462: The Hidden Truth About Dropshipping: Is It Really A Profitable Ecommerce Model With Saba Mohebpour

00:00
You’re listening to the My Wife, Good or Jot podcast, the place where I bring on bootstrap business owners and talk about the exact strategies they use to grow their businesses. And today I have a very special guest on the show, Saba Mohibpur. And Saba is the founder of Spocket, which is one of the leading dropshipping platforms in the world. And literally every single day I get asked questions about dropshipping. So I figured I’d have someone deep in the industry to come talk about it. And in this episode, I don’t hold back the questions.

00:27
and we do a deep dive into the viability and profitability of this business model. But before we begin, I want to thank Zipify, OneClick Upsell for sponsoring this episode. If you were on Shopify and you want to instantly increase your revenue by 10 to 15 % without doing much work, then you’ll want to try OneClick Upsell. It integrates seamlessly with your cart and you’ll see the gains almost immediately. And best of all, you only pay Zipify a commission when they actually generate you extra sales.

00:56
For more information, go to zipify.com. That’s z-i-p-i-f-y dot com. I also want to thank Link Whisper for sponsoring this episode. Now those of you who follow my blog over at mywifequitajob.com know that I’ve increased traffic 4x in the past year and I couldn’t have done it without Link Whisper, which is my favorite internal linking tool for SEO. Link Whisper allows you to easily add internal links to your blog so you can maximize your link equity on the pages that make you the most money.

01:25
Now if you have a blog, this tool is a must have. For more information, go to linkwhisper.com. That’s L-I-N-K-W-H-I-S-P-E-R.com. And then finally, I wanted to mention my other podcasts that I run with my partner Tony called the Profitable Audience Podcast. And not like this one where I interview other entrepreneurs, the Profitable Audience Podcast is just Tony and I riffing about online business. Go check out the Profitable Audience Podcast on your favorite podcast app. Now onto the show.

02:00
Welcome to the MyWifeQuitterJob podcast. Today I’ve got a special guest on the show, Saba Mahepour. Now Saba is the founder of one of the best dropshipping marketplaces in the world because their suppliers are primarily found in the US and Europe. And their claim to fame is that if you live in the US or the EU, your customers can get their products super fast compared to other services that can take a month or longer. And most of you guys who follow me now know that I’m not the biggest fan of dropshipping as a long-term business model.

02:30
which is actually one of the reasons why I’m so thrilled to have Saba on the show today. Now, clearly there’s a bunch of dropshippers who are successful, otherwise Spocket wouldn’t be where it is today. So what we’re going to do today is Saba and I are going to go into in depth on what it takes to be a successful dropshipper and highlight what some of his best customers are doing. And with that, welcome to the show Saba, how are doing today? I’m doing great Steve, thanks for having me on the show.

02:57
So Sabah, you told me you used to be pre-med. How did that turn into Spockit? Like what’s your background is medicine, but then you became a programmer and then you created Spockit. So what’s story there? Sure. I’ll tell you a little bit background about myself. So I moved to Canada in 2012. I had just studied medicine. I gave yourself British Columbia. Did my pre-med in 2015 while we’re setting my door. It was August 2015.

03:24
I was watching YouTube and I saw this 20, 30 seconds interview with this very young guy who was 17 years old and he built this out called Summary and he sold it to Yahoo for $30 million. So that was a trigger in my head that if a 17 years old guy can build such a massive business of software, I should be able to. So that night I started programming. So I learned how to program using YouTube and I bought a course at Udemy. So literally

03:54
Starting that, skipped all my classes, sat at my door and started programming 16, 17 hours a day. When I graduated in 2015, I started building many different apps while I was working, full-time jobs, and built probably 10, 11 different apps and they all failed. And I think Spocket was my number 11 or 12th try, which we launched it on the Shopify app store back in 2017. I’ve been trying to scale the company since then.

04:20
So I’m curious, so you self-taught yourself coding, like you didn’t take any classes or anything like that? I spent $20 to learn how to program. I watched a lot of YouTube videos. I bought a course for a team of 1499 from Udemy and I downloaded this script bought by Apple, which calls SWF, programming the SWF language. And yes, I taught myself how to program. Amazing. Amazing. And you coded the first version of Spockit from what I understand, right?

04:48
I did. The first two months when we launched the beta version on Shopify, I wrote a portion of it. I didn’t write all of it because I hired this co-op student from UBC that was helping me out to write the first version. yes, I wrote a portion of the code initially. I’m curious. So was this a bootstrap company or did you get funding for that first version? So I think we were eight months into.

05:15
building Spockit after we launched it on the App Store, which I think was June 2017. A couple months after we did our seed round with the Canadian VC. An year after we got into this program called Techstart. And after that we closed seed round. But we have not raised any money since. OK, nice, nice. So we’re kind of a trap because we haven’t gone through series A and B round of fundings, but not

05:45
the BlitzTrav, you know, some money. I just find it amazing that VCs will be willing to fund like someone just out of college, but I guess it happens all the time around here. For sure. Yeah. No, it happens a lot. Yeah. Yeah. All right. So most of my listeners are either store owners, people who want to start businesses, especially in e-commerce. And I mentioned before in the intro that I’m not a huge fan of drop shipping. So I thought it’d be interesting.

06:15
to just talk about how to get started and let’s just start with like how to pick the best products to sell. Like what are some gotchas? What are some best practices? Sure. I would say, uh, me without getting into the details and the data, because a lot of those confidential and I will not be keeping them confidential. Uh, to our success with dropshippers and merchant, uh, what a confidentiality matters. But in general, probably my first tip was that, uh, for dropshippers that to not start an Amazon store.

06:45
your stores should not have 2, 3, 4, 500 products. The successful dropshippers are the ones that focus on niche stores. You could have only 1, 2, 3, 5, 10 products and that should be enough. Usually if someone wants to buy just a general product, would go on Amazon or eBay. For a dropshipper, you would stand out when you focusing on a niche, as sourcing a very niche product to sell. So that’s probably the first thought on the dropshipping side.

07:14
In terms of data, obviously there’s a lot of products out there that help you out to analyze what’s selling, what’s the high selling products, are the training products, what are the winning products. We recently launched this solution within Swapy Dashboard, which is all winning products. Also within the next two, three months, we’re launching another section that we did on our dashboard, which basically to show you the trend of different types of products over time, within the past four or five years.

07:41
And then you see the trends, you decide what type of product and what categories you want to sell and what’s potential selling in the market. So let’s say I was a dropshipper. I actually wouldn’t want to see those features there because like you’re selling someone else’s product, right? And the fact that you’re highlighting what the trend, do you want to be selling trending products is what I’m trying to ask. Because that means a whole bunch of other people are going to be jumping on it, which will, you know, when you sell, when you’re selling something and a whole bunch of other people are selling.

08:10
that generally erodes prices, right? It does. So by the way, when we talk about the distinction that we’re adding within our dashboard in terms of training product, it’s not just the sales across Spockit, but we actually partner with multiple platforms and getting access to what’s being the sell of different products on marketplaces like Amazon, eBay, across the Shopify stores, there are over 2 million of them. So the analysis is not particular to a product or particular to a shop.

08:39
particularly to the powerful is across the market, e-commerce market. So, that high level would tell you that what type of categories you want to get into, what type of products you want to get into. To answer your question, let’s say it’s August and September, and usually August and September is back to school season. And those type of products would be very popular. So it’s good for you to see that what is the trend in August and September.

09:05
Maybe it’s not selling fashion product. Maybe it’s good to sell back to school products. So it’s not necessarily a thing. It’s good because you know what you need to be selling those particular quarters or months. Okay. You guys support Amazon, right? From what I remember. are very close to support Amazon. think the next four weeks, we’ll be launching our partnership with Amazon as well. Okay. So what’s funny is you said you don’t…

09:32
I don’t actually see how it works on Amazon because the margins are like the fees are so high on Amazon, right? So, yes. So maybe I can explain that. What if I step back and explain a little bit more about Spockit and what the offer, different top of the up where I said the offer, then I can explain on the marketplace side as well. when I started Spockit six years ago, I wanted to do dropshipping and I did not want to use platforms that

09:59
automate drop shipping using Aliexpress because the products are lower quality. to lot of thought leaders, there’s 50 % chance of failure in the shipping. And also the shipping time was like four weeks to eight weeks was too long. So that’s why Bill Spock in the first place for myself to automate my drop shipping while I get access to the local suppliers. So that’s it.

10:28
of Spockit that we create to meet local suppliers. Over 90 % of our base in USA, Europe. Now we have over one and a half million products. have over 3,000 suppliers that we matter the source within USA, Europe. We vet them. And another interesting requirement for the supplier to join Spockit is to offer us 25 to 50 % discount on the products. So when you start using Spockit, you automatically get a good margin on each of those products.

10:58
So to answer your question, if our merchants selling on different channels, do they have any margin? They already have margin on the products that are sourcing from stock. So that was the first section that we launched five, six years ago, which is just US and European suppliers. Over time, we found that a lot of merchants still want to drop ship from that express. what we learned over time is that we should not be biased towards the source of suppliers

11:27
and how other marketplace should be functioned, but we should provide what our customers and our merchants need. And it’s still a lot of people wanting to do AliExpress dropshipping. So we created another section and we built this cool tool called AdiScraper, which automates your entire AliExpress dropshipping that has over 60,000 active merchants using AdiScraper today. So later on, we found that a lot of our merchants that actually become successful,

11:55
They want to get out of drug shipping and they want to build their own brand. They want to do wide-level brands. So we partnered with this platform called Jubilee, which helps you out to build wide-level products. So if you want to build a wide-level cosmetic product, can literally do that within the dashboard, put your logo, put your brand on it, and we will basically warehouse it for you and ship it for you. And this is the extension of Spockit for very successful merchants that want to actually build their brand.

12:24
for a long-term e-commerce business that they want to continue to scale over time. Interesting. I actually didn’t know about that feature. So basically, it’s the same product, but you can put your own logo on it, essentially, right? Yes. It’s our partnership with this platform called Jupeleat. Their software solutions outside of Spockit. They have a different interface, but we’re still promoting them. I mean, our dashboard, with this Spockit dashboard, you would see the wide-level solution, which would

12:53
send you to the Jubilee product. So I’ll explain a bit further. So later on, we figure out that not all the merchants want to sell physical products. Maybe they want to sell digital products. And if you’ve seen the past two or three years, NFT has become very big. So we actually built another solution, which is helping our merchant to sell NFT within their Shopify store.

13:19
So the product is actually available on Shopify, App Store, and our TV Longitude, which they call it Dnfd, Dropship NFT. And within a few clicks, you can actually create NFT and sell it down their store. So we’re trying to evolve and trying to offer our merchant whatever they need, without being biased towards a source and the type of things that we think is right, right? And whatever you think, we’ll provide it for you. So your best customers still cater to a niche, right? Like I have a lot of people that come into me and say, Hey,

13:49
I have access to Spockit, so why don’t I sell 700,000 products? But you’re saying like for your best customers that you know of and you don’t have to reveal who they are. They all focus on a very specific subset of products. that accurate? Yes. Okay. Yes. So if you see our highest tiers, which is our unicorn tier, we cap the number of products that you can push from Spockit to 10,000. And we do get complaints from our merchants that

14:15
Why do you cap it to 10,000? I mean, for us, it’s very easy to increase that cap from 10,000 to 100,000. It just takes probably half an hour to put that in our code. Because based on our data, we know it’s not useful for you to spend your time pushing more than 10,000 products. Even 10,000 products is too many. But we actually try to help you out to save you time so you don’t go and spend days or weeks or months and importing 50,000 products. Because we had those cases.

14:43
And you have to answer your question. Yes. The best dropshipping stores are focusing on a niche. They’re not creating another Amazon store. Okay. So I have several friends who are successful in dropshipping and the way they are successful is one, either they’ve ranked in search somehow and drive traffic to their products that way, or two, they’ve created content and built an audience. Would you say that’s the typical route for your successful customers or how are they getting traffic?

15:13
I think it’s very different. Different merchants, different dropshipping, acquired customers in different base. Maybe I can tap into a few of them. Some of them really good marketers. They’re amazing at paid acquisition. We actually had this very successful merchant that was moving millions of dollars a sell. And maybe we started talking to them, we found that they had a marketing agents. And they started this dropshipping store on the site. There were solo details in how much money they spend and how much money they make. So the ROI was always positive.

15:43
And that’s how they were able to scale their dropshipping store. Whatever they’re making extra, they were spending it back into paid marketing and they were scaling the company. And at some point they actually built a brand around their store. So that’s one type of people that are extremely good at paid marketing. They’re sector of customer that you have, that they have a good social following. They have a, say Instagram account that has 10,000, 20,000, 50,000.

16:09
We have some merchant that their Instagram account are a few million followers. So for them it’s very, very easy actually, because they’re not spending any money to our customer. They they spit out a dropshipping store, quickly use Spockit to source on products and they go on their Instagram and they announce it to their customer that this is my store. It could be a bikini store, it could be a female fashion store, could be a cosmetic store. Those type of dropshippers usually become very successful early on.

16:36
because they don’t spend any money to acquire any customer. So they’re positive. The cash flow is from the beginning. Yeah. We have this case study on our blog. We had this dropshipper on our platform that started as fourth store. I she started with one store, was successful. She started another one. Then she started another one. Then she started another one. I believe she was moving $2 $2.5 million worth of sales every year and very, very profitable.

17:05
But also many of the successful dropshippers, they start, they, they expand to multiple different stores when the first one is successful. Yeah, that makes sense. Would you say the majority of your successful customers are on Shopify or their own platform, you know, their own website as opposed to, cause I know you guys support some marketplaces as well. So I’ve gone on almost 90 different e-commerce platforms, like all of the most popular e-commerce platforms are Shopify, Weights, e-commerce, Equid, Square, Squarespace.

17:35
Welcome to Moor. We’ve recently launched our partnership with eBay. And I think in four weeks, we should be launching our partnership with Amazon as well. I can’t talk about marketplaces they don’t and how they function. But I would say probably Shopify merchants, the dropshippers are, on average, probably the more successful ones because Shopify offers a wide range of tools and apps to help them out to become successful.

18:03
Of your most successful Shopify stores, are they doing all the other things that a traditional marketer would do like email, SMS, automated sequences and that sort of thing? Just trying to get an idea. Yeah, sure. So I don’t know the details of like what dropshippers do and every dropshipper file is different. Some of them do, some of them don’t. But I think things like email, SMS, push notification, sub, or…

18:29
And live in later stages after you acquire a customer, because if you don’t have any customer, you don’t have any email to turn an email to. So also the first step is to really think about how you would start acquiring customer and how you would be capturing that email, like either in checkout or we get a blog post or somehow have it in your website. But first you need to create an email list and list of customers that are interested in the products of yourself.

18:55
But then you can retarget that through, or remarketing through sending emails, notification, SMS, or retarget them using Google audience, or even Facebook network. When you say like the margins are, like you make sure that the supplier can provide adequate margins. And let’s say you said 40%, right? Like a 40 % margin. What is that off of? Is that off of MSRP?

19:25
And are these suppliers actually selling their own products on their own website or are they just strictly suppliers? So, uh, again, you have wide range of different suppliers. have suppliers that are just pure suppliers and they adjusted the warehousing and the shipping, uh, to suppliers that are from Etsy and they’re making things limited edition and they’re handmade. Uh, we also have a few wholesalers within our marketplace that is wholesalers sourced up from multiple different suppliers.

19:55
And their responsibility is just warehouse and ship it. So they’re not the producer. They’re just aggregating many different suppliers. So we have those type of suppliers too. So you get a wide range of different suppliers. To answer your question, when the onboard supplier, there’s different criteria requirements. There’s a checklist. I think we have almost 10 different requirements for onboarding every supplier. Onboarding this supplier is a

20:24
multi-week, sometimes multi-month process, just from starting the conversation to going through all the checklists, onboarding them. But one of them is that they need to offer us 25 to 50 % discount of the retail price. if they are, let’s say, drift selling their store for $50, we request that it goes 25 to 50 % discount of that $50. So our retailers, merchants, have a margin as soon as they start

20:54
I’m sourcing Port art from SmartKit. Are those suppliers that sell on their own website, are they allowed to give promotions and discounts on their own site? Yes, they could. But one thing that you have to consider is that there’s a difference between selling Port arts on marketplaces on Amazon. And again, that’s exactly what I said. I explained the marketplace situation later on.

21:19
There’s a difference between selling a product on Amazon or selling on your independent online store. So if you’re selling at Amazon, you’re selling the same product, when you’re listing it, when someone searches for that product, it’s basically a price competition, right? The customer would be able to see all these products and see who is cheaper, they got to purchase it from them. But that’s not the case if you have your independent online store. If you’re selling them Shopify, you make 200 store, 500 store, and it passes the store.

21:48
could be selling the same product and all of them have a good amount of sale. Because when you have your independent online store, you will be basically targeting different audience from different location, different age groups. So you’re not necessarily overlapping on the target as much. mean, US on its own has scary amount of 50 million people. If 500 stores are selling the same product, then each of them could be targeting many, many people only by the year-wise.

22:15
And that’s all concerning Europe and many other regions of the world. So we do have this balancer on our site that when merchants try to search for product or push product from our marketplace, we try to balance it out. if a has been pushed too many times, we try to not show it in the search as often than a product that has not been pushed. So we’re sort of balancing the number

22:43
that every product has been questioned, it’s been sold on different stores to reduce the amount of competition on different products. But that being said, we’re not too worried about it because these are like independent store and it could be targeting different audiences. Yeah. I mean, if you have your own audience, like you mentioned on social that it usually doesn’t matter. People probably aren’t price comparison or doing comparison shopping and that sort of thing because they’re just buying from their favorite influencer. I guess the same is with direct response ads as well.

23:10
I am curious though, so you could potentially be competing against your supplier though, in certain circumstances. just… Yeah. I want to say so. want to say so. think about it. I mean, maybe in like a very small cases, but in the most cases, usually suppliers and manufacturer are not good marketers. They’re not good sellers. They’re good at producing and their housing and shipping.

23:39
Basically, what we do when we discuss, when we have our negotiation conversation with suppliers, we tell them, what if you really focus on manufacturing and get really good at that and let hundreds of other merchants do the job of marketing and selling it for you? So basically dividing the responsibility on the both sides. So no, our suppliers are actually super happy because we’re actually bringing more stuff. They sell that they had to actually spend money to acquire those customers. Do you recommend

24:09
taking your own photography of the products and writing completely new descriptions or, or I’m just trying to get an idea of what most of your customers do. Do they just take the stock photos from the supplier and the descriptions? Well, what are your recommendations there? Yeah. So, uh, we actually have this feature on the Spock side, just sample orders. We were not great to consumer products. So we do not allow people to call it a web platform and purchase things.

24:36
Well, this is just for sample order and it comes from a merchant. So a merchant could be ordering sample orders and they could do their photography themselves. Some do. A good number of them actually do that, but not everyone does because that costs them some money. They want to do their photography on their end. I personally do not suggest it initially. I think it’s probably better to not have too much cost initially. Push those products to restore, do a bit of testing, see if that product sells, and then

25:06
order a few self orders, do the photography and build your store around those products. That makes sense. All right. So here’s a, here’s a different angle of a question. Do you recommend building the audience first and then starting the store or starting the store first and then trying to sell your products? This is a really, really good question. I think the way that I can answer that is how I end up scaling Spock it as a company. Okay. So.

25:37
I, as I mentioned, I built 10, 11 different products and they all failed. Between now and the reaction failure, because when I launched my first product, I learned how to code. When I built my second product, I learned how to run Facebook ads. My third product, I learned to hire my first co-op student. The fourth one, I learned how to apply for grants and get some more grants. So every single of those products that I built,

26:03
Maybe it failed at the end, it wasn’t actually a failure. I learned so much. So by the time when I landed on a successful idea, like Spocket, I knew how to hire, I knew how to raise money, I knew how to apply for grants and then all those steps that are required to build and selling a company. So to answer your question, I don’t think you should spend a year building your audience and not starting your online store to hopefully get to that number of audience and then start your store.

26:32
In my opinion, you should be doing it in parallel. Building your audience and at the same time, trying multiple times building a dropshipping store. mean, the cost is so low right now. Yeah, but you can’t pay with Shopify monthly cost is 25, $30. I think they’re increasing the prices to $40. Spark is $30. Your cost is less than $100 a month. That’s honestly like going out twice. Like it’s like having two dinner, two lunch outside.

27:01
It’s like eight coffees, nine coffees. The cost is just so low that I think it’s really worth experimenting, even if you know you’re going to fail first time, second time, third time. But every time you learn something new, learn the first time you learn how to use Shopify, how to set up your theme, how to set up your taxes, to use a platform like Spark Air, how to automate using different Chrome extensions. The third time you learn how to write Facebook apps, and every time it’s going to cost you less than $100.

27:29
By the time that you have the arguments, you exactly know what to do. You exactly know how to scale your e-commerce store. That’s my personal opinion. Again, everyone has their own way, but basically, it’s else-free. You know what’s funny about this is that where you and I live, one meal could easily be the monthly cost, but people don’t perceive it that way. They’re like, oh, I’m willing to spend that much money on a meal, but-

27:54
When it comes to like a cost of like Shopify, for some reason they bulk at 30 bucks. It kind of just doesn’t make sense to me. Honestly, many of my friends that they literally think that way and I’m trying to change their mindset. I’m like, we went out last night and paid a hundred dollars on cocktails. And how would you not, how would you don’t see that costly about when you want to start a business, you think a hundred dollars is costly. Exactly. Exactly. I am curious. So, uh,

28:23
How does Spockit make money? Is it primarily from the monthly fees or are there any other ways that you guys make money? So we started Spockit on a subscription business and over time we wanted to move to the GMB style and taking a cut or doing a mix of both like Shopify does that they charge a flat fee and also they take a cut. We wanted to introduce

28:50
and marching out of the cell. It’s been like two years I’ve watched in Jerusalem, but we always said, not yet, not yet, because we always want more marching to get on our customer site, on our merchant site. So they say in business. So if they say in business, got to stay longer in the business and we got to make more money on the flat to everybody. So we have not introduced any cut of the cell. Maybe we do that in the future. We definitely wanted to do it and the experimented it a little bit for a month or two.

29:20
And it was very successful for us as a company, but we thought it was probably not the right time yet. I’ve been getting some complaints from other merchants that, hey, what are you charging us fees and stuff? So we tried to not continue that yet. OK, so it’s just pretty much the flat monthly fee. At this point, it’s just a flat fee, yes. OK. And just logistically, from just a drive shipping standpoint,

29:48
Do the people get access to the supplier in case something goes wrong or do you guys kind of handle all the go-between between the supplier? So I think it’s good segue that I talked a bit about our customer support team that I’m sure. Yes. And honestly, the past, the last five years, probably been one of my top two priorities all the time. I still every single day check 10 to 15 tickets. I read them and they give

30:17
comments to our customer support team. have almost 35 people doing 24-7 customer support. We offer two minutes to respond to them. So, I mean, you can test it yourself, Steve, if you go on our website and you send a message to our customer support team, on average, you should be getting a response within two minutes. These are part of our KPIs that we track on a week-to-week basis. And I’ve been doing it for six years now. I would say I want Saba to respond within two minutes. Is that going to happen?

30:47
That’s totally not, can I hug? Yeah, obviously I’m like an awesome team that they’re doing a great job. mean, if you go look at our reviews on Shopify, look at our reviews on TrustBite, they’ll make different platforms. see like how much they’re talking. The reviews are definitely top-notch among all dropshipping platforms. There’s no question. Yeah, I would honestly give most of that to our customer support down top of it. If you have some sector of KPIs, what that is that?

31:15
It has to be two minutes to respond time, below two minutes to respond time. They must get over 95 % customer satisfaction, NPS, on a week to week basis. We understand that some customers are always not going to be happy with what we do, so we can’t really be 100%. But every agent that we have includes 75%. So we have some very strict and very high bar KPIs on the customer support side.

31:44
So to answer your question, we wanted to be in the middle. If there’s any communication our merchant wants to do with suppliers, we wanted to be in middle. And we were in the middle for four years. Like any communication from merchants was coming to our customer support team. We were reaching out to the supplier, getting information from them, and getting back to our customers. And we did that for multiple reasons. But one of them was that we as a company probably have higher authority.

32:13
to send this message to suppliers and get a faster response. Then let’s say our merchants reaching out to the suppliers, it takes days or weeks to get the response. So also when we are in the middle, when we reach out to the supplier, if they don’t respond to us, let’s say within 40 hours or 24 hours, we can remove that supplier. But if the communication is directly in our merchant and supplier, we don’t know, let’s say that communication is efficient. We don’t know if suppliers are responding to our merchant fast enough.

32:42
So we could not have the KPIs on our supplier end. That being said, seven, eight months ago, we launched a direct communication between our merchant and our suppliers on a limited number of suppliers, which we actually agreed to expand it to all of our suppliers by the end of this month. So at the of this month, if our merchants want to talk to any of the suppliers, they could do that directly. And if they want to talk to us and

33:10
We reach out to the supplier, they can do that as well. I mean, this is a segue to my next question, which was how are disputes resolved? let’s say I buy something from this one of your suppliers and I’m not happy with the quality, but the supplier doesn’t agree. Like, do you guys mediate or how does it get all worked out? We are, we are mitigating. are in the middle. If, if there’s any issue happens in terms of the product, know, where it is broken or it hasn’t reached into the customer.

33:39
or there’s any issue like our merchant would reach out to us. I mean, not 100 % of the orders reached successfully. Even not all the orders from Amazon have reached successfully. think Amazon’s success rate is around 98%. We’re really aiming to increase that bar and getting it as close to 98-99 % on a success rate, but there’s issues on the order processing for sure. And we’re there. Our customer support team is there.

34:07
24-7 to help out. We do reach out to the suppliers. We are in the middle of transactions. So if the situation is in a way that we think is fair, we will process a refund to the merchant on our end. And we will discuss the resolution of the supplier later on. because the transaction happens within our system, we could be processing those refund in case there’s an issue with the order. Right. Yeah, that makes sense. So

34:35
Under what circumstances would the seller reach out to the supplier directly? You mentioned you just introduced a new program with certain suppliers or like that. Do you encourage them to speak with the supplier directly or do you prefer that they go through you guys? Yeah. So honestly, the reason that we launched that, sort of beta and making it across all four suppliers by the end of this month was not really for…

35:04
situation like disputes. It was more a situation that, let’s say, a customer wanted this product to be a different color, or they wanted to ask questions about the inventory of products. So we’re like, it might be unnecessary for our merchant to reach out to us and say, many inventory of this product left? And they reach out to the supplier and the supplier let us know, and we get back to our merchants. Like, do you have the color of these t-shirt? And they come to us, and they reach out to the supplier, supplier get back to us, and we get a

35:32
communicated with our merchant. So for those smaller sort of question, if there’s any dispute, we still encourage them to reach out to us. Because we’re in a position to resolve their dispute much faster and in more efficient way. Inventory accounts are automatically updated though, right? It does. OK. It does. Yeah. Let me ask you this question then. Since there is communication now, is it possible for the seller to

36:01
interact directly with supplier outside of Spockit. So I mentioned one of the reasons that we didn’t have direct communication for four years, four and a half years. There was multiple reasons. Like we wanted to increase the quality of service, but at the same time, we were in marketplace and we didn’t want to encourage our merchants around us. At the end of the day, we are in marketplace and we have to protect our marketplace and all the work that we put in place in the past six years to build this marketplace. So we wanted to protect it.

36:30
We really believe at this point, the value out of spock is big enough that does not work for our merchant dropshippers or for our suppliers to go around us to save $30 a month. So our starter plan is $29. You’ve came that you basically getting access to millions of products. You get access to our partnership integration with both Alibaba and Aliexpress. You get access to wide level solution.

36:59
You get access to our NFT creation, you get access to our winning products, you get access to image search, you get access to real-time inventory update, you get access to 24-7 customer support, and many, many other features and solutions that we offer. If you really think all of these are worth $30 a month, and you’d to go around us and do all of these things manually by contacting the suppliers, sure, I mean, you can do that. We really think we’re at the stage that our value add is much higher.

37:28
than saving $30 a month. Also from the other side, our supplier side, for our supplier side to work with all of these merchants on a direct basis and processing these orders, getting these orders, the transactions, all of this thing, doing that with hundreds of retailers, manually, it’s pain in the agree. Yeah. Yeah. So a lot of our suppliers, even if a merchant want to work with them outside of it, they wouldn’t work with them on the dropshipping side.

37:57
Let me ask you this question. So one way I teach it is like, if you have no money, start out drop shipping, figure out what sells and then maybe carry inventory of that item to get higher margins. Is there that option in Spock? Let’s say you drop shipping something really successfully. Is there the option for me to buy like 500 units and get like a bigger margin on that product from one of the suppliers? Yes. So as I mentioned, our suppliers offer 25 to 50 % discount. So if you want to process a bulk,

38:26
order with them. could again, have thousands of suppliers like this is something that we can discuss with our merchant on a case by case, but they could even offer up to 50 % discount which is a wholesale price and you could warehouse it and ship it yourself. Some merchant want to do the packaging themselves because they want to have repackaging a certain way. So they put it all quarter. They put it in their housing, their house or the warehousing. They create the packaging themselves.

38:55
They create the experience that they want to for their customers. So you absolutely can do that. Yes. Is that something that requires talking, or is that already kind of built into the system? So right now, we do have a feature that you can process sample order at a discounted price. But I think we have a limit of 10 sample orders per product. And the reason that we added that limit is because we don’t want to become a direct consumer. absolutely.

39:23
because we basically are negotiating all this discount with our suppliers. We do that with the condition that business is going to be selling this product to the end consumer. So there’s a limited number of sample orders that someone can produce. Sorry, order. But if they want to order and want to doubt, yes, they need to reach out to our customer support and we put to facilitate that. Another question I have is we talked about AliExpress dropshipping earlier and you added it because some people want to drop ship from AliExpress.

39:53
Looking at your customer base, are your more successful customers drop shipping from your US and EU suppliers as opposed to people from China? Yes, as I mentioned, let me actually share some of the title stats. Okay. Then I’ll answer your question. So we add over, I think at the end of April, we crossed 150,000 active merchants across all the commerce platforms that we partner with.

40:22
And that has grown by almost $50,000 in the past eight months. So it’s been a really great year on the growth and having more dropshipper trusting us and using it as a solution. Out of that, since we launched our AdiScracker solution, which is automated AliExpress dropshipping, we have over $58,000 of active merchant using that solution as well. So that high level of the usage base, in terms of orders,

40:51
I think I was actually looking at our order stats a week or two weeks ago. Roughly around 68 to 70 % of our orders are processed in our USA, Europe marketplace than AliExpress. So I would say more than two-third of our orders are based on suppliers that are fast-shifting and high quality and lead on to vetting and verifying their suppliers. Okay. But you don’t vet the AliExpress suppliers, right? That’s probably a hard problem to solve.

41:23
We cannot really do that. And there are some measures on the Aliexpress side, like you would be able to see the rating of suppliers, the rating of port right. So we’ll let that to our merchant. If they want to use Aliexpress, they can use our Aliexpress solution. But then on the vetting side, it’s on their end. They have to decide if they want to work with the suppliers on Aliexpress or not. Yeah. So what I’m getting at is it’s a much better experience to use your vetted US and EU suppliers. Than the Aliexpress. 100%. 100%.

41:50
And even the support that we offer afterwards, we cannot really offer the support for Aliexpress. So if there is a dispute with a supplier within Aliexpress, because we did not vet them, we did not verify those are not verified suppliers, they cannot handle that. But within our marketplace, we can help with the resolutions and any sort of disputes. I just thought I’d ask you this question.

42:16
Do you know of any people who are doing AliExpress dropshipping successfully in the long term? So I know people that are doing great building AliExpress dropshipping and then making good amount of money, but in short period of time and then die afterward. I mean, they just sort of dies after a couple of months or maximum, I’d six to eight months. I think the final winning product, they go hard on marketing, failed acquisition mostly, they sell a lot.

42:44
some of them honestly sell a few million dollars in like two or three months. Really they’re making very good margin, very good amount of money. But very soon the competition grows and becomes so big that you can’t really compete as much. So they usually die and their store dies and they look for new products to sell. But the customers that sourcing local suppliers might not overnight like in like a month or two get to a million or two million dollar sales.

43:13
but they feel like more in all terms of sustainable businesses. Yeah. I am curious, and maybe you don’t even have this data, but how many of your customers who are the successful ones start out drop shipping and then move on to like the white label option that you mentioned and even going on to private label? Is that, is that like a stepping stone that you guys are seeing with your customers or do they primarily stick with drop shipping? So, uh, that’s a really good question. Uh, so you know, Shopify at launch Shopify plus, think as of 14. Yep.

43:42
And I listened to the interview with Toby and Harvey, the wide-diamond Shopify Plus. The reason wasn’t to get into enterprise e-commerce initially. The reason that they started Shopify Plus was that there’s so many people who are coming to Shopify, they become successful. But as soon as they become successful, they would have gone to use Magento or other platforms. So technically, the best merchants of Shopify, they were leaving them after they become very successful.

44:11
So that’s why Shopify started building Shopify Plus and you basically graduate to their Plus solution when you start selling auto-naughty like $100 million a year. Don’t quote me on that number. It’s like if you’re making like six to 10 million or something, it makes sense to upgrade or something like that. I can’t remember the exact number, but yeah. Yeah, so those are more like merchants that graduate to a Plus customer. So the same situation happened to us, like a drop-share pay was…

44:40
It’s for beginners, people that are entrepreneurs, people that want to start businesses. And the ones that become successful would graduate out of production and they want to their own brand. They want to warehouse their own product for a very long term, building the brand. And we weren’t part of that market. We weren’t part of, we weren’t a solution for them. So we’re part of this platform called Jubilee, which right now it’s purely focusing on cosmetic products. And we’re going to expand that to fashion products and other types of products too.

45:09
So if your dropshare store becomes successful and it’s helpful, you want to build your brand, we can help you out with that as well. you’re using sort of our system and our customer support, the same level of support, the same level of solution that we have, but now you build your own wide level brand. another very interesting stat that I might be just sharing too much, but I think this is very interesting stat that as soon as we started our partnership with Jubilee four months ago, they went.

45:37
from pretty much zero to over 12,000 active merchants using that solution now. So they’re scaling too, which on the Y label side and private label side, scaling is very beneficial because it significantly reduces the cost of shipping and warehousing. Yeah. Nice. OK, so it’s nice to know that you guys are going in that direction. It seems like there’s plenty of demand for that. And right now, there’s no extra charge for that. Is that correct?

46:04
Jubilee has its own sort of fees, which is like, honestly, very small. It’s like $19 a month. I think there’s a very small card of every cell, but that’s very small. It’s not many. But it’s not using usability. It’s the same. Like you use the Spocket app, you can import these white label products directly in your store. Right? It’s experience. It’s the same experience, but it’s a different solution. Got it. Okay. Okay.

46:34
Cool, Salva, I know you got to go. Where can people find more about your company if they have any questions and that sort of thing? Our website, spokken.co. We have our customer support team. guys see this purple bubble in there? The right bottom side of our website, our app, you can reach out to them. You should be getting a response in two minutes. If you don’t reach out to myself directly, my email is salva at spokken.co. Try our customer support. Again, if they don’t respond in 10 minutes.

47:04
They send me an email. But yeah, that’s how they can get more information. have our help center. I think pretty much have articles and content for every action within the dashboard and our solution that should help out as well. Yeah. mean, one thing just I’ve noticed, but by the way, if you guys are listening, Spongebob also has a free program where you can just kind of look at what’s being offered. And then the customer support is

47:33
is top notch compared to the other dropshipping marketplaces. I don’t do dropshipping, but I do see it as a good stepping stone for other things. And your answers actually confirm that with me today in the interview. So, Saba, thank you so much for coming on the show. I really appreciate your time. Thank you, I would just add one more point. Yes, sure. we end this conversation, last year, we actually launched our Academy. This is another section that added in our app that if…

48:01
There’s many courses over 50 quarters, most of them are for free. So if customers want to learn about SEO, they want to learn how to do marketing or how to start the dropshipping source set up in the Shopify store, there’s a course about it. That’s honestly the last thing I want to mention. Maybe if you just send me those links, I’ll link them up in the show notes. The Shopify facility. Yeah. All right. Well, thank you so much, Sala. Thanks, Sastif. Appreciate it.

48:27
hope you enjoyed that episode. Now if you have any questions about dropshipping, feel free to email me over at steve at mywifecluderjob.com. And I hope this episode helped to clear up any questions that you may have had. For more information, go to mywifecluderjob.com slash episode 462. And once again, I want to thank Link Whisper for sponsoring this episode. Now if search engine optimization is important to you and you run a blog, make sure you check out Link Whisper over at linkwhisper.com.

48:54
I also want to thank Zipify and OneClick Upsell for sponsoring this episode. Seriously, adding this one tool will instantly increase your Shopify revenue by 10 to 15 % with doing very little work. Go check it out at zipify.com. And if you are interested in starting your own e-commerce store, head on over to mywifequitterjob.com and sign up for my free six-day mini course. Just enter your email and I’ll send you the course right away. Thanks for listening.