Getting the Most Out of Every Penny When You Launch Your Store
With such a crazy amount of uncertainty right now, we talk about what it’s like to get into ecommerce when you have no money, no safety net, no cushion to play with.
For this one, we dialed up Chris Wane, who has stared down the same money headaches that lots of people are facing today. Chris does not sugarcoat his situation when he launched his online business. He. Was. Broke. Worse than broke, actually – he had 12,000 bucks in debt, and was, in his own words, in a pretty bad place. So bad, in fact, that the first day he turned a profit – a whopping five bucks – he was running around his apartment in ecstasy.
Chris explains how you can be scrappy and how you can squeeze every last cent of return from each dollar you put in. And then he also talks about the stress involved with launching a business when your business funds count as the same pool of money that you need to buy food.
Short on time? Here’s a five-point TL;DR version:
- Chris was in such a bad place financially at one point that he resorted to eating crackers and tea each night.
- When he discovered dropshipping, his aim was to make 200 pounds per month.
- Through a lot of perseverance and online learning, he made his business work and was making thousands per day.
- At the moment, amid the coronavirus, he’s reduced his ad spend to lower and better control his risks.
- Through his dropshipping business, Chris gained confidence and was able to step outside his comfort zone and grow not just his business but also himself.
Start Yours is a podcast about ecommerce, dropshipping, and all things launching a business.
Join us as we meet entrepreneurs who have gone through the triumphs and headaches of running an online store, and learn how they managed to survive and thrive.
David: You’ve described your pre-ecommerce life as living paycheck to paycheck and, of course, anybody who’s been in this situation knows that it creates a bit of a cloud that hangs over basically everything you do.
I’m curious to start. If you could describe the situation that you were in before you started with ecommerce, before you got into dropshipping, and just the toll that that was taking on your spirit, or on your psyche, just on a day-to-day basis.
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Scraping Through Life Before Dropshipping
Chris: Back before dropshipping, I was working at a contact center, a minimum paid job kind of thing, I was working 30, 40 hours a week. No real drive in life, I suppose. I didn’t really have a goal. I didn’t really know what I wanted to do, I had no real focus. It wasn’t great, but it had kind of taken over. I was living with a friend at the time, I was in a long-term relationship, so it was kinda just…
It was okay. It was just life, but then I went through a break-up. I ended up living on my own, and then it was in a place where I was on minimum wage with all these bills and not really any sort of drive, any focus, and it was in a bad place, to be honest, but I had no money. I couldn’t afford to do anything. There were times where I couldn’t even afford to get a taxi to go somewhere.
It was kinda like I had to be very careful with what I was spending my money on to the point where I was eating cracker bread for my tea each night.
It was like Vitabite or cracker bread. It was pretty much poverty in a way, which is really odd when I think about it. Yeah, and then I knew I had to do something about it, which is why I started looking for online business ideas, really. I did all sorts of things, like trying the standard eBay, selling stuff on eBay…
Chris: I tried Amazon. I tried gambling, which didn’t go very well. And I tried… I even set up a PC repair company, like I’d go to try and fix people’s PCs ’cause I was always tech-savvy. Nobody really hired me to do it. Nobody from family or friends helped me out. So that didn’t really work.
I even rented my driveway. There’s a website where you can actually rent your driveway out to people so they can park on your driveway and pay you.
But what people don’t know is I live on a typical suburban street, so you can park on the pavement outside. There’s no need to pay me to park your car in the driveway.
So that says how tight it was and how badly I was looking for something. And then I came across dropshipping, and that was the first moment when I first saw it.
David: In one of your early goals, you were saying that you wanted to make 200 bucks a month with dropshipping with ecommerce. And I think that this 200 a month is a very modest number, I would say.
It’s not the sort of big fat number that… Where people take screenshots of their Shopify Dashboard and they brag about it. There are only three digits here, 200. But 200 for the spot you were in, that would have been a big deal.
What was 200 gonna mean for you if you could get this ecommerce thing working to the tune of a couple of hundred bucks a month?
Chris: It just means more food. I’d be able to… Basic living. It’d just give me that little bit of a buffer that I didn’t have. And that’s what I was looking for. When I started going through the breakup, I was left in about 12 grand worth the debt as well at the time, just from bad life decisions. So I had that to cover off and… As well as the standard mortgage payments and the bills and things so it wasn’t great. But 200 pounds was gonna make an absolute world of a difference.
Chris: Just having a little bit of freedom allowed me to do other things and just have a better standard of life. And I always wanted to go to America.
I always wanted to do a road trip across America, as well. That was always in the back of my mind at the time, to travel and just get away from this shit.
I’d gone through this breakup and I wasn’t in a great place mentally, so it was like I just needed to get away, and that was really the goal. It was 200 pounds a month, just to help me pay my bills, and save up for this trip, really. And that was the only goal I ever had when I first started.
Launching a Business With Minimal Funds
David: And so before you started Big Red Gadgets, which was your first mega-successful store, you were at a point where you had set yourself aside 300 bucks to spend on the store. To spend on ecommerce marketing, and research, and ordering products, and whatnot.
And then there was also a $5 day Facebook ad budget. And so, I’m curious… How did that 300 pound total and then the $5 per day, what did that get you? How did it look as you were spending that, and what was it like launching what turned into a big business with really minimal funds?
Chris: Well, to foray into that, Big Red was the sixth attempt at this as well. I had five failed attempts over a period of a few years before that, on and off, not really having any focus. Big Red was that final attempt where I thought, “I really wanna give this a shot.” And I saw a new way to do it and I spent months saving up that $300.
And it was, “Okay well this is going to be my last shot, and if this doesn’t work now with the six attempts over a period of two or three years, then it’s not gonna work.”
I launched Big Red and then spent five pounds on the ad account on that first day, trying to sell… It was like a cat iPhone case. It was an iPhone case with some cute cats on it because I really didn’t know what I was doing, still. I would just try to find random products that I think people might like.
And it didn’t sell anything on the first day, so I lost a fiver and I remember thinking to myself, “I can’t afford to do this. Why am I doing this? I’m an idiot.”
And then on the second day, it made a sale and I was in profit. And I remember running around the room, saying, “I’m in profit, I’m gonna be rich, I’m gonna be rich.”
It was just a massive buzz that I got from making that first sale. And I think then after that, I think it was over the next six weeks, I earned ten thousand on it… Something like that. Not just on cat iPhone cases. I’d changed products during that time. But yeah, that five pounds that very first day. I’ll probably never forget that.
Making the Most of Free Content Online
David: And did the stores you mentioned before Big Red Gadgets and then Big Red Gadgets… One of the differences that you’ve mentioned between the unsuccessful ones and then finally the successful one is just the amount of research that you did beforehand. And so, what was the… Going into it, what was different? What did you have in your back pocket, knowledge-wise, that you didn’t with the stores that ended up in the red?
Chris: Well, we’ve not been able to afford to go and do much. I always got stuck in the house a lot. So I had a lot of free time. And when I realized I wanted to give this a go and this could potentially change, sort of, my life, I knew I had to really figure out and understand how this works.
I’m quite a logical person. So I like to understand the processes behind things. And I felt like this was a very process-driven kind of business that you follow.
Especially with Facebook ads, you follow these certain steps, these certain criteria, and people will buy from you. That was kind of the mentality I had with that.
So with all the free content you can get on YouTube and people telling you what you can do and showing you how to do it, I just spent hours upon hours just researching, looking at ways how to use Facebook ads, how to build good Shopify stores. I was looking at examples of Shopify stores. I was reading news articles about people who had done this.
I remember there was a company called LDSman, I think I was. That was his website. And he’d done a million dollars on his dropshipping store. And this was about three years ago, I think it was.
I remember seeing that and reading that article and just basically skimming through that article over and over and over again reading every single bit of advice he gave about how he set it up and how he scaled his business.
And I just soaked up as much information as I could until I had a plan in my head about how I was gonna do this. Because I couldn’t afford to lose money by spending money on Facebook ads without knowing what I was doing.
And I think one of the biggest mistakes a lot of people make when they’re new to this is they think they can just throw a five-pound ad up and make a million bucks.
I’ve actually had somebody say that to me once. They said, “Well, how come I never made a million dollars? I’ve spent a fiver on Facebook ads.”
David: Where is my money?
Chris: I was just like, “What?” You can be new to something. But then is that kind of level as well where it’s just… I just don’t know how people’s minds work sometimes. But yeah, so it was really just trying to soak up every piece of information I could that was out there for free and just try and come up with a plan.
David: What would the cash-strapped entrepreneur… What should they do today versus what you did? ‘Cause you were using Shopify and Oberlo and Facebook, and those are all the same tools that somebody might use to launch a dropshipping store today.
But 2017 was long enough ago that things have changed a little bit. So is the way that you went about it where you just maniacally researched and just started doing ads, is that replicable? Or are there some kind of obvious tweaks that you would make if it were 2020 and you were broke and you wanted to go about this that you would cut corners in a different way than you did back in 2017?
Chris: No, I think really, it comes down to knowledge of the platform. If I knew what I know now back when I started, I could have made so much more money than I did because I made a lot of dropshipping mistakes. Because I didn’t learn from somebody who’d done it. I just tried to figure out from all the free content that was online ’cause I couldn’t afford to learn from somebody.
And I took all this free content and all this stuff, fragmented ideas, and experiences and tried to put them into something that’d work for me. And it did. But it was really just knowledge.
You have to understand what you’re doing. And the only way to do that is taking the time to learn it, I suppose. Yes, the platforms have changed, methods have changed. But there’s so much free content out there, especially on YouTube now with how many people are doing YouTube channels, myself included. I give a lot of free information on my YouTube about how to do this.
So I think you’ve just got to learn because even when the platform is changed, you still have to have that knowledge to make it a success.
David: Yeah. And if anybody wants to check it out, Chris Wane’s YouTube channel is his name. So Chris Wane, W-A-N-E, punch that in, and you’ll find a lot of good stuff about how he’s done what he’s done and mistakes to avoid and things to replicate and all that. So definitely worth checking out.
Now, one of the things that you’ve gotten really good at over the years and one of the keys to your success is identifying products that are gonna sell really well. And so you run, at least in the past, you’ve run general stores, which means you sell a lot of different stuff in a lot of different niches.
And so it’s not like you’d have a store that just goes really, really deep on one specific type of product. You’re really across the board. And of course, you’re gonna absorb some misses with this strategy. But you’ve also been able to find winning products in all sorts of different categories across the board.
And I’m curious about how you are applying that product knowledge and that ability to sniff out big sellers, how are you applying that in this weird, current climate that we’re in with coronavirus and COVID-19 and just the travel bans and business closures.
Are you at a point now where you’re still trying to find new, hot selling trending products or are you pausing things while we go through this period of craziness? What does it look like specifically when it comes to products and product research and trying to figure out what’s gonna sell, if anything?
Coping With COVID-19
Chris: Well, there is a product that will sell very, very easily right now. And that’s masks. But I wouldn’t advise to go and do that just ’cause morally, it doesn’t seem right to me. And you definitely don’t know what the quality of that product is.
David: Right. I think there have been like a few thousand Shopify stores shut down ’cause they were selling masks. So yeah, I’m with you on the fact that that’s kind of a dicey one to be investing in right now.
Chris: Yeah. Definitely, definitely. But right now, for me personally, no.
I’m not looking for anything new right now just because I don’t think anybody knows what’s going on in the world right now when it comes to this virus and how long it’s gonna last, where it’s gonna go.
I have products that are selling. But I have reduced the ad spend just to try and control my risks as well because even though I believe China are getting back up and running with their production and my suppliers are at 100 percent capacity again and they’re running as if nothing’s happened, you’re still relying on distribution networks for the rest of the world.
And I think once it gets out of China, if it can get out of China ’cause a lot of parcels come on commercial airlines anyway, and if it does get out of China, then you’ve got the issue of just reduced workforces around the world anyway.
David: And so what are you seeing with… You mentioned distribution networks. And I think that this is really interesting. We talked to a handful of online business owners a couple of weeks ago and they said the same thing, that the operations that they work with in China are slowly ramping back up and are becoming normalized.
But then all their target markets now are going through shutdowns the way that China did back in late January, in February, and into March.
And so what’s been your experience with the distribution networks? Normally, it can get a product from China to anywhere relatively painlessly. But now it’s all been turned upside down. What are you seeing on that front?
Chris: Originally, it was taking quite a while for parcels to get out of China, over a week, in some cases, with one of my suppliers, which is very unusual, ’cause they are usually very, very quick. But like I said, that could be down to obviously, the commercial airline issue for a lot of the parcels going out on commercial airlines. It has brought pretty much… The entire air industry has been grounded. Especially to mainland Europe and the US and everything. So that was an issue.
At first for when they did start going, I found that they were sort of sitting in the shipping country longer as well. They’re not not arriving, kind of thing. They are arriving to the customers, it’s just a little bit slower, which isn’t ideal.
That is one of the reasons why I’ve lowered my ad spend anyway to lower that, sort of, risk to myself because I don’t wanna be getting thousands of orders that are sitting in warehouses where nobody’s working because the country’s in lockdown.
I think that’s my biggest concern with it, especially ’cause you don’t know what’s gonna happen next. It’s obviously growing, the exponential growth of the cases. It’s only gonna get worse before it gets better. And for me, now, the smartest thing for me is just to limit that risk until we’re kind of over those peaks.
David: And so, I guess you’re at a spot now where you’ve had enough consecutive months of big sales that you have a bit of a cushion. Is there anything in particular, though, that you would recommend somebody do who maybe started their business Q3 of last year, or even more recently than that, somebody who’s still at the beginning phase of their store?
I’m thinking about, if you ran into this mess back in 2017 when you started, you wouldn’t have had the reserves that you do now. So what does it take to survive this in terms of just like the raw money question? If somebody hasn’t been able to put away enough in sales, what would be the strategy moving forward?
Consider the Pros and Cons of Advertising on Facebook Now
Chris: I think right now, it all depends on what kind of metrics you’re seeing. Because this is a great time to advertise on Facebook, just because so many people are stopping advertising on Facebook. Your CPMs, your cost per thousand impressions, it’s really cheap.
But on the same side of that, customers are a little bit wary of spending money.
So when it comes to the advertising side, it’s very much dependent on what you’re seeing across the platform, whether you should carry on spending.
At the end of the day, if you’re profitable, keep it going, but then you then fall into the issue of the shipping issue. So it’s very, very important that you speak with your supplier first to see if they’re running and see if they have the stock and see what their expectations on shipping times are. And then it’s really just keeping… If you do get those orders, keep focused on the tracking just to make sure they are landing, and that you just gotta take it day-by-day, and make decisions as you go.
If I was starting right now without a lot of budget, then I would look at probably holding off on advertising right now, just to limit my risk.
And in the meantime, I’d be learning as much as I can about it. I’d be improving my store, I’d be building my email retargeting sequences, I’d be getting everything in the backend sorted so when I can start driving website traffic to the store again, once I’m happy the supply chain’s back up and running, then I have everything built in the back end.
I have all my video ads done, I have all my product descriptions done, all my email marketing is done, it’s all gonna be built and ready to go when we can start running this properly again.
David: Yeah, I think the idea of rebuilding the store, or at least doing a massive facelift, that’s something that we’ve heard from other ecommerce folk. I think that’s a great time to do it, and it seems like everybody that we’ve talked to, had some very specific things that they were just putting off that they knew they should do, but it was… They were too busy making sales, or too busy adding new products, and it was always kind of priority three or four.
But now that like you said, it’s not a great time to be advertising on Facebook for a lot of stuff. And it’s a precarious time to be relying on distribution networks. And so, yeah, I think this idea of fixing things that you’ve been kicking the can down the road on, it’s the time to do it.
Chris: Definitely, it definitely is. That’s what a lot of my time is being worked on at the moment, is like I said, signing up the email, retargeting the backend, improving some of my flow and my video ads, all that’s being done right now because I’m trapped in the house, and I’m already out of my quarantine snacks so I haven’t really got much else to do, other than work on my business. So that’s kind of what I’m doing.
I’m just using this time as productively as I can, really.
The Nirvana Moment
David: At the beginning, we talked about how every dollar, every pound that you were making was significant, even when you were just ending up like $5 on a day in the black, that that was a pretty big deal. But after a while, did it get to the point where you could exhale a little bit?
And I know you’re too ambitious, and you’re all about growing your stores, and so not that you would just totally kick back and chill. But was there a point that you remember where you were able to say like, “I’m not scraping by anymore. I actually, I got this thing figured out”?
Chris: Yeah, it was… Well, the first time I thought that was pretty early on, to be fair. My original goal was about 200 pounds a month, and I remember waking up one morning, and I’d made that overnight while I was asleep, and that’s profit. That wasn’t revenue, that was profit. So I made a 200-pound profit while I was asleep in bed, and now I had to get up and go to work for eight hours.
So I was thinking to myself, “Okay,” and that was the first day that it happened, so I was like, “Okay, there’s definitely potential with this now, I’ve completely smashed my monthly budget overnight whilst I was asleep.” And I was thinking, “What other business, what other job allows you to do that?” So that started happening every single night. And that was just over the night.
I started hitting 200-pound profits in the night, it was 1,000-pound profits in the day, 5,000-pound profits in the day.
And then you start thinking to yourself like, “Wow, this is actually crazy. Have I figured this out?” But then you always have that little doubt in your mind, “What happens if it stops? What happens if this product stops? I’m running this one product. Yeah, it’s doing great, but how long is this product gonna last?”
So it’s always about that longevity of it. So even though it felt like, “Yes, I’d figured this out, and it was working really well, and it was gonna change everything for me,” there was always that doubt, just a personal doubt of how long I could sustain it for. And then once you start seeing the success, I think, it’s pretty normal to have those doubts about it as well because it is so different from anything you’ve ever experienced before.
Dropshipping as a Confidence Booster
David: One more question for you, Chris, then I’ll get you out of here. You had talked at the beginning about, I think, you used the term that you were in a bad place. That you weren’t… That things were kind of just, in your life, a little bit topsy turvy, with a break-up, and then just the persistent money headaches.
And I’m curious about just how, not just from a business standpoint, how things have changed. And not just the fact that you can travel and live a little bit more freely and quit pinching pennies. All that stuff’s important, and it’s real.
But what about just from like a… I don’t know, a spiritual perspective, or just psychologically? Is the transformation there as dramatic as the one that you’ve seen when it comes to your pocketbook? Has it been a revelation for you in terms of just, I don’t know, confidence, or the way that you go about things?
Chris: Yeah, definitely. That was something that I didn’t actually expect… I didn’t even think about when I first started this.
My confidence levels have grown so much from starting this. Not just from the fact that earning quite a decent amount of money at the beginning to actually grow into what it got to.
That gives you confidence anyway because you’re not worrying about life as much, but also the experiences that I’ve had since then because of it, obviously, coming out to Oberlo to do that video interview on the YouTube channel. That was a massive step for me, ’cause I’m very rarely in front of the camera, which then caused me to launch my own YouTube channel, which again, was something that was completely out of my comfort zone that I’d never thought I’d be doing.
And it’s all because of what dropshipping has done for me personally that allowed me to take those steps and really just take a leap out of my own comfort zone. If you’d come to me two, three years ago, you wouldn’t… I don’t think you’d recognize who I am now. It’s really strange looking back how much actually has changed.
David: Awesome. We can leave it there, Chris. Again, we mentioned earlier, but Chris Wane’s on YouTube. Lots of fun stuff over there, just search for Chris Wane, and then also on advanceddropshipping.com, there are more goodies there as well where you can really level up your knowledge, and as Chris said, it’s a good time to do it.
Things are weird, and slow, and locked down right now, so no time like the present to get cracking on that stuff. Chris, thanks again so much for taking the time to chat.
Chris: No problem. Thanks for having me.
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