Today, we share a case study from Mark Tilbury, a 58-year-old investor and entrepreneur from the UK who decided to start dropshipping as a side hustle and see how far he can go.
This article is to guide our readers on the steps to follow to launch an eCommerce brand by following what Mark did while expecting realistic results.
We are sharing the initial steps he took to launch the eCommerce business. From finding the products, creating the Shopify store, the logos, and promotions. Then we will see the results he got in one day.
Mark’s plan was to start by paying different people on Fiverr to create all the parts of the dropshipping business. Everything from the Shopify store to the logo, to the social media advert. Then throw it all together to see if he could make some profit.
After some research, he decided to sell oversized blanket hoodies as they're one size fit when sold, pretty unique, and perfect for summer barbecue nights. Especially when the weather gets a little bit chilly, but people still want to stay outside.
He decided to sell them for $45 each. The product on AliExpress goes for $18, leaving nearly $27 in profit. Minus advertising expenses.
For the store to be successful, he needed to brainstorm a catchy name. So, he came up with the name "Kozee Comfort". And then, Mark secured the domain name.
Creating the Shopify Store
Mark then jumped onto Fiverr to compare the prices and service quality for the Shopify store freelance designers. This process took him at least 20 to 30 minutes.
Mark chose a freelancer who said he can create a converting one-product Shopify store, and that's exactly what Mark needed. The freelancer charged $175 for the website.
Creating the Logos
To create the logo, Mark found another freelancer on Fiverr that creates clean and simple logos for $25.
Creating Video Adverts
Lastly, Mark found another freelancer to create the video ads for $20.
What He Got from the Fiverr Orders
He had to wait for the 3 orders to be delivered after a few days. Later on, all the orders were delivered, and here is what he received from the freelancers:
He went back and forth with the designer for a few days, asked for a few changes, and at last, he got the final version, which he didn’t like so much.
Mark liked the video as the creator picked some great shots and everyone in the video looked happy. The hoodies were also shown both indoors and outdoors.
The designer nailed it totally. The images looked high-quality and that's important people were more likely to trust the site and part with their cash.
The Shopify website designer created him a free logo as well, which was better and had a premium quality.
The designer also used photos of both men and women on the site, which opened up the targeting to both demographics. This broadens the potential customers and therefore creates a higher chance of profitability.
The mobile version looked smooth too, which was very important because he was going to advertise through social media, which meant that most of the customers were going to visit the website via their phones.
The designer also placed reviews and added a discount on the pricing.
Promoting the Product
Before starting this project, he had consulted Sara Finance a young and well-experienced dropshipper.
Mark learned that it's very important to put your product and advert to the test. A perfect way to do this test was through paid promotion from influencers and large theme pages before jumping to spend on Facebook ads.
Reaching Out to the Influencers
Mark managed to find and contact a few large Instagram influencers in the fashion space. Unfortunately, many didn't reply. Some asked him for over $500 for a 24-hour story post, which he considered too high.
Mark received a reply from an influencer named Sophie. She offered to post the advert on both her Instagram feed and story for $150. But Mark had to bargain a little bit to get a lower price. He secured a $100 deal for the promotion on the condition that he makes the payment upfront.
Mark used PayPal goods and services just in case something was to go wrong and needed to charge back. He sent her the video ads and waited to check back when the ads were live.
Checking in 12 hours after ads went live, he found the results to be satisfying.
"I think the marketing strategy paid off as we got over 1 000 visitors to the website. This definitely shows we made the right decision to use a social media fashion influencer to promote our products. So, she obviously had the right audience."
In total, he received 6 orders which came to $550 with a 0.54% conversion rate. These results seem pretty great, but the real question is, “Did he make any profit?”
Let's crunch the numbers and find out. For each unit sold, he had an average of $26.30 in profit. So that makes a total of $315.60 in gross profit.
That's without subtracting the expenses. So adding the expenses:
The Shopify plan is not included in the expenses because Shopify provides all new users with a 14-day trial.
So, the total spend comes to $310, which isn't anything too crazy. This only left him with a total profit of $5.60 after the initial test.
Advice from Mark
"I know this $5.60 profit doesn't sound like a lot, but the one-time expenses are now out of the way. We have a great website that can generate sales as well as a catchy social media advert to drive traffic towards us. And I can't help but wonder what the results will be like if we tried this for a week or more. To be honest, I didn't even expect this to be profitable, but this definitely leaves the question, is dropshipping a sustainable business model?
I personally think it can be a great side hustle. However, if you want to take it to the next level and build a sustainable long-term business, then I believe it's important to take the leap and physically stock the products yourself... At the end of the day, stocking products will give you full control over your business and ultimately provide your customers with the best experience, which is the most important thing. Happy returning customers spreading the word is the best kind of promotion you can get.
I see dropshipping as a gateway business. Is a great way to get a taste for business and develop an understanding of how things work."