3 Month Drop Shipping Update – I Sold My Store For $2,250

Welcome back gentlemen. Most of you guys know I started my own drop shipping store a few months ago, and tonight I’m going to dive into my entire experience with it and why I ended up selling it.

Starting it was a ton of hard work, but it was totally worth it for learning a whole new world in ecommerce.

I can now use my knowledge (and additional capital), to start my next venture. I have an even better store planned and can’t wait to jump back into the game.

So without further adieu, let’s get it started.

drop shipping

How I Got Into Drop Shipping

I remember first learning about drop shipping 3 years ago when I was working for a catalogue company processing orders over the phone. We had a huge warehouse of products, but we also drop shipped many items from other companies as well.

Just incase you don’t know – drop shipping is when you list a company’s product at retail price, and when you get an order, you buy the product from the company at wholesale, and then you keep the difference in price (the margin).

You then give the original company your customers order information and they then ship the product to the customer. You never touch the inventory.

 

Anyway, I always thought about what a great concept it was and remember looking online trying to learn more.

Since I was still a loser back then, I didn’t really try too hard to learn about the business model and it slipped my mind for a few years.

Fast forward to October 2015, and I randomly found myself listening to an amazing podcast episode about drop shipping.

 

Right away I knew Anton Kraly was legit, and I bought his course Drop Ship Lifestyle on November 6th. My extensive review on the course is right here.

I went through the course and worked 14 hour days to get everything perfect for launch day. All my time and energy was put into the business, and I officially opened shop on December 19th.

Two hours later, I made my first sale.

 

It was an amazing moment as everything I had worked so hard for came together so quickly.

The business grew over the next month and a half before I decided to sell it which I will talk about below.

But first, let me talk about all the fine details about my store/niche. Due to the privacy of the new buyer, I can’t disclose the name of the site, but I will talk about everything else.

drop shipping

The Good Things About My Store

When I was doing my initial research on what niche to get into, there was a HUGE hole that I saw in the niche I ended up choosing.

All the other competitor’s websites we’re very outdated and I knew I could offer a much easier and better looking alternative to the market.

The site was built on Shopify, and me and my coder spent a lot of time designing the site to look great.

 

After that, I contacted all the potential suppliers in the niche and landed 3 out of 10.  Luckily the three I got were big names in the niche, which allowed me to start uploading a lot of products and not have a store with only one brand.

Once I started advertising on December 19th, sales came in immediately. Product Listing Ad’s in Google Adwords are the way to go, and I was averaging a much higher Click Through Rate than my competitors.

Another good thing was that paid traffic only made up about 10% of my overall traffic.

 

I set up an Affiliate Program and got involved in my niche by posting on forums/emailing other blogs and review sites and established relationships with them.

One review site listed all of products for free in exchange for a higher affiliate commission than my competitors were giving him. This deal established a lot of free traffic for me that otherwise would’ve cost me $3000+ a year.

I also had some banner ads designed and put them on a variety of sites which were very much worth it for the brand recognition and SEO juice.

Overall, 59% of my traffic came from referrals and my store quickly gained prominence in the niche.

 

In addition, in the short time I owned my site, Google loved me and ranked some of my products very high on the first page. I was converting 2.7% from organic traffic which was awesome.

Lastly, 22% of my traffic was direct, and 35% of my traffic was returning. These were insane numbers especially for a new store. I even had a few repeat customers in the short month and a half the site was live.

For all traffic, average session duration was 3:12, with 3.62 pages per session, with only a 53% bounce rate.

drop shipping

The Bad Thing About My Store

Even though I had a lot of good things going on with my store, there was a very significant problem.

I had an average order size of $150 with 25% margins, but there were so many other costs that ate into my profitability.

Credit card fees, affiliate payments, discount codes, advertising, and additional Shopify apps, all made it extremely hard to be profitable.

Pro tip: Most people will say that an average order size between $100-$200 is high enough to be profitable, but the biggest thing I learned is to sell much higher priced items. I will go over this more in future posts.

 

I was doing $5k/mo in revenue which was a great start, but I needed to scale up to a much higher volume of sales to get the profits I wanted.

The bad news was, I was already swamped with customer service and order processing.

It was my least favorite part of the business, and it required me to do work at specific times (something I hate).

 

I was stuck with the decision of hiring someone to do the ordering and customer service, continuing to do it myself (which would’ve made it impossible for me to scale up), or selling the business.

If I hired someone to do it I would’ve taken a monthly loss on the site for a good amount of time, and I really couldn’t afford to do that. I was running out of all the money I had saved when I moved to Florida in the Summer of 2014.

And I certainly couldn’t imagine to continue doing the operational work myself. It was already stressing me out and I needed the time to work on other things.

So in the beginning of February after a lot of thinking, I made the decision to sell the business. I stopped all advertising and took a much needed week to chill.

drop shipping

The Sale of My Store

After the week of doing nothing, aka watching every single episode of every season of MTV’s The Challenge (RIP Diem), I listed the site on Flippa.

Flippa is the biggest marketplace in the world for buying and selling sites, and is probably the best place for listing newer sites.

It draws a lot of people thinking they can just buy a site with no online business experience and make money. (Don’t do this, it will not work).

Therefore, if you list a good site on there, it will be bid up a lot.

 

Anyway, I listed my site at $100, as an auction to end in 14 days.

At the start, I got a few bids which brought it up to $450.

But for the next 13 days or so it was quiet. I was getting a lot of views, “watches”, comments and messages, but no-one bid for a long time.

 

At the last day of the sale, I removed the “reserve price”, which means that the highest bidder will get the site no matter what price it’s at.

I certainly didn’t want to let the site go for only $450, but removing the reserve lets the buyers know that you’re serious about selling.

I also didn’t have time to not sell the site, re-list it, and go through the whole process again. I was committed to selling the site and moving on to my next venture.

 

It was down to the last hour and the auction was set to end at 4am. I stayed up late, constantly refreshing the page to see if I got more bids/messages.

I was getting worried because I would be pissed if I only got $450 for the store. I had spent over 1000 hours on it and really needed the money.

Finally with about 15 minutes left, a new bidder placed a bid. The previous highest bidder immediately bid back and we had a bidding war on our hands.

 

The price quickly shot up to $1,000 and I was pumped.

Each time someone bids with an hour left in the auction, the auction will give the bidders another hour to bid.

So I went to bed and set an alarm every 30 minutes or so to check on the action. I couldn’t really even sleep because it was so exciting to see that money go up.

 

The two bidders were going back and forth, and 69 bids later, the site was sold for $2,250.

I was happy and it was right inline with what I thought I’d get for it. I was projecting somewhere between $1,500 – $3,000.

However, that wasn’t the end of the process. Now I had to deal with the buyer.

drop shipping

The Buyer From Hell

The next morning we got on Skype chat and he started asking me more questions about the business.

I was expecting this because I certainly wouldn’t want to send money to a stranger without talking to them first.

 

But, this dude went on for hours and kept stalling when it came to actually paying me.

I finally just unloaded on him and told him that if he didn’t pay me in 5 minutes I was suing him. I was literally yelling at my computer because I was so pissed at this guy.

Pro tip: If you win an auction you are obligated by law to pay.

 

After about three attempts at telling him my lawyer was about to give him a call, he finally paid me through PayPal.

What a nightmare.

 

He was a classic “get rich quick” loser, who had no idea what he was doing. He had never ran an ecommerce store before and was questioning everything I said.

To say the buyer was an idiot is putting it nicely. This guy is so stupid he shouldn’t be allowed to leave his house.

The way he handled the whole situation was the worst possible thing he could’ve done. Now I don’t have any interest in helping him be successful, he totally shot himself in the foot.

PS: He’s already made some horrible changes to the site and I’m guessing he goes out of business in a few months if not sooner.

drop shipping

Final Thoughts

All in all, I’m upset I had to sell my store. I had no doubt that if I worked on it for a few years it would’ve been a million dollar business.

But on the flip side, I got cash when I needed it and took the risk out of the equation.

Even more importantly, I learned a tremendous amount from this first store and it will make my second store that much easier to setup.

I feel like I’m already extremely knowledge in drop shipping and I’m confident that I can always use this stream for passive income.

It’s also pretty cool to say that I’ve sold a business. Not many people can say that.

 

Well guys that’s it for tonight.

Like I said, this was a great experience and I’ll certainly be writing more about drop shipping.

Let me know in the comments if you have any questions about my store, the sale, or drop shipping in general, and I’ll be happy to answer them.

Catch ya next week – Brian

 

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By | 2017-09-19T00:47:54+00:00 March 13th, 2016|Business|40 Comments

40 Comments

  1. Marco March 13, 2016 at 9:28 PM - Reply

    Yo what exactly were u dropshipping on ur site?

    • Loser 2 Winner
      Loser 2 Winner March 14, 2016 at 12:12 AM - Reply

      I can’t say cause it would be pretty easy to find the store and I gotta respect the privacy of the new buyer.

      I will however say that most good niches are hobbies. Stuff that people take very seriously.

      For example, I wasn’t selling TVs.

  2. Good Looking Loser March 14, 2016 at 9:00 PM - Reply

    Fantastic post

  3. Joey Crack March 24, 2016 at 6:51 AM - Reply

    It would have been a million dollar business in a few years but you sold it? Makes perfect sense. /s

    Dropshipping. Not even once.

    In all seriousness, at least you broke even after buying the course and coder and stuff right? Thats better than most people, plus you have the experience, and hopefully the lesson learned, so its not been a total disaster.

    • Loser 2 Winner
      Loser 2 Winner March 24, 2016 at 9:12 PM - Reply

      You think so huh? What’s your experience with it?

      I know many ppl with ds businesses doing $500k+

      And why do you think it was a disaster? I more than doubled my money and like you said got a lot of experience to use for my future stores.

      • Joey Crack March 25, 2016 at 7:44 AM - Reply

        Like I said, it wasn’t a complete disaster. What I can’t understand is why you would sell a profitable store, and after only 3 months. Especially one that you saw making millions in the future. That doesn’t make any sense whatsoever, however you read it.

        Really, how hard is customer service and placing orders? It takes what, an hour or two a day? An hour in the morning, and an hour at night. I can’t see how you paid money for a course, spent all time that building a site, but couldn’t be bothered to deal with orders and customers. Either complete and utter laziness or something was clearly not working.

        • Loser 2 Winner
          Loser 2 Winner March 25, 2016 at 5:41 PM - Reply

          You didn’t read the whole post..it wasn’t profitable.

          It would’ve took about a year of breaking even or a loss to scale up and be profitable. I didn’t have the time or money to do that.

          • Joe Crack March 25, 2016 at 9:31 PM - Reply

            Hmmmm. Maybe its hard to admit, but thats typically dropshipping nowadays. You got sucked in by a guru. All those ‘haters’ who’ve never dropshipped and dont know what theyre talking about blah blah blah, well, eventually you realise they were right. Thats why people make money selling courses instead of replicating the surefire dropshipping income they promote themselves.

            “Buy my course, in 2-3 months and you can build a passive income dropshipping!”.

            Ask them, “Ok, so why don’t you replicate it again and again instead of giving the surefire plan to others?” and you’ll get a bullshit excuse. The reality is what you’ve seen. Very few are profitable, the majority will take a loss. Of course they wont tell you that, but they know its true. Thats why personally I think these gurus are the lowest of the low, they knowingly prey on the dumb and naive under the guise of being helpul.

  4. Loser 2 Winner
    Loser 2 Winner March 26, 2016 at 10:23 AM - Reply

    sounds like u had a bad experience with a guru

    • Joe Crack March 26, 2016 at 11:07 AM - Reply

      Not personally, no, but I’ve met many who have.

      To a lesser degree than MLM schemes thankfully, did you have that explosion on Facebook over the past few years? Juice Plus and whatever else? Really sad seeing so many people going for it, same M.O as this drop shipping guru stuff, same psychology used again and again: “Don’t listen to naysayers, they’re unsuccessful people who just bring you down!”. Same fading into obscurity once it dies (FB status changed from ‘entrepreneur’ or ‘home business owner’ back ‘unemployed’ :/) and never mentioning it again, or plain denial that it failed for them. Its just sad to see it happen to people again and again.

      The top image comment here sums it up;
      https://m.reddit.com/r/digitalnomad/comments/3hl1pt/thinking_of_drop_shipping_here_is_my_experience/

      • Loser 2 Winner
        Loser 2 Winner March 26, 2016 at 1:42 PM - Reply

        100% of people who just “try” something are going to fail.

        It’s not the program, or the course, or anything else someone has to make an excuse on. It’s the person.

        Whether you think you can or you can’t, you’re right.

      • Alex April 1, 2016 at 4:32 PM - Reply

        The fact that this kid just said MLM is a “scheme” only shows how little he knows about anything related to making money.

        Network marketing has been around for decades and has made more millionaires than any other industry.

        The people who aren’t successful, regardless if it’s MLM, e-commerce, or any other form of business, are the ones who come up with every excuse under the sun to explain why things don’t work instead of focusing on the things that do work.

        Stop trying to find out what’s wrong with everything and start thinking about what’s RIGHT with it, and then maybe, just maybe, you’ll be successful.

        – Alex

        • Loser 2 Winner
          Loser 2 Winner April 1, 2016 at 4:39 PM - Reply

          Spot on. The reason why 90% or more of people aren’t successful is because 90% of people are just stupid as fuck, and they also don’t put in the work required.

        • Joey Crack. April 1, 2016 at 10:09 PM - Reply

          I’m already successful. I just hate seeing people ripped off.

          The fact that you’re advocating for MLM’s legitimacy says it all.

          Watch Penn & Teller’s Bullshit! : Episode 8, ‘Easy Money’.

          You guys are literally the online embodiment of the people featured in there, you just can’t see it.

  5. Walt March 30, 2016 at 7:05 AM - Reply

    Good post. I’ve been interested in drop-shipping for some time.

    How did you find the niche? Or is this info covered in the paid course you bought?

    And how much initial money did you invest up front to get up and running?

    Thanks.

    • Loser 2 Winner
      Loser 2 Winner March 30, 2016 at 10:08 AM - Reply

      Thx Walt.

      I found the niche by doing a bunch of market research, but ya I knew nothing about it until I bought the course. Learned an incredible amount.

      There’s a lot of different factors that goes into a good niche, but I’d say the most important is avg order size. You want to sell high priced items.

      Initial investment was maybe $200? By far the cheapest and least risky way to start a business as you’re never buying inventory.

      • Walt March 30, 2016 at 11:34 AM - Reply

        Thanks for the info. I’m gonna look into this further.

        By the way, sorry to see you’ve got some trolls trying to bring down the quality of your site. It must be sad that they hate their pathetic life so much that they spend time trying to bring down others instead of improving themselves, like we’re working to do.

        Keep up the good work!

        • Loser 2 Winner
          Loser 2 Winner March 30, 2016 at 12:30 PM - Reply

          Np Walt. I’ll have more posts about drop shipping coming out soon as well.

          I’m glad to see the trolls. It shows serious ppl what not to be and it lets me know I’m doing something right.

  6. nestor mendoza March 30, 2016 at 6:00 PM - Reply

    Great article.
    Sucks you dealt with a moron. But that experience will serve you well in the future. Hope to see more post on drop shipping.

    • Loser 2 Winner
      Loser 2 Winner March 30, 2016 at 6:27 PM - Reply

      Thx nestor. Ya it was a very interesting experience.

      More posts will be out soon!

  7. GetItGoing March 31, 2016 at 3:30 PM - Reply

    I really appreciate the post. Honestly, making money online (especially passive, if that’s possible, to some degree) is my dream, and my dream also would be to move overseas and live like some of the bloggers out there.

    I do have 2 questions:

    1. What do you think you’ll move to next?
    2. What would suggest for a guy starting out? (who is not afraid to work hard, and has great cust. service skills, etc).

    Thanks!

    PS: came here from http://www.gll-getalife.com/

    • Loser 2 Winner
      Loser 2 Winner March 31, 2016 at 6:29 PM - Reply

      Np GetitGoing. It’s definitely possible, you just gotta work really hard at first.

      Right now, I’m working on 2 new drop shipping stores, 2 plugins, and a service business.

      If you’re just starting out I’d suggest a drop shipping store, you can make money right away and it costs basically nothing to get it going.

      Good to have you here!

      • GetItGoing April 1, 2016 at 2:03 PM - Reply

        Thanks so much for both the info and helpful replies; glad to have found your site and there are some jewels here.

        I’ll check out drop shipping info in general, unless you can recommend a course also.

        Note: I realized my comments (or form other guys too) where videos somehow were embedded were those were numeric characters were in the comment.

        • Loser 2 Winner
          Loser 2 Winner April 1, 2016 at 4:43 PM - Reply

          Ya the course I recommend is the same one I took, Drop Ship Lifestyle (there’s a link in the article).

          I’ll have a full review of the course next week which will go over everything.

          Also I haven’t seen any video comments

  8. Ben March 31, 2016 at 3:44 PM - Reply

    Good post. Followed a link from GLL to get here. I bookmarked some of your sites for my own reference as I sell on Amazon and I think they will come in useful so thank you for those. 100% agree with selling higher priced items, you really don’t know until you’ve experienced all the costs that are involved. Higher margins make it much more worth your time.

    Best of luck with your next project!

    • Loser 2 Winner
      Loser 2 Winner March 31, 2016 at 6:33 PM - Reply

      The higher priced items actually have lower margins, but you’re making way more per sale which is what’s most important.

      For example, 25% margin on a $150 order = $37.50

      15% margin on a $1,000 order = $150

      It makes a huge difference when it comes to profitability and being able to scale up fast.

      Thx Ben!

  9. David April 2, 2016 at 7:26 AM - Reply

    Good read, thanks.

    When you list your site on Flippa, did you disclose your domain name? I believe you have the option of making it private but that can attract less buyers.

    • Loser 2 Winner
      Loser 2 Winner April 2, 2016 at 3:23 PM - Reply

      Thx David.

      Ya I listed it publicly. The ones that list private are huge sites which can’t really release all that sensitive information.

  10. Dean April 20, 2016 at 3:03 PM - Reply

    Hey bro can you clarify the lengthy customer services that take up your time?And is there a way to overcome it?

    • Loser 2 Winner
      Loser 2 Winner April 21, 2016 at 1:55 AM - Reply

      Hey Dean good question.

      It’s not that it takes a lot of time, you just have to do it at certain times (normal business hours).

      There’s apps that take care of most of it for you, and you can always hire someone to do it all once your making some decent sales.

      • Dean April 21, 2016 at 11:27 AM - Reply

        Thanks bro,

        I’ve been lurking for a good 6 months on this website but now have decided to take action, have saved up roughly $270 ( will keep saving more ) and will buy a shop from flippa with good potential to work my ass off to build it, tired of being so broke -_-

        Will keep you posted!

        • Loser 2 Winner
          Loser 2 Winner April 21, 2016 at 11:57 AM - Reply

          Do not buy a site off of flippa. I promise you it won’t work.

          Do it right or don’t do it at all.

  11. Dean April 21, 2016 at 1:51 PM - Reply

    Ok i will my direction:

    in about 2 weeks when i sort out my credit card , i will commit to the drop ship (via your affiliate, as gratitude) , and will begin this new venture, with the aims of pushing myself to the limits , whatever happens happens but i will do my best

  12. Dean April 21, 2016 at 1:58 PM - Reply

    *change my direction

    • Loser 2 Winner
      Loser 2 Winner April 21, 2016 at 2:16 PM - Reply

      Ya there’s just no way you could learn everything you need to know from buying an existing business. You’d be completely overwhelmed.

      You need to build a business to get the first-hand experience (and succeed), b4 u can buy existing businesses

  13. Dean April 21, 2016 at 2:43 PM - Reply

    Yh i get you man ,

    I got the idea from foreverjobless.com, the dude said he started off with one shop but had like 15-20 PROFITABLE ones by the end of the first year.

    Though its exam season at my university ( don’t worry no ponzi scheme its 100% free for me , even books and all) , i’m on top of it, and will spend minimal 8 hours a day on it.

    • Loser 2 Winner
      Loser 2 Winner April 21, 2016 at 2:55 PM - Reply

      Never heard of that site b4 but i just read a little bit and it’s sick, thx for sharing.

      Good luck man, let me know if u need any help.

  14. Dean April 21, 2016 at 3:16 PM - Reply

    Yh bro, the how to buy a ferrari for 20k really changes the way you see things, you know?

    You’re welcome man , I’ll keep you posted man.

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