This post is from a challenge I undertook in the summer of 2017 to ideate, build, and launch a business in a single month. The goal was to work on rapidly prototyping a business as well as challenge myself to just launch something instead of sitting in analysis paralysis forever without getting something out the door.
What is the project?
A while back in a post that i’ve since decided to condense into this one massive post, I was discussing the uncertainty of which project to pick for the a one month business challenge and debating the merits of both ideas that I had. I went with the ‘gun to the head’ approach to just pick one and went with a new idea that doesn’t have any previous infrastructure rather than an existing idea that i’d already worked on before. On one hand it’s more true to the spirit of the challenge, and on the other after a brief look into the niche it appears that there is a great opportunity in the short run that I can take advantage of.
So the answer is: Dropshipping!
I’m not going to go into the specific niche or product because I don’t really want to drive it traffic from this blog… not that I get much traffic, but still for integrity’s sake let’s just go with keeping it semi-anonymous. For now we can just say that it’s in the beauty industry and has a bit of seasonality involved due to the financial situations of the potential customers.
Why this niche and why drop shipping?
There are a few reasons that I picked this one, even though I am not and never will be a consumer of this specific product. In my agency business, I once had a client in this industry and got to learn a little about it. At first I just laughed that I wound up working with it… then I saw some of the revenues they were pulling in and I wasn’t laughing any more. I’m not using any resources, suppliers, or any other bit of proprietary information here other than the small bit of insight I have on the target market and my non-compete is long since gone so there aren’t any worries about ethics here either.
Now all that being said, I still went and did a bit of my own research. The product has fairly high search traffic: 100k-1M monthly searches according to Google. 
Interestingly, despite being a ‘high’ competition keyword on Google, none of the suggested bids on the keyword planner are actually over $1, leading me to believe that the competition may not be as challenging as Google would have me to believe on first inspection.
Yes, weeks could be spent on this part of the research alone, and yes, i’m leaving out a lot of steps. But the point of this isn’t to find the perfect idea, it’s to practice executing and rapid prototyping ideas rather than being stuck in analysis paralysis forever more. Could I do more research and probably find out a lot more? Of course.
Furthermore, looking at the actual results on Google shows that very few of the current businesses actually know how to market online. A good content strategy and some basic SEO would get a website ranked in no time. Obviously for this challenge I don’t have time to rely on those strategies for the next several weeks, but I still want to lay the groundwork for the future anyway.
Great seasonal timing. The next 4-8 weeks are peak season for this product due to tax refunds starting to roll in. That means that if I can get a website live and an ad campaign rolling in the next week, I could potentially be poised to take advantage of some of that trend. Fortunately, the demand is year round so even missing out on this specific window won’t hurt the potential very much.
High margins. ’nuff said. I haven’t set the specific price point just yet, but it looks like the gross margins should be in the 40-60% range based on the competition and suppliers I am looking at using. Obviously that’s damn good. If I can keep the overhead to around 20% then that leaves around 20-40% as potential net profit.
Why dropshipping? Probably the same reasons that anyone decides to try dropshipping: it’s fast to implement, next to no overhead, and requires little investment.
In addition to all that though, with this particular item it is relatively easy to expand into actual branded products. There are also dozens of natural add on products that could be paired with it. This means that should the experiment work out and I decide to continue on with it, there are plenty of opportunities to expand as well as control the product better.
My Plan for Executing
I’ll keep this one short and to the point since there are tons of guides on drop shipping out there that can explain vetting suppliers and building e-commerce websites significantly better than I can.
Week 1 – Email and decide on supplier, buy domain, build website, build Facebook page. Estimated costs: ~$12 for the domain.
Week 2 – Schedule out Facebook posts, plan blog strategy, write blog posts, post 5-6 blog posts, connect any last software needed, build any additional landing pages/exit intent offers. Estimated costs: ~$15 for Mailchimp upgrade to get automation tools.
Week 3 – Final testing of e-commerce and marketing systems, push website live, begin Facebook ad testing, write & publish 4-6 additional blog posts. Estimated costs: ~$20 on Facebook ads.
Week 4 – Facebook ad optimization, evaluate results. Determine if 2 week extension will be allowed, if not, decide on fate of project. Estimated costs: ~$50 for Facebook ads.
That’s the general plan anyway. Time to get to work and actually put some of this into action!
Updates on the Startup Challenge (Week Two)
Week one went by way too fast. I could have used an extra few…. ok several… hours to check off a few more things from the to-do list. That being said, there were also some great successes and a bit of a roadblock.
First up, the successes. From the last post, the goals for week one were laid out as follows: “Week 1 – Email and decide on supplier, buy domain, build website, build Facebook page. Estimated costs: ~$12 for the domain.”
How much of that was accomplished?
Week One Progress
Buy Domain: Check
Build Website: Check
Build Facebook Page: Not Completed
Email and Screen Suppliers: Partial Check
Buying the domain was, of course, the easy part. I went with a domain that has good longtail keywords and is simultaneously brandable due to some stylistic choices that I made. This will help the overall SEO strategy for the long term and aid in bringing traffic even when I am not actively working on the site-provided that I get some great content up there! Building the rest of the website was arduous and educational, but fun. I enjoy building them, especially using the X Theme from ThemeCo (Yes, that’s an affiliate link but if you don’t want to click it then just search ‘X Theme’ in Google and you’ll find it). This was my first e-commerce website build though so that made for some fun challenges that I hadn’t encountered before such as integrating a shopping cart, account management pages, and designing for product sales rather than registrations or email signups. I still need to configure a few more plugins and design a dedicated landing page to drive my traffic to for later remarketing, but otherwise it’s ready to launch.
The hiccup came in trying to vet suppliers. I had shortlisted three that I had done some research on and felt would be good partners for this and would be able to provide some quality product. Of the three, only ONE answered my email. And as it turns out, that one doesn’t work with dropshippers. He only does wholesale, but would be willing to give me a very low Minimum Order Quantity (MOQ) if I wanted to just make a small purchase. I had to do some thinking on whether I wanted to proceed on that course or not. To go the wholesale purchase route would mean adding complications in the way of dealing with customs and sales tax, as well as increasing the initial investment to somewhere in the $500-1,000 range depending on the size of the order. The margins would be excellent, in the 50-70% range, and I would have better control over the product quality, packaging, and customer experience. But it defeats the purpose of this experiment right out of the gate. So that in mind, I will keep his information and should this experiment go well I would be happy to quickly go that route as soon as I could. But for now, I will have to continue the dropship route to keep to the spirit of the experiment. That being said, there is another supplier that I found that does work with dropshippers, but I can’t be as sure of the quality of their product.
One workaround could be to simply do a hybrid wholesale/dropshipping, where I order the product from the dropshipper and have it sent to myself then I turn around and mail it on to the customer after checking the quality. Still adds complications, but might work for a very short time if I need it to. Will continue to ponder the best route this week and pull the trigger asap. In the mean time, what I have decided to do to validate the idea is to run a free giveaway. That will have a dedicated landing page that I will drive traffic to where they can enter their email to be considered to win a free product. This will give me an email list to work with, and I will still be able to judge the interest in this product by the conversion rates on the email form.
Refresher: What is Dropshipping?
Simply put, Dropshipping is when a middle man sells a product to the consumer, and then places an order with a wholesaler who ships that item directly to the consumer. The middleman (the dropshipper) holds no inventory of their own, and the wholesaler never needs to do the marketing for the product. Win win. Sometimes, however, problems arise like the ones that I mentioned above where the dropshipper doesn’t know the quality of the products being shipped on a regular basis, or something happens with the consumer’s order. What happens then? Well usually the customer contacts the dropshipper who in turn contacts the wholesaler and is instructed on what to do according the the wholesaler’s rules and policies. Sometimes the consumer can mail the item back to the wholesaler and get a refund or exchange, sometimes they cannot and the dropshipper must decide if they want to eat the cost of the product or risk backlash online for not issuing a refund. These are questions that a potential dropshipper must ask before getting in bed with a supplier. Ideally, order a few items from them first as well to ensure the quality of the product and see how they arrive/what the packaging looks like, etc.
What Questions Should You Ask a Potential Dropship Wholesaler?
Here is a comprehensive list of all the questions that I ask potential dropship suppliers:
Do you work with dropshippers?
What are your return policies? Are there any fees associated with this?
Who pays shipping on returned items?
How long before an account is credited for a refund?
Do you have minimum order requirements?
What is your average order processing time?
Do you include your branding on items?
Do you charge drop fees, direct or indirect charges, or other fees apart from the selling price in order to ship an item direct to my customers?
Are you able to add a custom label to products? If so, what are your requirements for that?
Are you able/willing to include receipts with our branding on them/ If so, are there any fees for this? If not, are you able to print receipts without any branding at all?
Whom can I contact if there is a problem with an order? What is the maximum time before receiving a reply?
Do you have any guarantee or warranty policies?
Can you provide any references for other sellers that you work with?
What are your shipping options?
Is online tracking available for all packages?
What is your standard shipping times to the US?
Are there different shipping prices for other locations?
How are products packed?
Do you have high quality product photos that you are able to provide?
Lastly, I add in a few that are product specific and I know to be potential issues surrounding the product that I chose. Depending on your product these questions will change, so I omitted them here.
This Week’s Goals
According to the goals laid out last week, this week I should be working on:
“Schedule out Facebook posts, plan blog strategy, write blog posts, post 5-6 blog posts, connect any last software needed, build any additional landing pages/exit intent offers. Estimated costs: ~$15 for Mailchimp upgrade to get automation tools.”
Looking good so far! I have many of these items on the list to get done between Monday-Tuesday so the remainder of the week will be primarily writing SEO blog posts to start filling up the Facebook page. A little secret- I am not a great writer and find it hard to get in the zone for writing so that may actually be the hardest part for me.
How are we doing on the budget?
Total Spent so Far: $23.87
- Domain Name: $11.99
- Domain Privacy: $11.88
Budget Remaining: $76.13
A little higher than i’d like because I didn’t account for the domain privacy in the initial estimate. Usually I don’t worry about buying that, but due to some specific traits in the target audience I decided that it would be best to go with it this time. On the other hand, I may be able to make that up by not using the paid level of Mailchimp for launch. We’ll see.
Back to work!
We’re in week three now, just one week to go on this challenge! The first three weeks went incredibly fast between building the e-commerce website from scratch and simultaneously preparing a new marketing campaign for my marketing agency.
Building an E-commerce Site from Scratch
I’m sure that the biggest question of anyone reading is: Why in the heck would I build the website myself instead of using something like shopify? And that’s a very fair question which doesn’t have just one answer. One reason was that with only a $100 budget I wanted to make the best use of that that I could and not spend $79 of it on a Shopify setup that has the features I would want. Another is that I just like building websites using Theme.co’s X theme and wanted to try building it myself. It turned out to be a bit of a struggle and a lot of long days pulling it together, but I learned a lot and it turned out to be quite possibly one of the best websites that i’ve ever built. Tons of things I just hadn’t considered before, like…. building the shopping cart into the design, adding recommended products in the right place, creating an account page, determining the best way to handle support, what the heck am I going to use as an exit intent offer? Basically just stuff that my naïveté hadn’t thought about in planning out the original design but were good for stretching my problem solving muscles.
I’ve also been fighting with suppliers in India to get the necessary information that I needed to be able to dropship the product for the near future. Being able to wholesale would be ideal, but I don’t have the capital for that just yet. My plan is to let the site run as a dropshipper for the time being and then when it starts getting a following bring the product in house. For now, I think the details are ironed out though.
I’ve got some great ideas for long term plans for this site that should be great revenue-adding activities in the future such as a monthly style club and a direct to stylist program that might be the ticket for early revenue. They will take some real dedication and time to get going though and aren’t feasible for this short term test, so i’ve outlined them in a note for now as something that I can come back to in the future either myself or with a partner who wants to take the lead on that.
What Else is New?
I’ve written five 500-1500 word articles and posted them to the site to start building the content marketing game which seems to be bringing in a little search-based traffic already. This is encouraging! I’ve since shared them to the businesses Facebook page and am running a $2/day ad using that article to start building a little traffic and interest in the brand. To amplify this side of things I hired a writer to help me start building the catalog of content. This will let me focus more on the paid media and promotion strategies rather than the content writing that I do not enjoy as much.
As far as paid media goes, i’ve only run that small $2/day content promotion ad, and one other ad which was for a product giveaway. So far i’ve spent about $10 on it, all in, and had a small trickle of traffic in return. Too soon to make any definitive calls on it with that paltry budget (Which honestly isn’t enough to really say anything at all), but this week we will ramp things up a little bit and see if we can get something going.
How Are We Doing on the Goals?
According to the plan that I laid out in week 1, I am doing pretty well so far.
Week 1 – Email and decide on supplier, buy domain, build website, build Facebook page. Estimated costs: ~$12 for the domain.
Week 2 – Schedule out Facebook posts, plan blog strategy, write blog posts, post 5-6 blog posts, connect any last software needed, build any additional landing pages/exit intent offers. Estimated costs: ~$15 for Mailchimp upgrade to get automation tools.
Fell short on the blog post goal, but otherwise check!Week 3 – Final testing of e-commerce and marketing systems, push website live, begin Facebook ad testing, write & publish 4-6 additional blog posts. Estimated costs: ~$20 on Facebook ads.
Launched the site without any hiccups, testing ads, but did not meet the content goals. Mostly check!Coming up this week: Week 4 – Facebook ad optimization, evaluate results. Determine if 2 week extension will be allowed, if not decide on fate of project. Estimated costs: ~$50 for Facebook ads.
So that means that this coming weekend will be decision time for the site. Two week extension, kill, or keep? Based on how i’m feeling about it right now I think I know which one it will be, but the numbers will have to really decide that for us!
One of the biggest questions that most entrepreneurs have is what tools to use for e-commerce. We all love to see what’s under the hood of someone else’s business and how it runs. So in that spirit, here is my complete list of tools I am using to run the site:
WordPress, obvs
X Theme from Themeco (Really can’t mention it enough!)
Plugins:
Akismet Anti-spam
Comet Cache
Contact Form 7
ConvertPlug
Cornerstone
Google Analytics (For analytics in my WP dashboard)
Google Tag Manager (For actually managing the pixels)
Hide Admin Bar from Non Admins
Jetpack
Pretty Link
Refer a Friend for WooCommerce
SumoMe
Theme My Login
Uji Countdown
UpdraftPlus (Automated Backups to Dropbox)
WooCommerce
WooCommerce Shipment Tracking
WooCommerce Stripe Gateway
Wp Smush (For image compression)
X Email Forms Mailchimp Integration
X Facebook Comments
X Under Construction
Yoast SEO
Other Services:
MailChimp
Tawk.to Live Chat
Facebook Developers Toolkit (For powering the Facebook comments)
Stripe
Pixabay and Unsplash for Stock images
White label Supplier of Product in India
Lastly, let’s look at the budget:
Total Spent so Far: $34.26
Domain Name: $11.99
Domain Privacy: $11.88
Facebook Ads: $4.21
Content Writer: $6.18
Budget Remaining: $65.74
Time to start scaling up those ads and see if we’ve really got something here!
What happened with Startup Challenge #1 and what was the result?
Probably exactly what you’d expect to happen when you only devote ~4 weeks to a project. And yet, maybe not.
When I set out to build a dropshipping website in just four weeks, I knew that this wouldn’t be enough time to build a full business and find success. What I hoped to accomplish was that I would try out a new business model, learn something new, and have a finished product at the end that I could either continue to work on or retire as I saw fit.
In that endeavor – I succeeded.
I learned what it takes to build an ecommerce site using the X theme on wordpress (a lot!), I learned how to build relationships with suppliers as well as the potential issues in building a dropshipping business, I learned about one of my biggest weaknesses in business, and I learned about a new industry!
Care to explain that a little more? Sure.
Building an ecommerce site is hard. There are a lot of things that you just never think about when building other kinds of websites. You have to design the header for both functionality and aesthetics so that customers can see their cart and account information at certain points in their journey and not at others. You need to design said cart! A good ecommerce site also borrows some features from a membership site since you need to create an account page so that a customer can save their order information and payment information for the future. You, of course, also need to integrate a payment processor. How about adding an inventory management system and product page? Yep, need those too. How are you going to deal with customer support? Integrate live chat and set up a support email… and so on.
I built the entire ecommerce site from scratch on the X theme using wordpress and Bluehost for hosting. That was a heck of a job. But it was fun! It was a challenge larger than I expected and ended up taking much longer than I expected because rather than building a simple site like a smart person, I decided to build a full site that has the image of a real reputable brand. Good for something that is growing and has a long commitment, bad for this whole rapid prototyping thing.
Building relationships with suppliers was also a fun new experience. Especially ones on the other side of the world who know that you aren’t going to be bringing a lot of business from day one. I found that many wouldn’t even talk to me, let alone provide details for shipping information and dropshipping processes. I ultimately found one company who was primarily a wholesaler, but was willing to dropship on my behalf if I sent him orders. Unfortunately, he also was particularly sparse on some of the requirements for shipping information so the exact margins will be unknown until I actually make an order. For now, i’m ok with that. Once the site makes a few sales I can start ordering wholesale and get better margins and have better control over the customer experience.
I also mentioned learning about one of my biggest weaknesses. In this case, it was focusing too much on building the ‘business’ rather than building a customer base. I could have spent 4 weeks building a Facebook page or group and then slowly started introducing products for sale. Or built a single page landing page and then run ads to that like Tim Ferriss says in the Four Hour Work Week. Either method would have had me focusing on my customers and audience above the site itself and had an extra two weeks to work on driving sales rather than playing in the backend of a website. So while I now have a fully operational ecommerce site to use as a portfolio item or continue to operate, I don’t have much in the way of customers.
So what now?
What is the fate of the site going to be? Well i’m not going to bury it, if that’s what you are wondering. I am particularly proud of what I built, even if it isn’t generating revenue yet. Ideally what i’d love to have happen is for someone out there to say they are interested in becoming a partner in it and be willing to pick up where I left off to help build that audience of followers. In lieu of that, I will continue to occasionally work on it here and there but without any specific focus on it. I have commissioned a few more pieces of content from a writer to publish to the blog so that it’s content marketing and SEO game remains strong (an area that this industry as a whole lacks, and an opportunity that I identified early on as somewhere I could stand out). Those articles will continue to roll out over the next several weeks/months, and I am setting up the social media presence to continue posting so the Facebook page stays active. Should anyone visit the page or website, they will see a business that appears active and alive. Hopefully a few orders will roll in here and there to cover it’s own operational costs. But if not, then so be it. I built it, I learned from it, and if that is all that it does, it was worth it.
How did the goals and budget shape up?
Total Spent: $67.93
Domain Name: $11.99
Domain Privacy: $11.88
Facebook Ads: $4.21
Content Writer: $6.18
Facebook Ads: $17.05
Facebook Ads: $4.29
Content Writer: $12.33
Unused Budget: $32.07
All in all, not bad. I left some money on the table from what I allotted myself for this experiment which could have driven some last minute traffic, but what’s done is done so i’m not going to worry about that.
I’d say that on average, about 75% of the goals for this challenge were hit and the final product was delivered. No revenue was made, a few emails were captured, and some followers were gained on the Facebook page. Not an all out failure. As I mentioned above, the education gained from this experience will undoubtedly pay me back many times over as I move ahead in this challenge and in life.