STILL POSSIBLE TO SELL LOW PRICED ITEMS ON FACEBOOK? – Shopify Drop Shipping Tutorial
In this video, I’m going to answer a question from Matt. He wants to know if it is still possible to sell low-priced items using Facebook ads and still make money. My answer is YES! Want to know why and how? Read the article or watch my video.
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Still Possible To Sell Low Priced Items On Facebook?
Two Strategies in e-Commerce
The answer to that questions is… YES! It is possible to do it. When it comes to e-commerce, there are two big schools of thought. The first is to drive traffic to a retail offer – a higher-priced item, then you make your profit, and then you can have one upsell or two. Most of the money, you make it on the front-end or retail offer. So you’re selling something at $50 or $60 and you make a good margin on that product.
The second school of thought is that you should start with a lower-priced item. A lot of people are starting with a free item plus shipping offer. So you’re giving out the item for free but the people have to pay for shipping. Obviously, you charge the shipping a little bit more than it costs you on Aliexpress so you still end up making money with that. Then when people buy your product, you do upsells and you make your money on the backend.
I’ve tried both of them and I’m still doing both of them on all of my stores. Both strategies work.
Retail offer vs Low-priced item
When I first started in e-commerce, I was really into the “free item+shipping” model. First the first few months, I was not doing any retail offers. At some point, I tested sending traffic to retail offers. I would say that 90% of my energy right now goes into sending traffic to retail offers directly. However, in most of my stores, I don’t have a brand new pixel. My pixel in each one of my stores is pretty smart at this point so I can get away with sending traffic directly to a retail offer.
In my opinion, if you have a new store, you should do a mix of both. Send traffic to a retail offer but you should also try a few “free item+shipping” offer. It is really low investment for the people to click on your ad and you can sell a lot of products doing that. Plus, you’re going to give a lot of data to Facebook, it will process the data quickly, and become smarter. The smarter your pixel, the more that you’ll be able to find buyers.
The more e-commerce that I’m doing, the more that I’m going to send traffic to a retail offer. There is no right answer here. I know a lot of people are killing it with the “free item+shipping” offer or they sell their products really really cheap. Their margins are also low but they have a lot of volume. There are also people who don’t sell much product but their margins are super high so they still end up making a lot of money. That’s why I say both strategies work.
Again, going back to your question, my answer is “YES! It is possible!”. I’m still doing “free item+shipping” offer. And proud to say that I’m still earning a lot with that strategy.
Why start with a low-priced item?
Let’s say you’re selling a product using Facebook ads and you’re doing the “free item+shipping” offer. You give away the product for free and a lot of people click on the ad because it is a good deal for them. In their mind, they are getting something for free.
Let’s say you sell the product for $11. So the product is free but the shipping cost is $11. Let’s say the cost of the product in Aliexpress is $5, including the shipping (ePacket). Remember, you always need a tracking number. don’t go with a free shipping without a tracking number. This means that your profit before you spend money on Facebook ads is $6. What you have to consider is that you’re going to have to spend money on Facebook ads.
On average, your CPA (cost per acquisition) is probably going to be about $5. Remember that the lower your CPA, the better. If your CPA on Facebook is $2, it means you need to spend $2 on Facebook to make 1 sale.
So going back to my example, let’s say your cost per acquisition is $5. This means that you have $1 profit. By selling this product and after paying for your Facebook ads, you’re only making $1 profit. Most people will say “I’m not going to do that! Why will I do that?”. To make $100 a day, you need to sell 100 pieces of the product. You need to find 100 buyers to make $100 dollars. Then, you have to pay for your virtual assistant to fulfill the orders, the apps, your Shopify store, and all other things. It’s not really worth it.
Importance of Sales Funnel
But what you have to remember is that that is only your front-end offer. A lot of people don’t think of e-commerce as a sales funnel which I think is wrong. I want you to think that e-commerce is a sales funnel. So you’re going to use your front-end offer just to bring people into your sales funnel. You want to grab the attention of the people. With the “free item+shipping” offer, you’re not going to make a lot of money but you’re going to have upsells.
Once people grab your front-end offer, you need to download an app for upsells. OneClickUpsell is an app that I highly recommend everybody to download. It’s an amazing app and I’m using it myself. Immediately after they buy your product, they are going to be shown another product. Some of them are going to buy it. So your total profit is not going to be $1 anymore; it’s going to be higher.
Let’s say your upsell margin is $10, depending on the number of people who will every day. Maybe after your first upsell, your total profit is going to be $7. Let’s say after the first upsell, you have another upsell. There is a small percentage of people who will also buy the second upsell. That will make your total profit to $12. So in order to get $100 a day, you only need to sell 8 or 9 of your back-end product.
Build your email list
I really like to do the low-priced item strategy when I have a new store with a new pixel because it is super easy to get your pixels smarter quickly. Even if people only buy the front-end offer, you don’t get a lot of money but they get added to your email list. So let’s say 100 people are buying per day, if you do that for 30 days, that’s 3,000 people on your email list. You can email them higher-priced items and you can make a more money.
Once people are on your list, you can email them almost forever. Unless they unsubscribe from your list. You are going to make money from this people. Always remember that it is much easier to sell something to someone who already bought from you than to find a new customer.
I highly recommend that you use MailChimp because you can also add people who add your product to their cart even if they don’t end up buying it. So the number of people that will be added to your list is not just 100. It is going to be more than that because of the people who add your product to their cart. That is a really good strategy to build your email list super quickly. It is also a good strategy to build data for Facebook to make your pixel smarter quickly.
So again, it is possible to sell low-priced items on Facebook. Set up a really good front-end offer that a lot of people would choose to click. You may not make a lot of money from your front-end offer but the real money is made on the back-end. Then continue sending them new offers and you’re going to make more money from your upsells. As I said, most of my energy right now is on sending traffic to a retail offer. But, do not underestimate the “free item+shipping” strategy. It is a really powerful strategy. I want you to think in terms of sales funnel from now on.
If you are looking for more, or are wanting to seriously pursue making money with e-commerce, then I want to invite you to join my E-commerce University Program.
E-commerce University is a step-by-step video training course that walks you through everything. The students in it are making a lot of money and the reviews are amazing.
In the program, you get to see me create an E-commerce business from scratch. The program consists of over 45+ “over the shoulder” videos where you get to watch me do everything.
You will learn EVERYTHING you need to know to be successful with e-commerce/dropshipping in this program. I leave nothing out and I am 100% transparent! I share with you exactly what I do with my stores, and even how to scale this business by automating and outsourcing the whole process by hiring virtual assistants! You will learn how to pick a good niche, good products,how to do Facebook ads, Instagram ads, advanced promotions strategies and much much more. This is the exact system I used on all of my stores.
To find out more about E-commerce University, CLICK HERE.
Please leave a comment below or let me know any questions you have. I’d love to hear what you think!