Most dropshippers know that one of the best ways to scale from 5 figures to 6 to 8 figures is to test more products. Not just any products, but specifically high quality products.
Basically, high quality products are products that go through a strict criteria to have the best chance of it becoming a profitable winning product. Unfortunately, finding high quality and scalable products consistently every day is one of the most common problems many dropshippers face.
After working with and talking to many 6 to 8 figures dropshippers, it has been noticeably due to these two reasons:
1. They reduce their product research criteria so that their team can test more products a day. Meaning, instead of only testing products that fulfill their five-step criteria process, they lower down their number of criteria to three instead, just so that they have more products to test. HUGE mistake.
By doing so, you are sacrificing quality for quantity. Leaving you to test products that have an extremely low chance of being profitable winners. Essentially, you are burning cash just to test these products, resulting in your dropshipping business becoming unprofitable.
(Many dropshippers often scale unprofitable products just to hit the 6 to 7 figure range, even if they are unprofitable. That’s why you see fake gurus flashing their Shopify dashboard, but not showing their profits.)
2. They hire more product researchers to find more products. While this is a great way to scale and increase the number of products to test every day, it brings a major problem if you don’t have a scalable system in place: duplicated products.
For example, if your product research process only relies on using spy tools like AdSpy — the more people you hire, the more people are using the same spy tool. This will result in your product researchers constantly finding the same products as each other.
So instead of hiring 3 extra product researchers to find 3x more products, you end up only finding 2 or 3 more products than usual, and the rest are just made up of duplicated products. It’s not because the product researchers are doing a bad job because even if you spend days to find and hire an extremely competent researcher, they will end up finding the same duplicated products again.
This happens all because you don’t have a proper scalable product research system in place.
In our agency we use the 4E Scalable Systems to optimize our client’s product research systems to double or sometimes triple the number of products they test, even without hiring any additional manpower. Further in this post, there is a case study included on how we did that using the 4E Scalable Systems.
Before we get into the 4E Scalable System and the case study, let’s first discuss what it is like when you have a scalable product research system in place.
When you have a scalable product research system in place, you start to find and test high quality products consistently every day, leading to a much higher chance of finding a PROFITABLE winning product. This is very important because you are testing and finding profitable winning products, you now have a smooth cash flow. No more worrying about not having enough money in your bank to pay for ads as you scale.
Along with that, you are also able to double the number of high quality products you test without going through the trouble of a lot of time and energy just to hire and train someone new, and you are able to add more product researchers into your product research system whenever you like and test even more high quality products.
Most important of all, you can scale to 6 and 7 figures a month and still remain profitable. All of these are possible when you have a scalable product research system in place.
So how can you turn your existing product research system into a scalable product research system using the 4E Scaling System?
4E stands for Effectiveness, Efficiency, Effortless & Exponentiality.
For your product research system to be able to sieve out high quality product after product with potential to become winning products, your processes must first be effective. Meaning, it has to produce results that directly contribute to the growth of the company.
One of the ways to know how effective your processes are is to set metrics to track their results. Most dropshippers track individual metrics like:
- Total number of products found per day
- Number of products that made it to launch
- Products that turned to winning products
While these metrics are useful and provide a better view of how your business is doing, they are one-dimensional.
If you get your product researcher to focus on hitting 15 products a day, there is a high chance they may end up “stuffing” the product sheet with low quality products just to hit the number quota. What they do is they hit the volume, but quality of products are generally low — resulting in you either not launching any of them, or burning money testing them.
In our agency, we apply something called the “360 Metric System” for our clients. 360 Metric System involves multi-dimensional metrics and KPI. They cover more bases and present a better view of what you’re actually looking out for.
Here’s an example: Instead of simply stating how many products you want to be found in a day, a 360 Metric System would be finding 15 products a day (excluding duplicates), with at least 80% of it making it through the quality test. This helps to paint a clearer picture of what you are expecting which isn’t just more and more products, but high quality products with the potential of becoming a winning product.
Once you have this 360 Metric System in place, your team will start producing more effective results almost immediately. Because now, they know what is the bar they will be measured against and they have a more all-rounded picture of what you are looking for.
Some more things you can do to increase effectiveness is to give incentives to your researchers by rewarding them a bonus if any of their products became a winning product, and by holding a weekly review session where you share with them how the products they found did. Which turned into a winning product and what are the traits of this product like.
What these do are to help to build a better idea of what a winning product should look like in your researcher’s head, allowing them to spot winners quicker — making it so much easier to double the number of high quality products they find in a day.
Efficiency is all about making sure your product research processes are not only effective and can produce results, but can also be executed with as minimal resources as possible.
As mentioned earlier, one of the common challenges most dropshippers face is product duplication because as your product research team grows, the chances of them finding the same products over and over again gets a lot higher — especially if your product research process revolves around AdSpy. So, even though each member may have found 15 products each day, which looks pretty good on excel sheets.
The truth is, out of the 15 products, only 10 of them are UNIQUE products, with the other 5 of them are actually the duplicates with other team members. While 5 items out of 15 doesn’t sound like a lot, the implication can be HUGE because the opportunity cost for these duplications can be very high.
5 duplicated products a day means 25 duplicated products a week, and having 25 duplicated products a week means you’re missing out the chance to test 25 additional unique products — which could have greatly increased your chance of finding multiple winners every week.
Each time you find a duplicated product is a chance wasted to find and test a high quality product.
An efficient product research system is one which reduces product duplication to the bare minimum. When you have a system that can reduce duplicated products, there is a higher chance of finding high quality products. Hence, higher chance of finding winning products to scale to 7 figures consistently and profitably.
If you’re not tracking it yet, it would be useful to see how many product duplications your team has on a weekly basis. You should be getting no more than 10% of the total products you find.
Case Study In Our Agency
Before working with us, one of our clients was testing 3 products a day with 2 product researchers in his team. His goal was to test 6 high quality products every day, but his team was already finding duplicate products even when there were only 2 people in the team.
Here’s what we did to help him go from testing 3 products a day to 6 high quality products a day in just 1 week.
First, we separated his product research team by niches.
For example, one of them would be searching for products in the beauty, pets and outdoors niche. While the other would be researching in the gadgets, home living, and kids niche. We do this for two reasons:
- With lesser people looking for the same category (especially when they use the spy tool AdSpy to find products), there’s a lesser chance of overlapping products.
- If the product researchers are specialized in the specific niche, they are more likely to recognize what are the common traits of the winning products for that niche, and increase the chance of finding winning products in that niche in the future.
Secondly, we created a custom product research system by integrating Google Form to Google Sheets.
Before working with us, our client had his team upload whatever products they found on a Google Sheet — just like what most dropshippers do. However, because of that, the product researcher had to spend a bulk of their team checking if anyone uploaded that product before.
To solve that, we created a custom integration between Google Sheets and Google Form. We then got his product research team to upload the products into the Google Form which then automatically adds the product into the Google Sheet. A product research team leader will then vet through the google sheet and remove any products that are duplicated.
This will prevent the product researcher to constantly refer back to the google sheets, and focus on finding as many products as they can. Just by applying this alone, we managed to double the number of products tested each day WITHOUT sacrificing quality or hiring any additional manpower.
Needless to say, it was a huge win and the client was extremely happy with it.
For your systems to be scalable, you need them to be effortless to execute. Meaning, any team member, whether they are new or experienced, will be able to execute their tasks easily with no questions asked. For that, your systems will be to be executed with minimum resources like time, money, effort or manpower.
A common mistake that dropshippers do is that their product research system has too many steps.
Go to AdSpy to find a product, then manually cross reference with criteria. If it doesn’t fit, restart the entire process but if it fits, upload the product into Google Sheet, and inform the manager to vet through and approve it. After all of that, the manager has to cross check with the criteria again just to approve it. A total of 5 steps for each and every product.
With a system like this, you are limiting the number of products you can find each day, and as you scale and test more products, you are forced to hire more people. Many people think that this is the only way for a product research system. That’s not true.
At our agency, we developed a “Traffic Light” System to help our clients to cut down their product research process to only two steps.
We created a Google Sheet with the product research criteria.
For example, one of the criteria for a winning product is that it must have between 1,000 to 1,800 shares on a competitor’s ad. The product researcher will then input the number inside the Google Sheet. If it’s below 1,000 shares or above 1,800 shares, it’ll be highlighted as red. If it’s around 1,100 or 1,700 shares, it’ll be highlighted as orange. If it’s around 1,200 – 1,600 shares, it’ll be highlighted as green.
From there, product research managers or project managers will just have to enter the sheet at the end of the day and pull out all of the products that have five green criteria. There’s no need for them to redo the work and cross reference it with the criterias again.
By doing this, we turned our client’s product research system from a 5 step system to a 3 step system: Research product > Add into Google Sheet > Manager exports it.
This resulted in our client doubling the number of high quality products they launch every single day, and helping them scale to a consistent 7 figures a month profitably!
The last part to creating a scalable product research system using the 4E Scalable Systems is Exponentiality. Meaning, there must not be any factors that can prevent the product research team system from scaling.
Most dropshippers are their own worst enemy when it comes to scaling. They suffer from the Superhero Syndrome, they are thinking that they must do or be involved in every single task by themself.
When it comes to product research, most dropshipping fall into the Superhero Syndrome trap. They tend to put themselves in the product research process. Most of the time, they get their product researchers to seek their approval before passing on the importing the product into the store — but by doing so, you are making yourself the bottleneck of the business as you scale.
Imagine scaling and having 3 product researchers in your team, with each of them presenting you with 15 products each, asking for your approval. That means you have to go through 45 products every single day just to pick 5 products to launch the next day — which could easily take an hour or two each day. A total waste of time.
As the business owner, you should be focusing on higher level tasks such as planning for the business. You should be planning what are the next steps to scale, planning to create your next eCommerce brand, or even having the freedom to take a week or two off to attend some high level mastermind and not worry about your business collapsing.
90% of your time should be planning, and only 10% executing.
In our agency we create delegation systems and issue our clients with Atomatic Business Managers (ABMs) who are highly trained operations experts to help our clients to optimize their systems, solve bottlenecks and execute on tasks. All of our clients now only spend 10% of their time executing, from their usual 80%.
Now, they just spend most of their day planning, creating new brands, software and attending masterminds.
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