Not a Niche: This Entrepreneur’s Formula for A Winning General Store
Article
by
Venetia Anderson
Chris Wane is proof that persistence pays off. It took him five failed ecommerce stores and hundreds of trialed products before he struck a winning formula. He battled through self-doubt and negativity from others around him, who laughed and dismissed his budding business as a “get rich quick scheme.” He began with rocky financial foundations, and came worryingly close to losing his entire budget.
Less than two years later, his dropshipping store Big Red Gadgets has generated over $537,457 in revenue. With a profit margin of 20% bringing his take-home amount to over $100,000, Chris’ life has transformed before his eyes.
Rewind three years, and Chris Wane was much like any other 27-year-old. He was living in his hometown, just outside of Manchester in the UK, and working a full-time job. But the cubicle life didn’t agree with him, and he knew it immediately. “I can’t see myself staying in an office the rest of my life,” he says. “I’ve always wanted to run my own business, but never known how to do it.”
And when he discovered dropshipping through a video on YouTube, it seemed like a way into business and out of his current financial situation.
Dropshipping is an ecommerce business model that allows entrepreneurs to run an online store and sell products without having to purchase inventory upfront. Only once you’ve made a sale do you pay your supplier, who then ships the products directly to your customer. You can use a marketplace like Modalyst to connect your store to thousands of suppliers and products.
Back then Chris was living each month paycheck-to-paycheck, and the stress of having no savings and no wiggle room in his budget weighed heavily on his mind.
“So when I first heard about dropshipping I was like, ‘This is actually really accessible for me.’ Even in the financial state I was in, it was still an option.”
He thought if he could do it right, he could make an extra $200 a month, just enough to help out with his bills and give him some extra money to put aside for travel.
But, there was one problem that stood in the way. He had no idea how to do it.
“When it came to Shopify and designing the stores and how to advertise it, I didn’t know what I was doing,” he says.
And finally he was ready to begin. Next came the trials, along with many, many errors.
Following the advice of other entrepreneurs he’d seen online, he started a niche store. The first one sold snowboarding gear. But he couldn’t make any sales. The next one sold beard oil, because after all, it was pretty trendy at the time. But again, it didn’t work. Finally he tried setting up shop in a niche he was more familiar with, fitness equipment. But once again, the store was unsuccessful.
Looking back, it’s easy for Chris to see now that there was so much he didn’t understand about how to run his businesses. “It was naivety from my point of view around what I could do, and it just didn’t work,” he says.
He was exhausted from trying and failing over and over again, but wasn’t ready to give up yet.
Finally Cracking the Code
“I said to myself, ‘Right, this is gonna be the last time I try this now, it’s gonna be my sixth attempt.’”
This time instead of building another niche store, he decided to go in the other direction.
“I went into a general store because I thought instead of building a store and failing, then building another store and failing, let’s just build one store I can throw any product on at first and just see if it works,” he says.
He set himself a budget of $300 to find a profitable product, and dove headfirst into studying more to fill his knowledge gaps.
“The difference with Big Red Gadgets is the amount of hours I’ve put into actually researching and reading. I mostly try to understand how Facebook ads works because that’s where all the traffic is being driven from,” he says.
After scrubbing up on Facebook advertising knowledge, he began testing different products, running Facebook ads to gauge his customers’ reactions.
The stakes were high, and Chris knew he really wasn’t in a position to waste any money. He started slowly, spending $5 a day to run a single ad for a product.
“I remember on the very first day, and it didn’t make a sale and I was like, ‘Oh my god, I can’t afford to lose $5. What am I doing this for again?’”
But he steeled his nerves and held out for the results on the next day.
“The second day, it made a sale and my profit margin was $15, so I’d spent $10 on my ads and made $15. I had made a fiver, and I remember I was running around the room thinking, ‘Oh my god, I’m gonna be rich. I made a fiver!’” he says, laughing.
The high of the first sale wore off, and Chris started to notice that as he continued to spend more on ads, the rest of his $300 budget was quickly drying up. And he was growing concerned that he still hadn’t found a product that was selling consistently.
It was a chance recommendation from a friend that turned his fortunes around.
“My best friend is really into cycling, so he came around to my house one day, and I was just flicking through AliExpress trying to find some products. I said to him, ‘You are into cycling. Have a look at these products, which would you buy?’ He found this pair of cycling glasses and said, ‘I would buy them.’ So I threw them up on the store, and it just blew up straight away.”
And when we talk about blow ups, this one was nuclear.
Thanks to the cycling glasses, Chris’ Big Red Gadgets store generated over $13,000 in sales in just under six weeks.
By the time I spoke to him in April 2019, his store’s revenue had ballooned to over $500,000 USD.
Achieving Financial Freedom
It’s been almost two years now since Chris first launched Big Red Gadgets, his last-ditch effort at trying to grow an ecommerce business.
In the time since then, he’s seen his life transform. Although he’s still working at his full-time job, he’s found that the financial freedom that his business has given him has changed his life for the better.
“It’s definitely relieved the stress of living paycheck-to-paycheck.”
Since then, he’s been able to afford to buy a car and take a long-awaited vacation to the United States, where he spent three weeks road tripping from New York to LA.
He’s also been able to take care of some of the smaller, often overlooked things in his life. He could afford to finally make repairs to his home and decorate the areas that had long been neglected.
“It’s all the little things,” he says. “I like how I don’t have to check my bank account every day just to make sure I’ve got enough for this and enough for that. It definitely just takes the weight off.”
Chris’ Winning Product Selection Strategy
Apart from his first winning product – the cycling glasses – Chris has also found success on Big Red Gadgets with snowboarding accessories, jewelry, sunglasses, and home decor products. One particular snowboarding product generated $100,000 over three months.
He owes his success in part to his clever Facebook advertising sales funnel (more on that later), but also to his keen eye for product selection.
After spending the past two years searching for and testing new products – “I’ve probably tested 300-400 products” he says – Chris has built up a strategy for finding those with the most potential.
When Chris is evaluating potential products for his online general store, he looks for products that:
Solve a problem for the customer
Can appeal to a large, mainstream audience
Has a ‘wow’ factor that will serve as a scroll stopper
Have very high order counts (over 10,000)
Aren’t currently being advertised on social media
He’s tried in the past to offer products with relatively low sales, but it never really worked out. So now he sticks to products that have already proven they’re popular.
After finding a potential winner with high order counts, he heads over to Facebook to search for anyone currently advertising the product.
He’ll look for posts promoting the product with high engagement, or any that look like they’ve come from a big AliExpress dropshipping business.
If he can’t find evidence of anyone that’s having success on Facebook, he counts that as a win.
It was this exact tactic that helped him to find the lamp that went on to generate $18,800 in sales in three weeks.
“This lamp, for example, had over 10,000 orders on AliExpress. But I’ve never seen any other dropshippers running it, and I’ve never seen an ad for it,” he explains.
“Those are the kind of the products that I like to go for, the ones that are obviously doing really, really well, but I’ve never really seen advertised.”
After checking product’s potential through the order numbers and social media platforms, he’ll do one final check.
He heads to Google Trends to review the product for seasonality. Here, he’s looking for peaks and troughs in the popularity of the product throughout the year. Ideally he’s looking for something that is popular year round, or that is just about to approach its peak in popularity.
Check out the graph below, tracking the volume of searches for ‘snowboarding gloves’.
It’s your best bet to try and sell this kind of product in early November, when demand is beginning to rise. By March, you’re better off looking for something else.
Chris’ Facebook Advertising Strategy
It took months and months of mistakes with his advertising before Chris was able to begin to get an understanding of the strategy that worked best for Facebook advertising.
“A lot of my experience has come from trial and error, from failing within Facebook, with getting it wrong,” he says.
Step 1: Audience Targeting
While initially he followed the advice of many others to target audiences on Facebook based off different interests, he’s skeptical about if this is still the best targeting method in 2019.
Facebook, after all, has continued to get smarter every day. All the data it’s collecting from all the thousands of ads running on the platform has been fed back right back into itself. Now the advertising algorithms are exceptionally clever at finding the right people to show your ad to.
Instead of manually picking interests to align with his target audience, Chris now leaves most of the heavy lifting of finding the right audience to Facebook’s algorithms.
“I’ve had more success in the last two weeks, running products to everybody. Like no interest targeting, just completely open to ages 18 to 65+ in the UK, US, Canada, Australia, wherever.”
Chris’ decision to use broad targeting with his ads in the product testing stage comes down to optimizing for one thing: CPM.
CPM, or cost per thousand, is a term that is used to measure the amount of money it costs to get your ad in front of 1,000 people. When you’re running ads to a smaller, more defined audience (including using lookalike audiences), you’ll be charged more to reach 1,000 people than if you are just targeting a very broad audience.
For example, Chris tried running ads using a lookalike audience, and he found that Facebook would charge him $15 to reach 1,000 people. But with broad targeting, his CPM would be as low as $5. That means, for $15 he’d be able to reach 3,000 people.
“So, you get three times as many people for the same price, and you still only need one sale in that,” he says.
Step 2: Testing His Sales Pitch
Chris’ next step is to then create three different variations on his ads, changing the copy slightly for each one. The idea here is to test different sales pitches, as you never really know which message is likely to resonate.
“I’ve been quite surprised about what the ad that I thought was gonna do well has done the worst, and the one that I didn’t think it was gonna do well is actually the one that everyone’s clicking and liking and sharing,” he says.
Step 3: Campaign Optimization
From there, he creates a campaign in Facebook Ads Manager, selecting the “engagement” optimization.
Wait, why would you run engagement based ads? Don’t you want to make sales, not just collect Facebook likes?
Great question. The answer is… it’s cheaper.
Facebook charges much less for campaigns that are optimized for engagement. That means in this early product testing phase, when you’re still trying to figure out whether your Facebook ads formula is working or not, you’re better off spending less.
“I don’t have to spend much on these ads, probably $30-40 to see which age range and demographics are performing and which ads people are liking and clicking through the most,” Chris says.
Step 4: Conversion Campaign
After running tests to see which audiences and sales pitches are working, Chris creates a second campaign. This time, he’ll optimize his campaign for “conversions”, and copy over the ad creative and audience demographics from his most successful ad from the previous campaign.
This campaign is intended to push customers down his sales funnel, encouraging them to convert into paying customers.
To wrap it all up for you, Chris’ Facebook advertising strategy is:
Target people broadly, with no interest-based targets.
Run engagement-optimized ads at the beginning (they’re cheaper).
Create multiple versions of the ad with different copy.
Create conversion-optimized ads based off the winning ad copy, reducing the demographics of your ad targeting to the ages and countries that are performing best.
Chris’ Advice for Beginners
In the past two years, Chris has been through it all. He’s been moments away from throwing in the towel and walking away. And now? He’s planning how to turn the business into his financial escape plan.
“That’s my next goal, trying to retire from it. I mean, I’m a bit of a way off that, but that’s the dream.”
For anyone who is just starting out dropshipping, know that you’re going into battle. You’re going to have to face self doubt, as well as skepticism from people around you.
Chris’ advice? Don’t listen.
“When I started I was laughed at and told that is was just another ‘get rich quick scheme’ and ‘it won’t work’,” he says. “If I had listened to those people I’d still be stuck in the same routine I was 18 months ago, struggling month to month. I think if you want something in life you just have to put the work in and go out and get it.”
