How One Bad Supplier Cost This Dropshipper A Million Dollar StoreTrends

Team Research
July 20, 2019 - 3 min read

A store caught our attention on the Shopify Exchange when it was listed for $5,000 with a revenue of $176,904 over 2 months this year. So, what’s the catch?

Data From The Shopify Exchange

Let’s start some analysis to figure out what went wrong in June, as the Shopify Exchange listing where the store is being sold doesn’t address this. Browsing the store with the Trending Products toolbar enabled helps us verify that the store is real.

Researching The Store’s Trends

The Trending Products Toolbar in action

Looking at the screenshot above, we can see our toolbar added some data above the main product’s image. We can see from this at a glance that the product has a great strength metric, meaning trends have been detected. In addition, we can see that our toolbar has also found ads and a reliable supplier for the product.

Notice the store was detected by us 3 months ago in April, exactly when their main product first started to trend – this is when we would have sent it to users with us. It’s also further proof of how we do what we say we do and track every trend in real-time, as the data can be verified against the revenue stats that can’t be changed on a Shopify Exchange listing.

We Detected A Reliable Product Supplier

How Did It Sell? Easy! We Found The Product’s Ads!

These are just two of the ads the store was using to promote the product, the store used a mix of static image ads and video ads. However, at this point we still don’t know why the store’s traffic dropped in June, so let’s look into that a little more.

One of the best ways to see how customers are responding to a product is by looking at recent comments on the ads detected by our toolbar.

Let’s Look At Some Customer Feedback

Bingo!

No dropshipper wants to see comments like these from customers. The store failed on every level – no support, slow delivery times and a poor quality product to top it all off.

That Explains The Low Exchange Price

It’s a shame because the store would have had so much potential if they spent more time selecting a good supplier first. They ran before they could walk and sent too much traffic to the product without verifying the supplier. Let’s look at the numbers from the Exchange listing to examine the stores first 2 months in more detail.

What Could have Been

The Sales Data
280,000 Website Visits
1.7% visitors convert to sales
5,000 Sales
Store Revenue of $176,904
Blanket Selling Price $29.95
Purchase Price Of $15.00
Cost of Goods $75,000
Gross Profit of $101,904
$60,000 Net Profit
$42,000 On Ads

Store Benchmarks
$8.4 cost per lead
$0.15 cost per click

All the data above is before the refund and chargeback requests not disclosed. If the owner of the store put more effort into finding a quality supplier there is no doubt that this store would have continued to make $30,000 profit per month, however, it failed before it even started. The store’s reputation is now forever tainted by poor customer reviews.

Always Have Backup Suppliers!

We found multiple good suppliers on AliExpress with positive feedback for this exact product. It just takes time to review each of them and get the information that matters.

How The Store Died In June

Due to the poor customer feedback and lack of updates, the payment account for the store was likely shutdown when customers started to initiate chargebacks (it’s why there’s a loss in June). The advertising account was also likely shutdown due to poor customer experience on Facebook when customers started to complain of a poor product, no product showing up, slow delivery times (3mo+ in some cases) and no support.

In summary, the downfall of this million dollar store was the supplier. Don’t let that ever be your problem. With the right preparation you can easily avoid the same situation.

Solve The Problem. Before It’s A Problem!

To solve the problem, we created AutoContact to remove the headache from finding quality suppliers on AliExpress! AutoContact generates and automatically sends a form to every supplier of a product, and notifies you when you get replies in our interface so you can easily sort them all, see their best price and contact info.

Finding good suppliers can be tedious, using AutoContact with our toolbar helps you save time and track hundreds of suppliers with ease. You can try out AutoContact and all our other features by joining as an early user with us!

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Team Research
Trending Products is the only product research solution that backs the trends we show with real data. We scan billions of data points each day to show you unique new trending products daily. Our industry-first features - Strength Metrics, Store Reports, SmartMatch, AutoContact and Trending Feeds will help you take your product research to a new level.