This transcript was generated from the episode audio and may contain minor errors.
[Music]
Hey, hey, what's up? This is Chris Guillebeau with Side Hustle School. I've got a really strong story for you today. It's all about dropshipping. We've talked about dropshipping a bit.
I'll explain it here again in this episode for those who aren't familiar. But this story in particular, after following his wife around Italy, an Irish man takes life by the handlebars and breaks the cycle of new jobs by learning how to dropship e-bikes. What are e-bikes? Well, e-bikes are electric bikes, but you know what? It doesn't actually really matter what they are because with the dropshipping model, he actually never has to store any e-bikes, never has to handle any inventory.
There is another company that does all of that. All this guy does is create a website and market that website, sell the e-bikes, somebody else handles everything. That is the beauty of the dropship model, which is why it is a popular subset of Side Hustles, at least for a lot of our listeners. We've had several episodes in the past looking at this in different ways. One of my favorites is the Bounce House Empire.
This guy who makes something like $300,000 a year dropshipping bouncy castles or bounce houses. That was episode 324 of the show. Definitely go back and listen to that if you're interested in this kind of thing. We've also had somebody doing it with Live Crickets, another famous or infamous Side Hustle School episode, episode number 46. Let me give one more example, Astronomical Gifts, episode 374.
Those are just a few examples that come to mind. If you listen to those, you'll get a general idea of what this is about. And of course, we'll continue to dive in as we go along. But today's story, this online bike store owner gears up for hands-off profits. I'm also going to include a mention of a free trial you can get from Shopify.
That's the same platform this guy uses to make a lot of money. How much money does he make? It's a lot of money, okay? Stay tuned, I'll tell you exactly how he does it and how much money that is. [Music]
Irishman John Murphy dreamed of a job that he could do from anywhere.
His wife was Italian and they moved around Italy a lot for her career. Each time John had to quit his job and look for another. With another move on the horizon, this time with a less than ideal job market, John decided to ask his current boss if he could work remotely. His boss said yes, but this victory came with a no-going-back realization. As soon as John started working from home, he knew he'd never wanted to stop.
With his interest peaked, John started looking into other ways he could make money online. While looking around for ideas, he came across a business model called dropshipping. If you're not familiar with dropshipping, it's when someone sets up an online store to sell other people's products. In exchange for marketing the items and running that store, the dropshipper gets a percentage of the profit. The dropshipper doesn't have to deal with producing, handling, or shipping what they sell.
To John, it seemed too good to be true, but it was true. He was ready for his turn. Where was this free money button on the internet? He'd heard people talk about using the Shopify platform, so he made an account and linked products from a big retail website called AliExpress. Then John waited for his bank account to inflate.
Unfortunately, he discovered that he hadn't hit the free money button after all. After spending $300 in marketing, he had made just $50 in sales, resulting in a, what is that? Let's see, $250 loss. That's 300 minus 50. See what I did there?
This only made John more determined. He knew that dropshipping was a successful business model. The proof was all over the internet. He just had to figure out what he was missing. So it was time for more research.
Early on, John decided he was gonna build his store with zero dollars. As it turns out, learning how to hack a competitive business model for free was easier said than done. He spent hours watching YouTube videos and reading articles, a majority of which gave advice that John now knows to be totally useless. At one point, John was tempted to give up his zero-dollar startup ideology to take a paid online video course. But he'd already done his studying, so he was confident that round two would be different.
This time, he picked a more specific niche to target, people who were afraid of an impending apocalypse. That's actually a pretty big niche these days for all kinds of reasons. He found more success this time with a survival kit store, but it still wasn't quite what he was looking for. He knew he could do better. So for round three, John focused on being more deliberate about the products he was going to sell.
Like one of our other features did, many episodes ago, he started with 100 random products and began to eliminate them one by one with a list of criteria. He looked at weight. Is it really heavy and thus expensive to ship? He looked at price. Is it more than $500?
He knew that was important because if a $20 product yields a $4 profit, you have to sell hundreds of those units each month before you start making any real money. And if you're selling hundreds of units, that means hundreds of emails, hundreds of tracking numbers, all kinds of stuff. But if you sell high ticket items with a profit margin of a few hundred dollars or more, you won't have to sell as many to make a lot of money. And just as important, you won't have that much backend work to manage it. Number three, he looked at the number of suppliers.
Are there many suppliers that sell this product? If there are only a couple of suppliers of a certain product and one or both refuse to work with you, then you're out of luck. Ideally having a pool of 20 or more suppliers to choose from is best. Number four, dropship compatibility. Are the products dropship friendly?
Basically, is this product already sold online by resellers without brick and mortar establishments? If yes, then likely you can get in on the action. If not, it's possible that this particular market doesn't lend itself to online retail success. And last but not least, market competition. How many online retailers are already in this market?
If there are already 50 online stores selling that same exact product, it's gonna be hard to carve out a large enough portion of the market for yourself. So John recommends you go to Google Shopping and search for the product, see how many other stores are selling it, and then check each website to verify that they are only online and not a brick and mortar store. That will clue you into the world of dropshippers in any market. Ultimately, John chose to start selling e-bikes, which he hoped would break him out of his old cycle. There was already an online presence for them, so he knew people would be willing to purchase them online.
Plus the average cost of the brands he chose was roughly $2,000 each. That meant that John had to sell fewer products to make more profit. If he sold just two to four bikes a month, he'd be making anywhere from an extra $1,000 to $4,000. High profit margins. He launched his e-bike store on July 31st, 2017.
Over the next six months, John only made a couple sales. But just as he was giving up hope, the store that dominated the e-bike market shut down. The owner had decided to move on and pursue a different career. John set up a one-hour phone call with him, adopted a number of tweaks and tactics, and since then has been making up to $25,000 a month from his store. That is correct, up to $25,000 a month from his online store, no inventory.
So what was the secret? Well, the owner had gone through a dropshipping course and knew that a key element to a successful store was trust. John made a number of changes to his storefront. One of the most popular was implementing a pop-up on the website that showed people when other people were purchasing. And you might've seen this elsewhere on the internet, when you're browsing around and a little pop-up comes up that says, "John Murphy bought a Mega Wheel 3000 today." So it's both trust and also social proof.
As I said, up to $25,000 a month, John is now making more money from his side hustle than he ever could have anticipated. But he's most excited of all about finally breaking his cycle and mastering the skill of dropshipping. [Music]
All right, what an amazing story. What a tremendous success. These kind of dropshipping models, sometimes they sound just like I said in the story, they sound like they're too good to be true, but they are true.
This is legit, people are doing this. It doesn't mean that every person who tries it is gonna be successful. Often there are multiple failed attempts to precede the success, just like you see in this story. So I never wanna tell you or anyone that this is super easy, you should just go out and do it and you're gonna make $25,000 a month. That is not my message at all, but I do like to highlight people who through struggle, through perseverance, through some creativity and research and hard work have been able to succeed to a pretty successful, pretty amazingly successful level.
And that's what we see here with John. This guy who is a corporate employee, I think he actually still works for a major multinational corporation. Not 100% sure about that, but the point is he started this while he was doing that for sure. And by tweaking and adjusting and researching as he goes along, he's able to create this hugely profitable online store. Will it continue forever?
Who knows, but he's learned this skill. He can probably apply it to a different market next, which is also pretty cool. I mentioned Shopify briefly. I actually haven't talked about them in a long time, but I have a number of friends at Shopify and a lot of our stories have featured Shopify just in a completely organic way. They're not a paid sponsor, but we do have a deal with them.
If you'd like to get a 21-day trial, you wanna check it out for yourself and see how this software works. You can just go to sidehustleschool.com/shopify. This is better than any other public offer they have out there. I think they have a seven or a 10 or maybe a 14-day offer somewhere. But this is a 21-day free trial offer.
You can check it out for yourself. See if you like the idea of building this kind of online store. And if you do, great, you keep it. If you don't, then you cancel it. You don't pay anything.
So again, that link is at sidehustleschool.com/shopify. All right, my friends, thank you so much for listening. Don't forget, inspiration is good, but inspiration with action is so much better. Our show notes for today, including links to everything I mentioned, are at sidehustleschool.com/579. If you've got a comment or a question for the show, give me a call on the Hustle hotline.
That number is 8449HUSTLE or 8449487853. My name is Chris Guillebeau. I am cheering you on and I will be back tomorrow with another story. You are listening to the one and only Side Hustle School.
