Learning About Dropshipping in the Military
David: You graduated high school last year, and you planned to attend university to study mechanical engineering. You ended up deferring that start date until 2020 so that you could complete your military service, which is mandatory in Finland.
David: And I wanted to ask about this background, mechanical engineering plus military. That's not necessarily the most obvious background for an online business owner. How did you find your way into the digital business world without having any sort of normal predictable route?
Ahmed: So I've always been good with computers ever since I was small. I actually used to do coding when I was smaller and I've never had any difficulties with online stuff or digital stuff, so that was never a big stepping stone for me. But I've actually had multiple passions when I was in school, and the ones that stuck were Maths, Social Studies, usually Civics, and then Science Studies. So I've always been interested in sciences and business.
And military service, well, it's mandatory so you just have to do it. And some people postpone military service until they're 25, up until they're 30. But I thought that I just wanna get it over with so I can pursue my other real passions instead of always thinking about this bump that's coming sometime in the future, which is military service.
But actually, it was quite good that I went because there, I met a friend who was with me and he told us about this dropshipping and ecommerce in general. And it was eye-opening because I had always thought... I always heard about making money online.
But I had this picture that to make money online, you have to be doing these surveys or these really painstaking tasks, which pay very little.
So I didn't really make much of it. But he told us that it was possible, and you can make a business online and it doesn't cost much to start. And he told us about this store he did in 2019, and he made €270,000 in revenue in, I think it was three months. And that was...
Ahmed: And that really struck me. I was like, "Wow! I've never heard a 19-year-old talk about figures like that." So that's when I started looking into it. Obviously, I was still in the military, so I didn't have much time to pursue it.
So all I did was when we had these... Every day after 6:00 PM, we had some free time. So I would go on the Internet and read about dropshipping and ecommerce and all these business models, print on demand, all this stuff, and gather information little by little until I got out, and then I actually started trying it out.
David: Cool. Now, you chatted with us for a story over at the Oberlo blog, and you had a great quote in there where you said,
"I'd heard about making money online and all those ads you see on the Internet, but I never really believed them, so I just took them all with a grain of salt."
Talk a bit more about that, if you would, because you're really not alone with this skeptical attitude. There are a lot of promises out there where people see a YouTube ad or something, that there's a promise of lots of money. You only have to work 30 minutes a week or whatever. What was your perception of online business when you were looking at those ads and based on the things you were hearing there?
Ahmed: Yeah, so obviously, I didn't believe them before I heard what my friend said in the army. I always thought that these were just schemes that these online gurus run to make money off of people who wanna make money online. And it's really a shame because I don't really blame the people who are skeptical because the media, social media, and news are filled with stories of people getting scammed online. It's a really big issue that people are afraid of getting scammed or ripped off online because it's easy to get away with. It's much easier to scam someone online than in real life.
So I think that's a big barrier for people between believing in the possibility of being able to work online, and as you said, maybe for only 30 minutes a day, compared to, traditionally, going to work physically to someplace for a nine-to-five job every day and making the same amount of money.
So, I really didn't believe any of those ads, which in hindsight is quite foolish because, obviously, if there are ads which are selling this dream, as you could call it, then, obviously, there are some people who are making it because if it wasn't true, then people wouldn't be running ads on it because people wouldn't buy into it. But since there are these gurus who are making money off of people who are buying the courses, then there has to be some kind of tangible proof that it works, otherwise, it would just die off.
Launching His First Store
David: Okay, so you were skeptical coming into it and then you kinda got your interest piqued when you heard your military buddy talking about it. So tell me about launching your first store. How did you pick the products and what sort of store was it?
Ahmed: Yeah, so before I picked the first store, before I started doing it, I was doing some research on it. I think I read about dropshipping about... Really did some research for about two weeks before I started my first store. And my research really consisted of watching YouTube videos of these, as I call them, online gurus. And they do give some helpful information, especially for beginners, but most of the time, they are trying to sell their own course.
So they give this kind of introduction, maybe some useful information, but then the rest of the real information is in the course that you have to buy. But, anyway, it was enough to get me started, and I figured I'd be better off learning as I do, starting a store, and learning as I progressed through the stages.
So I started this store with things that I myself had bought off of AliExpress, which are iPhone cases and things that go with it such as fake AirPods. I think I have this neck phone holder, which also fits into the same niche. And at the time, I had heard these people say, "Don't reinvent the wheel. Go where there is money to be made. Don't try to start a new trend. If something is selling, it means there's money to be made there."
But, obviously, if something is selling, there's also a lot of competition there.
And if you wanna be able to sell iPhone cases, you have to have something to stick out to beat your competition, which is, frankly, in 2020, it's really hard because there are these people who have already made it to the big leagues and it's really hard to beat them.
So, anyway, I got on with my first store. It was kind of a general store. I just threw everything that I thought would sell that fits into this electronics niche in there. And I made my own ads because... Well, I tried to be ethical with my business as well, so I don't like stealing ads.
David: That's good. We like that.
Ahmed: Yeah, so I made my own ads, but I think the ads are on the blog post. They aren't really that good. They look like they were made by an eight-year-old on paint.net, something like that. But, anyway, it was enough to get me interested and started with influencer marketing, which is paying Instagram pages or influencers a fixed amount for a 24-hour post, for example, for your ad.
And that's because Facebook advertising is, especially for beginners, in many cases, is really expensive, so people like to start off with influencer marketing.
But the thing with influencer marketing is that it's really a hit or miss kind of thing. If you hit, you usually hit pretty well, but if you miss, which happens most of the time, you would do zero sales and you'll end up losing all the money that you paid for the page.
David: I assume you missed.
Ahmed: Yeah. Definitely. But that wasn't... I'm not saying that the reason I didn't make money with the first store was that I didn't do Facebook marketing. There are many more reasons.
I didn't do any branding. I had these... When you import products with Oberlo, it imports the default description that AliExpress has, which has all this information, voltage, if it's an electronic product, all these specifications. And I remember thinking, I was like, "Oh, well, this is nice. It's all ready. I don't have to write the description myself." So I just left it there and thought it would sell like that. So that's one thing. I didn't focus on branding at all.
I had this idea that if you just throw products in front of the right audiences, they will buy it regardless of whether you try to sell it or not, which is of course very wrong.
That's not how it goes if you're a new brand. No one has heard of you. You have to sell your product. You have to give people a reason to buy from you.
David: Yeah, that's a good point. There is more to making sales than simply importing the products. We've actually talked to... Some of our customer satisfaction experts, they've talked about messages that they've gotten from users and the message will be something like, "Hey, I've had products in my store for two days and there are no sales yet. What's going on?"
And there's an assumption that all you need to do is put a product there and then it just kinda takes care of itself. But as you learned and as everybody's learned, there's a little bit more to it than simply hitting the import button.
Ahmed: Yeah, but I don't blame them, really, because the thing is that with all the ads about making money online and all these videos about how easy dropshipping and ecommerce is, it really does give you an image that dropshipping, especially, is really easy, and all you need to do is set up this Shopify store and import product through Oberlo and that's it, run some ads and people will buy from you.
And that's really how people... These gurus who try to sell their courses, that's how they get people to sign up because it seems so easy.
But the thing is that if it really were that easy, everyone would be doing it. Why would anyone work if it were that easy. Of course, you have to work to make real revenue.
David: Yeah, for sure. I mean, and easy... “Easy” is just a word that we kind of... I treat that as a bad word. We don't talk about things being easy 'cause it's not easy.
Ahmed: Exactly, yeah.
David: There are some things that are simple and there is “one-click import”, that's a thing, but it's very different having an imported product sitting in your back-end versus generating revenue on the front-end.
David: So, yeah, definitely, I think this is... This is a good takeaway that dropshipping is very hard, I think easier is a fair word, it is easier...
Ahmed: Sure, yeah.
David: To dropship than to have a retail store, open up a brick and mortar place, but definitely ain't easy. So I'm glad you brought that up.
Ahmed: Yeah, yeah. I did also try some Snapchat marketing, which didn't work, and I've never really looked into it after. But Snapchat, the thing with Snapchat is some people actually can find and have found success with Snapchat ads. But Snapchat is really a swipe-based application where people just swipe through all the posts, when people watch stories, they just tap through all the posts without really even giving any of them some attention.
So Snapchat was interesting in the sense that I got tons of traffic, I got like for only maybe putting €10 a day, you could get 1,000 visitors, but none of them would even add to cart, so I would say that the quality of traffic that you get from Snapchat ads, it's much, much lower than you would get from say, Facebook or Instagram.
David: Alright, so you had... You had your first store up, it didn't go great. So as you said, you did not invest in branding, you made the kind of rookie mistake of importing the AliExpress product descriptions word for word, which, if anybody's read those descriptions, they are not poetry.
Learning From His Mistakes and Launching a Second Store
David: And then you kind of... You had to make a few mistakes on the advertising front with Snapchat or trying things that didn't end up working, so that was store number one. But to your credit, you didn't give up, you came back and went for it again with store two. Talk about what was different when you decided to launch it for a second round.
Ahmed: Yeah, so the reason I didn't give up was that I was genuinely convinced that I could make this work because my friend had made it work.
And when I see something tangible, when I see someone I know say that something has happened, that's much more convincing than seeing an ad on the internet that something has happened.
And I also... It made sense. Dropshipping really makes sense when you start researching it, so I was like, this can definitely work, there's just something that I haven't figured out yet, so I was convinced that I just have to try again and again and at some point, it would work.
So the second store I made, I tried to focus on branding much more since the first store was this kind of a general store that I just threw products in without really putting any effort into it. The second store was this hair trimmer that I had found on AliExpress again, and the branding was actually done quite well and I even wrote compelling descriptions.
I made the entire site quite uniform, I made my own logos. But the thing with the product was that the product was, first of all, low quality, it was also widely available in brick and mortar stores.
For example, if someone wants to buy a hair trimmer, they're much more likely to buy it from their local store than from a random Internet store. So that was the problem with that product, and the bigger problem was, in my opinion, the fact that it was low quality.
People could see through the branding and the ads. It's actually good that people don't buy... That people aren't deceived by low-quality products because even if you do make your first sales, even if you do find success, when the customers eventually do get the product, that's the point at which they realize, "Oh, I've been ripped off. I've bought a 40... I've bought a trimmer worth 40 Euros but it's actually worth only two." Or something like that.
David: Right, right. It's worth the cost of the battery inside.
Ahmed: Exactly, yeah. And then you're just gonna get... You're just gonna get cashbacks and all the revenue you made is just gonna be lost, so what's the point? You're just gonna be stuck with a huge customer service problem.
David: It seems like a hair trimmer is also a product that people would probably want relatively quickly. If you have a need for a hair trimmer then that need is not gonna go away. In fact, it's only gonna get worse in the few weeks it might take to ship there. Was that another issue that you ran into with that particular product?
Ahmed: Yeah, certainly, certainly. Yeah, the shipping times were, if I remember correctly, around three to four weeks, which is quite normal for dropshipping out of China. But definitely, yeah, that was one issue too.
Doing Branding for a One-Product Store vs a General Store
David: You talked about the... That you emphasized branding more and I'm curious what that looked like because dropshippers often struggle with this idea of creating a brand image. I mean part of it is inherent to the business model. You are taking products that are... They're not yours, they're made from somebody else and it's very possible that other stores are selling the exact same thing.
And I think for some people there's a sense that they shouldn't even try to worry about the branding because their store... They might not plan on having it open for that long and there's no point in investing in this kind of a long-term branding strategy. What was your approach to branding for round two and what was better that time than with your first store where you really didn't pay any attention to that?
Ahmed: Yeah. Actually the second store was easier to brand because it was just this one product. It's much easier to brand a company around one product than it is around a variety of products, especially if it's mixed niches together because when you focus on one product or one group of similar products, you can really make your company seem like an expert in that area.
So, for example, concretely what I did on my second store was speak in a language that appeals to people who care about the way they look, put logos together, fonts together, colors together that match, and they match the language and they match the audience.
The most important thing about branding is that you have to understand your audience and you have to talk to them.
You have to be able to talk in a language that your audience can relate to, you have to be able to... How should I say this? Sell the outcome, not the product, don't focus on what the product does, you have to focus on... I'm sorry, I'm sorry... Don't focus on what the product is, you have to focus on what the product does, what the outcome is of them using your product, which is for a hair trimmer it's getting maybe a better-looking beard for men.
And you have to go further than that. What does a better-looking beard do for people who care about how they look? Well, it gives them better self-esteem. They might feel more confident. So you have to sell the confidence feature. You have to sell the self-esteem. You have to sell... Perhaps you have an ad that shows a guy waking up and he looks in the mirror and he's like, "Wow, I look good." And you know, people who maybe aren't that confident, they look at that ad and they're like, "I wanna be like that."
And that's all included in your branding, everything from logo, behavior, language. You have to have an About Us page. Even if you're starting out and you haven't made even one sale, you have to be able to tell your customers what your mission and vision are so that they will really understand why you exist and why they should buy from you and not from another store.
And all of this ties together. When people talk about branding, many people think it's just the logo and colors and fonts, but it's really... That's the most superficial level of branding. The real value of branding and the deeper meaning is found in the language, in your behavior, in your culture, the way you communicate to your audience, all that is included in branding.
David: Yeah, I think that's spot on. We actually had... We had somebody on the podcast a few months ago, Paul Lee. He had a beard brand and he really immersed himself in the whole beard culture. He learned this language that you're talking about. And these things like self-esteem and confidence, like those, are real things.
And I think for something like hair care products that you're talking about or Paul was talking about, those are definitely top of mind. And then for other niches, it's gonna be other things. Like if you sell swimwear, it'll be about having fun, for example, or enjoying the summer, whatever it might be. But there are, exactly like you're saying, there are these kinds of secondary effects. So like yes, you are trimming your hair, but what does that mean? Or, yes, you're going to the beach, but what is going to the beach feel like?
So I think that's an awesome way to put it, that you need to kind of look beyond the product itself and then look at what the product does and then think about, "Okay, what is it gonna do for somebody?"
Ahmed: Yeah, yeah.
The Third Time's the Charm
David: So okay, so you learned a lot about branding from your first store, and then you learned a lot about crappy products from your second store.
David: But you didn't give up. So what was it that kind of convinced you that maybe you should try this yet again and open up a third store?
Ahmed: Well, pretty soon I understood that the issue was in my product and I should just find another product and try again.
Because going back to the branding aspect, you can do all the branding you want, but if your product doesn't actually deliver on your branding, it's all for nothing.
You can promise that people will get self-esteem when they trim their beard with your hair trimmer. But then if they get a crappy plastic hair trimmer in the mail four weeks later after they buy it on the Internet, that story is gonna die out pretty soon, even though you do the best of branding.
So with the third store, I actually tried to use timing to my advantage because Valentine's Day was coming, and I thought I'd try a store and leverage timing to my advantage because I was just a beginner so I had to have some kind of edge over the competition.
So I opened up again a one-product store around this Golden Foil Rose in this dome, which is a classic dropshipping product.
David: It is very classic. This is one that we've written about on the Oberlo blog. This is definitely a tried-and-true dropshipping product, so look this up if you're interested.
Ahmed: Definitely, and the thing with the Gold Foil Rose is that it works every year. It's seasonal. Every time Valentine's Day comes around, it sells. And it's been like that for the last four or five years, at least.
So I did that, and I focused again on branding. I think I didn't really do much more than I did with the second store because I didn't know better. So I did the same thing with branding, tried to appeal to the audience, tried to make it relevant, tried to focus on the one product and make everything revolve around it and around the customer. And that's the store with which I made my first, I think three sales actually, and that's when I got the first taste of success and I was like, "Okay, this is gonna work. I just have to get a few more things right, and I can really make this work."
David: Yeah, and that's kind of a revelation that we've heard from other people as well that once you get the sales, you get the orders fulfilled, and the product is actually legitimate, that there's this, I don't know, like a light that flips on or whatever the cliche is that you wanna use. But there's kind of a realization and confidence that like, "Oh, this is how it's supposed to work. This is how it feels. It does work to do it this way."
So yeah, that's awesome that you kind of had the light bulb moment, so to speak, getting a few sales under your belt 'cause that's all it really takes. Once you see those first few come in, it kinda changes everything.
The First Sales Are the Hardest
Ahmed: Yeah, many people actually do say this that the first sales you make are the hardest and the rest come after it, which is really squeezing it in a nutshell, but it really does make sense. The first sales are the hardest ones to get, but after that, you can just duplicate and make your strategy better and you should be able to improve from that.
I remember the feeling. It was quite incredible to see the first sales because I had been... I live in Finland myself, and I had been... All these stores I made first were for English-speaking countries, mainly the United States. So all the sales I made with this Valentine's Day store were when I was sleeping. So I remember waking up and I looked at my phone and I had made three sales, and it was such an incredible feeling of knowing that you...
David: Nice, good notifications to get.
Ahmed: Yeah, that you had made money in your sleep. And I remember looking at the orders and looking at the customers and realizing that, "Wow, these are real people who came to my store and bought from me." And it was... It... It might sound silly that I'm saying this now, but it was really quite an incredible feeling at the time.
And, this is just the thing with business, that, the reason it's hard and easy at the same time, is that... The hard part is when you're actually doing the work because in business, the heavy lifting is done before you get the money.
And, the thing that makes it challenging is that when you're doing the heavy lifting, when you're putting in the hours and the work, and, you know, all the effort, you're not seeing any of the results yet, and you don't even know if you're gonna get results.
You can't know until you do actually get them. But when you do get the results, you're not doing anything, you might be sleeping like I was. So, it's like... You feel... You feel... It's really challenging at times, and then, when it does work out, it's the best feeling in the world.
Ahmed: So, with the third store, I had to close it pretty soon because it's a seasonal product so, as soon as Valentine's Day was over, or actually a week before it was over because the shipping times were about a week long, so, I had to close it because... Yeah.
David: You don't want any February 12th sales on a rose coming from... Yeah, coming from China, that won't... It won't get there.
Self-Learning and Leveraging Your Unique Traits
Ahmed: Yeah. Yeah. So after that, I had really realized... After that light bulb moment, I was like, "Okay, this is really gonna work." I didn't actually make any profit, I broke even with the store, but it was better than losing money as I did with the first stores. So, I realized that I've been having the right strategy in the sense that, every store I've made has been better than the earlier one, and that's exactly how you should do it.
You should always improve when you take your next shot. You should never do the same thing twice.
And the thing with online business and any business really, is that you should… As cliche as it sounds, you should really learn from your mistakes. And what it means is... What I did was I documented my mistakes, or more accurately, I documented everything I did. And after I closed the store, I looked over what I did and I was like, "Okay, which one of these things I did was good, and which one was not, and which one should I never do again, and which one should I maybe improve or implement in my next store too?"
And, with the third store, when I closed it, I really didn't know how I could improve with my fourth store. And that was bad because I wasn't ready to make a fourth store and lose money again or even break-even.
I was determined to make a profit with the fourth store. So, what I did was I actually took some time off. I was also working at the time. But my work was good in the sense that I was able to take my laptop with me to work, it was a customer service related job, and, when there were no customers, I was able to read about ecommerce and study during work time.
So, that's what I did. And I think for two to three weeks, all I did was go through videos, go through articles, do research on products. I actually took one free course that I found...
I don't think any beginners should buy a course because it's really hard to figure out which ones are worth the money in the beginning, and, quite frankly, I think all the information you need to get started is out there.
David: Oberlo's dropshipping course is free right now, I guess I should go ahead and plug that while we're on the topic...
Ahmed: Sure. Sure.
David: Our is... Ours is free. As Ahmed is saying, it has all the information you need so...
David: Alright. As you were. You set me up for that one. I had to take the chance.
Finding Success in His Fourth Store
Ahmed: Yeah, no problem. And, if you do buy a course, which is fine, and you totally should, and it's good to invest in yourself, just make sure you're not being ripped off. Don't buy a $1,000 Euro course or anything. Make sure it's... The value that the course offers is worth the money that you're paying. That's the... That's the main thing.
David: Yeah, there are a lot of... A lot of four-figure courses out there.
David: They're pretty expensive.
Ahmed: So, I did research and I learned many new things of which the most important I think was a huge lesson on branding. It's this concept called the 12 brand archetypes, which is this concept built by this psychologist I think. I don't remember his name. But it's this psychologist who came up with the concept that all brands should fit into personalities.
When you develop a brand, you should think of it as a book character that you're building.
You're building how he or she looks, you're building the language, you're building everything, the whole personality of the character, and you have to speak to your target audience with it. And, the 12 archetypes are divided roughly so that all brand types can fit into all of them.
And there are examples of the archetypes that might be the 'explorer' archetype into which, for example, The North Face fits. The North Face is this company that sells apparel and backpacks and all these, and you can see from their ads that... All their ads are these people who are trekking on mountains or hanging from cliffs, doing this really daredevil stuff in nature.
And, what this means... They're selling jackets. So, how does hanging from a cliff connect to selling jackets? Well, they're appealing to the people who maybe like nature, people who like trekking, people who like to take risks. It's all really psychological when you come to think of it. And, people who aren't like that, they don't buy jackets from The North Face, they buy jackets from another place, which appeals to their personality and things they like.
And this is really important with your target audience. Many people think that... Many people have this process of first finding the product and then thinking about, "Okay, who should I sell this to?" Whereas they should be thinking, "Okay, I need to find some people who need something... For example, I need to find a problem within the fishing community." Maybe fishers have a problem and, you have to find a product to solve that problem that they have.
That's a much better way of thinking about it, and it's way better to develop your brand when you start from the audience instead of the product. And, that's exactly what I did with my fourth store, which I opened soon after I finished researching and I found some new strategies to try out. And, I actually went with print on demand. And the fourth store is the store I'm currently running, it's this jewelry store that I have.
Another thing I learned, which I implemented was that you have to leverage your strengths because dropshipping is obviously gaining in popularity, and it has ever since, I would say, 2015 and really took off in 2017. And, it's getting harder and harder to compete against other dropshippers because quite frankly, other dropshippers are as good or many times better than you yourself are or I am. So you have to use your strengths to your advantage.
And I thought, "What's my strength compared to other dropshippers?" Well, to really find your strengths, you have to find what traits or abilities you have that other people might not have. And to me, that was living in Finland and to be able to talk, to speak the Finnish language. And I thought, "Okay, I'm gonna make a store in Finland and make it in Finnish and sell it to Finnish people."
Because dropshipping is really competitive in the English-speaking community, so I will eliminate a lot of the competition by catering to the Finnish community.
This is really important. And one of the big pieces of advice I would give to beginners is to really try to find strengths that you have. It can be like mine was. It's really, like, obvious and small but it makes a big difference. You have to find traits that you can leverage to beat your competition.
Fighting Saturation With Unconventional Dropshipping Markets
David: I love this idea of targeting a different market. I mean, this is something that I think a lot of people fall into the trap that maybe you fell into for your first few stores, where you think it needs to be the US or it needs to be these English-speaking markets like the US, UK, Australia, whatever. Those are definitely good markets. They buy a lot of stuff, and a lot of Oberlo users, for example, have huge success there.
But we've looked at this and published content on other markets that you can target all across Scandinavia. There are a lot of purchases coming into Oberlo-powered stores. Countries that you might not even think of like Malaysia and the Philippines. There are all sorts of markets out there to target. Of course, you had it pretty obvious with Finland, just kind of knowing the language and understanding the culture and the market.
But this is something that when people talk about, "Oh, this is saturated,” or, “Dropshipping is saturated,” or, “This dropshipping product is saturated," the world is a very big place and everybody's online now pretty much, so you do not need to restrict yourself to the US. 'Cause, yeah, something might be too expensive to market in the US or US Facebook ads are pricey and you have to compete with all these people that you were talking about, who are... They've been there, they've been doing it for a while, that is really, really difficult, but just change the target market. And then all of a sudden the dynamic changes if you find some little inefficiency, and what you're talking about is brilliant, just look in your back backyard and there's the market you should be focused on instead of the US.
Ahmed: Yeah, and many people talk about, as you said, saturation, which is a word I really hate personally because I think saturation is just a synonym for competition, but it's a much more negative tone. It's this word that you use when you're trying to make people... Crush people's hopes and dreams by calling a product or a market saturated, and what it really means is just, it's really competitive. And it's obviously harder to make it, but usually, when something, some market or some product is saturated, it does mean that there is a lot of money to be made there. And if you do make it, you are gonna get a big piece. But the flip side, there's always this balance, I would say.
David: Yeah, totally. We had somebody on the podcast before. He was talking about these face masks to clear your pores, and there was this perception that they were saturated. And I think in the US, they might have been. This is a big dropshipping. He was deep into it, so he knew which products were selling and where they were selling. And so face masks, US, okay, that actually might be a little bit saturated. But if you just do the same product and the same targeting, the same ads in Canada, it's all of a sudden a totally different ball game.
Ahmed: Yeah, exactly.
David: And the ad prices change, the market is not the same, there are new dynamics that you can take advantage of. So, yeah, I'm with you. I think that there is competition out there. It's not supposed to be easy like we talked about, but there is a lot of ecommerce and it's a big pie and a lot of pieces to go around for sure.
Ahmed: And changing the market, as you said, is only one way of beating this challenge of saturation. I don't know if you knew this, but the fidget spinner, which was a huge, huge, huge product back in, I think, 2017, I don't know if I got this wrong. But anyway, it was like a huge product during this... I think it was a six-month period or something like this.
But the funny thing with fidget spinners is that somebody actually already came up with the toy and tried to sell it back in, I think it was the early 2000s, but it was called the Spinning Toy, and it made absolutely… It was a horrible product at the time, it made no sales, and they were actually in the process of patenting it, but they gave up because it was such a bad product. And someone found it in 2015, 2016. The only thing that he changed, he or she changed, was the name, from Spinning Toy to the Fidget Spinner, and instantly, it became a hit product.
So sometimes all it takes is a bit more creativity. Give some new touch to it. Put it in a new light. Give some personalization aspect to it, anything to make it different from the saturated market that it is and you might be starting the next big trend.
A Hybrid Business Model
David: So your fourth store was a success. And instead of digging into the nuances of your Finnish ad copy and all that stuff, I wanted to ask you about how you are now fulfilling orders and testing products because I think you did something that's pretty cool. You went from a pure dropshipping fulfillment method to now kind of a hybrid between dropshipping and working with a supplier and their inventory directly. So tell us, if you would, about how you set that up and how you're still using dropshipping but not relying solely on that.
Ahmed: Yeah, so actually where they started from was, I had this huge problem with my supplier and it was due to the coronavirus. My supplier was based in the US and my store was in Finland, and it was selling to the Finnish audience, mainly.
And so all my products were supposed to come from the US to Finland via UPS, I think it was. But there was this issue that started appearing around April where my products would get stuck at the airports because of flights that were canceled and because of priority mail taking place... Priority mail has an advantage because the thing with many courier services is that they actually first stuff the priority mail in the planes, and then economy comes after if there is space.
So with flights being reduced, priority mail was mainly getting flown over to Finland and economy was just sitting at the airport and my… And the funny thing is April was actually the time I made the most sales too, so when I was scaling up, my deliveries were being stuck, which was a huge problem.
And I think I did about, I sold for about two weeks before realizing that this was an issue, I realized that, okay, deliveries are not coming through. So I stopped the store and I started looking into the problem, what's up, what's wrong, how can I expedite the delivery or help, or somehow make my customers get their products.
Customers were already calling me and sending emails and asking about where the products are, and the big problem was I didn't know myself.
So after finding out they were being stuck at the airports in the US, I realized that I could no longer work with the supplier and the thing with my supplier was, it was really, really hard because the supplier was good and he had good communication when things were going well. But as soon as things went downhill, it was getting harder to reach them, especially since I had, it was hundreds of deliveries that were stuck, it was about €8,000 in sales that I had stuck...
David: Oh wow!
Ahmed: At the airports, and the thing with... No, it was more, it was actually €14,000, but €8,000 was the amount I had to return to my customers because the issue with dropshipping is you don't have control over your deliveries, as I just proved with my store.
David: Right, yeah.
Ahmed: But the issue with the traditional online business, ecommerce with your own inventory is that you don't know if your product is going to sell before you actually try to sell it. So people are often buying huge inventories of products and then being stuck with them because they can't sell them.
I thought about this idea that I would test products, or actually, I had already tested the products which I had sold.
So why wouldn't I just buy the inventory to myself and ship them from within Finland and get one-day deliveries, two-day deliveries, and control my supply chain myself, and also get cheaper prices since I would get them straight from the factory and not have to pay my supplier, which is just a middle man in the supply chain?
So I did just that and I got my own inventory straight from the factories, and I started fulfilling orders myself from my house and...
David: And so that the process was that you would use, you would use ads and the different marketing channels that you talked about to do market research in a way or to kind of test what was going to work product-wise and then fulfill those orders with whatever kind of standard dropshipping was available. But then, in the background, you would invest in actual physical inventory...
David: That would give you more control, is that kind of how it worked?
Ahmed: Exactly, yeah.
Ahmed: And with the stuck orders, there was around €14,000 worth of stuck orders at the airports, and I had this solution that I would send to all the customers who had their delivery stuck, I sent them an email offering them two ways out. One was that they would get a replacement product from the ones that I had bought to my own inventory here to Finland.
It was slightly different. It was still the same necklace, it was just slightly different. I sent them a picture of it and I told them, "Hey, if you want, you can change to this product, I'll send it to you for free", because if they had already bought it and it was stuck, "And if you don't want this, I can return your money and we can be done with it. No problem."
And I was expecting that most people would want their money back. But I was surprised that about half actually wanted the replacement necklace, which was good because that saved me a lot of money.
And I ended up losing, because of this problem, I ended up losing around €13,000 in out of pocket, because €8,000 was the actual amount of sales that I lost, which is about half of the products that were stuck. But the thing is that with cashbacks, with returning the money to the customers, I'm not getting back the amount I lost on ads of those sales or the processing fees or the amounts that I actually paid to my supplier because my supplier ghosted me so I couldn't get my money back from there either.
So with a little bit of customer service, that problem got solved too. And that's one thing that I also advocate for, which is ethical business, really try and solve your problems, if you run into issues like this, which is you are bound to run into problems, maybe not this exact problem, but if you are a business owner, you will run into problems and you have to be able to solve them and you will be losing money sometimes.
But what makes people who succeed stand out is the ability to adapt in challenging situations like this one.
And in hindsight, this situation was actually good because it gave me this idea of implementing a hybrid business model between traditional ecommerce and dropshipping.
So now I have this system where all the products that I have already proven to be sellable, I have proven to sell them, I am getting them myself to my own inventory and I have a fulfiller that I'm paying to fulfill the products to here, and then I am doing prospecting with dropshipping, trying out new products and testing them maybe for a week or two. If they work, then I change it over to the traditional inventory stock system.
The Importance of Adapting and Perservering
David: I love this idea of adapting and I think if we look at the timeline of your stores, the first store had crappy branding, you adapted, had good branding, the second store had crappy products, you adapted, got better products, and then just kept pivoting wherever you needed to, I think that that's kind of something that anybody who's just getting started that they could, that could be a big takeaway, that there are gonna be headaches, there are gonna be problems and mistakes.
Ahmed: Yeah, exactly, it's never gonna be like you plan it out to be. That's definitely with, especially ecommerce, and I think other businesses too, not only ecommerce, but especially with ecommerce, you can make all the business plans you want, you can plan all you want, but it's usually not gonna go the way you want it to go.
Surprises are gonna come up, you will have to adapt to new situations, and if you don't have the ability to adapt, then it's gonna be much more challenging for you. You have to be comfortable making decisions that are not the ones that you were, you thought about making in the first place.
Especially when I had this huge problem of orders being stuck, I'm not gonna lie, I really did think about stopping the store and refunding and stopping, but often because it was a huge headache, especially since this was my first success, and I think I had made, the profits I had made were about the same as the returns I was about to give back.
I had made about €15,000 in profit, and I was about to refund about €14,000.
So I was like, "Wow, maybe I should just get a normal job and go back and be done with this headache of ecommerce,” because it's huge pressure to have 300 customers angry at you, wanting their money back, asking where the product is, and you don't know where it is.
But usually, these kinds of problems, especially these customer service problems, are actually quite easy to solve. All you have to be is transparent. Transparency over everything. If you start lying to your customers, you're gonna make it harder for yourself and your customer. I had many customers who were stuck in this problem that I had.
But when I was transparent, I told them that these products are stuck in the US because of the coronavirus thing, but you can change to this product or you can get a refund, actually, most of them were pretty happy, and they told me that they are really happy with the customer service they received and they would be return customers, they would buy in the future too because of the service they received.
So you should always try to flip your problems to your advantage, try to find the silver lining, try to learn, especially learn from your challenges and problems.
David: That's a great place to leave it Ahmed, so I'll let you get out of here. I really appreciate you taking the time to chat. Again, Ahmed Hadi, serial dropshipper, dropping some wisdom on us, so thank you. Thank you so much for taking the time, we appreciate it.
Ahmed: Yeah, thanks for having me.
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