11 months & $750,000 later, I decided to close my drop shipping business. Here’s why
A hard yet necessary decision
A few weeks ago, I split up with my partner. We had different visions, ambitions, motivations. I thought it was not compatible with running our business the way we should.
3 days ago, my store manager resigned. I realized he was taking care of basically everything. I thought I had no time to replace him or to train someone else to take his place.
Here’s the truth: the numbers going down, more interesting opportunities showing up, and my motivation decreasing, I think that I totally lost interest in my own company.
I wrote this blogpost as an introspection to understand what happened.
What is drop shipping anyway?
Let’s make this one simple. Here’s the definition provided by Shopify (the most used CMS for this type of business):
Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.
The most common method (the one I used) consists in going to Aliexpress, finding suppliers there, integrating the products to your store, and promote the product pages directly on social medias (mostly facebook and instagram).
Shopify, Aliexpress and Facebook Ads. This, and a bunch of apps directly integrated in Shopify, and you got your business “started”.
If you think it’s awesome and crazy how you can launch your own business online without any technical skill in 2017, well you’re right, it is.
If you want to go deeper about what is dropshipping and how to get yourself started, check this, and also this. It’s 100% free. And please, do NOT pay for any courses (if you’re just about to do it, ask me why you shouldn’t in the comments below).
Why did I start my drop shipping business?
Basically, I was broke and in debt, surviving in Bali. At the point when I really needed to find a way, I heard about eCommerce, and more about drop shipping.
Back then, I decided to quit the job I had for only a month in Bali and to focus on building my own online store with my friend Nick, who was then living in Paris.
What I loved the most in this model was:
- managing everything remotely
- learning things that would always be useful afterward
- being able to exit the rat race I was in back then
I have shared the complete story in the two following post, so feel free to read them if you want to:
6 months, from homeless in debt to $1,100 a day.
“Don’t give up on bad results, give up on bad habits.”
The 3 most valuable things I’ve learned on the way
Making money is a thing, but what we learn and who we become by doing so matters way more. In this way, starting this business was quite intense and steep, in the beginning.
Yet, the 3 most valuable things I’ve learned are not about this business itself, but more about the mindset I developed.
#1 — I can make money, and I am ok with this
You know when you try to do something for months/years, and you finally manage to do it. The next time you try again, it will only be a matter of days/weeks before you do it, right?
It’s the same here. I discovered that it’s possible to make money by myself at a scale I never experienced before. And I also discovered that people who do so aren’t so different than me. They just do things that bring them those results.
Whatever you’re doing, when you start from 0 and reach $750,000 in sales within a year, doing something you had no clue about before you google it and start taking action, you unlock something in your brain that makes you realize: “fuck, it’s actually possible!”.
Moreover, you open your mind wider, you connect with people doing the same numbers (and more), you consider more opportunities and you realize that whatever you achieved, you can do it again, and you can also do way better in the future.
#2 — Hustling is over rated
I’m a big fan of Gary Vaynerchuk, and I love his messages about hustling. Yet I only watch 5min of his videos when I need an extra boost of motivation to get something done.
Eventually, this all-in thing about hustling hard, and working 10 days a week / 50h a day is the dumbest thing to do once you start “making it”.
Once the business is running (aka, is profitable), what you need is not to work more, but to work smarter. There is millions of ways to be busy, work and doing things on the business. It doesn’t mean they are the one you should do.
At some point, the business needs more vision, and the execution has to be outsourced. The business needs to be led by someone who can work smarter, not longer.
Clarity and quality over quantity.
I totally missed this point during most of the past 11 months.
#3 — Being wrong is not “fine”, it’s a necessity
In this kind of business, it’s all about testing. You test the products, you test the audiences, you test new methods.
There are some basic principles that make sense to follow. But for the rest, the more you test, the more you have different results. And the more you learn from those results, the more you understand what works.
Moreover, as most of the time you’ll be wrong, being wrong is what brings the most interesting insights. It gives you so much data that you can use to decide what it the next action that you should take.
being wrong more often = having more data = taking better decisions afterward
So, why did I stop?
The first lines of this article aren’t the reason why I decided to stop it. They are triggers, and it’s important to notice the difference.
- Numbers going down
- Splitting up with my partner
- My store manager resigns
Those 3 elements above are only triggers, which means the decision itself rely on deeper reasons that those triggers are (re)activating.
“I don’t feel like we add any value”
This is what my store manager told be when he resigned, and he is right. Knowing that the customers have access to AliExpress themselves and can get the same products from the same suppliers, there is no reason for them to pay 3 times more by going on our store.
Yes, we do the marketing part, we push the product in front of their eyes while they are on facebook, but this is very poor. In my opinion.
We basically markup a product anyone can find, ship it slower that any one of the major eCommerce player and we call this a business.
Of course, you don’t need to markup x3, you can find products somewhere else than AliExpress, have a warehouse in the country you’re selling to ship faster, or you can make your own brand (which, in this business consists in basically stick your logo on the product and still add zero value).
There is potentially some ways to add actual value, yet the main one I can see is to create the product ourself and market it.
The business itself is quite boring (in the end)
Most of the drop shippers I know are spending their days alone in front of their laptop, trying to lower their cost per conversion, increase the website conversion rate or find the latest trending products.
Of course, you get the freedom, you get the independence, and those are things I valued from the beginning and still value.
But in the end of the day, we just spend our time buying cheap products to sell them more expensive.
This is probably the most basic form of trading, and it’s cool to be able to do it online, but it’s not like we are innovating, solving any problem or making people happier.
The exciting part of all of this for me was about learning the tools/knowledge/concept I didn’t know. All of those skills that are now part of me and that I can use again for something more meaningful.
A more exciting and long term opportunity showed up
A few months ago, I have been contacted by the company I worked for 1 year ago in Bali, and they offered me to work with them again. This time, not as an employee, but as a partner.
It’s a digital agency initially focused on creating websites, webdesign and SEO when I worked with them.
Now, they are growing way faster and diversify towards Facebook Marketing, Influencers Marketing and in house “startup” projects.
They are based in Bali and I intend to keep living in Indonesia for the next years.
Plus, the Indonesian market is growing like crazy and is still way undervalued by many, which leaves a huge spot for a Digital Agency like this one to grow and make a real difference for many local and global businesses.
On top of this, there is so many new things I think I will learn by partnering together with them. And it feels like joining a family, with various goals/ambitions, and 40 people inside working hard to make them real.
Having one of my online store closed will just give me more time and focus to help growing this agency in Bali.
Closing a business is often seen as a bad/sad thing.
In this specific situation, the only regret that I have is about the staff who were working with us and end up jobless.
After working for months with people, it’s hard to leave them (btw, if you are looking for a talented and experienced graphic designer or a french speaking customer service, let me know).
All of this is part of the adventure as well, and when we embrace the benefits, we also have to embrace the risks.
Today, all of this takes time to learn from, accept and process.
Yet, I am confident that tomorrow, the lessons learnt today will help to build more meaningful and impactful businesses.