Scale Your Business – Inside our $2 Million Dollar E-commerce Case Study

The Tan Brothers are notoriously known in the community as “league of their own” marketers for frequently sharing knowledge openly like this powerful e-commerce case study. It wasn’t easy for them, but they are making it easy for you.

First to share their lessons with an ever-growing following, one of their newfound forms of fulfillment is finding success in others, by helping them avoid pitfalls of their own. Not just any kind of success, million-dollar-a-month success.

The Tan Brothers took the stage for the first time at Affiliate World and dove into their personal $2 million dollar e-commerce case study that shows the audience how to scale their business quickly from zero to 7-figures a month. Pay close attention, because, after this, you’ll know how it’s just as easy selling 1000 products a day, as it is to sell 10.

Speech by Evan Tan and Steve Tan | Co-founders, eCommerce Elites Mastermind

Tan Brothers Speech Transcript

What’s up AWA?

I’m Steve Tan.

Hello everyone, I’m Evan Tan. How is everyone today?

How is everyone today?

Okay, alright.

So this is my first time to Bangkok. I’m very excited and honoured to be here to share how we scale our 2 million dollar store.

We have a little bit of time so I want to jump straight into a shot about us, about me and Evan. How we got started on this journey, okay?

Where It All Started

We’re not public speakers. I’m actually very nervous right now with my brother. So please give us some support, if we say some things, okay.

I started my journey doing physical products since 2006 from eBay. The reason why I’ve been selling physical products is because, I’ve been in based in China for the past 11 years.

So having access to Taobao, Alibaba, makes much easier for me to get into physical products.

Since then, I’ve been selling more than multiple 8 figures of physical products until now.

We have been selling it since 2006 on eBay and transitioned over to fully e-commerce on 2008.

So since then, I’ve been sharing a lot of our posts in my E-commerce Elites group. If you guys are interested, feel free join it. It’s a free group on Facebook.

And you can just go to SteveTan.com and it will redirect to our Facebook group.

Two Million Dollars In 30 Days

So some of the records that we have done personally about 2 million. This is back in April.

We have broken this record, but we have no time to update this screenshot.

We did about 3 million plus back in October for one of our big stores too. And this is our biggest day in one single store, 360K.

But there’s several more, smaller stores which we are doing right now to diversify, not everything in one store.

Today I’m gonna share a little bit more on how we scale horizontally and what we mean by scaling vertically.

Scaling Horizontally

A lot of people have been asking me some questions regarding “Why are you able to scale one store to such big numbers?”

So there are a few ways that we can do. We combine a few of this together so that we can achieve bigger numbers.

You can either have one big product which a lot of a lot of e-commerce players are doing right now, or you could have 50, 2k products.

What I mean is that you should actually diversify more instead of focusing everything on just one product.

When someone comes to me and tells me “Steve, I’m doing 50k per day, I’m doing big numbers.”

I say, “Good, how many products do you have?” If he says, “I only have one product”, the first thing I will tell them is, “You do not have a business.”

Because what if the product dies down, it dies in the natural product trend, you do not have a business the next day.

For me personally, of course, we like to have a lot of 1st tier products but we also have a lot of 2nd tier, like 2k products.

We also have a lot of 1k products, which I’ll say more about in the 3rd tier.

You need to have a lot of products in order to diversify your risk. And to have too much products, you need to have a system in place.

If you do not have a system in place, like researching methods for a team, this is very hard for you to scale efficiently.

Evan will touch base on how we do research and a few of the common sites and the common tools that we’re gonna use.

Scaling Vertically

When you find one, single product that you can do, you’re gonna scale it hard, okay.

Because if you do not scale it fast enough, everyone is gonna know.

This market is very transparent. Everyone’s gonna use the same ad copy, use the same product. Everyone has access to AliExpress.

So that is why you need to learn how to scale efficiently on Facebook.

We’re gonna go through the best practices that we use. What kind of ad copies? When to cut and scale your ads later on? Re-targeting and lookalike audiences as well.

And also the differences between auto and manual bids. Why we prefer the one over the other one.

So are you guys ready? Alright, awesome! Evan?

Research Methods

Alright. Wait, so first thing, just now as Steven said, how do we actually scale horizontally?

In order to really look for a lot of products out there in the market, you actually need to really go deep.

So we really have to go through the usual few. A lot of people when they always ask me, “Hey Steve and Evan, how do you look for the few products?”

They always talk about the usual few.

Instead, me and Steve, we actually have our secret weapon. And also, at the end of everything, we actually create a process so that all this process is automated.

The Usual Few

The first few or the usual few, ask everyone, “Where do I go search for products?”

It’s always that people go to the top sellers Amazon, AliExpress or Wish.

All these are the very, very common websites where people just go look for the top sellers and go through the categories.

This is the most common one where you can actually go.

Yes, it still works, but considering the market is getting more and more competitive and products are getting more and more saturated, it’s actually harder to find a product there nowadays.

Secret Weapon

So what we actually do, me and Steve, being in China for such a long period of time, we actually have our own secret weapon.

And that is actually Taobao.

Some of you guys, if you have been in China or actually have been shopping online a lot, probably you have heard of Taobao before.

There’s actually a saying,

If you can’t find something on Taobao, you probably can’t find it anywhere else. – Evan Tan

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Actually the person who says this, is me, myself.

Actually, why I actually say this is because being in China for so many years, I  buy a lot of stuff on Taobao.

So a lot of things you can find on Taobao, you actually don’t see it on Amazon.com.

The ridiculous thing is you can find ridiculous things on Taobao.com.

Look at what you can find on Taobao. You can even buy worms.

They even have a money-back guarantee to buy worms, living cockroaches.

You can buy all sorts of things.

Of course, I’m not saying, you are selling cockroaches on e-commerce right.

But, there are tons of categories out there in Taobao. A lot of the things that are not being developed yet in the United States, you can find it in Taobao.

For a quick run-through of the research process, have your staff or go through Toabao yourself. If you can’t read Chinese, Just translate it, go through all of it.

And I’m sure you find real killer products. You can find a lot of products that are going to sell really well in e-commerce.

So as you can see the picture right here. There are tons and tons of categories we can find.

Create a Process

So at the end of it, by creating a team, we create a process.

What are the WOW factors of these products? You ask yourself, if you are the customer, why is this product a WOW factor or does it actually have a wow factor?

Try selling and persuading yourself before. So after you know all of these factors, create an excel sheet for your staff, your research team.

Let them go through Taobao for you because it’s very time consuming to go through all this every day.

So at the end of it, vet it personally, go through the excel sheet of what your staff has done. And go through it.

Sooner or later, you’ll be able to find a lot of really good, 1st tier products, 2nd tier products, and 3rd tier products.

This is how me and Steve, we are able to build our e-commerce as a real business.

It’s not just one product where we scale really hard. And maybe one month later, we are closed for business.

That’s not how e-commerce works.

By setting a process out properly, you are able to sustain this e-commerce business for a long period of time, alright.

Right now, I’ll let Steve talk about how to scale vertically with Facebook Ads.

Scale Vertically with Facebook Ads

I’m gonna share a little bit of our best practices. And some of the things that we’re gonna go through here.

So the first thing is we use a lot and a lot of emojis. I’m sure a lot of you here are familiar with this.

But we try not to overdo it in a way that it becomes spammy. Do it more in a natural way because we find, it increases the click-through rate a lot.

Of course, when all of you guys start using it, the performance might decrease so try to be a little bit creative with different kinds of upcoming holidays, Christmas and so on and so forth.

It really helps us build-up on our click-through rates.

So here are some quick examples. I’m sure you guys see a lot of them on Facebook or spy tools.

Check it out. See how people are doing it. How hard all those good ads are doing. And how they are maintaining, scaling really, really huge video views or conversions, okay?

Customised Thumbnails

So we also use customised thumbnails for all our videos.

You shouldn’t just go and upload a video and just pull a random thumbnail that you think is gonna work well.

Always try to split test what kind of thumbnails would actually increase your click-through rates.

So for us, we usually have like 5 to 6 different thumbnails per video.

So that we can keep testing and split testing which ones have the best optimal conversions or click-through rates or CPA so on and so forth.

Because not everyone autoplays, and it captures attention with a unique thumbnail.

You can add in different kind of wordings with your thumbnail or you can add in some emojis.

I’m sure a lot of viral videos, the funny ones that you see on YouTube or the ones that you see on Facebook usually do have very customised video thumbnails.

Eye-catching Video

Eye-catching video. Always make sure you can put in some taglines, like “Tag someone who needs this.” or “Turn on the sound.” or “You would love this.”

Last time, before we started using this, we used it a lot on the ad copy. But we find, it performs way better if we put it inside the thumbnail itself where people when they see the ad they don’t even have to read your ad copy.

Because nowadays, people just skim through all the ads. Kind of becoming blind to it in a way.

So you want to make sure you put in a lot of effort into making sure that people seized it in the first split second.

Alright, so now we are in Q4, right.

High CTR

CPMs are outrageously high. So you have to make sure you have very good click-through rates, good engagement.

So usually, we will run a little bit of PPE ads, page post engagement, to kind of get a feel to how this ad is actually performing or engaging with the crowd or the viewers.

Make sure you have all these emojis, customised thumbnails, to make sure that you have better click-through rates.

And it will reduce your CPM a little it or it will make sure that you can actually scale bigger with more clicks.

Re-targeting

We’re also gonna touch base on how we do re-targeting.

So we do a lot of VC, initial check out but no purchase. Also, we do a lot of customised post to re-engage our customers.

I’m sure a lot of you here know what is re-targeting. But we do pretty much every single option that’s available on Facebook for making sure that we can reach all our custom audiences.

Last time, we avoided a lot of initial checkouts because we thought since we’re already doing add to cart, why should we do initial check-out?

It actually surprised us, one of our best-performing ad sets came from initial check out.

You make sure you segment your audience properly so that you can create a lot of re-targeting and use for lookalike audiences as well.

Lookalike Audiences

We use a lot of lookalike audiences which kind of accounts for pretty much 50 to 60% of all our sales.

So if you’re talking about our sales, I would say, at least 7 figures coming from lookalike audiences itself.

The only downside to lookalike audiences is sometimes it might be a little bit cranky. It might not have delivery.

But if you contact Facebook, they’ll tell you, “Okay, its overlap or something.”

I kind of feel, if you leave it there for a few days, sometimes it will just re-optimise itself and give you delivery.

But if you don’t get any delivery, just delete that ad set or that campaign and recreate it again.

Lifetime Value

Alright, so the lifetime value. This is something that’s pretty much added just a few months ago.

And this actually works a lot of wonders for us.

So you can basically export everything from Shopify or some way your email list, that has all this value and put it up.

Basically what it does is, it combines all the information of your top end customers.

Facebook will automatically find all the best, high-value customers for you based on your ROAS and based on the order value.

We do everything above 50%.

I haven’t tried anything below 50 because if someone is not interested in watching to finish your video, most probably they are not interested in buying a product as well.

Do test everything above 50% all the way to 95% for your lookalike audiences as well.

We also target top-tier countries like US, Canada, Australia, New Zealand.

But usually, we try to group them as well so we can segment them by APEC, EEA, ASEAN, and NAFTA.

Lookalike Audiences

Lookalike audiences. There are a few ways to do this. You know, 1 to 10%.

I have never gone above 10% with some special tools but I think 10% is pretty much the max you can do.

So usually, there are a few ways that I do this, either I do 1%-2%, 2%-3%, 3%-4%.

Or sometimes I’ll just segment them to 0-5, 5-10. Or you can just play around with it.

The best one I have is actually, around 3-5%.

Not necessarily that your 5% is going to outdo your 10%. It doesn’t mean that 0-1% is always the best performing one.

It doesn’t work like this.

So you have to make sure you test. Sometimes, you get way better results with 8-10%. Sometimes you get better result at 3%.

There’s no guarantee.

I wish I could tell you, 1% works the best. But the matter of truth is, Facebook doesn’t work that way.

Auto Bid

We use auto-bid on 70% of all our campaigns. Because it’s very time-saving to use auto-bid.

If you are using some manual bids, unless you’re using some tools like Smartly or some other tools, it will usually take you a lot of time to optimise your manual campaigns.

So we only use it for 20-30% of all our ads.

If you find a killer product, we will usually create a very, very big manual campaign. Usually in the range of 50,000 to 25,000 per ad set.

That is how we scale with manual bidding.

But sometimes when my friends ask me, “Are you doing a lot of manual bidding?” And ask, “What’s your budget?”

If you are spending less than like 100 to 200, a few hundred per day on that ad set, I wouldn’t suggest even trying out manual bidding because it doesn’t work very effectively.

There is no fixed way, but we use a lot. We only use auto bids for testing products.

I wouldn’t even use manual bidding for testing new products because it’s so time-consuming.

And we test so many different products day in and day out.

No fixed way of testing. So be flexible and be creative in testing. Similar to how you guys do CPA.

I kind of felt that you guys are way ahead of the curve with CPA. That is why a lot of my friends who are are doing very well in e-commerce usually have a very strong background in CPA.

You guys are crushing it a lot because with all the experience, with all the creativity and that you guys do, you guys can crush it easily.

And you have way more advantage than normal marketers.

So be creative in your testing.

Interest Targeting Testing

This is the initial way we do testing. It’s very common.

It’s one campaign per country. 20 ad sets usually per new product. We split it by interests.

Usually 500k and above audience size. This is how we do our testing.

If you have a big group of custom audience, you can use that for testing as well and we do one-day click.

Okay, so for auto-bid.

Oh, I’m running out of time, so I have to be fast here, okay.

This is all the information here. We usually scale when it has at least 2-3x ROI.

Because once you start scaling, your CPA is gonna go up. Your ROI is gonna go down, right.

So make sure you have at least good ROAS before you start scaling. ‘

Because if you don’t, you’re gonna see like, once you have 2x/3x, once you scale, probably you will go down in negative.

Okay, so scale with auto and duplicate manual.

If you have very good performing auto campaigns, auto ad sets, duplicate it and do manual. And you can scale pretty quickly with big budgets.

But make sure you have very good ROAS before you consider duplicating it to do manual.

Okay, alright so when to cut? Okay, I’ll just display everything.

When To Scale / Cut Ads

Do not optimise your ads like on day 1 or day 2. Try to at least give it at least 3-7 days.

If you give it enough time, and you can cut your ads, most likely you’re gonna see very inconsistent results.

So we usually have 2-3 screens, big screens.

If you guys are doing this as a full-time job, make sure you have big monitors, whereby you can split the screens, you can have 3 days here, 7 days here and compare the metrics easily.

Don’t start optimising your ads just like one day in you see good results or you see bad results, you start killing the budget or turning off the ad set.

It doesn’t work that way.

Give it a little bit more time. Now, we stick to at least 7 days, even if we are in the red, negative ROI. We’re still gonna give it a little bit more time in testing.

Facebook recommends 2 weeks but I think it’s kind of too long, so I’ll stick to 7 days.

Facebook Rules

We also use a lot of Facebook rules. We don’t use the paid media buy tools like Smartly. Because I feel it’s kind of a little bit expensive for us.

So we felt it’s more efficient if I hire a little bit more manpower for our media buyers.

We use a lot of Facebook automation tools, which I think some of the speakers have really touched base on.

It automates a lot of things while you’re away. Even if we’re on events or away on holidays, it does a lot of work.

It’s very straightforward.

You can adjust your cost per purchase. You can also adjust like a lot of things like, increase the budget by 20% per day, if it’s performing.

If not, you can turn it off.

Alright, so that’s all that I’m gonna share.

I hope you guys, you know, due to time constraints, I cannot expand all my information on how we deal with our company operations. How we do our full research.

Usually, we’ll have different kinds of operations for an entirely different company structure.

So I hope you guys can scale to the moon and I’ll see you guys up there.

Thank you so much.

Alright, thank you.

Q&A

Eric:

Thanks guys.

Steve:

Hey Eric.

Eric:

That was fantastic. Are you ready for a few questions?

Evan:

Yeah, sure.

Eric:

Yeah. So we’ve got the Tan Brothers on stage. So come on up to the microphones here. We’ve got some nice chairs. You guys sit over there. I’ll sit over here. So, they just said, they’re like, we normally like to talk about all these other things but we don’t have time, but now there’s time. Now you can ask them any of these type of questions. But wow, I just want to know, what’s your personal favourite emoji?

Favourite Emoji

Evan:

I think my personal favourite emoji is probably the heart eyes, you know, the eyes.

Eric:

I saw that in there, yeah.

Evan:

That’s the one that probably resonates with the customer the most.

Eric:

The most emotional, right? Because it’s that happy love feeling.

Evan:

Yeah. And of course, for Christmas, you have the Christmas trees. Before the customer even looks at the video itself, he knows that this is related to Christmas. So it will enable the customer to stop and actually look at the ad copy itself.

Eric:

Yeah, you got one?

Steve:

We kind of split test a few. But for me, I don’t have a personal favourite. I only care if it’s ROI. So it’s good ROI, it’s my personal favourite.

Eric:

Yeah nice. I got to use an emo the other day, a T-bone steak for the first time. I was describing James van Elswyk. So, I just put the T-bone steak and I was happy about that. I don’t know if it worked, but it was fun. Okay, we got a question here.

Audience:

Hello guys, it was really nice presentation, very informative. I’d like to ask you about “scare” or “shitty opens” marketing. How often do you use it to sell products to your audience? Do you scare them or you make them feel better before they come to your web page or before they make decision to buy?

Eric:

Can you repeat that?

Scare Marketing

Audience:

How often do you use scare or shitty opens marketing?

Eric:

Like fear-based marketing versus love-based marketing.

Steve:

Oh, you mean scarcity? I actually remove everything with scarcity because too much people are using it. And It’s kind of like, if you split test it with the performance on the time and conversion rate, it doesn’t affect too much. It actually went up for us, but do make sure you test. Actually, I like websites that load really quickly. So, we removed it and the time actually went down. If you have all these apps in place, it’s going to add a lot of time to your website.

Audience:

I will detail my question. For example, in case of dog collars, some people promote it like, 6,000,000 dogs being killed on the roads every year. And other people promote it like, this collar would look really nice on your dog. What would you suggest? Scare them or?

Eric:

Fear-based, right? So like, your dog is gonna die.

Steve:

I personally don’t like to use that. I mean, I do see some people using it, I’m not sure how well it converts or performs. But I mean, if you’re building a sustainable long-term brand, I would suggest you stay away from it. But if it’s kind of like, a small store that is just gonna last for like 5-6 months, feel free to use that if it increases your performance or ROI.

Audience:

And you mentioned about motivation timers? So you have only 10 minutes to buy?

Steve:

Yeah, I removed that. I removed that because I feel this is a little bit scammy. And it’s fake.

Discounts When Re-Marketing

Eric:

How about discounts? Like when you re-market, do you ever use discounts where you re-marketed to someone? You say, “Okay, now it’s 15% off.” Do you play around with that?

Steve:

Yeah. I re-target the crap out of them until they buy.

Eric:

Yeah. And do you scale the price down?

Steve:

Yeah, we do. We try with 5%. Then, after if they don’t buy, we increase it to 10% up to the maximum that we are comfortable with.

Eric:

Oh, cool. Nice. Within your margin. Anyone else out there? Oh right here?

Audience:

Hey guys great presentation. I want to ask you, what’s your input on branding product and fulfilling them directly, instead of drop shipping?

Steve:

Sorry, I can’t really hear.

Eric:

You gotta really get closer to the mic.

Branding Product and Fulfilling Them Vs Drop Shipping

Audience:

I’d like to ask, what is your input on branding product and fulfilling them instead of drop shipping them?

Steve:

Fulfilment time, is it? Yeah, alright. If you fulfill from the US, obviously, it’s gonna be way faster. If you want to go the branding route, you could send your stock to like a 3PL company in the US, or you can send it to Amazon, fulfilled by Amazon. Or I would suggest if you’re just starting out, do drop shipping all the way from China. But if you’re gonna do a sustainable long brand, probably you have to do it in the US. And eventually, you’re gonna have regional warehouses all over. The main few ones would be Europe, US and Asia. So we have a warehouse in Hong Kong as well that takes care of the APEC region and from China takes care of the other countries, sometimes US. And sometimes in the US, we do have local US warehouses if that product is very popular. But you have to make sure that product is something that’s gonna be trending for a long time. So one of the mistakes that we did, it was kind of scaled pretty quickly, but eventually it kind of died. But we have like over 100,000 stock in the US because no one’s buying after the whole trend dies. So you have to be a little bit more careful with stocking a lot of inventory if you’re branding your own product.

Eric:

Nice.

Audience:

Thank you.

Eric:

We have a celebrity question here from SheCommerce founder, Mirella.

Ad Placements

Mirella:

Okay, so you guys talked about how you let Facebook do a lot of the automation for you but with using the rules and everything. With regards to ad placement, do you use automatic placements or do you isolate them in ad sets to re-target them, say mobile and desktop later, and vice versa? How do you deal with ad placements?

Evan:

Alright, for our ad placement, normally we tend to split test a lot of them. We tend to, mostly use mobile and desktop feeds. And we split test them with another one with the audience network that Facebook has. And we actually split everything as well on Instagram. So actually, by splitting off this is very clear that we are able to see which ad set performs the best.

Steve:

Well usually, you get like lower CPMs if you don’t split them. So Facebook actually kind of recommends that we put in all placements, but we kind of have better performers if we split them up.

Eric:

Nice. So you guys have expanded. How big is your team now, total?

Steve:

60 plus.

Eric:

60 plus?

Steve and Evan:

Yeah.

Eric:

And that’s over in multiple regions or?

Evan:

Yeah. Almost 100% virtual. Only in the Philippines and in China, as well.

Most Essential Position In The Business

Eric:

Cool. So who do you consider or what position, let’s say, do you consider sort of the most essential to your business, other than you two?

Evan:

Project manager and right-hand man.

Steve:

We define it as project manager or product manager, it’s kind of the same role. In startups, the product manager has a lot of authority in the company. He dictates where the company’s going. So we kind of use it as a little bit like, so in our company we call it as the project manager that actually manages the whole thing. And he has a few managers under him and they report, too. This guy only reports directly to us, no one else.

Eric:

And how did you go about finding that person then? Did you meet them in person? Did you go to an Upwork-type site? Cause if there’s such a key person, how did you make sure they were right?

Steve:

You have to pay a lot for these kinds of people, obviously, right. If you pay crap, you get crap in return, right. So this guy actually worked for one of my startups before. I kind of knew his personality. He’s a hustler. He has to work. If you’re gonna find someone random, I wouldn’t hire someone that’s like super top-tier, executive level because he’s not the guy that actually does all the execution.

Eric:

You need a grinder. Yeah.

Steve:

So you need someone that’s kind of like one level below the executive so that he can do all this execution work for you.

Eric:

Yeah, that makes sense. I think we’ve got a question here.

Testing On A Weekly Basis

Audience:

I just wanted to know how many products are you testing on a weekly basis?

Evan:

So on a daily on a daily basis, we tend to test at least 10 products. So all this process has been automated by our team. So what we do, as we mentioned just now, we set out a process from the research team. So, let’s say our product team, the research team searched at least 30-40 products every single day. And we have our right-hand man who vets through all of the products. Then let’s say, 10 products each day, you set a date for each green light, you give a green light for them to launch it the next day, or the day after. And then our media buying team will take over from there, and then video editing. There will be video editing. Editing the videos, the photos, the thumbnails. And then it will be handed over to the media buying team, where they do get also copy-writing done for them. And then straightaway start doing the ads split test. So some of our media buyers, we actually fly them over to us. We train them personally so they actually know a lot of the strategies that we use. They would be in charge of actually doing most of the media buying. And then after that, for the final scaling where it’s really scaling, let’s say we find a really, really good product, then I actually come over and actually personally handle the large products we’re scaling above 100,000 a day, yeah.

When To Ship By Yourself

Audience:

And so, at what point, I mean essentially when you’re scaling the product, do you actually ship it to yourself to start doing all the marketing assets, so you’re not using it from AliExpress or whatnot, the imagery? At what point do you determine, when is a good time to actually ship it to yourself?

Evan:

Alright, so at the start, we always, it’s still a drop shipping business, but at a large scale like what we’re doing right now, we have our own warehouse in China. So actually what we feel is a good practice is after 2 days or 3 days, if it’s starting to sell above 100 pieces a day, we will start like buying in bulk. Buying maybe, like let’s say we’re selling 500 a day, we’ll buy around 700 a day. So everything will be shipped to our logistics partner in China. So it’s like more of a lean approach. We would rather, because of what Steve mentioned, we had a mistake where we overstock too much. So we actually just over stock by a little bit, where you’re guaranteed to sell it the next day. Overstock by a little bit, where you’re guaranteed to sell it the next day.

Audience:

Thank you.

Personally Going Through The Product

Eric:

Just specifically though, for people starting out in e-commerce, how important it is it to actually get your hands on the product, physically before you start selling it? So that you could potentially make assets about it.

Steve:

That’s a very tough question because there’s different ways of actually doing the business right. Some people prefer to see and feel the product, some people only care about ROI. Some people only care about making money. So it really boils down to the entrepreneur himself. If he cares a lot about the customer, definitely he will go through it. He will want to make sure that he sees the product, feel for it, if the product is good quality. So, for us because we have a team in China, so it makes it much easier for us to buy samples. And you can get away with having a physical presence and can request samples from these big suppliers.

Eric:

Because you come in? Yeah.

Steve:

And you can say we’re looking to buy 10,000 units, can you give us some samples? You usually will get it for free. So use the free ones and sell it through drop shipping and you get the ball rolling.

Eric:

Nice. Very cool. We got a question over here.

How To Handle The Shipping

Audience:

Hi guys, thanks for the presentations, very good. I got a question. I live in China, so I know how powerful Taobao is. But my question is compared to AliExpress, where most of the stores in AliExpress is pretty much equipped to ship nationally, but as we all know, Taobao is pretty much like a local business type of app or store or you know. So in terms of finding a product or after you found a product that you think it’s gonna work from Taobao, how do you handle the shipping? Do we talk to the supplier? Do they have options for you?

Steve:

So actually, you can, or well for us we have our own warehouse and logistics. So instead of setting up something for yourself, there’s a lot of 3PL’s fulfillment of logistics companies that you can work with. So once you test the product, it works well, you can ship it in bulk to this fulfillment company who takes care of everything for you. So something like an FBA-kind of set up but in China. So you send all orders to them every single day and they’ll take care of all shipping for you.

Audience:

So the supplier doesn’t handle this shipping?

Steve:

No. So everything that we do is all coming out from our own warehouse. We do it for more control and more privacy kind of approach. Because with sufficient cash bribe in China, you get a lot of unwanted information that you don’t want your competitors to know. We kind of have everything in-house for our logistics and our procurement. So that we don’t get unwanted information out as well. Also, if you ship everything in-house you get very good shipping rates and you get first tier, ePacket rates as well.

The Initial Phase After Finding The Product

Audience:

I think that’s after your business is pretty much settled? What about in the very initial phase after you target, like after you found a product, and it’s joined the testing phase?

Steve:

If you’re just starting out, probably you can just talk to your Taobao supplier because they do have access to all of it. It’s just a matter of whether they want or don’t want your business or is it a lot of hassle for them to do it for you. But I’m sure you can easily find a lot of fulfillment company in China that’s willing to help you get started with all this. So once you find this product well, you can order on Taobao and have it shipped to the fulfillment company, and they’ll take care of shipping for you.

Audience:

Okay thank you so much.

Evan:

Also another thing like I would like to add on, we mostly use Taobao as a reference point because a lot of things there’s actually available on Taobao is not listed on Aliexpress yet. By doing so, we use actually mostly as a reference point on Taobao. And then we actually have our own procurement team. So at the same time, you find a lot of agents or you know trading companies at Aliexpress. So you are able to actually go to Aliexpress, send him the Taobao link and say, “Hey I want this to be dropshipped.” So normally, they will get it handled for you. This is when it’s starting out for beginners, this is how you do it.

Audience:

Thank you very much.

Customer Service and Returns

Audience:

How do you handle a customer service and returns?

Eric:

Customer service? And returns.

Evan:

So for customer service, we have a full-fledged team in in the Philippines of at least 20 to 30 for customer service, replying every day. We also have a 24/7 a live chat service, where a lot of customers always send in requests or to ask about refunds, returns. For returns, is as simple as that. When a customer received it, if he is able to provide proof that the item is spoiled, destroyed or he didn’t receive it, the tracking shows it actually got lost, then we will actually just send him a new one, we will talk to him. Communication is really important here. We actually communicate with the customer and ask him, “Do you want a replacement?” If he is willing to accept a replacement, we just ship him a new one. If he’s unwilling, then we give him the refund.

Steve:

But for returns, we usually just tell them to ship it back to China. I know it’s not the best, exact customer service that you want but most of the time, they’ll just think it’s a hassle. And if they really want to ship it, it’s fine, we just refund them the full amount.

Eric:

Nice. Another one over here.

When A Niche Is Not Working Out

Audience:

Yeah, so thanks for the great talk. So during the initial research phase, when you are testing out new niches, when do you decide that it’s time that this particular niche is not working out? How much do you usually spend on Facebook or give it like a number of days before deciding that this is something that you don’t want to pursue further?

Evan:

So, actually like Steve has mentioned just now, we actually have general stores, where you just throw everything in there to test it. So normally, when we really decide to turn it off is after doing all of our testing methods. One is the interest targeting that we touched based on just now. We actually have other testing methods as well. So after, if we use all our strategies and test it with different copies, different video, different thumbnails, and it still doesn’t work. Like it’s negative, or not profitable at the end of the day, after like 3 days or 7 days then we decide that this product doesn’t work and we move on to the next product.

Eric:

Do you actually take them off your store? Or do you stop promoting?

Evan:

No, we just stop promoting.

Steve:

We still put it here. It’s free money, right.

Eric:

There’s no shelf space you’re taking up in the digital environment.

Evan:

We used to have a lot of products. Someone just comes to the store and he actually sees one item that he likes, and he just adds on to your AOV. He just goes, “Hey I like this as well.” He just adds it to the cart. Yeah, so it’s just free money. Just leave it on the store, but just stop promotion for that.

Audience:

Okay, thanks.

How To Hire A Manager

Eric:

Do we have someone else maneuvering up here for a question?

Audience:

First of all, thank you for the presentation.

Eric:

Really speak up.

Audience:

So you have talked a little bit about how to hire a manager. I would like to know more about how to hire a media buying team. I guess a lot of business owners here are afraid of giving up that part because they think that this is a very sensitive part of their business. So they like to handle it on their own. So I would like to know more about this matter please.

Steve:

I usually prefer to hire someone with just basic media buying knowledge because those that have really good media buying skills, they cause a bomb. And usually, there’s very good reasons why they left their company to join you, right. So usually we will try to find someone with kind of basic Google Ads. They have some internet marketing knowledge. We’ll usually hire them and guide them through step by step. So initially, these people that come into the company will be guided by a senior media buyer. So you’ll start with like very small budgets, doing small things, like testing, research, interest research so and so forth. Then slowly you guide them up step by step. It’s all about the skill that you want to do. I kind of like travelling a lot, and also travelling across the world. I still like my lifestyle. I like to hands-free my business. I haven’t checked my ads for a long time.

Set Up A Team With More Automation

I prefer to set up a team with more automation that can do all this stuff for you. So if you kind of prefer small team, in-house, then probably you can like just have one person helping you. But if you want more or hands-free, then you have to have people. Because if you don’t share, you can’t scale right. So Google or Facebook can’t get to where they are today if they don’t share their inside stuff between their own teams right. Probably the question for you, is if you have a virtual team, then probably how you can structured it in a way whereby all the media buyers kind of don’t know each other so they kind of can exchange information. Usually I don’t like one person that knows every single, inside out for your business because like if they can do that right, they can do it for themselves. And they can actually use your company for testing products. And when they find the hot selling products, they can just do it at their own Shopify store at night. So that’s what kind of happened to one of my friends in China. Because he’s just starting out, he doesn’t have a lot of business sense, but he’s doing like 10-20,000 per day. When I was talking to him, he showed me his business model. And I said, “Dude trust me, these two guys that you have right now, they will leave your company within 6 months.” And I’m right, they are gone. They are using the company for testing all these products. So find a little bit more time in structuring your company in a way that if you don’t like sharing all this information, so that if one person leaves everything is still intact.

Compartmentalisation

Eric:

Compartmentalisation.

Steve:

Yes.

Eric:

That makes sense.

Steve:

So even for our website. Website A customer support doesn’t know website B customer support, so and so forth. So in the event like if they want to do some funny tricks to us, they don’t have all this. Because almost everyone is hiring from the same location, Upwork or whichever, onlinejobs.ph. So sometimes when someone leaves, we will ask okay, which store did you manage or who did you work for and easily a lot of information just comes out naturally. So try to be a bit more sensitive about all this information.

Audience:

Thank you.

Eric:

Yeah, we got someone waiting here.

Fraud Payments

Audience:

Okay. Thank you for your presentation. And this is our first year in e-commerce, and we have a website and we only accept Paypal payment. And I find that, the order increases and there comes the fraud payments, like unauthorised payments. So here’s my question, we don’t have a freely mocking a message yet, so we wonder why and we’d like to know how to deal with this kind of payment that have any kind of this issue?

Steve:

For us. It’s very simple. If it’s high risk from Stripe or inside Shopify dashboard, it shows you if it’s high. If it’s as high risk, we’ll just refund it. Last time, we used to ask for more information but usually if you want more information, you have to ask for their ID, Government ID front and back, credit card cover the centre, 10 digits or whichever digits then ask them to send it over back to you. But if you’re dealing with very high level scammers, then like they have all this information with them anyway. So far our team right now, we’ll just refund all the high-risk orders.

High Fraud Countries

And especially there’s a few countries that we don’t ship to. I don’t know where, like Vietnam, Indonesia, those very high fraud countries. You can just Google high fraud countries, and it’s there.

Audience:

So do you mean your practice is just to ask them for the full information to attach it on people in dispute interface and then you just refund them?

Steve:

PayPal is very good at helping you with protection. So if you provide all the shipping information, they usually have you covered.

Audience:

But we heard that even if you refund the payment, Paypal will also count this order into your rates. And once the rate is raised to let’s say 1%, you face some risk in your payment account, this right?

Steve:

That’s part of the business, you have to deal with. It there’s nothing or no way around it.

Eric:

There’s no magic solution.

Audience:

Okay. Thank you.

Eric:

Okay guys, I think that’s it our time is up, unfortunately. You’re gonna have to find them after. Or you’re gonna, well I guess we’re out of tickets for Facebook Mastery Live, but make sure you grab the livestream for Facebook Mastery Live, the recordings. And we still have day passes for day 1 of the Facebook Elite Retreat where the Tan brothers are going to be giving away some amazing value there. So go find myself at the booth or someone at the iStack training booth and we can hook you up with our day passes to the elite retreat. Let’s give the Tan brothers a big round of applause. That was amazing.