Have you ever asked yourself How To Make $150K Dropshipping Using Instagram? Well, you are…
2. $400K In Sales- Eric Smith Shares His Dropshipping Journey
Welcome guys to another exciting one on one interview with one of the leading eCommerce expert and dropshipping guru Eric Smith.
If this is your first time coming across the name, then let me bring you up to speed, Eric is the founder of one of the best niche research dropshipping tool in the market, niche scraper, find the full review here.
The tool is design to crawl top shopify dropshipping store for analysis of top selling products, potential products, the sales report and product volume.
So he will tell us more about himself.
Eric, I am delighted to have you on this blog as part of my interview series, am grateful for this opportunity.
Eric Smith Of Niche Scraper Shares About Dropshipping
- Just to start off, would you kindly tell us who you are to those who really don’t know you?
Hey Samwel! I guess you could say I’m just a 26 year old programmer who fell in love with the world of dropshipping and eCommerce. I started programming when I was 13, developing online games here and there and eventually I went to university to study Software Engineering.
After working in the software industry for a few years I decided it was time to be my own boss and began dropshipping. Today, I’m fortunate enough to be making 6 figures with my online stores and am also the creator of a product research tool called Niche Scraper.
- I understand you held a very powerful and influential position in your previous job at Facebook, what made you quit your job? Considering many wish they had a job like yours?
Yeah that’s right, I was a Software Engineer at Facebook and Instagram for several years. A small team and I were actually the ones responsible for creating Instagram Stories, which was wildly successful and is currently used by millions of people around the world.
Working there had a lot of great perks — there was free food and celebrities came by all the time, it was basically a “dream job”. But at the end of the day I was still being told what to do and nothing I developed was actually my own.
I had always wanted to be my own boss, so this drove me to make the difficult decision to quit and attempt to start my own business. Trust me, plenty of people told me it was a terrible idea, but you just have to ignore that and do what makes you happy.
- How did you come across dropshipping and when did you decide to start?
I actually came across it when I was 22 in college. I vividly remember reading a post on Reddit about how some guy was making $300k a year dropshipping vitamins while traveling the world. This left a huge impression on me but I never actually took the initiative to try it for myself. Fast forward several years to when I was working at Facebook.
I told my girlfriend that I was thinking of leaving my job to start my own business. When she asked me what I wanted to do I really had no idea. I remembered that dropshipping article I had read on Reddit several years prior, so I went to my computer and typed the term “dropshipping” into Google.
I was amazed to hear the success stories from all the people who quit their jobs and gained financial freedom. I really wanted to escape the rat race of a traditional job, so I thought to myself, if they could do it why couldn’t I? So, I took a leap of faith and decided to give it a shot.
- What was your dropshipping journey like, considering its tough venture to get into more so if one is green and clueless?
Yeah it can definitely be tough for someone to get into at the beginning. There’s an overwhelming amount of information out there. I think most new dropshippers become paralyzed with all the new things they need to learn. My own journey wasn’t some overnight success like you often hear about, it took a few months of trial and error before I figured things out.
I remember my first few weeks I only made a few sales but spent somewhere around $400 on ads, so it was definitely a rocky start. I kept working on optimizing my ads and slowly saw my sales increase over the next 2 months. I think it was around that time that I programmed a web crawler to analyze the web and suggest me potential winning products.
A few of these products really worked for me and my sales just kept on growing. Within 8 months after starting I was hitting $47,000 a month with a ~38% profit margin. I have a few new stores I’m testing out, looking to expand into other niches.
- Do you remember your failure when you started droshipping? How many stores did you try and never worked and why do think they never picked up?
It’s funny to look back at my first failed store because I did so many things wrong. The first one I ever created was a general store called “Gadget Panda” and it was such a disaster. I had no idea how to do product research so I just chose random products off AliExpress and I don’t even think I had a contact page.
Basically if you were to make a list at all the things you shouldn’t do, my first store was the perfect example. I ended up emailing a few people who abandoned their carts asking if they would provide feedback on my store. Most most of their responses said that they didn’t “trust” my store.
This should have been obvious to me, but when you are new it’s hard to see what you’re doing wrong. So I decided to try again with a second store, but this time I focused on a niche and made it look very professional. It made a huge difference and this is the store I mentioned previously that ended up scaling to $50k a month.
- Despite having stores closed down, what motivated you to continue pushing and trying new stores?
I was in a rough position because I had literally quit my job to work on this. If it failed that would mean giving up on my dream of having financial freedom and going back to the a 9-5 job. Failing really was not an option and I knew that if I kept pushing forward it would work. Maybe it was bloated confidence, but I saw other people doing this successfully so I knew if I got the right products in front of the right people it would work.
- What are some of the worst methods you were using to find your niche or products that you contributed to your early failure when you started?
When I first started I was literally going on AliExpress, sorting by the highest order count and picking random products I thought looked “cool”. This is terrible because I did research to see how competitive the product was, or who my target demographic might be.
- What’s the best way to find a profitable dropshipping niche and do you believe in following passion or demand?
I believe that demand is a requirement and passion is an added bonus. If you can find both then that is a great niche. One of my favorite ways to pick a niche is through “reverse research”. This basically means that instead of choosing a niche first and then picking products, you choose products first and see what niche matches.
What I will do is use Niche Scraper to find 10-20 products that are currently trending on AliExpress and try to group them together. If it turns out that 12 of those products are related to yoga, I would create a store in the yoga niche because I already have winning products for it.
- Is there a bad niche in the dropshipping world?
I wouldn’t say there is a “bad” niche necessarily, but there are definitely some that are more challenging than others. Luxury watches is one of those and unfortunately attracts many new dropshippers. Most customers are going to choose a famous brand for anything “luxury”, so unless you have thousands of dollars and are a world class marketer, I would avoid this niche.
- If you were to go back to the time you started dropshipping, which niches or products would you have avoided like a plague and why?
Funny enough, I tried selling luxury watches in my first store. So I would definitely go back and avoid those. I also had some success selling lamps, but they would arrive broken half of the time because of the long distance shipping. I ended up losing more money on refunds and chargebacks, so I would go back and avoid selling fragile goods from China.
- What are some of the misconception about finding a niche that you’ve come to rule out?
A lot of people are quick to claim that an entire niche is saturated. I think this is a huge misconception, as it’s usually not the niche that is saturated but rather specific products in that niche. For example, most people say the pet niche is saturated. It probably would be if you sell the exact same pet collar as everyone else in that niche, but if you can find those “undiscovered products” then you can still be very successful regardless of the niche you choose.
- Would you prefer a general niche or niche down to specific sub-niche?
I personally prefer broader niche stores, as this will allow you more flexibility to scale and grow. Extremely specific niche stores can definitely work too, but they require a lot more research and there’s more room for failure if you choose wrong.
- What are some of the ‘ a must have elements for Shopify store in your view?
You absolutely need a contact page, return policy, and FAQ page.
- What would you not stress about in a shopify store?
So many people stress about the EXACT number of products their stores needs to have. As if having one less or one more product will completely stop them from getting sales. The general rule of thumb is to have enough products so your store doesn’t feel empty or “spammy”. There’s no set number here, do whatever makes your theme look complete.
- Describe a perfect shopify store?
A perfect shopify store should have a good looking logo, amazing product descriptions and well selected product images that look great on the front page. It should also be extremely user friendly, and give the customer the feeling that your store is well established.
- Describe a perfect product page?
A perfect product page should have amazing descriptions and product images. If possible, it should include a demo video or gif of the product and the “Buy Button” should be very prominent. It should also include reviews to help gain the customers trust.
18.A free or premium shopify theme and why? Doe it even help in conversion?
If you don’t have a huge budget, a free theme works just fine for conversions. Some premium themes include features that you would need to purchase in the app store otherwise though, so calculate that into your cost. I use the free debut theme for my store and have no complaints.
19.Your a must have shopify apps ad the role they play in your store?
I have a few favorite apps that I install for every store. Oberlo is great for order fulfillment if you dropship from AliExpress.
Discounted upsells for getting customers to add more items into their cart. It’s a great way to increase your average order value.
Niche Scraper is my obvious choice for product research and niche finding.
Loox is good for importing reviews from AliExpress. Adds a lot of credibility to the product page.
Help Center is nice for creating FAQ pages, which is definitely something your store should have.
Last but not least would be Mailchimp to handle email campaigns.
- What are some of your basic checklist before you start running your facebook ad?
- Double check to make sure you gave the correct URL in your ad.
- Triple check for any grammar mistakes.
- View your ad on different placements i.e. Instagram, right hand column, feed, stories, etc. and make sure it looks good everywhere.
- Talking about Facebook ads, should one start with PPE or WC and if so what would be the ideal starting budget per day per ad?
If you have no idea who your target audience is, starting with PPE is a cheap way to get an idea of ruling out bad or unresponsive audiences. If you are fairly confident in your targeting already, then WC is the way to go. I personally like to start with $10 a day per ad, but it really comes down to how fast you are willing to collect data. If you spend less then you will have to wait longer to see results.
- I Have seen gurus advising newbies to never mixed platforms when running ads e.g. Fb feed and Instagram feed ads should run ads separately, What’s your stand on this?
I think when you are starting mixing platforms is fine. However, when you start scaling and optimizing your ads you should eventually split out the two platforms to test which one works best for you. Some products like fashion and apparel tend to do better on Instagram, and others on Facebook.
- Why do you think people fail when it comes to running Facebook ads?
Most people don’t understand that it takes time for Facebook to optimize ads. This means the first few days you are essentially “buying data” waiting for it to optimize and shouldn’t expect crazy profits. I think this period of spending money with little to no results scares most people off and causes them to fail.
- These are the 5 pointers if one do well, they are likely to have their ads covert on Facebook:
- Split test many different interests.
- Retarget people with a follow up ad and a discount offer.
- Test at least 3 ad “creatives” per adset.
- Use lookalike audiences as soon as possible
- Don’t get scared and kill your ad too
- Video or image ads and why?
Facebook definitely prefers video ads or images. Not only this, but they are more engaging and have a higher chance of sticking in your customers mind. Of course, image ads can work great as well, but in general I would say video.
- Have you tried carousel ads? What was your experience?
I love carousel ads, especially for re-targeting products similar to what the customer already viewed. This is actually the type of ad I ran that got me my first sale on Facebook.
- When is one expected to pause or delete an ad when they are not converting or yielding results?
This is tough to generalize, but I would say that if you are spending more than product costs on your store, I would kill it.
28. What are some of the factors you look into when it comes to ad performances? What makes you keep or kill an ad?
I like to look at the number of add to carts before killing an ad. Even if I haven’t gotten a sale, if I notice there are a lot of people adding to cart then I will investigate my product page to see if there’s anything stopping them from purchasing. I will also see how much I’m spending per click compared to my other ads. If the click is very cheap, then something about my ad is interesting which allows to me to tweak other areas that may need work. In the end, the final decision comes down to what kind of return on investment I am getting.
29.What’s the best way to scale an ad for massive conversion?
Definitely lookalike audiences. Once I have a “winning” ad I will increase its budget by 10-20% every couple of days. It’s important to monitor the ad to make sure its performance doesn’t decrease too much. Keep doing this until your results plateau.
30.Do you do email marketing? If yes what’s the best practice newbies should be aware of?
I do some basic email marketing, but it’s definitely an area I’m working to improve upon. For newbies, I definitely recommend emailing customers who have abandoned checkout with a discount code encouraging them to complete their purchase. Another good use of email marketing is sending out weekly deals to existing customers. I’ve found both of these are a great way to boost sales.
- You’ve talked of retargeting, how can this be achieved and which apps can you recommend?
Yeah, retargeting is extremely important and I feel like it’s often overlooked by newcomers. Put simply, retargeting is a way of reaching someone who has already interacted with your brand. There are two common ways of doing this: Facebook ads and abandoned cart emails.
With Facebook you can create something called a “custom audience” and choose to only show your advertisement to people who have visited your website in the last 30 days. I like to add a discount code in the ad copy to encourage people to come back.
The second way is through abandoned cart emails. Mailchimp has an app on Shopify that easily allows you to create email campaigns. This way you can automatically send an email to someone who reached your store’s checkout page but never purchased. Both are great tactics and is something I recommend to any store owner.
- Tell us how you manage to use PayPal without limitation or did you run into problem with them?
I’ve heard a lot of people having trouble with PayPal, but luckily I’ve never run into these issues.
- What’s the best way to use PayPal without having troubles and how do you handle your chargebacks and disputes?
I think one of the reasons I’ve been lucky enough not to have PayPal issues is because I’m constantly communicating with my customers. If there are any issues I do my best to resolve them before the customer feels a need to complain to PayPal. But no matter how good your customer service is, you are going to eventually have some chargebacks and disputes. You can either try contacting the customer and dealing with it so that they drop the dispute, or simply do your best and provide all the information PayPal requires.
- Thanks a lot for the above detailed answers you’ve given buddy, as we wrap up, what motivated you to start niche scraper and what’s the dream and objective behind the innovation?
Well, when I was first out, I realized I had no idea what products would sell. I knew if I was going to make this work I needed to take advantage of doing what I was good at — programming.
I immediately went to my computer and start coding up a script that could analyze other Shopify stores and show me a massive list of every single best-selling item on the market.
I let this web scraper run for 24 hours, and when I came back to my computer it had collected over 16,000 products from all over the internet that have been proven to sell.
That’s actually how I found the first set of winning products for the store that is doing $50k a month. That tool is now accessible at Niche Scraper with the goal of making product research accessible for all dropshippers. I still love coding, so I’m still constantly adding new features to it.
- There are many niche researching tools on the web, what makes your bot stand out?
The amazing thing about the tool is that its powered by a bot that is constantly analyzing winning products based on AliExpress order history, other stores best sellers and more. This means the products it suggests are backed by real data, rather than the opinion of one person. Other services offer a curated list of hand picked products, which we also offer, but they don’t give you access to products that are changing in real time based on what’s popular in the market. This is where our tool makes a difference, and why our members are getting such great results.
- I have seen testimonial on how niche scraper helped newbies find success in dropshipping, what is the one story or testimonial that gave you hope about the tool?
We actually had this one guy who knew very little about dropshipping when he first became a member. He was convinced that he wanted to make one product stores, and build a bunch of those rather than the traditional approach of creating one store with multiple products.
Several months went by and when he finally reached out to me I found that he had created 5-6 stores based off products he researched on Niche Scraper, and they were doing something like $5k to $15k each… which is more than I was making. Absolutely insane.
- Where do you see niche scraper in the next 5 years having in mind there are a lot of features added on the platform?
I’ve been thinking about this a lot lately and I want to eventually build a suite of tools that help ecommerce stores grow their business. Product research is just one aspect of this, so eventually I want to expand to marketing tools as well. In the meantime I have a huge list of features that members have been requesting on Niche Scraper and I’m slowly working my way through those.
- Do you have plans of one day starting mentorship program or course since I see you have a lot of pressure from your followers?
Yeah I actually do get asked this a lot. It was never something I considered really, because I try to help people for free whenever I’m asked questions. But i’ve noticed people asking the same questions over and over, so I’ve considered making a course to address a lot of these.
If I do, I really want to make sure i’m providing a ton of value to people and creating something that will truly help people get to the next level of where they want to be dropshipping. So who knows, maybe you’ll see something released by me in the near future :)
37.Any advice to newcomers about dropshipping, Facebook ads, and shop management?
If you’re new I would say just jump right in. You’ll learn faster by ‘doing’ than endlessly researching. Just be mentally prepared for hard work, this isn’t a business where you can expect to get rich quick by doing nothing. 95% of people give up too soon because they didn’t expect it to be hard, and these are the ones who claim everything is saturated and dead. It’s the remaining 5% that keep pushing forward who are the ones that really see results.
- Is there anything you want to add as sounding bite?
How can one reach you?
Thanks very much Eric for taking time despite your busy schedule, it’s my hope that many will find this interview insightful and will help them make better decision when it comes to starting and running successful dropshipping store.