percent.
But if you can see any click-through rates of like three to four percent, which is three to four times the industry rate, that tells you a lot of information, that people are actually very interested or engaged with your ad.
Jessica: Yeah. So your ad is definitely working.
Melvin: Exactly.
Jessica: But I guess the whole puzzle for dropshippers is you might have an ad with a four percent click-through rate, and then a 50 percent bounce rate, and a low add-to-cart ratio, so it’s all a matter of, okay, what’s the problem to solve here? Is it the landing page or the ad or what? Right?
Melvin: Exactly. So I think finding a winning product is not easy or not tough at the same time as well, but I think figuring out which part of the marketing funnel to actually look into, which pockets to actually look into, it’s really important. So if, let’s say, you have no problems on Facebook’s site, then there are problems on your Shopify funnels, then figure out where, where is the problem, and fix the problem.
Jessica: Okay, this is really cool. I’m definitely taking that makeup bag with me. I’m dying to know what your $4 million product is, but before we do that, let’s move on to product recommendation number four.
Melvin: Sure.
Product Recommendation #4: LED Mirror
Jessica: So this fourth of five product recommendations is an LED makeup mirror. And this is actually a product that we’ve talked about in our blog and in some of our videos as being a trending product. But walk me through why you this is one of your product recommendations.
Melvin: Right, exactly. I think, for any female that looks at this product, they would think that this is a huge problem-solver for them, especially if you are in a room that has dim lights or a room that doesn’t have enough sunlight even for your makeup. So this product actually enhances your entire makeup experience, to make… Girls, of course, apply makeup to look better for themself, right? So, of course, this product solves big problems for them.
Jessica: This is interesting because the product recommendations that we’ve talked about so far, they haven’t all been problem-solvers. The make-up bag, yes, but the unicorn slippers it’s not solving a problem. So what’s your philosophy? Some dropshippers only want problem-solvers, but you kind of mix it up.
Melvin: Right. Like I said previously, I literally sell any products that will work according to my audience, right.
So I figure out that I know my audience really well, that whatever products that we can fit into the market, that will literally work for them, I will do it, I will sell it.
So this is one of the products that I actually see selling to the audience that I was selling to, so that’s why we have a mixture of products that are problem-solver, we have products that are a novelty, and we have a combination of both as well.
Using Instagram to Look For Product Recommendations
Jessica: So one thing that’s clear to me and that sets you apart from other dropshippers is you’re not so focused on the product, but you’re so focused on your target market. And you just study women between the ages of 18 and 24, and their buying habits, and what they want, and then, from there, you start to decide on the products to sell.
Melvin: Exactly.
Jessica: But I wanna know then how do you get to know this target market really well? What are the pages that you look at?
Melvin: Exactly. So, for example, one of them is Beauty Insider. So there are a lot of beauty product recommendations on this page to females. I will imagine all of them stand anywhere from 18 to 24 or even 18 to 30. So all these products that you see them posting every day, you could actually get some product recommendations, but you can sell not exactly the same products but the products that are evolving around their product recommendations.
So that gives you a more… A bigger, broader brainstorming idea on what sort of products that we can actually go into, what sort of products that… What kind of problems they are actually solving, and that’s a way to actually find product recommendations.
Jessica: And if we go up and say we follow them, then we see a lot of suggested accounts, right?
Melvin: Exactly.
Jessica: Would you follow those accounts just to get deeper into the rabbit hole with this audience?
Melvin: Yeah. So this feature by Instagram is actually really, really powerful. So it tells you all these pages that are related to this page and you can, if you have the time, go through each of these pages and you can actually have a drop-down even on the next page. And that gives you a bigger group of pages to look at or to follow and to get inspirations from.
Jessica: Let’s go back to Beauty Insider because… Say if I was browsing Beauty Insider, and I thought maybe this is like a lip gloss or something, transforming glitter lips. Okay. Well, that is really intense.
Wow. Okay, so this lipstick gets more glittery as people pucker their lips together.
Melvin: Exactly.
Pay Attention to Comments Section for Product Recommendations
Jessica: Where do you go from there? Do you just start selling it ’cause you saw it on Beauty Insider, or what more research do you do?
Melvin: So I’ll look at the comments, of course, look at the engagement, look at the views, look at the… I’m sure that if they post on Instagram, they will be posting on Facebook, they will be posting on YouTube as well.
Look through all the comments, look through what people are talking about, and I’m sure there’ll be some people that put out some brands or some products, that they actually have seen similar products like that. And from then on, you can actually have deeper research on what are other products that will be similar to this product.
Jessica: Ah, okay, looking at the comments, I see… Well, I see some that say, “Terrible product.” So we’ve got some feedback there, and we see this kind of a dialogue that goes on…
Melvin: Exactly.
Jessica: But then we also have, “How can I buy?”, “Where do they sell them?” So if you were a brand, would you jump in there and comment or would you just use this as intelligence?
Melvin: I’ll use this as intelligence. I normally don’t give out a lot of information on any of the posts that I see. But I actually use all these kinds of information that all these consumers are putting out there to actually put the puzzle together to find out product recommendations that people will actually love or would actually want to use at the end of the day.
Jessica: Okay. So you might go through an account like this and take note that this has 74k views, and then you’ll compare that with this, and see how many views does this have, and start to narrow down your product ideas from here.
Melvin: Exactly.
Jessica: Do you use any sites besides Instagram to do this, or is this your main portal?
Melvin: So Instagram will always be the channel that actually funnels all these ideas, and then I’ll look up on YouTube, I’ll look up on Facebook, I’ll look up on Twitter and see what people are actually talking about. If you have a product in mind that will make things a lot easier for you to just go and figure out if people are actually talking about the product on all these platforms and see what kind of feedback they are getting on the products.
Jessica: Okay. Before we move on to your $4 million product recommendation, let’s talk price with this product. So this is priced… There’s quite a range, I guess, depending on how many pieces you buy. But let’s say it’s about $5 with free shipping to the US via USPS. Actually, this is great ’cause it seems like it has a US factory here. Would you price this at… I bet I can get this, $25?
Melvin: Exactly.
Jessica: Alright.
Melvin: I’ll put it anywhere from 25 to 30.
The Perception of Free Shipping
Jessica: And you would never offer free shipping on something like that.
Melvin: Yeah, exactly, ’cause I think a lot of dropshippers offer free shipping.
Jessica: Yeah.
Melvin: And I try to do the opposite of doing free shipping ’cause I think that creates the entire perception that we are using more reliable services, and of course that gives us room to actually use a different alternative shipping method that every other dropshipping… Dropshippers are actually doing it, ’cause another $5 extra or $3 extra, you actually can use a lot of different special-line shipping services in China, not just the ones that are actually being offered on AliExpress.
Jessica: Okay. So there is room to go outside of ePacket delivery. I guess the important thing would be to test that yourself, order your product from different shipping options and see what happens.
Melvin: Exactly, and if you built a relationship with the suppliers there, I’m sure they have different alternative shipping methods as well, and that creates a competitive edge over any other dropshippers out there.
Jessica: Yeah, definitely. Really cool. Okay, I think we’ve waited long enough. Let’s talk about your multi-million dollar product recommendation.
Melvin: Sure.
Product Recommendation #5: Mermaid Tail Blanket
Jessica: Well, Melvin, you’ve turned me into a $4 million mermaid. This is the product that made you $4 million?
Melvin: Exactly. The mermaid blanket.
Jessica: Wow, I’m gonna try to give it a little flap, flap. So I’m actually wearing the product that made you not six, but seven figures in sales.
Melvin: Exactly.
Jessica: Let’s take a look at this product on AliExpress because I wanna talk about the price point of this product.
Melvin: Sure.
Determining a Price Point
Jessica: I see that it’s actually not the cheapest product. Walk me through how you price this.
Melvin: Exactly, I think for… So we have two versions for… The adult vision and a kids version. So, for the adult version, I think it costs about… Let’s see, I think it costs about $12 to $13, and to price these mermaid blankets, I think we were selling about $60.
Jessica: $60?
Melvin: $60. Exactly.
Jessica: That’s a high price point.
Melvin: It is. And we… Of course, in the beginning, we did not customize anything on our mermaid blankets, but when we found that it was a winning product, we actually… The first customization that we did was actually to customize the packaging. So to include our branding and the entire mermaid experience that we have around it, the packaging, and that increased the value of the product itself.
Jessica: Okay. I get that the packaging would help with the brand perception, but when someone’s seeing this product for the first time, how do you convince them that it’s worth $60?
Melvin: So one thing, on our side, to sell it, also is…It is because of the size of the product, right? So the product is not a small, tiny product but it’s actually a pretty big…
Jessica: Yeah.
Melvin: It fits the entire adult. So that itself speaks volumes, and that itself speaks the value of the product itself as well. So that creates even more value to it as a product.
Jessica: Did you just create an ecommerce joke that, in itself, speaks volumes? Because you talk about volume sales and the actual size of the product.
Melvin: Yeah, ’cause, end of the day, everything is about creating perception, right? So…
Jessica: That’s really interesting.
Melvin: Marketing is about perception.
Varying Your Instagram Marketing Strategy
Jessica: And then tell me about those ads that you used. Was this something that you made a video ad for or how did you get this flying off the shelves?
Melvin: Right. So we started contacting a lot of small little influencers on Instagram, actually just sending products out to them, and in return, we got all these content from all these small-time influencers that we got from them, and from there, we actually make them into videos or slideshows to actually push out on Instagram and Facebook.
Jessica: So you weren’t working with big meme accounts this time, but rather micro influencers?
Melvin: We were working with micro-influencers to produce content, and then, from content, we actually use all this big meme account to actually scale it up, on a bigger scale.
Jessica: Ah, okay. So you didn’t really care whether the micro-influencer got you a couple of sales or not, you were in it for the photos.
Melvin: Exactly, the content was the one that actually was more valuable to us, ’cause we know, with the scale of the network of influencers or the meme pages, that’s a lot bigger scale than all these micro-influencers.
Jessica: I see. How much would you pay, or how much would you pay today for that?
Melvin: We pay nothing for all these micro-influencers, only all these meme pages, that we’re actually paying them.
Jessica: Oh, okay, because I guess you send them the product for free, and you just ask for photos.
Melvin: Exactly. Exactly. And we tell them what sort of content we want, how we want them to post it, and all these kinds of instructions that come with it.
Jessica: Ah, okay. So can I actually see some of the ads that you show us?
Melvin: Sure. Sure. Let’s go.
Jessica: Let’s go into the computer.
Melvin: So this was one of our winning ads. We actually shot this in a studio, so these two were actually our models. So we found out that a lot of our consumers are actually buying them for their besties. So during Christmas season, during their birthdays, and all this kind of thing, and that’s why we have a call-to-action of, “Tag your bestie” on Instagram, and it just went viral.
Jessica: Wait, how did you figure out that your shoppers were buying this product for their besties?
Melvin: Because we have emails from our consumers, customers, saying that they want them in two different colors or even the same colors, and that tells us that they’re actually buying that off for their other half, or whatever it is. And we have people emailing us, telling them… Telling us that they are actually buying it for another bestie that is crazy about a mermaid, so that gives a lot of information about what kind of audience we are targeting.
Jessica: Did you ever try discounts, like buy to get 50 percent off?
Melvin: Yes, we do. So we do a lot of tier pricing of volume discounts. So the more you buy, the cheaper you get per item, price per item.
Jessica: And then there was this other ad that you created. Now, this is back on that meme account, right?
Melvin: Exactly.
Jessica: So you were still working with some meme counts, but you just weren’t working with these meme accounts for content. You had already gotten a picture like this, I’m assuming, from a micro-influencer.
Melvin: Yes. All these photos are from customers or micro-influencers.
Jessica: Ah. Okay. So you’re really working with two sets of people on Instagram. You’re working with micro-influencers for original content, and then once you have really original great photos, then you reach out to meme accounts and pay to promote those great photos.
Melvin: Exactly.
Jessica: That is a really cool advertising model, and it’s not one that I’ve heard about before on the show.
Melvin: I think it’s one of the ways to actually have the shortest time possible to actually create the most content. I think what we were lacking was really the people to go in and instruct this video-shooting or photo-shooting to produce all these sorts of content, so we figure out why don’t we just do everything online, and getting in touch with all this micro-influencers, and all these meme pages are all done through online. So, that was the easiest way to actually do it.
Jessica: Wow. Okay, and when you start running the ads on Facebook, who are you targeting for something like this?
Melvin: Right. So, especially the girls that are really interested in mermaids, or like even with unicorns, they are pretty related, in a way, that we were targeting people that are interested in Ariel, the mermaid.
Jessica: Ah, Ariel, the Disney mermaid.
Melvin: Exactly.
Jessica: Ah, of course. Yeah.
Melvin: So, from there, we get to expand a lot of interest on Facebook, and of course, Facebook provides a lot of information on who to target to, what sort of audience, and it connects to our Google Analytics, and that tells us what kind of age group, what people are buying our products, and from there on, we got pretty much information on how we target these products.
Jessica: Okay. Melvin, these product recommendations have been absolutely incredible. Before you leave, though, I want to ask you for one piece of advice that you would give new dropshippers who are starting out in 2019.
Melvin: Just do it. I think dropshipping is about finding the right product to sell.
There’s never a right product to sell, but that’s always… It’s all about how you sell it, how you market it. At the end of the day, you just gotta know how to make money off it.
Jessica: That’s awesome. Thanks so much for joining us today and for your product recommendations.
Melvin: Pleasure.
Jessica: And for those of you who have any questions for Melvin, make sure to leave them in the comments, and he’ll respond with his thoughts. Thanks and until next time, learn often, market better.
Melvin: And sell more.