The Ups and Downs of Drop Shipping: A Personal Story

TLDR: The speaker shares their personal experience in drop shipping which led to major financial loss due to a fraudulent supplier, and how they recovered and learned from the setback.

Insights

Starting a Drop Shipping Business

🎬 Inspired by YouTube videos, the speaker started a drop shipping business
💸 Managed to make $10,000 in profit without spending any money on paid ads

Experiencing Success

📈 Leveraged the profit and expanded the business by using Facebook Ads
💵 The business boomed to over $200,000 in revenue in just a few weeks

The Major Setback and Loss

🔴 Experienced a major setback when a supplier started providing fake tracking numbers
💔 Refunded orders, chargeback fees, and a debt of over $20,000 accumulated due to the supplier’s fraud
💰 AliExpress only refunded $9,000 of the hundreds of thousands that was used to fulfill orders

Bouncing Back and Learning

🔄 Used the refunded money to start new stores and create ways of bounce back
👥 Networked within the drop shipping community and found a more reliable supplier
⚖ Initiated contracts with the new supplier to mitigate risks and protect the business

Video Summary

00:00: 😟 The content is about the speaker’s experience with drop shipping. Initially, he was motivated to start his drop shipping business due to something he saw on YouTube. He started with little to no money and found a way to draw traffic to his website for free, which allowed him to make his first $10,000 with over 75% in profit because he didn’t spend any money on ads. After this success, he began to use the profit from his initial earnings to run Facebook ads.
Key ideas:

• He started his drop shipping business after being influenced by YouTube videos.
• He started his business with no money and drew free traffic to his website.
• He achieved his initial success of $10,000 with a profit margin of over 75% without spending on ads.
• He used his initial profits to run Facebook ads.

01:14: ⚠️ The author shares his experience with dropshipping, stating that while he was able to make over $200,000 in just a few weeks, the lifestyle change that came with profiting from dropshipping could be dangerous. He cautions viewers that his new-found luxury lifestyle, including moving into a luxurious apartment and upgrading his lifestyle with travel, shopping, and eating at fancy restaurants, might not be sustainable.
Key ideas:

• The author made over $200,000 in a few weeks from dropshipping.
• The financial success led to a significant lifestyle change, including moving into a luxury apartment, increased travel, and regular dining at high-end restaurants.
• The author warns that this lifestyle might not be sustainable and could lead to negative consequences.

02:31: 💸 The speaker discusses his experiences in business, particularly in product sales. Despite initial success, they suffered financial losses due to issues with their supply chain and order fulfilling procedures, which resulted in customer complaints and loss of money.
Key ideas:

• He was initially successful in selling products.
• Despite this success, he ended up losing all his money.
• The loss was due to issues with order fulfillment and supplier problems.
• He received customer complaints about non-working tracking numbers.

03:56: 🚚 The text discusses the process of drop shipping with AliExpress, emphasizing the importance of providing customers with tracking numbers for their packages. There were some issues with tracking numbers not working immediately, leading to customer complaints. Despite this, orders were continued to be fulfilled. The author notes that it typically takes a few weeks for tracking numbers to function due to the drop shipping process, information specified on the website that not all customers may read. This highlights the need for clear communication about shipping processes and timelines with customers.
Key ideas:

• Drop shipping with AliExpress entails a delay in the functionality of tracking numbers.
• Certain customers complained immediately after receiving their non-functioning tracking numbers.
• The website contains information about the delay in tracking number functionality, but not all customers read this.
• The author continued to fulfill customer orders regardless of the tracking number issues.

05:08: 😰 The individual had upgraded their lifestyle believing they were profiting from a successful online business, only to find the supplier had been issuing fake tracking numbers and not fulfilling orders. This led to the individual becoming significantly in debt after issuing refunds to their customers. Attempts to resolve this with the supplier, who is with AliExpress, only resulted in partial refunds. This represented the uncertainty and risk when dealing with suppliers on platforms such as AliExpress.
Key ideas:

• The supplier provided fake tracking numbers leading to unfulfilled orders.
• The individual incurred heavy debt due to refunds issued to customers.
• AliExpress refunded a portion of the expenses after complaint.
• This incident revealed the risk of dealing with suppliers on platforms like AliExpress.

06:36: 💪 The writer recounts their experience being defrauded by a supplier whilst pursuing a drop shipping venture. Despite the setback, they were able to rebound due to their mental strength and their confidence in their sales abilities. They shared how they progressed, learning how to effectively run ads and sell products online. They even expressed confidence in being able to sell a simple water bottle.
Key ideas:

• The writer encountered a fraudulent supplier in their drop shipping business.
• They managed to rebound from this setback due to their mental strength and sales abilities.
• They are confident in their ability to sell products online.
• They learned how to effectively run ads.

07:40: 💡 The speaker shares their experience in the Drop Shipping business, recounting how they used their refund from AliExpress to expand. They also relate how networking with other professionals in the industry aided in finding a reliable agent. This not only involved formal contractual agreements, but also allowed for personal interaction through FaceTime. The speaker emphasizes learning from their mistakes and hopes that viewers also learn from their experiences. They advise not to be disheartened by problems as they are common in all businesses.
Key ideas:

• The speaker used their refund from AliExpress to expand and set up new stores.
• They networked with other professionals in the Drop Shipping industry.
• They found a reliable agent through networking and established a formal contract.
• Mistakes and problems were seen as opportunities for learning and growth.
• FaceTime was used for personal interaction with the agent.
• The speaker shares these experiences in hopes of educating and encouraging others in the Drop Shipping business.

08:45: 💪 The given text provides encouragement to not be afraid and learn from failures when focusing on businesses like Drop Shipping. The supplier vetting process is discussed, as well as the use of apps like autods. Recommendations are made for obtaining an agent once the business takes off to ensure further safety. A video is suggested for an easy start in Drop Shipping with no ad expenditure.
Key ideas:

• Drop Shipping is a main focus of the text.
• Autods is suggested as a helpful app for products.
• Obtaining an agent for safety is recommended once business growth occurs.
• A video is suggested to start Drop Shipping without ad expense.

Q&A

How did the speaker start their drop shipping business?

They started the business with no initial investment, after being inspired by YouTube videos.

What was their initial success?

They made a profit of $10,000 with no advertising cost, and further scaled up the business making over $200,000 in a few weeks.

What led to their major setback?

Their supplier started giving fake tracking numbers leading to loss of trust with customers and major financial loss due to refunds and chargebacks.

How did they recover from the setback?

They used the small refund from AliExpress to restart their business, networked with the dropshipping community and found a more reliable supplier.

How did they mitigate the risk of encountering a similar setback in the future?

They initiated legal contracts with the new supplier to mitigate the risk and protect the business.

Comments

TLDR: Commenters appreciated Leon for sharing his story, suggesting the value of personal lessons in the field of dropshipping. Other users share their own successful experiences with dropshipping and discuss the tools they use, such as Winnerzila. Some ask questions or seek advice about suppliers and technical issues. A few suggest a cautious approach to business to avoid pitfalls.
Negative: Some viewers criticize the mistakes that the user made in his business and advise a more cautious approach. Others express concerns about potential scams or ask about issues they are having with their own businesses. One commenter strongly criticizes dropshipping, saying that all dropshippers ‘deserve to go bankrupt’.
Positive: Many people appreciate the user’s openness about his experiences, both positive and negative, in dropshipping, which they find informative and inspirational. Several users also appreciate the use of specific tools or platforms, such as Winnerzila and AutoDS, that have helped them succeed in their own dropshipping businesses.
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