If you're thinking about starting a dropshipping business, one of the first questions you'll need to answer is where you're going to source your products.
And if you're looking to dropship products to customers in the United States, that means finding reliable US-based suppliers.
In this post, we'll give you a few tips on how to find trustworthy suppliers for your dropshipping business.
The easiest way to find potential suppliers is to do a Google™ search for "dropshipping" or "dropshippers”, drop-shipping” or “drop-shippers."
This will generate a list of companies that offer dropshipping services. You can then narrow down this list by looking for companies that are based in the United States and dropship within the USA.
Once you've found a few companies that meet these criteria, it's time to start doing your due diligence.
One of the most important things you'll want to look at is each company's customer reviews.
Customer reviews can give you insights into a company's shipping times, customer service, and overall reliability. You should also take a look at each company's social media presence. A strong social media presence can be an indication of a company's popularity and reach.
Another thing to keep in mind is that not all dropshipping suppliers are created equal.
Some companies may have longer shipping times than others, or they may not offer the same range of products. It's important to find a supplier that offers the products you're interested in and that can ship them to your customers in a timely manner.
In summary, if you're looking for reliable US-based dropshippers, there are a few things you'll want to keep in mind:
First, do your research and read customer reviews before partnering with any supplier.
Second, take a look at each company's social media presence; a strong social media presence can be an indication of a company's popularity and reach.
And finally, make sure you choose a supplier that offers the products you're interested in and that can ship them to your customers quickly and efficiently.
By following these tips, you'll be on your way to finding the perfect US-based supplier for your dropshipping business.
Here at Zendrop, we’ve done the heavy lifting for you (all of our suppliers are pre-vetted for excellent service and top-notch quality).
Ready to get started on your dropshipping journey? Click the link below to claim your FREE trial of Zendrop Plus and start building your ecom empire today!
How to Make Your Dropshipping Store a Success
Making your dropshipping store a success is no easy feat. With over 1 million dropshipping stores worldwide, the competition is stiff.
But don't despair!
There are many things you can do to set your store apart from the rest. In this blog post, we'll share three digital marketing strategies that are sure to help your store thrive.
Digital Marketing Strategy #1: Create Memorable Content
If you want people to remember your store, you need to create content that is both memorable and shareable.
One great way to do this is to create infographics. People love visual content, and infographics are an easy way to pack a lot of information into one visually appealing package.
You can use CanvaTM or PiktochartTM to create free infographics. Once you've created your infographic, be sure to promote it on social media and other online channels. You can also submit it to popular infographic directories like VisuallyTM.
Digital Marketing Strategy #2: Use Email Marketing
Email marketing is one of the most effective ways to reach your target audience. It's also an inexpensive way to market your business. There are many ways to use email marketing effectively.
Try sending out a weekly email newsletter featuring new products, blog posts, or special discounts. You could also send out automated email sequences when someone subscribes to your list or makes a purchase.
Finally, don't forget about abandoned cart emails! These are automated emails that are sent when someone adds an item to their shopping cart but doesn't complete the purchase.
Digital Marketing Strategy #3: Invest in Paid Advertising
While organic reach is important, it's not always easy (or cheap) to get in front of your target audience organically.
That's where paid advertising comes in. Paid advertising allows you to pay for placement on popular platforms like Google™, Facebook™, and Instagram™. When done correctly, paid advertising can be very effective at driving traffic and sales to your store. Just be sure to track your results so that you know what's working and what isn't worth your time and money.
Making your dropshipping store a success requires some creativity and effort. By following these three digital marketing tips, you'll be well on your way to setting your store apart from the competition.
Ready to get started on your dropshipping journey? Click the link below to claim your FREE trial of Zendrop Plus and start building your ecom empire today!
How to Start Dropshipping with Zendrop
Dropshipping is a type of ecommerce business model where you don’t have to carry any inventory.
You simply partner with a supplier who will ship products directly to your customers.
Dropshipping is a great way to start an ecommerce business because it’s relatively low risk and easy to set up.
In this post, we’ll show you how to start dropshipping with Zendrop.
First, you’ll need to sign up for a Zendrop account. Once you’ve done that, you can browse through our supplier directory and choose a few suppliers that you’d like to partner with.
Once you’ve found a few good suppliers, it’s time to set up your store.
We recommend signing up with Shopify™ next to create a professional-looking store in just a few minutes.
We provide all the tools and resources you need to get started, including customizable themes, product descriptions, and even marketing materials.
Once your store is up and running, it’s time to start promoting it. There are many ways to promote your store, but one of the most effective methods is through social media.
Zendrop offers a range of tools that makes it easy to manage and track your results.
Here are just a few of the amazing tools and options Zendrop offers to help you get started:
Fast Shipping: Provide your customers with the best shipping options in the dropshipping space no matter what country you're shipping to.
Automated Dropshipping: Fire your fulfillment VA. Turn on Auto-Fulfillment to put your order fulfillment on autopilot.
24/7 Support: Work with our world-class support team around the clock in order to keep a pulse on all of your business needs at all times.
US Fulfillment: Ship from our US Warehouses and our trusted US Suppliers in 2-8 days to your end customer.
Brand Development: Level up your customer experience and increase brand equity by adding custom Thank-You Cards to every order.
Real-Time Analytics: Keep a pulse on the health of your business in one easy-to-read dashboard.
Custom Branding: Customize your winning products to set yourself apart from the competition with private labelling and custom packaging on any product in our catalog.
Subscription Boxes: Take advantage of the recurring revenue model by creating Subscription Boxes with a few easy clicks.
So, if you’re looking for a simple way to get started in ecommerce, dropshipping with Zendrop is the way to go.
Ready to get started on your dropshipping journey? Click the link below to claim your FREE trial of Zendrop Plus and start building your ecom empire today!
Understanding Sales Taxes For Your Shopify Business
US sales tax is a tax paid to a local governing body (State or Local) for the sales of certain goods and services. These laws require the seller to collect funds for the tax from the consumer at the point of purchase. The seller is then required to remit sales taxes collected into the state or local tax authorities. For large “Brick and Mortar” retailers (such as WalMart) understanding what jurisdiction to collect and remit sales taxes in is simple. The point of sale is where the buyer physically purchases the goods, which would be the State (or local town) of the store in which the purchase was made.
For online sellers (e-commerce), there is usually no physical store for which the purchase occurred. In most tax jurisdictions, Sales Tax for online sales is a DESTINATION-BASED which means the transaction is likely taxable in the State (or local town) for which the order was SHIPPED TO. This tends to alarm online sellers because at scale you can have orders shipped to many different jurisdictions.
As you can tell, this is a very complex area for online sellers. As a result, Sales Tax compliance questions are definitely some of the most frequently asked questions that we receive as a firm.
Where should I comply with Sales Taxes?
As an E-Commerce Seller, you need to comply in jurisdictions for which you have NEXUS. Nexus is a tax term that essentially means presence. The two types of Nexus are PHYSICAL NEXUS and ECONOMIC NEXUS.
What is Physical Nexus?
Physical Nexus focuses on the PHYSICAL PRESENCE presence of your business. Some common examples for online sellers include:
Owner’s location – This includes where the owners are physically located and operating from.
Inventory – This includes all states that you have physical inventory stored in (Warehousing, FBA, 3PL, etc)
Office Space – This includes office workspace (either rented or owned) for which your operations occur.
Employees – This includes where your W-2 employees are located. This ordinarily does not include independent contractors, including those that live overseas.
What is Economic Nexus?
The intent of the economic nexus is for Tax Authorities to generate sales tax revenues, even if the E-commerce sellers do not have a physical presence in their state. To simplify, economic nexus includes States for which you have no physical presence but have a high volume of sales.
Unfortunately, every state has its own rules so it requires lots of research and knowledge to become and remain compliant. Fortunately, most of the states have adopted similar rules, which we will present to you. Even with these similar rules being adapted, we do recommend that all E-Commerce sellers very closely analyze risk for economic nexus.
Most economic nexus states have adopted the following thresholds for the trailing 12 months:
200 sales transactions – This means 200 orders delivered into the state over the previous 12 months
Or $100K in total Gross Sales over the previous 12 months.
If either of these rules are tripped up, the state views the Seller as having an Economic Nexus and technically requires the seller to be Sales Tax compliant going forward.
I have Nexus, what does Sales Tax Compliance Entail?
If you determine that you have nexus and need to be Sales Tax Compliant in a jurisdiction, you need to register with that jurisdiction to acquire a Sales Tax Permit (Some states have a different name for this, but it is essentially the same for each state).
Once you have a state Sales Tax Permit, you are required to charge sales taxes to your customers who ship their orders into the state. You are then required to remit (pay in) the collected sales taxes to the state that you’re registered in. For example, if you have a sales tax permit in NY you are generally required to charge sales taxes to any customers that SHIPS TO NY. Then you are obligated to remit those Sales Taxes collected to the state of NY.
No! These are two separate and distinct tax types. They are similar in terms of their calculation, but “Sales Tax” typically pertains to state and local tax authorities in the United States, while VAT is applicable to sales that occur outside of the US.
As you can likely tell, Sales Taxes can be extremely complex. Our advice is to consider consulting with a Sales Tax professional that specializes in E-Commerce.
Keyword, SPECIALIZE.
Many accountants are generalists and may not understand your business, which can create significant sales tax risk. Would you go to your primary doctor and ask them about cavities? (NO!) Then why would you go to your local town CPA and ask them about E-Commerce specific tax issues?
About Us
The Ecommerce Accountants is an accounting firm that specializes in Ecommerce Entrepreneurs including Amazon Sellers, Shopify Sellers, Digital Marketers, Dropshippers, Cryptocurrency Brands, and much much more! Our services include bookkeeping, sales tax compliance, income tax compliance, income tax planning, and CFO services.
For more information, visit our website @ www.theecommerceaccountants.com
Everything You Need To Know About Dropshipping
What Is Dropshipping?
By now, you’ve probably already heard about dropshipping (in fact, it’s been a popular buzzword for quite a few years!)
But what is dropshipping really? Simply put, dropshipping is an order fulfillment method, where the store itself doesn’t actually keep or handle ANY products they sell. Instead, the shop purchases inventory on an as-needed basis, from a third party, such as a wholesaler or manufacturer.
Obviously, the KEY difference here is the fact that dropshippers do NOT own their own inventory. Instead, they act as a middleman.
As a result, they don’t have to deal with sticky fulfillment details, or pay massive amounts of upfront costs for a product.
This makes it easier and more accessible to start a dropshipping business.
Want to learn more?
Keep reading for all the details on dropshipping (and whether or not it’s a good fit for you and your business!).
How Exactly Does Dropshipping Work?
To start with, dropshippers need to find good quality suppliers who offer their products at affordable rates, for you to resell.
You can do a manual search, or you can use an app like Zendrop to find high-quality suppliers with fast dispatch times and great reputations.
Finding a quality supplier is absolutely key to a successful relationship with your customers and the success of your business.
Once you have found a supplier and listed your product, you’ll need to handle the fulfillment process. With Zendrop, fulfillment is completely automated, which streamlines the process for you- especially when you are just getting started.
Benefits Of Dropshipping
It’s no secret dropshipping has been around for a while! It’s accessible and easy for business owners to get started, without a lot of upfront capital.
Here’s a few of the KEY reasons dropshipping is a great choice for starting a business online.
1. Low Upfront Costs
Starting a business comes with its fair share of costs (especially an ecommerce business!)
But when you use the dropshipping model, you don’t need vast amounts of inventory just to launch your business. In fact, you can start a successful dropshipping business with a reasonably lean budget and still grow and scale.
In addition, there’s less risk to you if your products don’t take off in the market, as you’ve not invested thousands into inventory.
2. Quick And Easy To Get Started
Dropshipping is reasonably easy to get started with, especially when you are not struggling with physical products, inventory, packing your orders and inbound shipments. Plus, apps like Zendrop make it easier to deal with fulfillment and sourcing products, which makes the whole process even easier.
3. Low Overhead Costs
Without inventory and warehouse costs (not to mention the costs of a brick-and-mortar business), the overhead costs are reasonably low. Many dropshipping apps, like Zendrop, have many different plans to choose from, to suit your business growth- so you never have to worry about inflated overhead costs.
4. Flexible Working Location
With a dropshipping business, you can work from anywhere in the world. As long as you have an internet connection, you’ll be able to communicate with your customers and suppliers- and run a successful business.
5. Thousands Of Products To Choose From
With dropshipping, you’re not limited by storage and stock limitations- so you can choose from millions of products! When you work with a partner like Zendrop, you’ll get access to hundreds of thousands of products (and be able to effectively monitor trends)
6. Low-Risk Testing
When your dropship, you can test a range of different items in your store and refine what you sell over time before committing to buying a large amount of inventory. This not only saves costs, but helps your business grow and keep up with changing trends more effectively.
7. Scale Easily And Efficiently
Traditional ecommerce businesses are hard to scale, simply from a fulfillment perspective. The more products you scale, the more work that’s involved! As a dropshipper, it’s easy to scale your business with minimal stress and cost.
Cons of dropshipping
While there are many benefits to dropshipping, it’s not perfect! Here are a few problems to consider if you’re thinking about dropshipping.
1. Lower Margins
When you’re not manufacturing your own products (and getting them straight from the source), you obviously run the risk of paying a little more for your products. Additionally, with other stores competing for the same market, rock-bottom prices are often the norm.
One way to combat this is by working with a good dropshipping partner to help you find good quality products at the lowest price (without bloated middle-man costs).
2. Inventory Issues
One problem that occasionally happens is when your suppliers have low inventory. As inventory can change quickly, you might find out that your supplier is out of stock when a customer orders from your website.
Luckily, it is possible to monitor inventory, and sync with your suppliers through several different apps on the market.
3. Shipping Costs
When you work with several suppliers, you might find elevated shipping costs become an issue when your customer orders several products at once. Typically, it’s wise for you to factor in these costs and absorb them into your business margins- but it can be complicated and time-consuming to calculate this efficiently.
4. Supply Problems
If your supplier makes a mistake (or they provide low quality products), the responsibility falls on you.
One way to avoid this is by partnering with quality suppliers. At Zendrop, we work hard to ensure every single product on our site is well-reviewed and well-made, so you’re never caught out with unreliable shipping of sub-par products on your site.
Have you ever been blamed for something that wasn’t your fault but had to accept responsibility for anyway?
5. Limited Branding Options
When it comes to branding your business, dropshipping can be tough. Most suppliers don’t offer customization or branding options, so you are not able to add these premium touches for your clients.
Unfortunately, if you want to go custom, you’ll often have to make a minimum order upfront, which can be problematic for dropshippers just starting out.
Fortunately, Zendrop offers premium branding options on several of our plans- so you can cultivate a strong brand image from day one!
Ready to get started on your dropshipping journey? Click the link below to claim your FREE trial of Zendrop Plus and start building your ecom empire today!
Dropshipping For Beginners
When you’re first getting started in the world of dropshipping, it can feel pretty overwhelming.
There are a lot of moving parts, and it’s not always clear what’s profitable, what’s not, and what you need to know before you get started.
So today, we’re going to jump into all of your most frequently asked questions and get clear on exactly what you need to do to build a successful ecom empire!
How Much Do You Need To Get Started With Dropshipping?
While costs can vary, you’ll need to make sure you budget for a good dropshipping app, an ecommerce platform, ads, and branding. To start with, you need at least $500 to launch your business successfully.
How Do Dropshippers Earn Income?
In short, dropshippers act as middlemen, selling a product directly from a supplier. They have to factor in marketing costs, overhead costs and product costs, before they make any profit.
To make a profit, dropshippers mark up their products when they sell them in their store.
It’s important to know your market, your audience and how much money you’re making on each product- so you can ensure you’re running at a profit and not a loss!
Is Dropshipping Legal?
Yes, absolutely! As long as you are running your business legally according to state and federal laws, dropshipping itself is merely a fulfillment model- and is perfectly legal.
Focus on building an upstanding brand, with clear branding and great customer support, and you’ll be able to scale and grow.
Consult with a lawyer to make sure you are following all laws regarding business practices and taxes, to ensure you are not making any careless errors.
Is It Possible To Dropship On Amazon?
Of course! Dropshipping on Amazon is a viable way to grow an ecommerce business. However, as margins are slimmer on Amazon, it might be worth considering establishing your own website or store and driving traffic directly to your products- depending on your goals!
What’s the difference between dropshipping and retail arbitrage?
Retail arbitrage refers to any instance where you resell products bought from other retailers and make a profit from this sale. Dropshipping is when you purchase directly from a wholesaler, and never actually handle the product- your supplier ships directly to your customer.
Is Dropshipping Still Profitable In 2022?
While any business model takes hard work and effort to succeed, dropshipping is absolutely a viable option to build a successful business and grow your online presence!
If you’re interested in dropshipping, make sure you arm yourself with the RIGHT tools and information, to give yourself the best chance of success.
Ready to get started on your dropshipping journey? Click the link below to claim your FREE trial of Zendrop Plus and start building your ecom empire today!
How Should You Prepare for Chinese New Year 2022
At the start of 2022, it’s important to start preparing your eCommerce business for the Chinese New Year. Almost all Chinese business operations come to a complete halt during a 1-4 week period, which includes most Chinese suppliers. But don’t fret! Even with dropshipping businesses heavily relying on Chinese suppliers, we have compiled some simple steps you can take to prevent any bumps in the road your store or your customers might face during the Chinese New Year.
Chinese New Year 2022 Timeline
Chinese New Year 2022 will take place starting on February 1st. Typically, suppliers will take at least a week off to celebrate the holiday. But plan for at least 3-4 weeks in factory and supplier shutdowns to make sure that you are fully prepared. It’s safe to expect that most suppliers and factories in China will start to shut down at the end of January.
Shipping Products During Chinese New Year
It’s fairly common for suppliers and factories to slow down production a week or two before the beginning of Chinese New Year. Don’t worry though, many manufacturers will have enough inventory in stock so they can continue selling until the actual week of the holiday. But this can mean that orders placed in that time frame might be delayed in addition to any orders placed during the actual celebration of Chinese New Year.
Our factories are estimated to shut down between January 15th and February 10th.
So, What Can You Do?
Many blogs and Facebook groups will overexaggerate the Chinese New Year timeline and tell you to close your store. But, should you? No, of course not! Similar to any other type of business, there are always periods of implications. The bright side is that this is an implication that we can prepare for in advance.
Halting your momentum in your eCommerce business can have benefits and drawbacks during this time. This could be a great time to promote discounts on pre-ordering products. Chinese New Year is still a great opportunity to hone in on your customer service skills and focus on plans to scale your business following the ending of the holiday.
Transparency is Key
The easiest way to mitigate customer frustration is to be upfront. Make it very clear that there will be potential shifts in shipping times. Put a notice on your product pages declaring delays may happen due to the holiday season from January 15th to February 10th. You should also add this information to your shipping policy page, and order confirmation email or checkout page.
If you are transparent with your customers prior to the placing of an order on your store, shoppers will be able to make their own educated decisions as to whether or not they’d like to purchase during this time period. In most cases, they will still go through with making a purchase. They just want honesty!
You can also add incentives such as a coupon code on your product page for the inconvenience. An example would be something like: “Because of the holiday season and small delay with your shipping here is a 5% off coupon from us for the inconvenience.”
Marketing during Chinese New Year
While it can be a good idea to continue running paid advertising during Chinese New Year, it may be best to put them on hold. Even though there is far less competition during the holiday, dropshippers will need to rely heavily on good customer service to mitigate refund requests for order delays. However, if you do decide to continue running ads, now is not the time to scale but to maintain. Be mindful of your spending in an effort to be frugal during a time of small order volume.
Also, don’t forget to continue your cost-efficient marketing efforts. Even if you are spending less on paid advertising, continue to capitalize on the use of social media, blogging, email marketing, and affiliate programs. With how quickly potential customers scroll through their social feeds and move from one shopping focus to the next, you want to keep your brand at the forefront of your customers’ minds. Additionally, this is a great time to build rapport with returning customers while building relationships with potential customers.
At Zendrop, we are dedicated to getting you through the potential stress that is the Chinese New Year. Don’t let a couple of weeks of the year ruin the momentum of a business you have worked so hard to create! Start creating your action plan now so that you are fully prepared.
Happy selling!
Do You Need a College Degree to Succeed?
On our latest episode of 9 to NEVER: The Podcast for Entrepreneaurs, host Kennedy Meek answers some very pressing questions asked by our Zendrop users.
How much money is required to start a dropshipping store? Is dropshipping too saturated? Is it illegal? Who can be successful in eCommerce?
If any of these questions peak your interest, this episode is for you!
You can listen to the episode on Apple Podcasts, watch it on Youtube, or read the following transcript below.
How much money do you need actually to start a dropshipping store?
If you know anything about dropshipping up until this moment, you will know is that the barrier for entry is extremely low. What this means is it doesn’t actually cost a lot of money to start a dropshipping store. This is the beauty of dropshipping in the first place. However, what is the exact number that you should be thinking about when it comes to a realistic price point for a dropshipping store? Well, let’s think of what we need in order to start a dropshipping store.
First and foremost, you will need a Shopify account. Shopify charges $29 a month for a basic plan that will work for a dropshipping store. Additionally, you will need to purchase a domain name. Domains are fairly cheap. You can actually purchase straight through Shopify or through another source, like GoDaddy. And depending on the actual domain name that you choose, you’re looking at spending around $12 a year.
Then you’ll need to think about your fulfillment resource. Zendrop is a fulfillment resource and our Pro Membership costs $49 a month. We always recommend trying out our platform for free, first. In fact, you get a seven-day free trial when you sign up for our Pro membership!
Now, we’ve covered the basics. We have your Shopify store price point, your domain name, and your fulfillment resource (aka Zendrop). Next, we need to consider Facebook and other forms of paid advertising. In order to gain success with a dropshipping store, you will need to be testing many products, specifically in the initial phases of your online business. In terms of a realistic budget, it is completely up to you! However, the speed at which your store starts to make sales is directly correlated with how much you are investing in paid advertising. A typical suggestion for new dropshippers is to spend $10 a day per ad on Facebook.
Is dropshipping too saturated?
And the reality is no, absolutely not. If you’re only recently learning about the dropshipping space, I can understand why it might seem very saturated. The more research you’re doing on your own about dropshipping, the more you realize, “Oh my goodness! So many people already knew about dropshipping before I did. This is a far too saturated market.”
But here are a few statistics to keep in mind:
There were 2.05 billion online shoppers in 2020.
Of those billions of online shoppers, 23% of all online orders were fulfilled through the dropshipping model.
In fact, 27% of all online retailers have adopted the dropshipping model.
Basically, if someone has an iPhone, or a computer, or any kind of smart device that can get them access to the internet, they are a potential customer of your online store.
Is dropshipping illegal?
Yes, dropshipping is perfectly legal! In simplicity, dropshipping as a form of retail is no different than shopping at your local grocery store. The benefit of dropshipping, however, is that you do not have to order stock in advance. This means you save a lot of money on the front end. And you are only purchasing product when a customer places an order on your store. Now you can run into definitely some copyright infringement or trademark violations. Avoid selling products with brand names or trademarked characters (such as Disney or Marvel).
What are some ways to drive traffic to your online store other than paid advertising?
First and foremost, social media. Instagram and Facebook have a really easy shoppable feature on their app. You can have your customers come directly to your Instagram or Facebook page and place orders directly on that social platform rather than going to your online store. Additionally, TikTok is creating so much opportunity for eCommerce stores right now. In fact, many trending products have come from other TikTok users themselves. Influencer marketing is also a pretty fast way to get your product in front of a bunch of eyes that aren’t in your direct audience.
How can I deal with the longer shipping times in a positive way for my online store?
This is a pretty typical issue that many dropshippers face, until they decide to start selling US-based products. And by the way, Zendrop has a lot of products that ship from the United States, which means far shorter shipping times!
But if you are dealing with long shipping times, which is pretty common for any dropshipper, the reality is you just have to be transparent. You cannot say that your products will get to your customer faster than it actually will. This leads to chargebacks, refunds, and unhappy customers. There are many ways that online stores spin this information in a positive light, so it’s very possible! Just remember to keep honesty as a priority.
Can anyone become successful in dropshipping?
Short answer, yes. What I will say is, success is a mindset, not a formula. Yes, anybody can sign up for Shopify, anybody can sign up for Zendrop and anybody can run Facebook ads for a product online. But there is a certain mindset and stamina that is required to become successful in dropshipping.
One perspective that really sets successful dropshippers apart is understanding that there is no other option except succeeding in dropshipping. The reality is it takes a lot of stamina. It’s a lot of testing different products. Your first product is not going to be your winner.
Internet marketers love to talk about how quickly they got rich from dropshipping. That might be true for some, but the reality is it does take a lot of perseverance through some of those minor setbacks and failures. So yes, anyone can be successful, but how much do you want to be successful? That is going to indicate if you actually are successful or not.
Do you need a degree to be successful?
This is the age-old question. For older generations, college was a requirement for any level of success. You needed that piece of paper to get you in any corporate job. In the present, there are so many other avenues of success and financial freedom that don’t require a college degree.
I don’t want to be the person that tells an 18-year-old not to go to college. College is incredibly valuable and there’s nothing wrong with obtaining higher level education. But is it required for success? Definitely not. Obviously, there are exceptions to this rule. If you have a very specialized career goals, such as the medical field, mental health, or practicing law, you’ll need some level of higher education to qualify for a job. But eCommerce can be learned, and mastered, through experience.
Many individuals who do not have college degrees will make millions of dollars, and many individuals with college degrees are also equally successful. So, there’s no direct path to success and everybody’s path is going to look different.
Is Dropshipping Dead?
On our most recent episode of 9 to NEVER, the podcast by Zendrop, we interviewed Florian Hartfelder.
Florian is an eCommerce expert who was able to go from debt to over $444,000/month with his dropshipping business. He is the online entrepreneur behind several multimillion-dollar retail brands and has helped many students generate self-sustaining full-time incomes online with the dropshipping business model he teaches.
He is a former Zendrop Select client turned Zendrop team member, bringing so much knowledge to the current state of the dropshipping industry and how you can succeed through using Zendrop!
This episode discusses Florian’s view on dropshipping courses (are they worth it?), the single advertising strategy that got him to 7 figures a year in revenue, his experience working with Zendrop, and what he thinks the future of dropshipping will look like. And of course, he answers the age-old question: Is dropshipping dead?
You can listen to the episode on Apple Podcasts, watch it via Youtube below, or read the transcription of the interview in this blog post.
9 to NEVER Episode 11 | Florian Hartfelder – Multiple 8 Figure Dropshipper
Kennedy Meek:
How about you give our listeners a little bit of background on who you are, how you got to where you are today, and just the whole elevator pitch of what you’ve been doing with your career?
Florian Hartfelder:
So did the typical route… try to get good grades, went to college, studied accounting and finance. And about halfway through, I realized that I was just learning a bunch of theories and nothing that I was learning would really make me money. It was essentially, to make other people money. And the whole reason why I got a degree in both accounting and finance was because I wanted to learn how money worked so that I could make more money for myself.
During my junior year, I started initially day trading stocks, penny stocks, returned 131% my first year, and then got ran an ad by Alex Becker. I’m sure most people listening to this know who that is, but yeah, anyway, got started in Shopify dropshipping. I thought it would be a part-time gig but realized that just like any business, it’s going to take time and effort in building a functional team.
Kennedy Meek:
What was your experience dropshipping when you first started out?
Florian Hartfelder:
So at first it was brutal, lost my entire net worth all the way down to $17.34. And I had one product that was winning. Some days it was profitable, some days it wasn’t. It was really wishy-washy. So pretty much just paused all my ads, hit my second or third reboot, and learn some more Facebook strategies. Then I took out probably the biggest gamble of my life.
I started using a new method on Facebook ads that I’d never tried before. The starting budget was $500 a day. So thank God for credit cards. I pushed myself basically into debt, but the strategy worked. Within three months, I was pulling off the dealership lot with a brand new Audi i8. So I’ve been through it. I know that it’s tough, but I also know that if you actually treat it like a business dropshipping is not dead, it’s definitely still a viable way to make a full-time income.
Kennedy Meek:
When did you discover dropshipping, and what made you decide to just try it out and go for it?
Florian Hartfelder:
I opened up my LLC in February, of 2018, but I didn’t start really running ads until October. The reason being I spent most of that time watching videos on YouTube, exploring Google articles. I had got presented with an advertisement for Alex Becker’s dropshipping course. And after I bought it, I actually refunded my money the next day because I realized that all of the content that I needed, at least in his course, was available for free on YouTube. So there’s really zero barrier to entry.
There’s no reason that you shouldn’t be getting started. And at the end of the day, your success comes down to really two things. The first, and most importantly, is knowledge. And the second is your drive, your mindset, and your ability to make things happen, even when everything looks like it’s not going to work out.
Kennedy Meek:
Let’s talk about courses for a second. What are your opinions on them?
Florian Hartfelder:
So here’s a really, really good way to figure out 90% of whether the course is worth getting. Look at the timeline. So the one question that you need to ask yourself is, did they get their supercar before they made the course, or after they made the course?
And a lot of times you’ll find that they end up getting these cars after they made the course. What happens is they made a few sales on Shopify and they only show you the revenue. So what they’ll do is they’ll create a course, considering they can’t actually really make it work. The course is how they make their income.
A lot of times, they finally got it after the course, which means that they made their money mostly from the course and not from actually doing it, which is really important, right? Because you want to learn from someone who got that car from the business model that they’re teaching.
Kennedy Meek:
So let’s talk about this Facebook ad strategy that transformed your business. The one that costs $500 a day in ads, do you want to talk about this a little bit? Explain to me how you found out about this and the whole thought process that went into changing your ad strategy.
Florian Hartfelder:
At the time, my best friend had got a paid course from someone who was actually doing significant volume. And that’s where the strategy came from. It’s so crazy because the strategy just went against everything that I knew about Facebook advertising, or that I thought I knew about Facebook advertising.
Just go as general and broad as you possibly can. For the entire lifetime of my advertising, I’d always left the expanded interest box unchecked. This strategy said, check that box and don’t put any interest or lookalike audiences, which was completely different than everything that I’d ever been told, or learned, or seen on Facebook.
And this guy was pushing volume. So obviously working for him and I’ve got a product with enough pixel data where if it’s going to work, it should work. And it did. If you get an ad set running starting at $500 a day that’s profitable, you can scale it immensely, especially since it’s such a general broad targeting.
So with that strategy, I’ve had ad sets that had over $20,000 a day budget. That’s not something that you can do with your traditional interest-based targeting, or look like audiences because it’s super defined. And while you can get a good return on those, they’re not scalable to those big numbers.
Kennedy Meek:
Were there any other strategies in addition to Facebook advertising that you can credit to your growth?
Florian Hartfelder:
Yes. There is no way that you can run profitable front-end traffic on Facebook alone. At the very least you need a Google Smart Shopping retargeting campaign. Another one that’s extremely profitable on Google is a brand search name. This is where you create a search campaign on Google and you only display the ad to people that search for your name.
If you have an ad and that’s the first thing that pops up when a potential customer is searching for your store, that’s going to build a lot of trust and it makes you more of an authority and establish brand and reputation. It captures a lot of those sales that you would’ve missed.
So when you factor all those together, you can actually now run profitable Facebook traffic, because you’re capturing all of the loss of sales.
Kennedy Meek:
Where does brand building, or community rapport, come into the strategy for you?
Florian Hartfelder:
Really, it comes down to sustainability. A lot of dropshippers are so focused on today’s profits that they’re blinded by the fact that it could all collapse tomorrow because of how they’re operating their business. And it’s twofold. It blows my mind that 99% of dropshippers just totally ignore this fact.
But if you improve the customer experience and you actually provide a brand experience and something that you would buy from and buy again, it solves so many problems. I’d say 98 out of 100 dropshippers will have about a three-month lifespan on average. This is because of payments being held, or Facebook shutting them down.
Kennedy Meek:
How do you think Zendrop will be able to contribute to that change?
Florian Hartfelder:
Where do I see dropshipping going? So there’s a lot of people saying dropshipping is dead and all that nonsense, that’s not true. Dropshipping is not going anywhere. Is it getting more and more difficult? Yes, absolutely, but that’s how it is with any business.
The thing is people are still teaching the same concepts and stuff like that, that they were when I got started, and the playing field has changed drastically. And with dropshipping, it changes every couple of months. If you don’t adapt to the industry and the environment and the business, and constantly try to make changes to keep up with that, you’re going to go out of business.
They’ve been saying dropshipping’s dead since I started. It’s not going to go away. What will go away are the people that are unwilling to put in the effort and adapt, which is what we humans are fantastic at and why you and I are able to have this conversation today.
Kennedy Meek:
How do you think Zendrop is going to contribute to the change?
Florian Hartfelder:
Zendrop is adapting. There’s just a commitment to growth. And personally for everyone that works with Zendrop, but also for the clients. How do we improve the customer experience? What can we do to expand and extend the customer lifetime of our users? How can we educate them about the changing environment? Zendrop is trying to give people the tools to be able to adapt and to make it happen.
Zendrop is going to give you a fantastic fulfillment experience and they’re also actively working on taking care of you and your business and giving you the tools to succeed.
Understand the 2021 VAT Changes and How it Will Affect Your Business
Ever heard of the VAT tax? At this point, most dropshippers probably have. What you might not know is Europe is making some new changes to the VAT tax, and you need to know about them in order to continue scaling your dropshipping stores.
Before we get into all the updates happening with VAT, let’s fully understand what VAT exactly is.
“A value-added tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed.” SOURCE
So in Europe, each country has its own VAT rate.
Many dropshippers have come to us asking how these VAT changes will affect their business and what they need to do in order to stay ahead of the game.
So we’re going to lay it all out for you in this blog post!
Let’s Get Really Clear on What Exactly is Changing Starting on July 1, 2021:
As a business owner, you are now responsible for paying VAT if your online store makes more than €10.000 in sales revenue per year.
Previously, each country had a different distance selling threshold, meaning that the VAT tax did not necessarily apply to every country you were shipping to depending on your revenue. Now, no matter what country you are shipping to, the standard threshold for the VAT tax is €10.000 per year.
Imported items valued at less than €22 are no longer exempt from paying VAT.
Before these changes, distance sellers did not need to pay VAT on all items being imported that were valued under €22. Beginning July 1, 2021, VAT will be charged on ALL commercial goods imported into the EU, regardless of value. For shipments with a value of €150 or below, this can either be charged at the time of the sale, or be collected from the end-customer by the carrier. Due to this change, Europe has introduced the Import One Stop Shop (IOSS). This resource allows for sellers electing to charge VAT at the time of sale to more easily declare and pay VAT to tax authorities, rather than having the customer pay VAT costs when their packages land in their country.
VAT can be paid to any European country through the Import One Stop Shop (IOSS).
Prior to the new VAT laws, distance sellers who hit the threshold for VAT in multiple countries had to register with each country and pay VAT individually. Now, by registering for VAT through the IOSS, filing, and payment of VAT is much easier.
You can go about business as usual by charging your local VAT rate if you are a European business doing less than €10.000 in revenue per year.
So European-based sellers do not have to register with the IOSS if they do less than €10.000 in sales annually. These sellers can continue charging the VAT rate of their country when shipping to anywhere in Europe.
Why are the VAT Rules Changing?
Simplifies VAT across all of Europe.
Managing VAT for 27 countries can get quite confusing, leaving a lot of margin for error. This change will make the VAT process significantly more efficient for both governments and tax authorities as well as dropshippers!
Decrease Fraud.
Historically, VAT fraud has been fairly easy to commit and has cost European countries billions of dollars in the process. VAT fraud can be perpetrated in a variety of ways and ranging from dropshippers to large corporations. Either way, these VAT changes significantly decrease the possibility of fraud.
Giving European-based merchants a fair chance.
Due to the lower threshold for individual products and overall revenue enforced by the VAT tax laws, European business owners have not received a fair chance to succeed in eCommerce. These new changes level the playing field for all online businesses.
Now That You Understand What Exactly is Changing with VAT, What Should You Do to Prepare?
Register for OSS or IOSS
For European business owners that are distance selling to other European countries, you’ll need to register for the One Stop Shop (OSS) system to pay all your VAT taxes through one tax authority.
Now, if you’re a non-European business, you’ll want to register for the Import One Stop Shop (IOSS) system. This will allow you to follow the proper processes for products valued under €150. The IOSS creates a faster process for filing and paying VAT, while also speeding up the process of importing your products through customs.
While IOSS is not required to pay VAT, it makes the process much more efficient. Dropshippers who do not utilize IOSS might experience longer shipping times due to extra valuation checks at the border, as well as extra VAT charges.
If you’re using an online marketplace, such as Facebook Marketplace, these rules may be different. Under these new VAT regulations, it is possible to de-register for VAT in selective European countries. This is because the marketplace you’re using might be considered a vendor of the products. So then the marketplace is the party responsible for collecting VAT at every sale.
Dropshippers already know the typical pains of handling taxes for your business. So as you can imagine, VAT taxes are even harder to understand. If you are unsure what changes need to be made to your business based on VAT (or don’t know where to start), hiring a consultant or lawyer is definitely worth the investment.
Every business is unique and requires different action items. Therefore, contacting a tax professional may be in your best interest, as they will be able to fully examine your unique business needs in order to advise you on the best steps to take going forward.
Do Your Own Research
Even though these new VAT changes are fairly clear and straightforward (or at least, we hope they are after reading this blog post!), more details and information will most definitely come to the surface once these new regulations take effect on July 1, 2021.
For this reason, subscribe to our newsletter to receive more updates as information becomes available. Also, do your own research so that any potential misconceptions you may have can be clarified as fast as possible!
How Zendrop is Addressing These Changes
As always, we consider tax compliance and consulting with licensed professionals as the best practice. With this being considered, we also want to continue to offer you solutions to continue conducting business. Refer to our two scenarios below for how we are working through these legislation changes.
If you choose to register for the IOSS and pay VAT, our prices will remain unaltered from these legislative changes. We simply request that you provide your OSS or IOSS registration ID with us.
If you choose to not register, we will be charging a $1.25 surcharge for orders shipped to the 27 countries listed in the new legislation. This surcharge is an additional shipping fee that Zendrop incurs to ensure that the shipping carriers that ship to your European customers are adequately registered to pay VAT in your place. Please note, that according to our advisors, this technically does not represent full compliance with the new legislation, however, this is an alternate solution that we are making available for you to continue conducting business.
Time to Make Some Changes
Based on the new 2021 European VAT laws, change is going to be unavoidable for your online business. Whether this means opting out of selling certain products to Europe, raising your prices, or even hiring a tax expert, you’ll need to prepare to adapt and push forward through this transition in business.
