All, good morning. Jessica Oberlo is my name. Melvin CHEE is my name. Melvin’s dropshipping business made $15 million in just two years. Melvin does not own a Lamborghini. He does however own an e-commerce business that employs 17 employees. Melvin is a master of his craft, it’s safe to assume. Today, Melvin will share five dropshipping products you should be selling with Oberlo. Let’s get started.
Melvin, I am sure that our audience wants to buy the products that you recommend. You are the most successful merchant I have ever seen, with $15 million in just two years. It’s insane. How did you get started dropshipping? That’s right. My entire e-commerce journey began in 2012, when I learned about Facebook ads and digital marketing.
It was impossible for me to imagine selling products online back then. Growing up in Malaysia, I was raised in a small town with no knowledge of online selling. I had some knowledge about e-commerce. Selling things online makes me feel completely crazy. What was your motivation to get into e-commerce?
That’s right. It’s funny and so cliché. I started ecommerce because I wanted to make more from my pocket money. My parents were still in college and provided just enough money to live on, but not enough to buy all the gadgets I want. As a way to make more money, I began e-commerce.
You thought it would be awesome if you had $100 or $200 more per month. Yes. At the time, my goal was $200 per month. This was your goal. This was my goal. Even though I had only $200, it was enough to eat whatever I wanted. At that time I was just the kid with more college money. I’m sure that the last product we’ll be discussing today was a product that made you at least $4 million.
Yes. Nearly $5 million. Oh my goodness. Nearly $5 million. Would you be willing to share the dropshipping niche you have gotten into? I am just an average Asian guy who doesn’t know much about the female market. All the products I have sold, in fact, have been in the female market–beauty products, fashion products and everything in between–anything between 18-24 year-old girls’ market. That’s right.
It’s not likely that you are an 18- to 24-year old girl. This is exactly the market where you have found success. Yes. Yes. It was the only market that I had a lot of success in the e-commerce world. I didn’t know anything about female fashion or female beauty products. You think this market was the reason you found such success. It’s true. Because it all started with Instagram.
I began following Instagram pages that were, you know. Mostly, they are for girls aged 18-24. From there, I was able to find out the products these girls love. From there, I was able to find out what products they liked and how to market them. That was cool. You found this growing marketing platform. The type of people that are there was determined. Then, you could determine what products they would like.
How did you go from someone who wanted $200 per month to start a business to one with 17 employees? It happened by chance. I couldn’t have imagined it. It just happened by chance. It just began growing. We, as Asians, are raised with the belief that money is money. We just kept throwing money at whatever was working. The ads were working at one point. We’re only scaling up what was working.
We just do it, we double down on whatever was working. It just grew from there to where it is today. Now, where are you today? Dropshipping is still a viable option for you, right? You’ve grown beyond dropshipping. That’s exactly. We are still in hybrid dropshipping. We also sell our products. We produce our own packaging. Our own 3PL centers run all of our processes.
In a sense, dropshipping is still what we do. We are also improvising the dropshipping process. Let’s move on to the product recommendations for women’s fashion accessories and fashion. OK. Let’s do it. Hea. I can sarcasm fluently. Wait. Do you recommend this product? Yes. It was one of the few products that actually earned a few hundred thousand dollars back in 2016.
This t-shirt brought in a few thousand dollars. You made a lot of money selling this t-shirt. It’s exactly. I feel like I’m wearing money right now. Tell me, why would this t-shirt sell. MELVIN CHEE – Exactly. It would be something that girls between 18 and 24 would find relatable in everyday conversation with their friends. This is what your customer would say to someone.
It’s exactly. Okay. I spend a lot of time on Instagram, including meme and funny pages. It was a lot of sentences back then. I discovered that if you put the text on a tee-shirt, it will work well. This shirt might be attractive to some people. Because it only has text on the shirt they might think they could print it on demand.
Why did dropshipping win over print on demand? I’ll be honest, I didn’t know what print on demand was back then. Because I was just beginning dropshipping. I came across this Ali Express product that had exactly the same sentence as mine. It has all the text I need. Just now, I’m putting up one of my Shopify pages. At that time, I only had one product. Honestly, I had one product, with four sizes and four SKUs. Then, I just began selling it the next day.
Are you really? This was, in fact, the only product you had in your shop at that time. It was the only product I had in my store. This was the first product you sold? It is. It is. Wow. Is it nostalgic to just look at it? It actually does. It was in the early days of e-commerce. Yes. Print on Demand is a choice that many people are making when trying to decide between dropshipping or print on demand. They are concerned about pricing and margins.
Dropshipping can often give you better margins. That’s exactly what you get. Talk to me about pricing this product to ensure you have the right margins. Yes. I believe that dropshipping is the most important type of pricing. We price the product five times as high as the product. At least four to five times. At the very least, you keep your product costs under 20% all the time. This is to make sure that you don’t spend too much marketing, but not enough product.
Dropshippers should aim to have 20%-30% profit margins. Margin of 20%-30% Net profit. It’s true. Okay. The goal is 20%-30% net profit margins. That’s exactly. Okay. You’ve just given out too many numbers. So I am going to ask you if you would be willing to open a spreadsheet and show me what you are talking about. It’s possible. If the shirt costs $4, then I believe we can sell it at $20. Plus shipping, maybe $2 or $3.
You end up with approximately $25 Okay. You do not charge shipping for your products. We do. Okay. Your total retail would then be $25. This would include shipping and any other costs. That’s exactly. Shopify’s processing fees will also be taken into consideration. You have some flexibility to make adjustments if there are any returns, exchanges, or lost parcels.
Okay. It wasn’t fractions or percentages that you used for returns. Okay. It’s not complicated math when you put it in the computer like that. Discuss the marketing channels you used to sell this t-shirt. That’s exactly. We started selling the products on Instagram to three influencers. We found many influencers on Instagram with millions of followers. We reached out to these influencers, asking them if they were available for shutouts.
We just sent all of this content to the influencers in our network. We actually just promoted the products. Let’s take a look at the ads. Yes. Okay. Now we’re on the computer. This is a screenshot. Because I remember the business it was, it was from several years ago. This ad is really interesting to me. This worked for you.
The most important thing about an ad is the call to action. We actually added a “tag friends” option. This is a way to encourage people who saw the ad, to continue to tag their friends. Some people tag as many as 4 to 5 to 10 of their friends in the ad. Imagine the organic traffic we drive from one person to 10 people who actually look at the ad.
This creates virality within the product. Okay, now we are going to look at another one of your ads. However, sarcasm doesn’t sound like a influencer. Is this the name of someone? Or, what account is that? Yes. It’s not an individual. It’s a meme site. It’s just a random person posting funny content every day. This is the account we reached out to promote our content.
They actually have around 10 million followers at any given time. We reached out to them and negotiated a price to post it, put the content up for a few hours, and pay X amount. We managed to get this kind of engagement with the ads. INTERVIEWER – What kind of engagement? That’s 74,000 likes and more than 5,000 comments. It’s amazing. MELVIN CHEE (Yes).
This was within three hours. It took three hours to just push the ad. We sold over $20,000 in three hours. Wow. This is one of my favorite things. I think the comment here really illustrates what I was talking about. When someone tags a friend and says, ha ha! I need this, it’s a way to start a conversation with them or to relate to them through your t-shirt.
Yes. Yes. We get tons and tons of content, or tons of comments, by simply tagging our friends and telling them how much they need it. You know what? I think the product speaks for itself. People are so connected to it that they begin to tag their friends. They also start to tag their schoolmates and anyone else in their network that might be interested in this product. OK. However, I believe the viewers may be trying to put together the pieces.
Dropshipping was a popular way to start selling products on Instagram in 2012. What marketing channels are available to viewers who want to dropship in 2019? I believe that Instagram, Facebook and Instagram are still the best platforms to promote all these products.
We have to be aware of new platforms such as Snapchat, Pinterest, and TikTok. This is especially important when these platforms are still relatively new, but there are not many advertisers on them. This is where you can get lower impressions and get more clicks. Okay. You’re still using Instagram for your business. Yes.
There’s still plenty of power. But it’s not over. It’s true. It might be a smart strategy to have both Facebook and Instagram ads, but with lower acquisition costs for traffic and brand recognition. That’s exactly what you should do. Particularly on new platforms where costs–cost per click are associated. It’s much easier to create brand awareness. We can reach a lot of people from these lower-cost platforms, and then target them.
We target a warm audience via Instagram and Facebook. Yes. It’s really cool. OK. Great strategy. Okay. I’m going change out of my bestselling tee-shirt. Let’s now move onto product number 2. MELVIN CHEE (Yes). Let’s do it. INTERVIEWER : Ok. Perhaps you can speak the language for female shoppers. I am freaking out over these glittery, sparkly unicorn slippers.
These products are amazing. How on earth did you discover this product? This product is cute to me. Every girl between 18 and 24 years old would love to see unicorns. You can even be older than 24. Yes. Okay, but how can you find something like that? That’s right. This is how I found this product on Twitter. What are you doing on Twitter?
Twitter. Yes. It was just a casual post about the product that they purchased from Amazon back then. It seemed like a product that would sell well on Instagram. So we duplicated the products, set up Shopify within a day, and then just launched the product on Instagram. Okay. I’ve got a question about Amazon versus dropshipping. These are the basics.
This is going to get serious. I need to know if you saw this product because somebody else bought it from Amazon. Why didn’t your immediate reaction be, “Oh, well, you can find it on Amazon. I won’t dropship it.” Yes. At that time I thought I had looked up Amazon. It wasn’t, there weren’t many ratings. This tells me that the product was not a winner back then.
At that time, however, no one had actually promoted the product on a large enough scale to make unicorn slippers for everyone. That’s when I realized there was a huge opportunity. We took advantage of the opportunity. It’s really fascinating. It’s interesting that someone bought something on Amazon and talked about it. That’s exactly what it is.
You’ve done your research and found that there are not many reviews. There’s still a lot of opportunity. Yes. Okay. Dropshipping allows us to test products in a matter of hours. We simply need to scrape some content from Facebook, Instagram, Twitter and then put it all together and push it out on Instagram. We began to see all the signs of success and realized that this was a winner product.
Yes. Okay. You can always check for yourself, even if you think something is saturated. It’s exactly. That’s cool. Another thing to consider when you see the product on Amazon is that there may be more than one supplier. Dropshippers often ask us how to find reliable suppliers. How do you go about finding reliable suppliers? To be completely honest, I believe that finding reliable suppliers is a huge challenge. Dropshippers around the world aren’t sure if they can trust them or if they are honest.
One way I– I think that one way we can– is to use Ali Express to look up unicorn slippers. Then I will sort them by orders. Just looking at the reviews and the badges they have earned from Ali Express, you can get an idea of how many orders these suppliers actually get.
We also split orders among different suppliers to find the best quality products, reliable fulfillment processes, and the fastest shipping. This tells us who we will work with to review it. Wow. Wow. It is possible to test suppliers with different segments.
Many of our viewers still hope for multiple customers. But, I’d like to delve deeper into what you said. This is what badges are. Yes. These are badges these suppliers have earned from Ali Express to identify them as top sellers on Ali Express. This is a good indicator that they are OK most of the times.
They aren’t here to con you or give you shady products. These badges are also earned by them because they have reviewed the products. INTERVIEWER : The number of orders also tells you if a product is too saturated and not something that a dropshipper can sell. MELVIN CHEE : No. This is because it gives you an indication that the product actually sells well. However, it is possible that other sellers may be selling the product.
The market is so vast, so large, that it doesn’t mean you can’t sell these products if 10 other sellers are also selling them. Okay. We have a video that will help you find the best Ali Express suppliers. You can find it right there. Let’s look at the price again while we are in Ali Express. If this is $10 per pair, with free shipping, then I would. So I would multiply it by 4.
Wait. It would cost about $45. MELVIN CHEE : Yes. INTERVIEWER : Who are you finding that will buy these slippers for $45? That’s right. Because price point is not something I believe in. It’s all about creating. Marketing is about creating perceptions of the product’s value. Your contents, or the content you create, are not worth $45, but the perceived value of the other part (the users) will not be $45.
If you believe that your product creates a value of $45 through its packaging, shipping time, and all the features it has, then I believe the end result is that the product will be perceived as a $45 product, not $20. That’s right. It all starts with the ad. Having an ad that clearly shows the product’s value is crucial. That’s exactly.
The ad is not the only thing that matters. It should also include the landing page, product page, checkout page, and all warranties, exchanges, returns, and other information that can be put in place to build trust with consumers. This is very interesting. Dropshippers often hesitate to post information on shipping times and return policies on their websites. You’re saying, write it all.
Yes. It’s better than trying to hide it. You’re more likely to lose your transaction if you give out fake information, as consumers are more likely to dispute transactions. If you’re actually providing real information and keeping customers informed from the moment they buy it, through shipping it, to the time it arrives at their doorstep and any reviews that follow, it will improve the dropshipping experience.
To sell this ad at $45, you would need to hire an agency. They can make it really fancy with lots of close-ups. Is that what you did? We didn’t. Actually, we didn’t. This is how I got the product in. My sister-in law, who is also my business partner, was thrilled to wear it. She was dancing on our porch. And I was only recording her dancing in front a porch.
The product is what made the video go wild. It lights up when you jump on to it. People are fascinated by the product. It happened overnight. Wow. These are now your relative’s shoes. You picked up your iPhone, and you said, “Dance.” You had an ad which made you lots and lots of money. Yes. It’s hilarious.
You still have the logo at the bottom that says “Made with whatever it may be.” It just got crazy. Holy cow. Oh, man. Okay. How much success in dropshipping do you attribute to the right product or the right advertising? To be honest, I believe it’s a combination. This doesn’t necessarily mean your ad must be great. However, it doesn’t mean everything else has to work out. It must be the whole experience, from your ad to landing pages to product pages.
Both must be integrated. This doesn’t necessarily mean that one works. Both work and all of it works. It doesn’t work this way. Okay. You priced it at $45, and you had a great advertisement. What was the profit you made selling these unicorn slippers to customers? We made $90,000. That’s somewhere around $100,000, I believe. You say this with a disappointed voice, because you are a $15 million dropshipper.
That’s it. It is. Yes. Yes, we do use it as a traffic driver product. Products like these attract high clickthrough rates. A lot of people, a lot, come in just to look at the product. We then upsell them with products at a lower price or that revolve around the fantasy of unicorns on mermaid, or any other similar categories to it to increase our AOV and increase our lifetime value.
It’s really interesting. It could happen that a dropshipper tests products and finds that one product gets the most traffic but not many buys. That could be a reason to say, “Just keep driving that traffic, but add more products.” It’s exactly. It’s okay. It’s okay to break even with your traffic driver product, but it is possible to improve your funnels, your upsell, and your cross-sell.