The online retail industry is a growing and ever-evolving market, and Shopify is one of the most popular platforms for starting an e-commerce store. In this case study, we will be examining the steps taken by an internet marketing expert to create a successful Shopify store selling gifts in the French market, with a profit of €30,000.
The proof of earnings and detailed insights this case study provides will serve as a valuable resource for those who want to learn how to launch and grow a Shopify store in a foreign market.
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Let's dive into this article...
Landon is an internet entrepreneur who focuses on dropshipping as a source of income, and he has a YouTube channel where he teaches various ways of making money through dropshipping. Currently, he's building a dropshipping brand, and sourcing the brand products from China; however, he's using private sourcing agents. Since the products are branded, they can't be found on AliExpress, which could be a good thing because beginner dropshippers will not be able to replicate the winning products in their store.
Result Breakdown
Landon made €87 850.04 in revenue in October and claimed he made over €30 000 in profit. For the same month, he had 114 516 store sessions, 106 735 visitors, a 1.79 conversion rate, and an average order value of €41.51.
He said,
"I made revenue of €87 000 to €130 000 a month, but my profit was around €30 000 initially. We started the new month at €2 000 per day, which was not great; however, compared to the previous months, it was a lot better. In the previous month, we were doing almost nothing because I got blocked on Facebook. So it was pretty rough in the beginning, but we didn't have any issues scaling for Black Friday. If I compare that to this month, we were able to do a lot more."
Store Review
Although Landon did not reveal the ideal products sold in the store, he said the store is in the French market. This means the products are mainly sold to people in France, and he is categorically selling gifts. The goal of the store was to make consistent revenue every day, and at a point, the store was consistently making over €6,000 in daily sales.
How to Generate Consistent Profit On Your E-commerce Store
Landon's secret to generating consistent profit in his store is by increasing the number of products there. The store used to have fewer than ten products, but he increased the number of products to around a hundred to ensure a consistent profit. Further, he tests new products regularly for high profitability and adds those that pass the test to the product catalog on the store's website. With this, a visitor has various things to buy and options to choose from. Also, this strategy provides many upsells and backend products he can easily use to improve his monthly revenue.
Landon increased the store's AOV (average order value) by offering a price discount. Buyers always want to save money when buying online; therefore, offering them discounts is one of the best strategies to promote your products. For example, you can write in your store:
"If you spend $50 in the store, you will get $5 back; if you spend $100, you will get $20 back".
This sentence works like magic, and you will get many buyers who will buy from you just because they want more value for what they purchase.
While commenting on how he generated consistent profit from his store, he said,
"I didn't scale super aggressively one day and then kill everything the next; I just kill it slowly, even the winning products. So I was able to generate a lot more profit because when you scale aggressively, you will lose so much profitability on your product. But by maintaining a pretty consistent ad spend every day, I was able to get the same consistent profit margins. Also, I was constantly testing new products, so when our winning products eventually die down, I always have new products coming up that we can scale up. I have many products that are not necessarily winners, but they keep selling in the store without promoting them aggressively."
The lesson one learns here is that one should be prepared to keep adding more products to dropshipping stores, but care must be taken not to rush the process. It is very important to take one's time to test potential products very well to know the ones to spend money to advertise aggressively. Scaling up is good and it is the secret to making huge money, but doing it too early can be disastrous and may end such a store prematurely.
How to Set Up the Best Facebook Ads Campaign For an Online Store
According to Landon,
"I mainly use Facebook ads as my primary source of traffic, but I also dabbled in Tiktok ads and Snapchat ads at one point while testing what works. However, Facebook ads are really what is performing best for me, especially because I test many products with a lot of images as ad creatives, which isn't good for Tiktok."
His Facebook ad strategy is in levels:
- the campaign level,
- the ad set level, and
- the various creative levels.
Only a few things can be done at the campaign level, which implies that the budget for the campaign should not be determined at this level but at the next - ad set level. At the ad set level, one will have to choose the targeted country, which in Landon's case in France and all French-speaking countries. In addition, one must ensure to add French as the primary language, as doing this will target anyone who speaks French, irrespective of their country of origin: Canada, America, or anywhere around the world. The ad's interest is also determined at the ad set level.
Furthermore, the ad's interest is determined at the ad set level, and Landon usually opts for a broad audience when configuring his ad's interest. This means that he doesn't select any interests, gender, or age at this stage, but leaves everything blank for Facebook to automatically use its algorithm to decide what is the best option for his campaign. He does it this way because Facebook has robust data and algorithms good enough to determine and match the best set of people that will be interested in the ads.
For the creatives, he always has five ad creatives so that he can use his ad budget to test out multiple ad creatives. Another advantage of using multiple ad creatives is that it minimizes the risk of ad burnout. For instance, if you spend so much of the ad budget on one ad creative, and it eventually dies, it will be a great loss. But, if you spend the same ad budget on five ad creatives, even if one creative fails, there will be four other creatives to fall back on.
Landon used only images for his ad creatives because they allowed him to effectively test more products while running the ads simultaneously. To scale more aggressively to over $100 000 a day, using images shouldn't be the only strategy to implement; however, to generate a consistent daily profit margin, using only images works fine.
The ability to duplicate this ad campaign is another benefit of Landon's strategy, and the only thing needed to replicate the ad campaign is to change the link to the ads and the product images in the ad creatives.
To test the profitability of a product, Landon set up a store for the product. He then set up a test ad campaign with a budget of around $30 for the ad sets. In his opinion, $30 should be enough to know the profitability of a product. Once he finds a profitable product with this strategy, he duplicates the whole ad set and tests it with multiple interests; this is the first step in scaling. Landon said,
"What this will do is make you spend more money on promoting the same product, but you will generate more sales. At the same time, it's not going to overlap with the audience of the first ad campaign, because that's just going to make it more expensive to advertise and your cost-profit ratio is going to go up."
After he has tested the profitability of an ad set with some new interests, and it's still good, it's time to move to the final scaling phase. In the final phase, he either duplicates the broad audience ad set or slowly increases the budget every day. Or if the interests work better, he looks for similar interests, puts them together in one ad set, and puts a bigger budget on running them.
Although this strategy is slow in achieving a positive result, it is guaranteed to generate consistent traffic that will almost always result in consistent sales and profit.
Revenue Analysis
- Revenue for one month: €87 850.04
- Conversion rate: 1.79
- Average order value: €41.51
Conclusion
In this post, Landon made €30 000 profit in a month using a Shopify dropshipping business model, and we've been able to dissect how he did it. His target audience was generally French-speaking people to whom he sells gifts, with particular emphasis on France. Also, we looked at how he maintained a consistent profit margin over the month by increasing the number of products in his store catalog. Also, he grew his store's average order value by offering respondent price discounts because buyers always want more value for the money they spend online.
His Facebook ad strategy was divided into three parts: the ad campaign, the ad set, and the creatives. The ad campaign level consists of the ad sets, the ad sets consist of the creatives, and the creatives are targeted at different ad interests.
Finally, Landon tested a profitable product by trying out its performance on a $30 budget. There are some things he did during the initial and final scaling phases, like duplicating ad sets. One thing to remember about this method of making money with a dropshipping store is that it takes a long time to produce results, but the results are always consistent month after month.
