Resources for Buying and Selling Online Businesses

How to Dropship From China Using Influencers

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Alex Fedotoff

Alex Fedotoff is the Founder and CEO of eCommerce Scaling Secrets and the founder of several e-commerce brands that he scaled to seven and eight figures. From the bedroom in his parent’s apartment, Alex embarked on his e-commerce journey in 2014 without being fluent in English. He is an expert on advertising on Facebook and other platforms and has helped his clients collectively generate over $120 million in sales. He has consulted big brands like Lululemon, Under Armour, Ella & Mila, and others on what works in paid acquisition, helping brands scale at AF Media LLC. He’s also Chairman of the Board for D2C Brands.

Here’s a glimpse of what you’ll learn:

  • [03:28] Alex Fedotoff talks about his accidental exposure to the e-commerce marketplace that launched a business
  • [07:21] How to follow and identify the influencer market to engage with promotions and demand
  • [11:55] Why transparency in shipping times is key to consumer satisfaction
  • [17:58] Alex discusses the difference between private label versus brand label dropshipping
  • [23:50] Can an influencer help expand your product base?
  • [27:40] How brand ambassadors track their revenue from promoted products
  • [33:01] Alex explains how custom packaging increases the perceived value of your products
  • [38:03] The learning curve and opportunities of generating appealing content
  • [45:05] Alex shares how to find diluted influencers to collaborate with your products

In this episode…

As an entrepreneur, figuring out what to sell is half the battle. How are you going to build and sell your product across the e-commerce marketplace? Is it possible to market your products without risking a profit upfront?

There is power behind a message — and as a brand owner, you want that message to be your product. By using brand influencers and ambassadors, your product and brand are on display across e-commerce channels. Alex Fedotoff knows that to generate more revenue, there needs to be a quick dropshipping rate and an emotional attachment between your brand, influencers, and ambassadors. He knows the value of finding an influencer with an open market and the efficiency of an ambassador. If you want to learn, too, you do not want to miss this episode.

In this episode of the Quiet Light Podcast, Joe Valley sits down with Alex Fedotoff, CEO of eCommerce Scaling Secrets, to discuss launching a business with influencer marketing and dropshipping. Alex explains how to build a business without exponential upfront costs, the role of an influencer and brand ambassador when scaling your brand, and why custom packaging increases the value of your brand. Stay tuned!

Resources Mentioned in this episode

Sponsor for this episode

This episode is brought to you by Quiet Light, a brokerage firm that wants to help you successfully sell your online business.

There is no wrong reason for selling your business. However, there is a right time and a right way. The team of leading entrepreneurs at Quiet Light wants to help you discover the right time and strategy for selling your business. By providing trustworthy advice, effective strategies, and honest valuations, your Quiet Light advisor isn’t your every-day broker—they’re your partner and friend through every phase of the exit planning process.

If you’re new to the prospect of buying and selling, Quiet Light is here to support you. Their plethora of top-notch resources will provide everything you need to know about when and how to buy or sell an online business. Quiet Light offers high-quality videos, articles, podcasts, and guides to help you make the best decision for your online business.

Not sure what your business is really worth? No worries. Quiet Light offers a free valuation and marketplace-ready assessment on their website. That’s right—this quick, easy, and free valuation has no strings attached. Knowing the true value of your business has never been easier!

What are you waiting for? Quiet Light is offering the best experience, strategies, and advice to make your exit successful. To learn more, go to quietlight.com, email [email protected], or call 800.746.5034 today.

Episode Transcript

Intro  0:07

Hi folks, it’s the Quiet Light Podcast where we share relentlessly honest insights, actionable tips, and entrepreneurial stories that will help founders identify and reach their goals.

Joe Valley  0:18

Hi folks, Joe Valley here. Thanks for joining me for another episode of the Quiet Light Podcast. Today, we are going to talk about drop shipping, launching a business with very little cash using influencer marketing, and then flipping it to a branded model where you’ve got your own brand and line of products. Very interesting conversation with guy named Alex Fedotoff lots of tidbits and nuggets on how to find influencers connect with them, make sure that you’re not paying them a whole bunch of money up front actually gives out some links and URLs to affiliate programs. Like I’ll tell you right now, Buzzbassador.com where the influencers can get paid a percentage of revenue, really innovative, creative ways to launch a business and get it cranking up without spending a whole lot of money upfront, and eventually building a business that you can convert to your own private label brand, and sell for high value. Before we jump to the podcast. I do want to give a little commercial break here to the EXITpreneur’s Playbook. We’ve done very well over the last 12 months promoting the book and marketing. My goal for the next 12 months is giveaway 10,000 Yes, 10,000 digital copies of the book. So I want you to go to EXITpreneur.io/QLPod. That’s QUl pod like the Quiet Light Podcast. There you can get a you sign up and you get a free digital version of the book. If you do it on your mobile device. You can download it onto your iPad, your you can read it on a Kindle, your Nook, your iBook, whatever it might be. So it’s essentially a free digital or Kindle version of the book itself. If you are buying a business, it’s a must read. Look, I know I wrote it. And I’m being a little self promotion type here. But it’s the playbook that the buyers used to build that the sellers use to build an exit their business, why in the world wouldn’t you want to have it as a buyer, as a seller, it’s going to help you avoid the ignorance discount that too many people get when they’re buying a business directly from a seller on their own. And there’s not an advisor in the middle, it’s going to help you understand the value of what you have, it’s going to help you get the most value for what is likely your most valuable asset, which is your business. And we’re coming up against some potential economic tough times here, where multiples may come down, you want to make sure you’re getting every dollar you can for your business. So go to EXITpreneur.io/QLPod and get your free digital copy of the EXITpreneur’s Playbook. Okay, here we go on to the podcast. Alex, welcome to the Quiet Light Podcast.

Alex Fedotoff  3:11

Thank you for having me, Joe,

Joe Valley  3:13

tell us tell us a little bit more about yourself and your background and what you do.

Alex Fedotoff  3:18

Sure. So I’m originally from Ukraine, we moved to United States like two years ago, I started in an online space kind of like by accident, because I was working like labor jobs. And I didn’t want to do that for you know, for the rest of my life. And I decided to be like a freelancer back in back in Ukraine. And the only problem was like, I didn’t speak English, and I didn’t have any skills. So I had to figure that that stuff out, it took me like, probably like one and a half, two years until it started to get some traction. And some of my first like, clients in that freelancing world were like e-commerce businesses. So I guess that kind of determined my, my future paths. And one of the clients was actually drop shipping business. And I just figured out that model that was so easy, kind of like on surface because you didn’t have to own the product. You don’t have to kind of like have the inventory you can just sell it and then fulfill the product from your actual like revenue from your actual profit. So that’s how I got hooked on that drop shipping model. Now there’s

Joe Valley  4:32

so much so much we could talk about in particular the Ukraine war on what’s going over there on over there. I hope your your family and your friends back home are safe. And I’m glad that you’re here in the States. I did hear I’m gonna say this out loud, folks. I did read something this morning. I headline that Biden when he was at a Asian Summit. He said if China attacked Taiwan that America would defend Taiwan. And my immediate thought was why the hell aren’t we doing that Ukraine? It’s just, I mean, they both got nuclear weapons. I don’t know what the issue is. But I’m, I mean, I don’t want to go to war. Bottom line. But I’m disappointed that our president would say, we protect Taiwan, but not not help defend. And this is with military action, and military defense, Ukraine as well. But we won’t do that podcast today. I’ll do it another day. I’m just happy and glad that your family and friends are safe. All right, so on to drop shipping as a model to get into e-commerce and then eventually flip that particular dropship product to a, you know, a private label brand. One of the complaints people always have or that I hear is that the margins in dropshipping are not great. Can you address that? And tell us about it? What you see as far as margins?

Alex Fedotoff  5:54

100%? Um, I think from from my perspective, I think the issue is, I think there are different type of like, drop shipping kind of like products. So for instance, there are even companies in United States like the Wayfair, you know, big business, you know, billion dollar business, it’s a big part of it is drop shipping, so then I’ll actually own the inventory. But once we get the order done, they fulfill that order from one of their suppliers.

Joe Valley  6:22

Good point. Good point,

Alex Fedotoff  6:24

we are kind of like our specialty always has been drop shipping from China. Which means let’s say, we advertise in the United States, once we get an order, we have a warehouse in China, we have suppliers in China, and we can actually fulfill product directly from there to the customers.

Joe Valley  6:44

Right, so jumping right into that, I mean, it’s, I would guess, that it’s got to be a very light product, so it can be shipped by air. One. 100%. Okay, so you can let’s, let’s, let’s talk about finding products that you can dropship from China first, how do you do it? What can you recommend? Where Where should the audience go? If they want to go searching for products to dropship? And what kind of products sell best in a drop shipping model?

Alex Fedotoff  7:14

100%. So, from my, from my experience, it’s definitely yes, definitely light products. And it has to be something that is ideally, that’s something that’s problem solving, like some gadgets, like some gadgets for I don’t know, even for gardening, like you know, there’s some products for gardening to improve your I don’t know, maybe some lights for your, for your yard, for your house, some gadgets for home, something that is kind of like solving a specific problem like gadgets for kitchen, you know, maybe to cut like potatoes more efficiently or to like organizer like small organizers, plastic organizers, stuff like that. does very well. Usually we don’t kind of like we don’t try to like reinvent the wheel. We just go and spy we just spy on what’s working because we don’t want to be pioneers. Pioneers usually have arrows in their back. How do you

Joe Valley  8:13

determine what’s working? Yeah, so because this is this is not we’re not talking about selling these on Amazon like so many people were talking about influencer marketing is that one of the next steps you’re gonna take and talk about here in a few minutes, and marketing these products on your own website. So how do you spy on the competition or find those products and see if they’re selling elsewhere? If you can’t use tools like Jungle Scout and helium 10

Alex Fedotoff  8:37

So there are tools like ad spy, for instance, where you can see what actual products are being like sold

Joe Valley  8:46

as that ad spy ad Spy.

Alex Fedotoff  8:49

Spy, there’s another tool called mania so am i and e a my Nia so my Nia allows you to actually see what’s being advertised on TikTok was being advertised on Instagram was being advertised on Facebook and also the influencer marketing. So what what influencers are promoting what type of products so then you can kind of like learn what’s in actual demand, what’s selling, and you can go off there those particular categories.

Joe Valley  9:26

So my near would be the first step. Essentially, if I’m going to go ahead and say, look, the reality is I don’t have a whole lot of money to start or I don’t want to risk a whole lot. I’ve tried before and failed and my spouse won’t let me spend a whole lot of money on launching a new product. So I’m gonna go to my Nia M I N E a.com.

Alex Fedotoff  9:47

Yeah, let me see. Let me see the proper domain for that. I believe so I believe.

Joe Valley  9:52

And then with that you can identify find the influencers and what they’re pitching on TikTok Facebook instant gram, and so on and so forth. And essentially, okay, I like that product it seems to be doing well, there’s lots of interest in it. And then go ahead and try to source it over in China. Yeah. So how do you source it?

Alex Fedotoff  10:16

Yeah, so for sourcing it, actually. So for example, one of one of our brands that we have acquired, it’s an apparel brand. And it’s actually started like, rough like one, one half, one half, one, almost like two years ago. And it started from this actual drop shipping model. And the previous owner who started this brand, he was dropped shipping these products directly from initially from AliExpress. AliExpress is a big platform where you can find a lot of products, but the problem was AliExpress, usually is that shipping times are horrible. Like, they’re like 30 days, 40 days. So it’s I mean, the product will get delivered. And the products usually are okay quality, but the shipping times are just that bad. So, but that’s kind of like a good like starting point, if you want to do that. And also sometimes on AliExpress, you have other options. So if you want a faster shipping, it will just cost you like few dollars more to have the product delivered, like faster, but then, you know, it will get delivered.

Joe Valley  11:24

So how long is the typical shipping time? We? I’m sure that came up in people’s minds the moment we said, Yeah, you’re gonna ship from China gonna drop ship from China? What are we talking about here? 10 days, two weeks, seven years,

Alex Fedotoff  11:39

than 212 days. Usually is, is what we are getting.

Joe Valley  11:44

And you do you do? Do you in the checkout? On your websites? Do you say how long the shipping time is?

Alex Fedotoff  11:52

Yep, yep. Yeah, that is absolutely necessary to just like, you cannot like lie to people or like, because they’ll be they’ll be, they’ll be frustrated, they’ll be like, just you know, you’ll

Joe Valley  12:04

probably get more customer service problems. If you’re not up front, that is going to take seven to 10 days. I get frustrated personally, when I go to order something it doesn’t show up in the afternoon, because I’ve got an Amazon fulfillment center about 3030 minutes from where I live. So yeah, I yeah, that’s another another thing I hate. Like when when I buy a gift for somebody else that lives in a more remote location. I’m expecting okay, I can wait to the last minute to buy it. But then it takes a week to get there. Because they don’t have a filament center close by. So anyway, all right. So 10 to 12 days is the answer in terms of shipping time.

Alex Fedotoff  12:39

So that’s with suppliers, right? I mean, I can provide, you know, if anyone is interested in actual, like suppliers that we use in China, to listeners of your podcast, like I can share the people that they can specifically reach out and source products.

Joe Valley  12:56

Absolutely. Let’s do that. Let’s add it to the show link. So everybody can access all of the suppliers that you work with. Yeah, really? Yeah. Hey, and just as a point of reference here, I did bring up my nia.com. It’s actually it’s I typed in M I N E ae.com. Came up, but then the URL shows e n dot m i n e AE. But the message is it says the message it says folks it says my Nia analyzes all online advertising to help you find the best products to launch and the best creatives in your niche in just a few clicks. And then from that, you’re going to go ahead and you’re going to supply suppliers for people to look at to find those products. That right Alex? Yeah,

Alex Fedotoff  13:42

yeah. So once you have, once you kind of like figure out okay, so this is a product I want to sell. Usually there is a little bit more to that. Kind of like, we want to figure out like why? Like, they’re like two stages, the way the way I like to see it is like, because every market is competitive, right? And depending kind of like what do you want to do? Is this business? Do you want to just like, sell and have it at arbitrage to make some money? Or do you want to build like an actual brand out of it. So if you want to build like an actual brand out of it, then you might just kind of like analyze spider, like that niche and that that product that you want to sell, and why you want to sell it kind of like what is the angle? Right? Like so. Like, what is unique that you can make about that product? Maybe that’s a story that you can attach to it. Maybe that’s you know, maybe you’ll give some portion of your proceeds of your revenue to charities, maybe you will I mean, maybe there’s ice that’s the product for a specific demographic like for example, if you’re selling like, like a gadget for beauty four, and you want to you want to say this is specifically for Afro American women, or this is for for males or this is for female kinda like, create the messaging that would help you to create like a niche, because that will help you with, when we get through, like into like influencer outreach, that message has very big impact on the response rates. Because let’s say if you’re like, you know, I give an example, there is this product, you know that we’ve been selling shoes. And we’ve been selling these shoes, kind of like, oh, this is the most comfortable shoes in us, obviously, what you’ve done from China, but then after some time, we have realized that, you know, these products were mostly used by older ladies because they have pain in their feet. So now that like that trace, like a very good message that we can use for the outreach, because that’s specifically resonates with that segment of the audience, hey, we selling this product that helps you know, women over 45 or 50, to overcome pain in their feet, and tackle like neuropathy or you know, other like, conditions. So, I think there’s like, I mean, you don’t have to kind of like overthink it. But it’s the same time, you just want to think about like, how can you carry yourself like a niche from the products that you want to sell?

Joe Valley  16:14

Yeah, so let’s go to I always talk about grilling aprons, because I sold Hudson durable goods once upon a time greatest grilling aprons on Earth, they expanded barbershop aprons and things of that nature. But so if you mentioned outdoor gardening, so if there’s a, you know, a great product, or that you’ve found through my Nia that is in the outdoor gardening space and influencers are using it and promoting it, then you would think I would, I would assume, Alex that when you find the supplier for that one particular product, that they have a whole line of outdoor gardening products, and that you can build a brand of you know, Alex’s tool shed or gardening shed, or whatever it might be, and build a brand out of it. But let me ask you a question. Because I’m a little confused. dropshipping, to me typically means that I’m just going to sell that suppliers brand under their brand name. And private label means that not much different. I’m going to sell that suppliers product, but with my branding on it. Where do you start? When you’re drop shipping? Are you putting your brand name on it right away? When you’re shipping from China? Or are you just going with whatever name is on it?

Alex Fedotoff  17:25

The that depends on the state of the business that you’re in? Um,

Joe Valley  17:29

let’s, let’s assume that I want to build a brand, how much money they have. Okay, so let’s talk about that. Yeah, how much what’s the difference going to be if I’m just going to ship their product or ship their product with my with my brand name on it? What’s What’s the cost difference gonna be?

Alex Fedotoff  17:45

The only difference is, so if you want a private label, there’s usually like MOQ, minimum order quantity, like pre order

Joe Valley  17:52

plus, so I can’t, I can’t, I can’t do private label and have them ship one off from China directly to the customer.

Alex Fedotoff  17:58

Oh, they will they will ship but they will ship was their kind of like packaging. If you want to create like a custom packaging, that just has to be like, let’s say you want to you want to slap your logo on the product, there just has to be like a minimum order quantity. So they will have to order like 100 200 500,000 depending on on the supplier, depending on the factory, depending on the product. Yeah. Um, so that’s the only difference. So this is about

Joe Valley  18:22

So let’s assume, let’s assume that Bootstrap, I don’t have a whole lot of dough. And then I’m just gonna sell their product initially, does that actually work that I’m just going to sell their product with their brand name on it, and the influencers would would talk about it and promote it, and it? Okay, so at what point? Well, let’s talk about that first, how much how much money would you say your average client needs to come up with in order to start that process and not have to, you know, go and get more money inside of 10 days?

Alex Fedotoff  18:49

Two to $5,000,

Joe Valley  18:51

usually two to $5,000 to do drop shipping. And that’s that money goes into what building the website hiring influencers? I mean, does it go to

Alex Fedotoff  19:01

website you can build by yourself? I mean, there’s like YouTube tutorials that you can use to build a website by yourself. If you’re not very technical, like let’s say 150 to $100, you can build a basic website, Shopify, usually, we use like a team’s called like the build. So it’s like free teams, so you don’t have to pay for it. It’s in Shopify, so that part of the process is free, you will need some you need some apps, maybe another like 100 $200 per month for like email marketing. A lot of them are free to start with a lot of them have like have like free trials. So that part is not expensive. Um, then in terms of the actual kind of like how I would allocate that budget, knowing what I know now obviously, that changed over time, but I would allocate probably, like so let’s say I want to sell the product. We’ve done some research when on Amazon, people buying the product people have that particular problem that we can help them solve If we know how to communicate the problem, we have some differentiating point. Is there a surprise, but I don’t like to compete on price? Well, maybe that’s like the messaging the story. So some differentiating point that we can use to get kind of like, get a sale. So I would dedicate probably like $2,000 on actual, like branding. So you can do that probably for like, much less. But

Joe Valley  20:29

what is branding? Let me just say it, what is? What is branding? What money? Are you actually what are you? Who are you actually spending money on in terms of branding?

Alex Fedotoff  20:38

100%. So what I would do is I would do like a custom packaging. So what do you want to do? What you want to do is like, when people come to your website, ideally, you can you ask a question whether you can get away with like selling exactly the same product was, like, standard, kind of like packaging standards,

Joe Valley  20:58

that it looks right. Right, because we’re going with the dropship model. First, we’re not private label, like so. Yeah, but you just said custom packaging. Does that?

Alex Fedotoff  21:07

Yeah. So that’s, that’s a deal case scenario, right, like, so if we have, let’s say, $5,000, then I assume you would have, I would assume you have like sufficient budget to actually kind of like, facilitate that, what I would do is, I would do like, let’s say, maybe like 100 items, so if you want to go for like influencers, then we have to, we have to send them the right type of probe. Because if we send influencers, the type of product that is like in a very like, standard, like packaging, like we shouldn’t use ladders on them, then then they might not like to promote the product, okay, just like doesn’t look good, they don’t want to be associated with those kinds of products.

Joe Valley  21:54

So that so the pure drop shipping from the suppliers, manufacturer, to the customer in their packaging doesn’t work with influencer marketing.

Alex Fedotoff  22:04

So that depends on product because you know, some products they have kind of like by their, by their packaging by default. And some products simply are not don’t have like, what kind of like packaging. So that would that would depend on the product category that that you’re going after. Okay, um,

Joe Valley  22:22

so if you’re going to, if you’re going to go ahead and eventually move to private labeling, and it’s, you want to dedicate save, you said two to 5000, let’s say 5000, is you’re gonna go private label brand, eventually, you want to spend a couple 1000 of that five, on packaging, so that when you send the product out to influencers, they’re going to be impressed with what they get. Yes. Yeah. Okay. So moving on to influencers? Well, no, actually, I have another question about pricing. You know, margins, I said early on that the general stigma with drop shipping is that the margin is not real strong. I love the model, because you don’t have to have a whole lot of dough, and you’re not risking a lot of working capital upfront. But you know, what, what is the best? What? Not? I know that there’s no single answer for this. What do you see, for a typical price range? For the product? Retail price range for your clients products? And what kind of margins? Do they have? Meaning if it costs them $5? Are they selling it for 25? Are they selling it for 15? They selling it for 50? What are we talking about here?

Alex Fedotoff  23:29

Usually what we are aiming for is at least like 3x So the product like cost was shipping cost us let’s say that dollars, we want to be selling it for at least like $30

Joe Valley  23:39

So So is there no paid advertising the influencers are getting? What are they? What are the influencers getting just a product to talk about? Are they and they’re not getting paid their micro influencers at this point?

Alex Fedotoff  23:50

Yeah, yeah. So kind of like the power of your message. Sometimes would like so influencers do things for like, Trump, that at least from my observation, like, two main reasons, right, like so they didn’t want to get paid, they want to make money, or they want to be associated with a good product with something cool that it’s like trendy. So if you don’t have a lot of money, probably you don’t want to kind of like compete on price. There’s like bigger brands that are like sponsoring these influencers and 1000s of dollars, without like seeing given direct return. So what I want to do is, that’s why the messaging is so so crucial, because kind of like a lot of the things you can get away with if you have a good messaging. Like for instance, give an example. You know, was was our brand was apparel brand. We are messaging because my wife is a mom and so she said it’s a it’s a mom founded a brand for moms. So we have a lot of resonation with influencers that are actually moms. And some of them have like, let’s say half a million followers on YouTube. Yeah, and

Joe Valley  25:00

In Los Angeles, when they get at that point, they’re, they’re still okay with promoting it for free product. They’re not asking for money.

Alex Fedotoff  25:07

Yeah, sometimes, you know, obviously it’s like the band’s case on case.

Joe Valley  25:11

Well, what’s your brand’s URL by the way? So folks listen you can

Alex Fedotoff  25:17

eqyl. EQYL. eqylactivewear.com eqylactivewear.com. Equal

Joe Valley  25:25

activewear.com equal Eqylactivewear.com, folks. Okay, good. So, my experience, what little there is because, you know, I’m a micro influencer on TikTok, I think I’ve got 17 followers now 10 of which are my kids, friends, you know, you and I chatted about a friend of mine, minimally underscore her on Instagram, and you know, her audience is growing pretty consistently, she might be at 25 or 30,000. Now. And she’s, you know, she doesn’t have connections to other influencers. So she really doesn’t know how to charge for the promotions that she gives, she gets free products. And she also gets paid by a couple of consistent brands that asked her to promote it. So she does get paid a little bit when she’s not, you know, just doing it for free products. And her goal is obviously to make money doing it. Yeah, hers is not necessarily everybody’s so like, what is what is the sort of minimum size audience do you feel that an influencer should have to even call them an influencer?

Alex Fedotoff  26:39

So I think ideally, like 10,000 followers, or more so you can get away with and you can actually generate sales. Like one of the one of the ways kind of like to get this, like initial traction is, and I’ll always share kind of the templates that we have used as well in the document. You can basically enroll people to be your Okay, so this is this is our brand, and we stand for this and we want to kind of like participate. So that’s how we start the conversation, then people say yes, if people say yes, you’re kind of giving them more details that to become like, called a brand ambassador, right? To become like an brand ambassador, you have to actually make a purchase. So you pretty much kind of like oftentimes have to guide them to the checkout process. Okay, which product do like Which color do like let’s get it for you. Okay, so cool here is you know, you can you can complete the checkout, and I’ll enroll the into like brand ambassador program. And after that, you can promote these products and get a kickback from every sale that comes in.

Joe Valley  27:49

That’s what I I wanted to get to that point. So thank you see, this young lady doesn’t get paid for your sales that she generates on her Instagram account. She just gets paid a flat fee to model the clothing and things of that nature. I love the I love the Brandon Basler type of program where people are getting paid a fee, or a percentage of the sale percentage of the revenue. And and they can just log on to the apps that you talked about when we chatted prior to recording to see what kind of revenue their clicks or revenues they produced. Let’s talk about that. So folks that are out there listening what platforms do you use or recommend to have people understand and follow it looks like Busby use ZZ Bassett or Bassett door. So buzzbassador Buzzbassador.com. So that’s that that’s a plugin that goes into your website, the back end allows influencers to track their sales. Is that what it is?

Alex Fedotoff  29:00

Exactly? So. So that’s one I’ll send you another one here. It’s called goal AF Pro. So both of them are good. I would probably recommend boss Basler it’s about functionality. But this the second one also cool. So pretty much how it works is customers go to the, to the page where they these potential like brand ambassadors, they go to the page where they can sign up as brand ambassadors and then they have like a particular like codes or links that they can share with their audience. So if anyone is buying through that link, then they get a kickback from that purchase. Usually it’s like 15% That’s like industry standard. You can go as high as 20 Depending on the your margins. But then, kind of like if you acquire these customers the way to think about it so always like CPA, how much it actually costs you to acquire that like I’m Yasser, I’m

Joe Valley  30:02

50 percents great 20 percents Great. That’s, you know, if your ad cost is that that’s, that’s fantastic. And the beautiful thing about it, and this is I love this type of model is, is you’re not paying that upfront, it’s just a percentage of the sale. So if sales drop, you’re not spending the same amount of money, you’re spending less your sales, sales climb, you’re spending 15% period, it doesn’t climb to 42%. In some cases, if somebody totally screws up.

Alex Fedotoff  30:29

Yeah, we love this tool, it’s obviously needs to be kind of like on the you can get like to like 1020, like 30 $50,000 a month in revenue. Just doing this, right, just messaging a lot of people having conversations with them, enrolling them as brand ambassadors. And then obviously sustaining those relationships. Let’s say you have like a new model, or you have like a new product, and you just messaging everyone. Hey, guys, you know, we have this like new product. You know, you can push it to your audiences. So just by doing this, you can get your business to. I mean, that’s from our experience to like, six figures, mid six figure like revenue wise, was little or no, like paid advertising.

Joe Valley  31:16

I like it. I like it very, very much. All right. So let’s say you’ve done all of this, you found that supplier overseas, let’s say you start with a dropship model initially, and you get some traction? At what point do you flip it to your own private label brand? And are the suppliers perfectly fine with that? Or do they actually prefer that? Because they’re getting money up front? For a certain MOQ?

Alex Fedotoff  31:41

Yeah, so usually suppliers are just made up man was factories right as, for instance, most factories are not the best thing like communication. Huge, that’s why we’re using this supplier. They’re like middleman usually they they get there like 15 20% on top of on top of like what the cogs was shipping is let’s say if it costs them like $10, then that actually paid them like $12, because they kind of have to compensate for their work. So I would think about that, once you have at least 100 200 Like orders. And if you’re like serious, and you can dedicate that capital, obviously, it’s like you cannot be like stressed over that, like, you know, $5,000 or whatever you have to invest because you’d have to buy some inventory. Right. So let’s say you have to buy like, let’s say 1000 Let’s say like 300 items, and let’s say each item is I don’t know, five $7. Right, so you’d have to invest in that inventory at that point, if you want to, because you need to have the minimum order quantity, if you want to go private label. So the custom packaging, I mean, that’s usually like one $2 max per product, but that dramatically increases the perceived value, that would increase the customer like satisfaction that would that would pretty much help you to kind of like get on that path of building like an actual brand. So a few $100 is probably where I would start thinking about it. But then obviously, everyone commitment is on different levels. And people just like go all in and kind of like you know, just in the bass, everything they can other people kind of like more cautious and they just want okay, this works. Maybe I can accumulate more capital, you can just like sending people like product in a like standard packaging, and I can get away with it. And I can I can accumulate some capital and only then I can invest back and reinvest back into this business.

Joe Valley  33:42

Okay. All right. Before I before we wrap up, I want to talk about time to different times, meaning how long it takes to get this, you know, typically up and running, where I’m making money. And then how many hours a week people have to put into but before we answer those questions, I’m going to take a brief commercial break folks read live here and made up along the way, for a free digital version of the EXITpreneur’s Playbook. If you own an online business, and you don’t understand how to calculate the value of that business properly, you don’t understand or know what all 18 Different add backs are that we talked about in the book, or what the four pillars are, or what I call the four pillar tilt, meaning, yes, you know what the four pillars are, but if you’re weak in one area, it’s going to tilt your valuation to the lower side. All of these things and everything I’ve learned over the last decade through selling half a billion dollars of online businesses to the team at Quiet Light is in the book. It’s in the EXITpreneur’s Playbook. And my objective and goal over the next 12 months is to give away 10,000 digital versions of the book. If you want a paperback if you want the audible if you want the hardcover, you could just go to Amazon and buy it If you want the free digital version of it, the Kindle version of it, essentially, you can download it by going to exitpreneur.io/QLpod and fill out the form, do it on your mobile device. And then you can save it to your Kindle, your iBook, your Nook, whatever it might be, that you like best. And it will help you understand the true value of your online business and make sure you get maximum value when you do eventually exit. Okay, back to the question, Alex. The question is, how much time should somebody dedicate each week two bootstrapping a dropship business with influencer marketing?

Alex Fedotoff  35:42

I think then, like 1020 hours a week,

Joe Valley  35:47

20 hours, okay, I

Alex Fedotoff  35:48

like most you know, so we have, we have like a community of e-commerce, like entrepreneurs, most of them, like now, I mean, now they’re operating like seven, eight figure businesses, but most of them started, like, while they’re working late night, five jobs, and they just started this, like, on the side, it’s mostly like, it’s the most kind of like, common thread between all of them, that they they started this way, kind of like part time, and then, you know, it starts to show some traction, and then they kind of like start to dedicate a little bit more time into it. And then at some point, the amount of income that they’re making from that surpasses their, like nine to five, or they have sufficient amount of savings, and they feel good about that business. And they just want to, like fully commit, some of them just like, alright, they’re cutting their commitments was there, like nine to five and just dedicating that full time. So whichever, like risk of kind of, like, risk appetite, you know, listeners have and try to commit to, I think that we’re dependent, you know, I cannot tell like that someone quit their job and like start e-commerce business,

Joe Valley  36:54

you know, everybody’s everybody’s gonna be a little bit different there. What are you seeing from, you know, the average person or client that you work with? From the time they go, okay, yeah, let’s do this, to the time that they’re actually profitable. We talking weeks, we talk in months, what’s the typical average time, I’m not talking about the exceptions or the bad cases, just the average,

Alex Fedotoff  37:17

average, I would say like three to six months, three to six

Joe Valley  37:21

months. So they’ve invested five, well, if they’re just doing drop shipping, invested less, let’s say, 2500, if they’re doing, you know, the specialty packaging, and things of that nature, and going to go private label, eventually, five grand to start with, and so they’re going to earn that money back and breakeven in three to six months and then start to be profitable after that you

Alex Fedotoff  37:43

think? Oh, yeah, yeah. So I mean, that’s it considering, you know, person is committed, right? Because there will be some, like, let’s say, you messaging hundreds of influencers, and, like, no one responds, that could happen, that probably will happen, right? So I’ll be just ready for that. Okay, so what do you have to do have to adjust your messaging, you have to adjust maybe the website make it like more like a feeling? Maybe you’re like, if you’re doing outreach on Instagram, maybe making your page more appealing seeing other successful brands. So it is like a learning curve, like everything else, like you know, selling a business, it’s a learning curve. A lot of people don’t even know their businesses have value. So that’s why they need to book. So it’s a learning curve. You know, from from my perspective, it just like if you, if you just dedicate to it, and you just like, Okay, I would probably even don’t, I would even probably not I said like very high expectations, I would expect that it will be like rejection from day one. Because if you have like extremely high expectations, oh, it’s like I started in like, tomorrow become like a millionaire then it will be kind of like more difficult to deal with, like setbacks. Because you have to consider that. You know, it is it is a great opportunity. And you can build something that that can be worth like 510 20 $50 million in like 510 20 years of time. But initially to get that traction, I mean, you’re in the same level. Like playing field was like hundreds and 1000s of other brands.

Joe Valley  39:24

Yeah, you got to set your expectations it’s you know, people to get famous overnight or rich overnight in our eyes is never overnight in there. I hope

Alex Fedotoff  39:34

people not drop off off there say this like, Oh, no.

Joe Valley  39:37

Lucky, I think no, right. I don’t think they will. I think it’s it’s people understand that this type of stuff is hard work and it’s worth it when you stick to it and you’ve got a successful brand or successful business that eventually you can exit someday. It doesn’t come easy and you can’t just you know, make it happen. In 30, days

Alex Fedotoff  40:01

100%. And also one of the things that it kind of like gets better over time, right? Because let’s say you got, let’s say you do this outreach, right. And you’re getting a lot of these influencers. And maybe like, after some time you have some, some more capital, some more like brand equity, so you can reach out to bigger influencers. And then once you get bigger ones, then you can leverage their names to attract smaller ones. Sure, because, like smaller influencers, they usually they want to do they want to do like what’s cool, right? Okay, so this product has been promoted by these influencers and problem school, always, if Joe Rogan is promoting something, then you know, it’s probably a cool product, and I want to be associated with something that you’re organizers associated with. So it gets better over time. It just that initial kind of like traction, this is where you have to kind of like this, detach yourself from the outcome. And just like, try to learn, try to see what kind of like messages people respond to. Okay, so what are the main the main objections, okay, so if people want to, like, we convert people, for instance, that’s like, that’s a one like good hack. So we convert people that people say, we’re reaching out to them, and they say, oh, I want to get like, I’m usually getting paid like 500 or $1,000 per post. Okay, cool, you know, so instead of like, just like giving up, we were saying, okay, cool. We are, we’re cool with that. But we just would like to start with something like smaller, would it be able to do like, Rails for us with our product. So rails, it’s type of content on Instagram, that has a very high reach compared to post higher, because Instagram is trying to compete with TikTok and TikTok is taking the market share. So now Instagram is giving like really a lot of free speech. Because they want more consumption, they want people to stay on the platform. So real estate is something that can get you like, a lot of organic extraction.

Joe Valley  42:08

Yeah, I’ll address that too. Because, you know, my social media, VAs just started doing Instagram reels Alex. And it’s funny, she, she didn’t do them before, because she didn’t have a mobile phone. Apparently, you’ve got to have a mobile mobile device to do it. But we went from, you know, 30 or 40 views to 3000 views. Wow. In instantly really by using nails? Yeah, or impressions, I should say impressions.

Alex Fedotoff  42:36

Very cool. Yeah. And that is like, you know, um, that is a good way that you can negotiate. Okay, so we, you know, we want to pay you like $500,000 per post, but let’s start with something smaller. Let’s let us pay you for like, let’s say one hour of time, how many resources Thank you can pray for us during that time. So let’s say they say like three reels. So now it’s like you paying $30 to reel that can get like 1000s 10s of 1000s sometimes hundreds of 1000s of views. And you kind of like negotiated that and then once you see that, that influencer actually bringing you sales, now it could be different conversation. But this way you have actually validated the influencer and kinda like because sometimes what you will find was influencer, that’s also another like considerations that like logically think, the bigger the influencer, usually the more sales they should bring. But there is no direct correlation. For example, we’ve had some times more sales with from like, influencers with like, fan 15,000 followers than from influencers was 150,000 followers, which doesn’t make any sense. But that’s just how it is, you know,

Joe Valley  43:45

the quality the audience, and, you know, it’s kind of interesting. You know, I think people’s first thought is, like you said, I think testing it, let’s, let’s pay you for an hour of your time, do three reels, you know, $30 each, you know, costing $90 versus 500 to 1000, then you see if they work or not. Yeah, and people’s instinct initially might be okay, well, I’m going to just pay them that $500 For more posts, versus doing the ambassador program. I think the Buzzbassador program, yeah, even if it’s gonna cost you more in the long run, you’re gonna get more posts and better posts because they’re gonna be excited because they’re earning 15% of all revenue that you generate, which which do you push in that situation you do go for the flat fee, or the best basketball program.

Alex Fedotoff  44:35

I don’t like flat fees. I don’t like flat fees. Maybe just a level of brands you know, some of my friends are running brands that are doing like 200 million in revenue and they just been like brands or an influencer some the retainers here like 1000 bucks 5000 bucks 10,000 bucks and they have specific amount of content that they have to produce is there bigger influencers was million millions of followers. We We are not at that stage yet, where we can just like, hey, here’s your $5,000. And just like, we just expect four posts and four stories in a given months. So that’s why I prefer kind of like more like bootstrapped way where it’s either they become ambassadors by actually buying. So this way, we just like break even on that first like transaction. And then they also pose because they want to earn like the extra Commission, or we just like negotiate and pay them for like, very specific content, let’s say like creo, six, seven or reals. Or we’re just sending them free product and they share it with their audience. Okay, this way, your your, your whole cost is, obviously the outreach that time of the VA or someone on your team or yours. And the cards actual product costs. Yeah, yeah, shipping and product

Joe Valley  45:51

costs. So let’s talk about how to find these influencers, as we wrap up this podcast, other tools and services and apps and websites out there to find the influencers, or do you just grind it out and look for them on Instagram at TikTok

Alex Fedotoff  46:06

on initially, I would just, I would just do it manually, I would just like initially, if you’re just starting out, I would, I would really try to understand it, you know, I would just try to really try to kind of like go to different pages observed engaged in different ones go to different go, see how other brands are promoting themselves. So kind of, like try to learn as much as possible. And this outreach, initially can be done in a manual way, there are tools, like green, so G, R, and green. So they still here. It’s not, it’s not cheap. It like usually these tools are like three $5,000 a year was annual long contract. So probably initially, you don’t want to be using anything like that, but through their platform, you kind of like you can do the emailing, you can do the outreach, you can Maton manage the whole like influencer marketing program, initially, just to scratch it, you know, so you go on Instagram, you go through your competitors, or the brands in your niche that you want to sell to. And you can just reach out to the same influencers that are promoting other brands. And you can find those influencers by if so if you go to any like Instagram page, there is this tab that is called tagged. So you have posts, you have reels, you have videos, and you have tags, okay, if you go to tags that this is where you will see actual people that have tagged this brand, in their, in their feed, and those are the people that you can start reaching out to because if they’re promoting other products, then they’re familiar with this kind of like whole model. And they’re like, kind of like they know how to collaborate with was brands. The only disadvantage of this approach would be that if they’re promoting with say 10 other brands 20 other brands, you know, their audience is not that receptive to like it, let’s say you work with them. And they’re like, Oh, here’s another brand that like, you know, the send me like, you know, you send them like a free product so their response rates and that probably won’t be that high but you will still generate sales on the other side, you can go kind of like more you can search influencers by the hashtag. So let’s say hashtag, like beauty or hashtag like running or hashtag gardening whatever that is. And that’s that’s another way where you can find kind of like less saturated influencers that don’t promote like too many brands because the more brands influencers promoting, and the they’re promoting, like daily something, then that’s response like we’ve had influencers was like half a million followers. And then they’re promoting us and it seems like you know, their audience is big and amazing and engagement is high but that is simply not buying like the only few sales that they generate, because they promoting something like five times a day. Okay. Oh, this is the water. Oh, this is cool water. Oh, this is sunglasses. Oh, this is like smoothie from this bar. Oh, this is like a book.

Joe Valley  49:29

You know, this is not even they’re not even related to each other though. Yeah. Like,

Alex Fedotoff  49:33

they just like, you know, these brands are sending them free products are paying them and they just like they’re like promotion vehicle. So I think kind of like being like data driven this and removing that emotional attachment and also not being dependent. Oh, if I only get this influencer. I mean there’s 1000 of them. If you don’t get this one, you know, there’s like hundreds of other ones that you can get so I have been data driven and disattached. From the from the kind of outcome I think that’s

Joe Valley  50:06

emotionally detached. Yeah, makes total sense. This analysis, we are running out of time, but I want people to be able to reach out to you directly. Because this is what you do. And if they, if they want to go out on their own, they can. But if they want to get some expert help behind it, how would they reach out to you and connect with you?

Alex Fedotoff  50:26

Sure, um, you can find me on YouTube. It’s Alex Fedotoff. So, how YouTube channel I’m shooting like tutorials and sharing kind of like what’s working. And so people can check it out.

Joe Valley  50:41

spelled F e d o t o f f, correct? Yeah. And I’ll share a link in the show notes. Okay, how else can they find you.

Alex Fedotoff  50:49

And also, I mean, we have a website called eCommerce Scaling Secrets. This is for this is for our, like, kind of a community for a mentorship program, where pretty much you know, we are, we are connected with other like, entrepreneurs, we’re all like, learning together. growing together, we have also the community of like, we have like coaches that helping students house, you know, these are like our media buyers. So actually what we’re doing in our business, what we’re practicing, like, on a day to day basis, that’s what you’re sharing this, you know, the industry is changing all the time. And also we are learning from, you know, sometimes we get these like, crazy, like 20 year old, like various successful entrepreneurs are joining us, and we’re learning from them, you know, as much as they learn from some from us. So, kind of like the community, the mastermind that we all learn from each other.

Joe Valley  51:41

Well, that’s great stuff. Great stuff. This has been fascinating Alex, giving people the opportunity to start small scaling, and, and grow it and eventually flip it over to the private label, model. Appreciate it. And I think the education on the influencer marketing stuff is just fantastic. So folks, check out the show notes, all of the links that we’ve talked about today. You can find them in the show notes. So you could just do a search for Alex. That’s A l e x Fedotoff, F e d o t o f f, and check out his YouTube channel and other things there as well. Alex, thanks so much for joining us on the quiet life podcast today. Much appreciated.

Alex Fedotoff  52:21

Thank you so much. It’s been a pleasure. And hopefully you know, guys, you got some value out of it. Yeah, thank you, Joe. Thank you so much for inviting you back.

Outro  52:32

Today’s podcast was produced by Rise25 And the Quiet Light content team. If you have a suggestion for a future podcast, subject or guest, email us at [email protected] Be sure to follow us on YouTube, Facebook, LinkedIn, Twitter and Instagram, and subscribe to the show wherever you get your podcasts. Thanks for listening. We’ll see you next week.

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