How do we discover dropshipping business model?
CJDropshipping is one of the first dropshipping supply companies in China and strives to provide an all-in-one solution for aspiring entrepreneurs. Initially starting as a jewelry manufacturer on alibaba.com and aliexpress.com, CJ Dropshipping quickly grew to a multi-niche supplier for business around the world.
We discovered the dropshipping business model when fulfilling orders for a particular entrepreneur. Juan（Co-Founder in Trafilea) is from Iceland, at the time he was a student in his freshman year of university constantly selling hundreds FAST and Furious Necklace.
We wondered why one person would buy so many necklaces and have them shipped all around the world, specifically requesting to never ship the item with an invoice. We eventually spoke with Juan via Skype and not long afterward scheduled a meeting at our headquarters in China. We went on to be lasting business partners and sold millions worth of products
These were the early days of dropshipping, the business model didn’t even have a proper name at the time. And because it was still so fresh, it was largely unregulated. It was like the “wild west,” where nearly anything was up for grabs. And like most pioneers, you tend to go where the money is.
Selling branded products easily
In terms of dropshipping, this meant you can easily sell branded products without necessarily needing a license. It was certainly a grey area, but we went on to sell tons of Harry Potter necklaces. However, over time Juan faced issues with his payment gateway, and not long after Facebook blocked his account. It was becoming very obvious that working within this grey area was not going to be sustainable. And quickly ditched selling branded merchandise in favor of something viable.
I have to say that Trafilea has grown to be a massive company since 2016. They are literally masters of marketing and managed themselves so well that they were able to scale to the position they hold today. After deciding to switch products, Juan then focused on marketing the elephant pillow.
Finding winning products
This however was another grey area product, as IKEA was selling something very similar at the time. But Juan knew how to advertise and I knew where they were being manufactured, so quickly we had another winner on our hands. We were sending packages out like crazy, it was a win-win situation for both of us. With thousands of units sold daily for that product alone. You can see exactly how crazy it was here.
It was an incredible couple of months for both Trafilea and CJ Dropshipping. Both of us have seen tremendous growth from just a handful of winning products. I’m not going to go into detail about his methods, but Juan really knew how to pick winners. I’m sure he spent hours researching and testing products and their niches. But while searching for a product that’s more “evergreen” Juan at Trafilea was able to find another huge niche — BODY SHAPING
We here at CJ talk with a ton of dropshippers and most of them find that it’s hard to make consistent sales the entire year round. Let alone off of one niche/targeted audience. So the concept that a product can remain “evergreen” through the entirety of the year sounds like a myth to most people.
The problem is that most people tend to sell products that have little shelf life. Meaning that over time the product or niche will become saturated. Smart entrepreneurs have adapted by selling a rotating supply of different gadgets. When a product becomes liquidated they simply switch it for another and start the whole advertising process over again. Some simply ignore their own store for several months as they only make sales during a certain portion of the year.
Selling shapewear was ultimately Juan’s winning niche, with his first brand being EMPETUA. He initially tested its viability using Aliexpress. He found the right product but was unsatisfied with the inconsistent shipping times. Later opting for CJ Dropshipping as we typically could get deliveries to customers a week faster.
It’s a good strategy to test a product with Aliexpress and then scale with CJ once finding a winner. You can read more about the process here. It’s not often that we fulfill hundreds of orders from the get-go. And I attribute his immediate success to actually designing the product before launch.
After hours of research and testing to see if the product was even viable, he had our Sourcing Agents contact numerous manufacturers to custom make a signature line of shapewear. It was a process of adjusting sizes to fit both the European and American markets. We would submit the final silhouettes to different manufacturers scattered throughout the mainland, from Guangzhou, Fujian, Shenzhen, Yiwu, Zhuji, and Jiangxi to find the best prices.
When prototypes were made we would then check the quality before sending the best ones to Juan for approval. It wasn’t easy, but we knew that Juan had something special and was more than capable of marketing the product correctly. With his superior product and knowledge in advertising paired with our ability to offer faster shipping, we again had another winner on our hands.
Secrets to a successful brand
One thing that really ensured their success was custom packaging. Not only did we help source the product but we also had custom mailers and pack-ins made as well. Virtually none of Juan’s competitors had anything like this. Which made him stand out and gave his company more credibility. His customers were impressed, often posting their purchases on Facebook and Instagram.
In 2017, EMPETUA was exclusively dropshipping units from China. This means that orders typically took 20+ days to arrive. They were getting complaints, which is never good for business. In 2018 they aimed to take a more domestic approach to dropshipping.
We here at CJ had opened our first fulfillment center in the U.S around that time. So naturally, we saw another win-win situation for everyone. They asked their American customers if they will pay 5 dollars more for 2-5 day shipping. And the results yielded an astounding yes. Within 3 months they re-branded and moved all their inventory into the U.S and exclusively shipped domestically.
Scaling the business with perfect marketing strategy
Now known as Shapermint, Juan was able to scale his business from a mere idea to one of the most successful e-commerce companies on the web. It wasn’t profitable at first and also required substantial upfront investment.
But with superior marketing and a custom-made product, Juan was able to build a high customer retention rate. Not only did he have a product that you can only get through Shappermint, but customers often bought multiple units throughout the year. Simply because he was able to build his brand’s credibility.
Using a combination of FB/IG ads, email marketing, and being seen on major networks and publications, Shappermint literally dominates the body shaping niche. And with exceptional customer service, he is able to keep customers happy and therefore more likely to return for more purchases further down the line.
As it stands now and in the future, only brands are able to reach a point of sustainability. It would be wise to incorporate this into your overall strategy. It’s important for entrepreneurs to have some form of Branding Guideline, Marketing Strategy, and Scaling Strategy before they launch a new business.
These 3 documents will help you reach a higher level of personal success. Though they may change over time, it’s always great to start from somewhere. It’s also important to consider how you structure your business. For instants, you can double down on the cost per unit, but if you brand correctly a customer is more likely to purchase multiple units per transaction and return for more further down the line.
This can be formulated as (Branding strategy=Less money on a single purchase+Bigger margins on multiple units sold per transaction+Customer retention based on Brand Credibility) This is only one example of the infinite possibilities on how to structure business and conversion funnels. We here at CJ dropshipping implore you to chart out a structure that best works for you.