Strategy:

 As a new business, you have no data on how well

a product will perform in the market. You need to
test the concept.
 Traditionally, you had to buy products in bulk
before you could sell them. This is very risky as
one bad idea could leave you broke. Many
people invest their life savings into a business
that’s doomed to fail.
 Instead, start doing micro experiments. Put
advertising into the market first to see how
customers react to certain product.
 If the market likes it, they will vote with their
cash (make purchases), and then you can invest
more into the business idea. Risk less capital.

What is drop shipping?

 Drop shipping is a fulfilment method that reduces

risk. You don’t need to buy inventory before you
sell products. You sell products and only pay for
them once your customer pays you.
  The only initial investment is marketing. You need
to spend money to see how the market reacts to
your product.
 The big issue with drop shipping is that the
customer experience is poor. We buy from China
as it’s the biggest manufacturer of consumer
goods in the world and the cheapest. Profit
margins matter.
 Shipping times are long and customers are
unhappy but this doesn’t matter. We’re only
looking for purchase intent.

Stage 1: Drop shipping:

 In the beginning, you should source products from

websites such as AliExpress. They have the largest
database of products. This is the cheapest option
for beginners. Slowest shipping (14-28 days).
 Another option is to send your first 5-10 orders
from AliExpress. Then do a bulk purchase of 20-30
units from AliExpress and ship from home.
 If you would like to dropship with a better
customer experience. You can use:
CJDropshipping, Spocket, Zendrop, uDroppy and
WiiO. They offer much faster shipping times (7-14
days) but the prices are higher.
Stage 2: Sourcing agent:
 Once you have consistent orders, you can get a
sourcing agent in China. We have a HU exclusive
agent that you can use.
 A sourcing agent is a drop shipper who works in
China and negotiates with manufacturers to get
you the best prices. 10-20% cheaper than
AliExpress.
 They use fast shipping methods such as Yun
express which can deliver products to customers
within 5-10 days. EU is faster.
 They can also negotiate with the manufacturers
to add custom branding to your orders. Thank
you notes, custom packaging/bagging and many
more.
 This is your segue into building a genuine brand.

Stage 3: Local fulfilment:

 Once you start getting consistent orders, you can
legitimise the business by shipping from your
customer’s country.
 You can buy products in bulk and ship it from
home. In addition, you can hire a
warehouse/employee to manage this for you.
 Better yet, you can buy products in bulk and ship
it to a 3PL. They will ship orders to your
customers and at scale, it tends to be cheaper
and less intensive than shipping it yourself.
 This option requires a lot more risk. You need to
order 100+ units usually therefore you must be
sure that your product sells.