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Who's Going To Try Oberlo?

Discussion in 'Ecommerce' started by Joe F, Sep 6, 2016.

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  1. I like things that can be / are sold locally. Think clothes, cars, furniture, tools, building supplies, and a million other things. Then you can get them listed properly in Google/Bing local, Yell, Cylex, FreeIndex and so on. And straight off the bat that gives you a solid base to build on in the search engines. In fact, I've built multiple, very successful, businesses from scratch just by setting everything up properly in the local business directories and with no other marketing at all. My brother and I run a building company that employs 6 people now and all we did there was get listed properly in the local directories. No social media, no SEO, no paid advertising, nothing.

    Let me give you an example...

    We've got a local paint supplier who only set up a couple of years ago. They've got premises, overheads, advertising costs etc. etc.

    But their SE listings are crap and if I spent a week just setting up my own "The Local Paint Supplier" website and doing all of the online stuff right from the outset I'd outrank them and anyone searching in my local area, and beyond, would find me before them.

    Zero costs involved, just time, and no-one cares if it's an affiliate site or a dropshipping store - because it looks like a real company - not even Google can tell the difference, well, not without some manual intervention.

    That's the way I've been thinking about from day one and my first store is on target to do roughly 500 sales in the first 3 months, so there might be some logic in it.

    I hear you about Google Shopping, but it's expensive and you're competing for sales with small margins already. Getting your products on Amazon would be great too - and it's easy, they even do everything for you - but everyone is taking their slice and a lot of these suppliers are only making 1-3% on an item that might sell for £100. Seriously. Less than affiliate commissions, but they're doing it in bulk, so there is that.
     
  2. I wouldn't look at eBay or Amazon as direct competition. Those marketplaces are huge and it is difficult to compete with people who go there looking for items. What we would be trying to do is build a store and grab the customer's attention before someone else does as if you provide them what they want they may not spend hours elsewhere looking for the best price.

    Affiliate marketing is a different game altogether. You will not have to deal with any support or delivery related problems. All you do is promote the items and collect a commission. You are, however, only getting a small percentage of the profit that the retailer is getting.

    I spoke about some of the downsides to affiliate marketing in my article "Eleven Reasons Affiliate Marketing Sucks". When affiliate marketing goes well, it's great. Unfortunately, there are many times when companies just refuse to pay you what you have earned. You aren't in control of your own destiny.

    There have been many times when I have been doing well and then it all went crashing to the floor. When a company realises that it costs them a lot of money to keep paying their affiliates the lifetime commissions they promised, many will just close the affiliate program down. You would be surprised at the size of companies that do this. FastClick did this to me. I spent a long time promoting them and was earning hundreds of dollars per month through lifetime referral commissions. Then they just said they were closing the affiliate program and they were subsequently bought by Google.

    This is what is attracting me to dropshipping. I like the idea of having more control of my my earnings.

    Of course, diversification is important. I am going to still do affiliate marketing and generate income in a number of different ways.
     
  3. Ditto - after 6 or 7 years promoting casino/poker programs, I'd built up a residual income of $12K+ per month by 2006, then the US closed them all down and I lost 90% of my income overnight. That sucked.

    So, yeah, definitely do agree that diversification is important :)
     
  4. Yep I went through all of that as well. Some of the companies were incredibly scummy.

    I used to earn thousands from FullTilt and they then just closed down the program. They were bought by Pokerstars who were another of my main earners. They then started saying that if you didn't refer them a set number of new clients every month, they would stop paying you for new customers and close your account. So even when I was referring them new customers they were not paying them.

    I was there from the start and the same companies that begged me and begged me to promote them were the same people who then screwed me out of money years later. How they were able to still operate is beyond me.

    The reality is that affiliate marketing is still a bit like the wild west. Companies can and will screw over affiliates and there is little that they can do about it.

    Anyways, it's good that we are all in the same boat. We should be able to help each other and share what is working and what isn't.
     
  5. Absolutely. The poker/casino crowd were terrible. I once went to the casino affiliate convention thing they have in Amsterdam every year and I swear on my life this is true... one company, who I can't remember the name of now, had a stall and they were promoting a white-label casino affiliate solution. Well, I spoke to the guy in the bar for hours after it finished, as you do, and he told me that if I signed up to their "preferential partners scheme" I'd be able to set my own casino payouts myself. Starting from, erm, zero. So, I could set it so that every penny that came in never left again. True story. That was about 15 years ago right enough and it's probably changed a lot now, but it just shows you, eh?
     
  6. I don't doubt that for a second. The industry was full of people screwing customers and affiliates. The affiliate market can be just as dirty too. If you look at the blogs of major affiliate marketers you will see them complaining about companies and networks just point blank refusing to pay them what they are owed.
     
  7. I logged in today and noticed that I only had about six days left on my trial. I've got a lot of work on this week and I'm away to Belfast this weekend for WordCamp. I'm also buying a new car so need to sort out a lot of stuff like that.

    So I've cancelled my trial. I will need to get back to this when I set aside a few days to get it going. I'm still intrigued by this and think there is good money to be made.
     
  8. Actually, something occurred to me about it this morning too. Have you thought about VAT? The threshold is £83,000 which might seem like a long way off, but if you're taking the customer's money directly and then purchasing the goods from merchants on AliExpress it could add up quickly. This month I've got over £3,000 in sales on Amazon so far and that's almost half-way to the VAT threshold, in only my 3rd month, so if I was dropshipping like this it would be getting to the point where I'd have to start thinking about VAT.

    With that in mind, when you do get started, it might be worth focussing on goods that are VAT exempt...

    https://www.gov.uk/guidance/rates-of-vat-on-different-goods-and-services

    Not a lot isn't to be honest, but children's / baby clothing is a possibility, disability products - which I'm already doing - and incontinence and low vision aids are others I'd be interested in too. Sports / health type services are included too, but not equipment unfortunately.

    The thing is, if you were doing anything that VAT applied to, you'd have to factor in an extra 20% on all of your prices and that could hurt!
     
  9. VAT hadn't something I had approached yet as I was still looking at what products etc to add. It's definitely something we will need to tackle before launching a store.

    Great idea about selling tax exempt items. That could save a lot of hassle.

    With regards to building an affiliate store, it is definitely something to look into, though bear in mind that it is a different thing altogether. Perhaps we should start another thread about that. I would be happy to do a test store with all of you guys and see how it performs. It could be good to try that and see how we get on.
     
  10. Sorry if its a pain me going back and forth through Dropshipping Vs Affiliate Store ideas on this thread. I just keep looking at the costs involved in dropshipping and thinking "jeez, you're paying a monthly Shopify fee, and per transaction, you're paying a monthly Oberlo fee, and then a payment gateway fee (PayPal etc.) on top of that, and THEN - when you start to get into a position where you might be making enough for a smallish mortgage payment every month for all of your hard work - you're going to have to think about VAT and increase your prices by 20%.

    Phew..... you know what I mean? And that's before you even think about FB ads, Google Shopping ads, re-targeting costs and so on.

    I think, and this is just what I think, that you need to be highly competitive with pricing, like everyone on Amazon, where the merchants are working to (at best) 3-5% profit per item.

    Because all of the above costs are going to stuff you before you even start.... unless, unless..... you're selling your own unique products. If you're not, then I just can't see how anyone could make money buying stuff from AliExpress and adding a % on. I honestly can't see it, not for the UK market anyway.
     
  11. No it's certainly not a pain. :)

    I do agree with you that there are a lot of fees in the beginning, though the cost is still under £30 per month for launching your own hosted store. It's not a huge commitment if you are going to make the shop a priority. If you launch a new online shop you still have to pay for hosting, backups, handle security etc.

    There are a lot of people selling products via AliExpress. It's easy to forget that most people don't even realise that everything is coming from China. They see something they like online and they order it. They aren't worried about someone ordering direct from China.

    I think this could work if you choose the right products.
     
  12. #52 Paul G, Oct 4, 2016
    Last edited by a moderator: Oct 4, 2016
  13. I think anyone who pays $997 for an online course probably has more money than sense. That being said, I do not want links to illegally hosted versions of courses and digital products.

    We need to support website owners and developers. It wouldn't be fair to host premium WordPress themes and plugins and I do not think it is right for us to link to other premium products either.
     
  14. Ah, okay. Sorry about that. I just came across it earlier and the link to download it was right there in the results :)
     
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