Jeffrey Ho started dropshipping when he was still working at his banking job. He first started selling products in the men’s fashion niche, transitioned to women’s fashion, then built a 6 figure store in around one year. He was then able to leave his banking job and run his dropshipping store full time. Watch the video above or read below to learn more about all the steps that Jeffrey had to take to get his store above the 6 figure mark!
SaleHoo’s Sean: Hi there, it's Sean from SaleHoo and today I'm interviewing Jeff, who started dropshipping in 2017, explored it for one and a half years, grew his brand to five people and was featured in other interviews and articles such as that Oberlo and Debutify. Thanks for agreeing to the interview Jeff, it's a it's an honor to have you here.
Jeffrey Ho: Thank you, Sean, for having me. I'm so happy to be here. And I'm honored to share some information with everyone in the podcast and interview.
Sean: Awesome. Yeah, we really look forward to it. Um, for the first question, can you share a bit of background on your eCommerce journey, I understand that you were on quite a good career path, namely banking, before doing eCommerce.
Jeffrey: Yeah, so I graduated in 2017, just a bit of a backstory. Again, following the very traditional path, I landed my first job at the bank, and worked there for a year or so. And during that time, is when I found out about eCommerce in I think it was late 2017. I read this blog on Oberlo. It was talking about dropshipping, what it is, how it works, you know how you can get started. And that kind of interested me, because, you know, it was the first time hearing about a business model that didn't require any inventory. So I knew that the you know, the profit margins will be high and the start up costs will be low. So I explored a bit for a while, you know, working on that full time job at the bank. So that's where I got my interest first in eCommerce. And then I worked alongside it while you know, working in the banking job, and then soon, about one year and actually quit the banking job to do it full time for about a year and a half in total, like you said. So I guess that's where I got started. I just felt really interested in the concepts and the business model. And yeah, everything just kind of propelled from there.
Sean: Nice. Nice. And how did your store do, what was the niche that you started with?
Jeffrey: I chose the products and the niche depending on what my passions were and what my interests were. So back then I was really into, you know, men's fashion and grooming and things like that. So I sold a lot those men's fashion accessory items. So when I first started off, so I guess that was the niche that I kind of went towards and you know, start to grow from there.
Sean: Nice. But I understand that you switched niches. Did the first niche, men's fashion, not work out for you?
Jeffrey: Yeah, yeah. So funny stories. You know, later after I kind of experimented with eCommerce and found all those little successful, you know, men's fashion because the audience, I assume transitioned to another niche, which was quite similar, but then it was, you know, more towards the female demographic, but selling pretty similar kind of accessories, but more tailored to more woman, towards women. So there was a slight, you know, change in niche there. But then I guess the interest will remain the same.
Sean: Yeah, yeah, at least it's still, you know, more on fashion.
Jeffrey: Yeah. Fashion It's always been something I've been interested in. So, you know, I try keeping it that and see where it went from there.
Sean: Nice. And how did it go?
Jeffrey: Actually, yeah, after changing to I mean, woman's, the woman's demographic, I think I found it a little bit more success, because, first of all, women, I think, based on a lot of research, they tend to buy more online.
Jeffrey: Not just that, but they have a strong incentive to buy. And they have they tend to spend more in general as well. I mean, based on your experience, right, as guys here, we know that sometimes we might not want to spend so much. Right, right, especially like, you know, technology items, you know, consumer technology, clothes, especially we don't really like to buy online. So then, you know, based on that kind of that idea. Focusing on the woman demographic would be like a more logical choice, if you want to, like, you know, succeed or like see some results in eCommerce. So, so that's what I did.
Sean: Yeah, and especially fashion.
Jeffrey: Yeah, I mean, fashion is, is a very competitive niche, as you know. And, you know, if you don't have a unique selling point, first of all, it's hard to sell it. Anybody do. You know, selling it to men might might not be the most ideal, right, starting off?
Jeffrey: So we're transitioning to the female demographic to make it a bit easier.
Sean: Are you comfortable with sharing? Uh, you know, you're sort of how far you were able to scale your store to in terms of, you know, so was it a six figure five figure
Jeffrey: Yeah, so back then write the word love success stories, because there were there were a lot less resources, a lot of training and tutorials on YouTube and you know, the courses. So back then, I think I did about five figures or so in 2018. And then 2019 was when I reached the six figure mark.
You know, obviously, we talked about revenue. Yeah, we'll talk about revenue here not profit margins. As you know, people who've been at this game for a while, usually, for a dropshipping store, you retain about 25 to 20 to 25% of the profit margins. You know, if you're, if you're lucky, and you know, if everything goes according to plan, but usually it's about 10 to 15. So that's why, like, we're talking about, you know, strictly revenue here. But those were the kind of figures that I did kind of hit within about one to two year mark. Yeah, mainly focusing on, you know, the women's fashion niche, as we mentioned.
Sean: Nice. Yeah. But, was that your first and last store? Or did you have more that you use? To create?
Jeffrey: Yeah, that's a that's a good question, actually. Because there was actually, it's technically it was my first ever store. But then I kind of changed a niche, because the name was basically the same, but it's just a niche, I changed within that store.
Jeffrey: So then you can say that it was my first ever store. But then, you know, within it, obviously, there were a lot of changes, you know, the leash, the products, the design, the branding, the social media posts, you know, things like that. But yeah, this is I guess you could say, it was the first store.
Sean: Yeah, nice.
Jeffrey: I got kind of lucky, I guess.
Sean: I think that also something that a lot of, you know, aspiring eCommerce entrepreneurs would like to ask is, how much budget did it take? Right, like, how much budget did you start with?
Jeffrey: Yeah. So, this has been a question that's pretty commonly asked, I would think, you know.
Jeffrey: I, you know, back when I was making videos, I was also, you know, making videos based on what people want to see. Right. So a lot of that was, a lot of the questions that kept coming up was, you know, how much do I need? What kind of budget do I need to actually successfully start a store? And the straight up answer is like, obviously, the more the better, right, because you have more budget to work with, not only not only in terms of advertising, but also, you know, setting up your store, making a custom design store, hiring some freelancers, maybe to make a very premium logo, you know, maybe setting up a very premium looking social media account, things like that, you know, a lot of that requires a lot of budget, right? So obviously, the more you have, the better. But if you want to start from scratch, you know, the learning curve might be a lot more, you have to learn a lot of things yourself. But it is possible, and you can start I think, with maybe around $1,000 nowadays, one to 1.5k I would say.
Sean: Is that what you started with?
Jeffrey: I started with I think 1k back then, but then obviously a few years ago, it was a lot easier, because yeah, competition was fierce. And now we know things are getting harder, people are getting more stack, the market is getting more saturated. Products are getting more saturated. The market is getting saturated.
Sean: I think customers are getting more intelligent as well.
Jeffrey: Yeah, yeah, that's a good point, too, right. Like nowadays, people aren't stupid when you shop online. At least at least I know.
Sean: Yeah. Yeah. absolutely Yeah.
Jeffrey: Like when someone is opening a dropshipping store, you can tell like, oh, that, that that smells fishy, you know, especially you get a product page for like, you know, this item will be sent in like 30 days, and you know, that use it, they're using epacket, you know, yeah, before the effort. So, you know, things like these, you know, that people are dropshipping and like you said, customers aren't doubt becoming more intelligent. So, it is worth more, you know, more of your efforts to you know, to spend on perfecting your store, making sure it doesn't look like a dropshipping store. And making sure you know, once something is working, you want to invest in logistics working with a reputable supplier. So, you know, like that, something like that.
Sean: Yeah. But you were also in a very popular niche which was, you know, fashion. Are you are you willing to share what your were your best selling products, and how were you able to differentiate yourself? Because fashion is so competitive. It's so competitive and like the fact that you made six figures from that store is, that's it's incredible. So how do you how did you differentiate yourself in such a crowded market? And what do you like, your sort of winning line of product?
Jeffrey: Yeah, obviously, I won't get to the specific details, you know, what kind of item I was selling. But basically, it was like a category of products that was selling well. And so I focused my efforts on that category of products within fashion. It was in the woman's niche. And basically, you know, when you try to sell items, the concept is the same for whatever niche you're in, right, you want to have a USP. So what that is, is a unique selling product, unique selling point, sorry. And that means you have to find a product that's like, differentiating and someone unique when something that catches your attention, when you're when you're, when you're when you're your target customer jumping online. So that was what I focused on, you had to find a product that has a USP. It's the same across all the niches, but that's what my focus was on for, for that fashion accessory. So then I focused on, you know, finding one product that was selling really well, and try to sell other products that was similar to that. So, you know, that would enable a lot of cross selling opportunities. Especially since, you know, those items that I was selling was a passion product, it wasn't something that solve the problem, solve the problem, necessarily, but it was something that, you know, the target audience that the ground demographic was very passionate about. And so that's what I did, I added a bunch of products that was very similar, and then made the store into a very reputable, you know, branded looking kind of store. And then later on, you know, kind of invested in, you know, logistics, finding really quality suppliers, you know, good branding, packaging, and things like that. So, so yeah, I guess, I guess, coming back full circle is, is finding products that work already, and then try to find similar products like that to sell.
Sean: Yeah, I think that's a good point that you made. Um, sometimes it's not, that the product is so special, it's how you, it's how you present it, it's the presentation, it's like the angle.
Jeffrey: Yeah, exactly. You know, people always see, you know, what's the angle? What's the marketing angle? You know, for example, like, let's say you're, you know, for the ease of, you know, understanding, yeah, we try to find, we're trying to sell a problem solving products, you know, that product might solve one particular problems, for example, back pain. But then, if you, if you focus on, you know, another target segment or another time customer, you know, they might not be looking for a product like itself, back pain because they don't have back pain, maybe same time, they might be looking for something that would help them. Let's say, for example, this product helps them, you know, ease their back pain, but also helps them sleep better. So, you can use sleeping better, or like insomnia as a pain point, and as a marketing angle to sell that product. So it depends on you know, what kind of perspective you you're looking at it from, and, you know, it's really less about the product as a result, but more about how can you position a product such that, you know, it can catch your target your customer, your customers interest? So, yeah, yeah.
Sean: Yeah. And yeah, there are some angles that, you know, these, like big companies, they just didn't see it that way. So I think that market saturation, yeah, it's, it exists, but, you know, as long as it's always gonna be there, that's the thing. So as long as you need to think innovatively, you should do fine. You like leaving the banking space? I wanted to ask you about that. How did he know when you could leave it?
Jeffrey: Yeah. So I think that's also a really good question. Because a lot of people think that it began, it began to entrepreneurship, you know, it can replace your job, right? Not only in terms of your income, but also your lifestyle. You know, once you get to entrepreneurship, you can completely change your lifestyle. But it's a very common misconception, because, you know, what people need to understand and I'm speaking from personal experience, is that at least the first half a year is going to be really tough. And until you can find a way to, you know, generate income and not only that, but do it sustainably through at least you know, half a year so, you shouldn't even consider quitting your job. You know, it should never be a replacement of your current job or lifestyle, but rather a supplement. So what I mean by that is, you have to work on your side hustle to the point where it can generate you enough. And ideally, you know more money than how much you can earn in your full time job, in order for you to quit. I think that's the safest route for people who are considering getting into, you know, full time entrepreneurship. When you work full time job, you work nine to five for in some cases, you know, you might work longer, like nine, six and seven, depending on the job nature. But if you're working entrepreneurship, you work, whenever you have to work, and we don't count hours, you it's based on a necessity in that business need. And so you could be working 12 hours, 15 hours if you need to. But obviously, you can measure on time, but you need to, you need to work based on what you need to do, as opposed to you know, clocking in and clocking out. But you know, what's, what's great about eCommerce is that, you know, especially owning your own eCommerce Store, is that whatever you put in, you know, that you're going to get out, you know, you know that something is going to go that and it's for your own good, it's for your own benefit. So whatever you put in amount of effort, you know, that this is maybe it's money, maybe it's branding, whatever, you know, that whatever you put out, you know, you bring you generate as a result is a direct result of how much you put in.
Sean: Can you go through as well, how you found your suppliers, you know, how did you make sure they're reputable, did you get them from AliExpress? And then you transition from dropshipping to wholesale? How did you go about that? Supplier wise.
Jeffrey: So, I had my own approach to doing it. So in the first couple of months, you know, it was just, I would always find products, it was more about the products that I want to sell, rather than finding the vendor that sells that product, if that makes sense. So it was very product oriented so wherever, whichever vendor held that product, I'll select that vendor. I've also done some research with SaleHoo, you know, prior to doing this, this interview, and I know it's a fully integrated platform for people to check out different products, do supplier assessments, find a copy that's relevant all for like a, a fee, a small fee. I know you guys are SAS, software as a service and those kind of services provide a lot of value because your stakeholders don't have to look around for different information - you just find all the information in one place.
Sean: As for marketing, what were the experiments and key things that you've done?
Jeffrey: Yeah, so in digital marketing, we like to use this, we like to mention, I would like to use this thing called AB testing, right? I'm sure you've heard, it's basically, you have two variables that you want to test out to see which one is better, and you do them not really intended, but also you do them separately, and see which one gives better results. So that can be in terms of the landing page, like your product page, or it can be in terms of your maybe your ad copy, or your ad creative. So using a different photo or like a different copy. So that's why I did I did a bit of AB testing, with product pages, and then with different ad copies to see which one would work better. So that's another kind of useful marketing technique, then which you can use. But I wouldn't say to do it, you know, very early on, obviously, at the end of the day, product and marketing is still king. But once you've found a product that, you know, is working well, based on your data, that's when you can kind of explore the A B testing, and especially in relation to your marketing efforts.
Sean: When it comes to marketing. That's such a big expense for beginners, you know, and a lot of beginners they only started with $200 $400 $500. How would you approach it with a $500 budget? Or would you not approach it with a $5 budget when you save up first?
Jeffrey: Yeah, that's a good question. 500 nowadays is a bit steep. I think unless you actually know what you're doing and you've done hefty research on, you know, proper branding, how to set up the store properly with good, you know, good design, then it's going to be hard to have a family life by honestly, if that's the case, you get no launch. I would probably wait until you have like 1.5k or something 1.5k Or at least one to 1.5 Okay, before we started testing, especially in this day and age, it's gonna be really competitive and we don't want to get.
Sean: It is really expensive.
Jeffrey: Yeah, it is really expensive. But, I mean, if you look from the grand scheme of things, you know, starting a business with 1k 1.5k USD isn't a lot because you know, everybody cutting down inventory, you don't have to hire staff to do that yet it can be a one man band. So grand scheme of things, not too bad. But I guess on the other side, you know, of the coin, if you really want to start with family dollars, I would probably, you know, find the product first that works. Focus on the branding stuff on your store, and then I'll use influencers. Okay, but not Instagram influencers. But I think now the trend is to use tick tock I think that's the trend nowadays. And I think there's still a lot of potential and the rates are not too bad right now. Obviously, your due diligence and, you know, finding a suitable and eligible you know, in Tiktok influencer is another story. But once you find the right one, I think there's going to be a lot of potential so that family dollars can be spent majority, you know, majorly from Tik Tok, I would say.
Sean: Just the follow up question to that, how do you allocate the budget? So, you set up your campaign, it could be, you know, influencer outreach, or it could be a Facebook ads campaign, how do you allocate the budget?
Jeffrey: Yeah, so, uh, I would say, as a beginner, you should focus more on, you know, shoutouts, influencer shoutouts, in particular, because the vendor, you're the assessment, and that criteria is much easier to understand and grasp. Whereas, if you're using Facebook ads, or Google ads, it's a lot more technical. And the learning curve is a lot steeper, which means that your, pportunity to fail and lose more money is a lot higher, right. So definitely, as a beginner, you would want to focus maybe, I would say at least 60% of your budget, on, you know, influencers and stuff, making sure you find the right ones, and maybe 30 to 40% on learning Facebook ads, learning Google ads, maybe even Pinterest ads, if you want. Yeah, you know, especially just learning the ins and outs, and perhaps how the algorithm works, what constitutes a good copy, but what constitutes, good, maybe just ad creative, write your benchmark of other brands as well see how they're doing. So yeah, it's more of a learning curve. That's why, you know, those kind of be buying platforms might be a bit harder, and something that you should spend less money on.
Sean: For the closing question. I wanted to ask, How do you think dropshipping or ECommerce will change over the next one to two years? You know, a lot of things have changed, you know, TikTok, has been tick tock. Facebook has been getting so expensive. Yeah, what are your predictions? And how do you advise to adapt to that change over the next one to two years?
Jeffrey: Yeah, so I think I've mentioned this before, in the previous question, questions, which is, if you want to start in this day and age, I think you should focus heavily on branding, focus heavily on making sure that your design is in place, your branding is in place, your social media, you know, the branding is in place as well, making sure that the store is credible and reputable. And from there, you know, you already have the good, you already have a good foundation in place, right. And from there, you can start investing in, you know, quality, you know, influencers or marketing, on Facebook ads, or whatever. But I think the foundation should always be set in this day and age, especially considering the wave, the huge, you know, the saturation of different dropshippers. not only from Facebook ads, but also you know, a lot of dropshippers are doing Google ads now. And it seems so hard and most people are picking up on what dropshipping is and how, you know, what are the very distinct characteristics of dropshipping. So, you know, the product pages might be a bit scammy fishy. The copy might be like directly from Aliexpress or whatever. So you want to have that foundation in place before you do anything. Do a lot of research with that before you actually go ahead on and, you know, focusing on your marketing efforts.
Sean: This is the really great interview that I think a lot of our viewers love thank you so much Jeff for all the value packed information I'm going to leave Jeff's channel in the description below if any of you want to learn more about Jeff and follow his journey thanks Jeff.
Jeffrey: Cool thanks for having me Sean. It's a pleasure.