DISCOVER HOW TO BUILD THE RETAIL STORE
“It doesn't matter what others are doing
It matters what YOU are doing"
What is dropshipping? [9:40]
How you manage the customer's expectation? [17:29]
Is it actually possible to make money from a dropshipping business? [27:29]
Tips on how you can approach companies and try and get them to buy into the whole dropshipping lifestyle? [33:05]
How much product description is important and how can help us to sell more? [43:05]
The best inventions are born of necessity. When Charles Palleschi purchased a site that sold popcorn, popcorn kernels, and popcorn related accessories ecommerce business, he quickly realised that he needed to scale and parts of his business. That need inspired Charles to create Spark Shipping, the leading dropship software which automates millions upon millions of orders for eCommerce and retail entrepreneurs every month.
00:02 Salena: Hey there, and welcome to this week's episode of the bringing business to retail podcast. The best inventions are born of necessity. When Charles Palleschi purchased a store that sells popcorn, of all things, popcorn kernels and popcorn related accessories, the e-commerce business was a stepping stone for him to realize that if he wanted to grow he was going to have to scale and automate parts of his business. And that need inspired Charles to create spark shipping, the leading drop ship software which automates millions upon millions of orders for a-commerce and bricks and mortar retailers every single month. I am really excited to be talking about drop shipping because it is something that a lot of retailers may not know that they are even doing. So welcome to the show Charles.
00:53 Charles: Hey, thanks a lot for having me on.
Salena: This is a New York accent am I right?
Charles: Close, from Australia, it may sound like that. But Boston you are very close to that.
Salena: Still getting use to my accents. Like Americans love Australian accent. We love all the individual accents.
Charles: You will hear it pretty quickly. It's very Boston.
Salena: 01:19 Great, okay. So tell us what exactly is drop shipping because I have a feeling that some of the people who are listening today will know what it is, but others will actually be doing it already in some sort of informal arrangement in their store. And they don't even know that they are doing it. So what is drop shipping? Charles: Yeah, so what drop shipping is kind of a basic definition is any time you're sending orders to a vendor for purpose of vendor, let's say it's a manufacturer or a distributor. You send the orders directly to them but you are not taking physical possession of the inventory. So you're not going out there and purchasing X number of units bringing it to your warehouse or your local store, your 3PL. You are sending one off exactly, they send the order directly to the end customer. So you are able to send orders small orders one order at a time to the vendors.
Salena: 02:10 Without actually having to fork out the money to have the inventory in the first place.
Charles: Exactly, so you don't have to do any kind of predictions about price to sell. You can just send the orders as they come. They make you do a lot of different interesting things. You do't have to make some major bets, you can try a lot of things. And that enables you to try some different things that typical warehousing doesn't allow for.
Salena: 02:36 I have always found drop shipping is great for really big bulky items because not everybody wants to be paying to warehouse those. I was in the baby, baby industry and so I'm thinking in my experience things like cribs and rocking chairs, and any nursery furniture. That's the first thing that pops in my head. Because having that in our stores, we need to have the one item on display so that people could have a look at it and maybe different colour samples. But having all that inventory, one was going to cost us money in real estate. Two meant we had to move premises because our stock just wasn't that big. And three the actual logistics if trying to work out how to ship that item to somebody was just mind boggling. And trying to train my staff on how to calculate shipping, it just was way too hard basket.
Charles: Yeah, that's how we got started with furniture basically. Furniture. bed that sort of thing where those industries have done it forever. You go in a typical mattress retail store for example. The mattress might be there but it's always sent to you from the manufacturer You never go and get the mattress and put it on your roof and drive home. So they've always done that and that's kind of where drop shipping started from just because they've always done this. But then as online shopping has grown that's where it has expanded where almost everyone has some form of this now. So that's what we see more and more.
Salena: 03:56 So how did popcorn get into the drop shipping business because popcorn is small. It seems like something that; and I can't imagine it's expensive. So it seems like the kind of item that wouldn't necessary lend itself as the perfect drop shipping enterprise. How did you get started into drop shipping?
Charles: Yes, so I originally started, this is going even further back, originally corporate job and that sort of thing. Went off and did some freelance consulting. Somewhere along the way and it's all technic consulting, building out, custom's offer. Somewhere along the way I decided to purchase that e-commerce store of popcorn. No idea why popcorn, it just kind of came across and then I purchased that. And that's kind of how that happened. So it wasn't that I grew up in a carnival and have a love for popcorn. It's just something I kind of found and stepped into. And through that, that was kind of the first introduction into e-commerce and it's kind of how the spark shipping was born. The reason why drop shipping works for that business, it's something I would actually recommend for a lot of businesses even with smaller items. Where for large things mattresses make total sense. But then in the exact opposite direction when you start looking at very small items. So for example, a popcorn machine, all different parts. Better example be automobile distributors where you have headlights for hundreds of different cars, different years, different models, different parts. All different things. It doesn't make sense to stock all of these but you might want to stock some of them. You are just not sure which ones make sense, which ones are going to be best sellers. You are able to bring a whole line of products in that you've never had access to. And maybe initially you are not getting as great a margin because you do have to drop ship them. And there are some extra fees involved with that. But the nice part is you can trial these and you can really go out there and figure out what's selling, what your customer is like. And then based off that you could start saying, okay, maybe I want to do this hybrid and pull in some of these products and ship these from our warehouse or our local place of business. And we drop ship kind of a long tale of products. So these obscure products, just headlight on the 86 Chevy.
Let's drop ship that, we sell one a year. But this one right here that we can sell X-number per week, that we are going to pull into inventory. It allows you to kind of pull in some different inventory, test it, see what works and then make decisions based on that which is really powerful. That was the benefit of the popcorn business. We had some stuff local, we did some FBA, that sort of thing. We were able to for the long tale for the vast majority of the skews go direct to the manufacturers which was great.
Salena: 06:44 Okay, so I had it in my a head a little bit differently. SO I thought you were the distributor of the popcorn. SO that's my fault, I misinterpreted it. I misinterpreted that. SO you actually decided that, instead of owning the popcorn inventory, you would go straight to the suppliers. Now tell me how that works in the case of; this is one of the questions that I have for you. How does it work> Say you've got your popcorn machine coming from supplier A and Caramel popcorn coming from supplier B. How does that work for you in the sense that 1, you probably going to be paying two sets of freight to the customer and 2, as a customer, I am a little bit miffed if my popcorn machine turns up and I don't have any popcorn to go with it? So how do you manage that?
Charles: Yeah, that's definitely a challenge where you don't necessarily know, in the case of multiple distributors that carry the same product. You might not even know when the order comes in, who is going to have that product in stock at that exact moment. So this is something that as a retailer you have to figure out your shipping averages and get kind of an idea and dig it in that in some orders you are going to be doing really well and other orders not so much. Hopefully, it's not extreme, popcorn machines are actually tough one, where if you are sending a popcorn machine to Alaska from the continental US, shipping is not cheap. SO you have to be careful in those sort of things. But yeah you want to cut it big in those margins and get an average and look at it that way, if that helps.
Salena: 08:29 And so how do you manage the customers’ expectations as well? Because I know as a customer, it does really annoy me here in Australia, even if I order from; there is one department store which never has what I want. SO I always have to go online and buy it my size. And I don't know how it works, honestly, in my brain they clearly are losing money in their online orders because they will send me one product from one store postage. And postage here in Australia is ridiculously expensive. Minimum you probably going to be charging is bout $5-7 for one parcel. And so if I order three things they might come from three separate stores. And they maybe haven't even cost $7. But it's really annoying. I wanted to but an outfit, I like go shopping very often. So if I buy something, I kind of want them all turn up at the same time. And there is nothing worse than the belt turns up three days later than the dress. SO how do you manage that customer expectation?
Charles: Part of that is the vendors you work with are gonna give you certain guarantees. And some vendors are very good at this, others not so much. So depending on who you are working with, some might be able to say these regions we can guarantee two day, these we can guarantee three and it kind of goes that way. Other manufacturers are just not great at that. So it's really up to you as a retailer of choosing, you know baking that into kind of who you want to work with. If you are able to pick and choose your manufacturers, distributors, you can start selecting the ones that have the best availability. Some of them have multiple warehouse kind of here in the US dotted across the US where they know anything in the continental US they can reach in two days. SO if you place an order they can get that to you. Other vendors might say we have one warehouse in Cincinnati if you order from Mexico that will be five day, but if you order something a little closer, we could do that same day. SO sometimes it's depending on the manufacturer, it's difficult with some of them. So it really depends on who you are working with and picking is the retailer to work with some folks that are better at that part essentially. And you kind of learn overtime which manufacturer is doing well and which ones are kind of out meeting the shipping expectations. Because they don't always do the same thing.
Salena: 10:45 Do you think it's important to write in your product description or make it clear at sometime through the checkout process; I mean I know this is not necessarily your area of expertise but as somebody hears the drop ship, I'm sure somebody has ordered products online multiple times. Do you think it is important to let the customer know that the items might not arrive at the same time or they might come from different shipping companies? Because if just because one thing turns up it doesn't mean the other thing won't turn up. Do you think it's important to actually stress that through the customer journey?
Charles: I think as long as you are clearly communicating tracking back to the customer and they see, here are these two orders. Here is the tracking for these items in your order rather, these other items have not yet shipped. They get those notifications, and that kind of sets the expectations as they go. And this is something even of you order from Amazon. Sometimes you'll order five products, you'll see three have shipped in this order and you'll see two are still pending. So you kind of just know that you are expecting them in different lots. So as long as you kind of group it like that. What you don't want to do is send one tracking number and say your order shipped, great. And then you get the order and two out of the five orders have arrived and the other ones are five days later. You just want to set the expectations as early as possible. And you might not know when the order is coming in exactly when. But as long as when you get in that tracking you kind of let them know, hey these two have already went. I kind of found that usually what people are shooting for. And even Amazon doesn’t get it. You don't know sometimes when you place a large order on Amazon, how many items you are gonna be receiving in each order. You kind of find out as the tracking is coming in the groups.
Salena: 12:27 And inevitably the thing you really, really wanted is the thing that is still pending. [laughing]
Charles: Well, and hopefully on the product descriptions, you are able to pull that data from the manufacturers. Typically when they do give you an inventory feed, and this is kind of a drop shipping, thing you'll find. They'll give you a feed but a lot of times you are able to say, these products are two day shipping. These products are five days, these could be up to a week sort of thing. Then you can pull that data and out that in your product data. So right on your sight you can actually show and set expectations for shipping times for any given product.
Salena: 12:59 And these are something we used to do on our website where we had very informal arrangements with a couple of suppliers for those big nursery items. Nothing as sophisticated as your software and we used to say, a little bit...we used to say, this items ships from our warehouse and maybe delayed one to five days. We didn't have a warehouse. we just had a stocked room but they were shipped from the drop shipper. So we kind of just say these items shipped from our warehouse. It maybe shipped separately and with the delay of one to five days with your other items. So I just feel as a customer that you need to be aware. And I like the idea that you can have these multiple tracking numbers and I'm curious how you do that. Because I've worked with most of the big e-commerce platforms: genter, shipify, and when an order comes in, I haven't seen the option to send out multiple tracking numbers for different products. Maybe that's an add-on but tell us how does that work? Because seems like a really good answer. The way you phrased it seems like the perfect answer to managing those customers expectations. So tell us how does that happen?
Charles: So most do, and I know Magento supports it and Shopify definitely14:18 I believe Big Commerce as well. But you can split on top of the order level the...14:24 shipments. In each shipment there are multiple items. Each shipment has a single tracking number. So one of the things we do is expart shipment. What we do is basically automate the connection with the vendor. We know these two items are going to vendor A. We are expecting those two items come back on a tracking number. We know vendor B got three items, we are expecting those to come back. SO we are able to kind of group them based on that and hopes that those expectations. So that's kind of one thing we've worked very hard to be able to push that data back so then the end user gets an email saying, these two items have shipped, these three items have shipped. And kind of set it that way. SO they don't know it's come from different vendors, they just see different tracking numbers.
Salena: 15:06 Great, which answers the question that I was asking, how did you manage their expectation. And I haven't seen that before because clearly I have not used your kind of software. However it's just being this is shipped, this is shipped. So I like that idea that you can have the different tracking numbers for the different; and actually attributed to the different products. So the person does know what to expect.
Charles: Yeah, the more granule they can get the better with that case. The more day you can get back to the user, the more they can kind of view into what's happening. They might not have exactly what's going on. But the more you can give them, that usually kind of gives everyone a better feeling. And it also reduces your kind of customer service inquiries of hey, where is my package? They kind of see at least something moving through the pipeline so that they can know what's happening. It's just not they send in an order, it goes into a black hole and they hear back a week later that it's back...16:00 So that's not the experience you want.
Salena: 16:03 No, and that's where I was going to with that question of having been on the end of the phone with the person say, hey I ordered this piece of furniture and only one turned up. And then you have to get in to system and works out what's going on and call the supplier and all that kind of stuff. I love the fact that your software has just completely automated that process. And so thank you for creating it. I haven't used it but thank you from all the retailers out there.
Charles: Yeah, we had the same pain plan with the popcorn business exactly where you're going with an order. And you place it with the manufacturer and they say it's been out of stock for a month. You go, oh no.
Salena: 16:43 How do you deal with that?
Charles: So, one thing Sparks Shipping does do, is where; so first of all these vendors, typically most vendors, and this is in a hard and fast. not what everyone does. But a lot of times vendors do this, we will provide you up to that inventory. Up to date could mean real time, it could mean every hour, every day, hopefully better than every week. I've seen every quarter. The more up to date the better. I have seen never which is an interesting one. Hopefully, provide you something let's say every hour. One thing our software does which is something everyone should be doing as often as you can, pull those quantities in and updating the store. So when the vendor is putting out a stock, it drops out of stock in your atore. So it kind of nips this one off earlier on where you aren't even getting orders and be out of stock. Because if you are able to pull in the vendors inventory corners, updating your store, you are not even getting those order submissions. So you are able to do that kind of march your way around the process and afford those kind of calls.
Salena: 17:49 We've all been there. I worked three of those, then you ring the supplier and then you only have two. Then you have to work out a solution and you have to try and shop around. When it would have been easier if the person only could buy two?
Charles: Exactly, and sometimes you have to call then and say, well, we have this other colour, we would want that. And then you have to leave a message and they'll call you back. So it creates like this extra hour of work. Also, an online business, in drop shipping, the margin is not that huge. So if you have to spend hours figuring out an order and doing all these alternative things in your order, it really set to eat in your margin pretty quick. So the more you can streamline and the less of those customer service calls, the better off for everyone and the happier your customers are.
Salena: 18:32 Yeah, and we won't have the customers to like come back. But margins is the one thing I said to you I wanted to talk about before we jumped onto the podcast. So, here in Australia, the margin for a drop ship product tends to be around about 10%. If you're lucky you might get 20. If you are really, really lucky you might get 30. But we are talking quite low margins for drop shp products. And in addition to that, you may have to weigh some of the shipping if you offer flat rate shipping. If you've been silly enough for things like furniture to offer flat rate shipping. And you also have to deal with the things that are involved. I'm sure that the fair feel software, the fair feel website, does your payment processor. So when you add all of those things together, is it actually possible to make money from a drop shipping business?
Charles: Yeah, so I mean the first part of it is the margins where you see so many vendors and other folds who name themselves as a drop shipping vendor. There are different levels of vendors just to make that clear. These vendors if you are in the retailer or you just opened your e-commerce store yesterday, it has a little coming soon page. You are able to go out to them and say, hey, can I drop ship for you? They'll say, sure come on. And you are able to actually sell the products. Those tend to have the low margins because they accept everyone. You are competing with everyone out there. And there are products on Amazon you see fifty other people selling the exact same product and you realize oh, wow and there's people selling Amazon. So, there make that kind of money on its way and there's going to be some real But, you kind of move up the food chain and say okay, we have the say, we have a little more established business Day one we went to and said, hey you know, can we sell your products? They said absolutely not. At a certain point a while later we had vendors approach us and say hey, what do you think of this we have these products, it started working in the other direction where people actually said, oh they're doing a decent amount of business. There were some of the vendors, the more exclusive ones, you tend to make much better margins because you're not competing with everyone out there that sort of thing. You also, and some of those guys depending on the industry, there'll be things like map pricing where there is just a set price and that's no kind of you know you're not all beating up everyone up over price, everyone sells at the same price. So, a nice blend of some higher vendors, some map vendors. You start to get some decent margin that way, so you are able to make some money once you move up the food chain some better vendors and in any event at that there are some real small vendors that maybe they don't even you know have like a drop shipping official program, it's really like the vendor that people don't know about and those make some really great margins where they might be the only ones selling that product or they have only a hand full of people carrying it. So, you are able to go in there and really kind of do something that not a lot of folks are doing and really you know set the market price.
Salena: [00:21:51] Oh I like that. I always love funnier niche.
Charles:[00:21:54] And once you're doing you go deeper into it. You start uncovering these little gems. But, day one there are the vendors out there that ever sign you know you put the form online and you get the email back twenty minutes later saying you're approved and they send you a list and great, you start looking for prices and once you do those calculations of okay, here's how much I have to pay for my shopping cart, here's how much I have to pay Amazon or Ebay, whatever all the fees are and once you ship any sort of tax like that you've realized oh gosh, like that's you know...
Salena: [00:22:27] That's one dollar
Charles: [00:22:28] Yea, okay. I can do all this and return one, now I'm in the whole five orders. Those initial vendors you know great to start with but you want to start looking at you know what else is available and that's where the margins come into play.
Salena: [00:22:43] I think that people listening here aren't necessarily in a position where they're like, hey, I'm just going to start and ecommerce business, I'm just going to be a drop shipper. I think the people listening today would look at drop shipping as another line of inventory that they could add to their already existing base which personally I think is much more sustainable way to do it. Like you're saying you can then go in and pick the kinds of people you want to work with based on the products that work with your store rather than being one of these people who has everything from the headlights to the popcorn to furniture in hope that if they dump enough product unto the internet everywhere they might make a few dollars.
Charles: [00:23:26] If you use it to experiment you're not just saying it's not for you to carry products or drop ship and this is what I do, you're using it as discovery process. We found out the popcorn site that this one particular top on a cotton candy machine (I don't know why I remember that) it sold very well. I don't know why, we couldn't tell the machine itself, we could tell the top on it for some reason. So, we bought the top of machines and we were just able to sell those time after time. So, we started carrying like actually stocking those, I don't know why but it was only like the top of machine, and it just turned out that was great. But, we would have never found that because that's not something you will go and say let me just buy the top of these cotton candy machines. But, using drop shipping you're able to just try a lot of different things and realize oh wow that for some realize I can do that one and just go deep on that.
Salena: [00:24:18] Obviously you experience with these vendors who have drop shipping set up, it's how they do their business. Do you have any tips (I'm kind of going from left field here it's okay if you don't.) Do you have any tip where if you have a current supplier and you think it is bulky, is it the kind of thing that we do get asked for but we don't want to be holding stock all the time or there is a product that you would love to maybe think about selling but you don't want to invest the money in the inventory. Do you have any tips on how you can approach those companies and try and get them to buy into the whole drop shipping lifestyle?
Charles: [00:24:59] Yes we get this a lot with, one thing the shipping does is it automate the connection of inventory orders and tracking. One thing we can do is pretty much send or receive those in any format the vendors want. The kind of reason behind that is when you approach a vendor the best thing to do isn't to tell them hey, I want drop shipping and here's how I'm doing it and this and that. Approach them and find out whether you send them an order, what are they doing with that data? A lot of times they might be key into this system putting in different format, typing in a spreadsheet and then importing it to something. But, when you're sending them the data, they're doing something and sending that to something else. So, kind of what we found is that when you talk to the vendors initially, find out how you can make it easy for them if it's some reason they have some huge system they built in the 1980's and it has a CSV in very peculiar format, if you can format it like that and say, hey, I can send you an order one at a time but, I'm going to send them in the exact format that you're using today. Then send me back tracking the exact format you're using. It's a lot better response than going in and saying I have this thing I call drop shipping and you know you kind of educate him on it, it's more going in and saying you know how can I send you one order at a time? What's the easiest format for you and making it easy for them so they don't have to change their work route. A lot of these vendors have built out these complex systems and work flows over years and years and they're not going to change. So, finding out how they do it and just fitting into that is really one of the keys to getting folks into this just making it easier for them.
Salena: [00:26:45] So, your software, does both parties have to have the software? Can I have the software and it integrates with their system without your software? Does that make sense?
Charles: [00:27:01] It's a good question. The goal of spark shipping, we work with the retailer and we kind of know that [00:27:08] [unclear] the vendors do what that do and regardless of what the retailers want, so if the vendors want to receive a CSV that's what they're going to do and they're not going to change it for any given retailer. If the vendors have and EPI, if they use EDI they just do that you're not going to change them they're going to say hey, if you want to send us an order this is how we receive it. So, with spark shipping does and what our goal is we send orders to vendors and get tracking from them in any format they do today. So, we're able to an order into as many format as you need, we could send one vendor a CSV, hit one vendors ATI, send an EDI file to another vendor and then receive back tracking in those formats as well so the vendors don't need to do anything different. So, you're not going and asking them hey, you know log into this other site and key some extra data in or go check this everyday, you just find out how they want to receive the data and what spark shipping does is take the data from a retail side and convert it into anything the vendors use today.
Salena: [00:28:15] And so when the vendor puts in the tracking number how do you get that back again?
Charles: [00:28:24] So, as long as they can send it back in some sort of programatic fashion, the only thing we found that don't work very well with the body of a [00:28:32] [unclear] female we've had vendors literally email back just prat numbers and then in a text email not great the [00:28:41] that comes out relatively sketchy the data could misinterpret somethings but what we found is as long as exporting it from some sort of system, exporting in a CSV in a spreadsheet they might be emailing it, they might be dumping it unto a FTP site, htp, they might have an API OS, they might use EDI files anything like that can be extracted and then what spark shipping does is knows it sent them two items are coming back. It sends a tracking data backup to the retail store and then the retail store in turn notifies the customer. You never want the vendors notifying a customer, you never want anything between, you always want the data back to retail side of your store so that all that email and all the correspondents come from you. So, the customers never know hey you know maybe three products shipped out of your warehouse and these other two are going over to this manufacturer. All they see is an email coming directly from you, and hey here is a tracking number.
Salena: [00:29:46] Great, great. I like that. I like the seamlessness of the whole thing.
Charles: [00:29:51] Yea, the goal is to just make it easy for everyone right where the vendors want this because they want to just send the data format, they want they're not going to for any given retailer. As a retailer you ought to get the data to them as quick as possible because for example if you hit an order you know Saturday morning at 2 a.m. the vendors usually (drop ship vendors) the inventory is first come, first serve sort of thing. So, if they only have two left in stock and you split that order Saturday at 3 a.m. you're going to get that. But, let's say you're queuing up orders all weekend okay let's start submitting some orders you might find that products when you received your last inventory update might have gone out of stock. So, getting you're orders and all that data to the vendor as quick as possible is one of the kind of keys of securing those quantities and saying okay, you had in stock, I sent you the order right after you know those items are mine. So, you're not missing those items that way so it's another thing, the faster you can do that as a retailer the better off it is for your customer.
Salena: [00:30:59] That being able to see when the inventory runs out is also so good because if the inventory runs out at 2 a.m on a Saturday morning you don't want to get another ten orders over the weekend and then have to be exactly where we started of before making all those phone calls trying to work out when the stocks will be back in, managing the customers' expectations. All that kind of stuff that just eats into the time that you're trying to get back by trying to use a system like yours anyway.
Charles: [00:31:24] Well the worst I've seen is, let's say you saw one Amazon and three other retailers selling the same product, two of them are using a system like this and you're not, it might go out of stock Saturday morning at 2 a.m., their item is out of stock you still have it in stock, you start getting orders many, many, if it's Amazon, let's say it's a popular product you may get all the orders at that point which it sounds great but now the vendor doesn't get them back in for a week, Amazon is going to start digging you off you're going to have to cancel the order or late shipping and your score is going to go way down. So, being able to actually know is pretty critical when you start going to these market places cause it will hurt you quick if it's a popular product and you're the only one selling it cause you will get all the orders and that can be a bad thing in some cases.
Salena: [00:32:16] We love to have all the orders but only when we can fulfill them.
Charles: [00:32:20] One of the few times you don't want all the orders on Amazon is when you can't get the products in.
Salena: [00:32:25] Tell me if you have any trends that you can say on the horizon for 2018, we are already the first quarter in and so what are you seeing happening in ecommerce land?
Charles: [00:32:38] Definitely the growth of Amazon things like that is just getting more and more. So, we've kind of seen more folks are getting intimate and can provide value in their particular niche, that's better where if you're going out there and you're trying to sell the same products everyone else is trying to sell, you try and dump money on Amazon, it's a war and unless you're equip to fight that, there's a lot of folks who are and it's going to be a battle. We kind of see that retailers are doing well. They're finding a niche and they are providing a lot of value in that niche whether it's having a very well built system of like category where it makes it easy to find products. So, a good example is auto parts manufacturer, you might be looking at different parts and trying to find what are the exact things that fit my car or my boat or whatever it is and you're able to easily find that, that's something you can't do on the big market places so you can find that value. and people aren't going to find for example you know popcorn machines at a carnival that's something you know the guys working in the carnival probably aren't going to Amazon and buy there, machine So, they still need a place to buy it and they need to compare them so you have these niche sites on these items that allows you to still do well in the ever increasing presence of Amazon and the other big market places.
Salena: [00:34:07] One of the things I think people over look and I've talked about this before I've got to download a link people forget to just personalize the product descriptions and this is where I feel especially if you're drop shipping if you can actually somehow see the product or at least rewrite the product description to include the answers to questions then they're not going to buy it from you. If I'm buying a piece of clothing and it's just the stock standard manufacturer's description but then you've gone in and added, we fit that this item tends to run a bit large or the hem, something about the hem, something about the detail. All of a sudden you actually know what you're talking about, even if it's a little bit more expensive I'm going to go with you because you didn't just mass produce the product description and the picture.
Charles: [00:35:01] Totally agree, we found out sometime we have new people starting off and they say work with this drop shipping manufacturer. They have a hundred thousand items, I'm going to load them unto my store and you start looking at those descriptions those vendors send and it says green shirt, and it's like one picture it's just kind of like bizarre picture that doesn't even look right and you can tell they use the same picture for a hundred dollar product. It's adding value and that's what I mean by adding that value there of having exact same thing built out categories, built out descriptions, really kind of show the exact size, specifications and really build that so when you're shopping you know this will work with my x and this is exactly what I'm expecting. I've even seen people go as far as bringing the products in house and taking some nice pictures and using those. So, then you have your own photos that you know the vendor might give you that one or two you know awful photos but you have your high res ones that no one else has and they are yours. Now, you're really adding value and it shows you know you actually know what you're talking about like you sell these products and you're able to show those you are in the front of the site and showcase your top selling products but really go deep in those products and show what they're all about.
Salena: [00:36:21] And make sure mark those high res pictures because for sure everybody else is going to think that the product manufacturer gave them to you and they're going to take them and use them.
Charles: [00:36:30] You hear that a lot, people taking photos and now you are generating that IP, you're generating those descriptions and that's valuable. So, you're actually done at that point building an asset in those descriptions and photos. So, like you said, the more you can do to protect that the better.
Salena: [00:36:48] Are there any last tips you would leave us with when it comes to drop shipping, ecommerce, trading online, what's the one thing that ah, slaps my forehead, I just wish every person did this, life would be so much better?
Charles: [00:37:05] I mean with anything wherever you kind of, wherever they are today and where you're going it's a process so there's no one thing, it's knowing that you're going to grow and it's going to change over time and this is sort of an organic thing. So, like we're saying before starting with some basic vendors and kind of growing from there just realizing it's a journey and wherever you're starting now isn't where it's going to end and just developing over time and realizing that since we found at the top of that cotton candy machine you start just as you do it and as you're in it you start finding things and realize oh that's the product, that's it right there. We can sell this one right here and then realizing you're going to keep doing it and you're going to find product two and three and it's going to grow over time and just realizing that's part of the process and that's the job find those thing over time, finding those vendors, finding those products that not everyone found and that's just part of the process.
Salena: [00:38:02] The unicorn products.
Charles: [00:38:04] Yea, the unicorn products exactly.
Salena: [00:38:07] Being an ecommerce leader, are you an in store shopper or are you an online shopper?
Charles: [00:38:14] I would say bulk online. You know Herron Boston, we have very good shipping. There's a you know things come quite quick so we're able to you know order stuff at the house or even to the office and it shows up in a day or two now and it's almost magical. Even a few years ago, where you know shipping was delayed and things took time and things ship very quick now so I would say mostly online.
Salena: [00:38:39] What's your favorite online store?
Charles: [00:38:43] Like everyone else I do a lot of shopping on Amazon I hate to admit it. But, you know any niche hobby I have I still go to some of the smaller sites for the niches and that's kind of, just because I know they have some more information that Amazon doesn't. That's the kind of thing that we advocate all the time, go for the niches and the thing that's amazing is you realize it's 2018 and they still say ecommerce accounts are 10% of the market and everyone says something different but relatively small amount of the market so you realize how much opportunity there still is going from retail to ecommerce. It's every time I hear that it blows my mind.
Salena: [00:39:26] I think a lot of people forget that if you have a Bricks and Mortar Store the ecommerce portion of it even if people are just using it as a catalogue to see what you stock that is driving traffic into your store but it can also bring revenue in with people who are buying who aren't necessarily local. So, I think retailers forget like Bricks and Mortar Retailer sometimes forget that ecommerce in 2018 but even in 2010 is actually a necessary part of being a retailer. It's not nice to have, it's a something I should have something I have to have.
Charles: [00:40:06] It can help the Bricks and Mortar Store too kind of augment in the ecommerce because the same vendors let's say you're Bricks and Mortar and you're working with two different manufacturers or distributors, if you start having some ecommerce business augmenting that even if your mortgages are a bit lower, your gross is a lot higher then you're going to go those distributers and start kind of negotiating some better price breaks for some of those products you're carrying in store so even if you're doing you know relatively small margins online it can actually still help out your net margins on the Brick and Mortar side. So, I've heard of folks like that where they have you know Brick and Mortar you know work with boat dealer but their whole part of the panel is online but, then they're able to say we're ordering a lot more volume to our distributors so we can negotiate some better prices that way.
Salena: [00:40:54] We all love better prices cause that's money in the bank.
Charles: [00:40:58] Then you're able to generate a lot of sales online even if the margins smaller you have some big gross numbers. Negotiate down what you pay and you know help other Brick and Mortar as well.
Salena: [00:41:08] Fantastic, love it, love it, love it. If people are thinking I'm on this drop shipping thing or I'm already doing the drop shipping thing but I would love to get this to get this automated, I would love to have this system that Charles has been telling me about where I don't have to ring the supplier then I wait for the tracking number then I got to call the customer, where can we find more about you and spark shipping?
Charles: [00:41:31] Spark shipping you can find us easy sparkshipping.com I also have a podcast at the Business of Ecommerce.fm. We have links on spark shipping as well and you can find me on Twitter, I can send you a link to that and you know accessible through just about everywhere. Charles@sparkshipping if you want to reach me directly keep it nice and easy.
Salena: [00:41:53] Fantastic. Thank you for all information, I know a lot of people here will be thinking something I need to not necessarily implement right now but something I should definitely think about going forward for the testing of the products and if they are already doing it to make their life so much easier. Thanks for sharing of these tips and all of this information here today on the show.
Charles: Thank you very much for having me. It was great talking to you.
Charles is the founder of Spark Shipping, which helps eCommerce retailers automate their connections with their vendors. He first got his start with eCommerce when he
purchased a site that sold popcorn, popcorn kernels, andm popcorn related accessories. He was like Bubba from Forrest Gump, but with popcorn instead of shrimp. It was during
his time on the proverbial shrimping vessel that he found a need to automate parts of his business. That need inspired
Charles to create Spark Shipping, the leading dropship software which automates millions upon millions of orders for eCommerce and retail entrepreneurs every month.
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