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Luke Belmar Dropshipping Book
Luke Belmar Dropshipping Book
Luke Belmar
2020
CONTENTS
Introduction Page 3
The information
in I present here is based on my personal implementation
and research. Keep in mind: this document is designed to supplement
your eCommerce business, and you should continue developing your
product research skills independently. Product research is the most
foundational element in building a successful eCommerce business that
is why mastering it will elevate your chances of success.
If you find this document to be helpful and worthwhile, please share it on your
Instagram stories and tag me at: lukebelmar
and where they buy it - ideally, from The id is the primitive and instinctive
you. component of personality. It consists
of all the inherited components of
When consumers see a product at the personality present at birth. The id is
grocery store, they don’t just add it to the impulsive and unconscious part of
their cart by chance. Within our psyche which responds directly,
microseconds, consumers decided immediately, and instinctually.
whether or not the product would
fulfill their needs for one of the four The ego develops
de in order to mediate
groups I outlined above. It is your job between the unrealistic id and the
to sell products
p that provide a solution external real world and is the
to the customer’s problem. decision-making component of
personality. Ideally, the ego works
In Freudian theory, we all have a through reason, whereas the id is
conscious and unconscious mind. The chaotic and totally unreasonable. The
conscious mind oversees all of your ego operates
ope according to the reality
present conditions and things you need principle, working out realistic ways of
to be aware of. The unconscious mind satisfying the id’s demands, often
manages everything outside of our compromising or postponing
physical awareness — this is what I call satisfaction to avoid negative
our primal instincts or our innate nature. consequences. The ego considers
social realities and norms, etiquette,
Freud compared our minds to an and rules when deciding how to
iceberg. Above the water, the fraction behave. Like the id, the ego seeks
of ice we can see is the conscious mind. pleasure (i.e. tension reduction) and
What determines our behavior is avoids pain. Unlike the id, the ego is
under the water: the unconscious. In concerned with devising a realistic
addition to breaking the mind into two strategy to obtain pleasure. The ego
categories, the Freudian theory also has no concept of right or wrong;
divides the human personality into something is good simply
simp if it achieves
three subcategories: the id, ego, and its end of satisfying without causing
superego. One of these segments of harm to itself or to the id.
personality is always behind the
decisions you make. The superego incorporates the
learned values and morals of society.
The superego consists of two systems:
the conscience and the ideal self.
CHAPTER 1 HOW CUSTOMERS OPERATE
The conscience can punish the ego The super-ego can also reward us
with feelings of guilt. For example, if through the ideal self when we
the ego gives in to the id's demands, behave ‘properly’ by making us feel
the superego may make the person proud. 1
feel bad through guilt. The ideal self
(or ego-ideal) is an imaginary picture In chapters two through six we will be
of how you ought to be and focusing on the four behavioral groups
represents career aspirations,
aspi how to (primal, emotional, efficient, and social),
treat other people, and how to the most important values within each
behave as a member of society. group, and how they should influence
2/3 Behavior that falls short of the your product research.
ideal self may be punished by the
superego through guilt.
EGO
conscious
SUPER-EGO
ID
sub-conscious
CHAPTER 2
PRIMAL VALUES
Social media is just the newest channel we can use to leverage consumer sales.
With Freudian theory as the theoretical framework, our goal is to objectively
understand why people buy new products.
I have categorized six values that are commonly found in the products that we
offer and have placed them in the first of the four groups. These values focus on
both conscious and subconscious behaviors that are prompted by external
influences.
Six Primal Values:
1. Survival - People buy things to help As long as we have these things, we
them survive the physical world, such are very open to anything that will
as food, water, weapons, and shelter. increase the possibility for us to fulfill
These primordial tendencies are those desires. Products such as
instinctual and tend to be with us from vitamins, cancer preventatives, or
the time we are born. The fundamental radiation neutralization are just a few
need for survival is always a driving extremely good sellers. However, this
force in our decision-making process.
fo space is often full of fraudsters and
Our primal behaviors mean we will requires a brand with extensive
always do things like maintain customer trust and loyalty.
adequate body temperatures, sleep,
and stay alive. If you can provide a 3. Reciprocity - This basic instinct of
product that can keep someone warm cooperation is commonly found in the
when they are cold, facilitate their animal kingdom. Someone does
next meal,
meal or help them sleep you are something nice for you, which means
providing value to one of the most you reward them with a similar or
basic human inclinations. positive action. Based on Robert
Cialdini’s ideas in his book Influence:
2. Lifespan Longevity - The desire for The Psychology
Psy of Persuasion, we are
a long life is driven by things that give intrinsically wired to return favors or
us intrinsic meaning. Apart from show mutual kindness. Creating or
survival, humans seek lifespan longevity finding products that let individuals
to fulfill their desires for happiness, show benevolence and affection to
such as traveling the world, raising kids, their counterparts will always be in
or having hobbies. demand.
CHAPTER 2 PRIMAL VALUES
I have found that products focusing on you have a list of similar products that
altruistic values do very well when allows them to continue indulging.
delivered with clever offers.You see
products push this value point during 5. Pain Avoidance - People will do
Valentine’s Day, Christmas, or when anything to avoid pain. Products
someone has a birthday. focusing on self-preservation and
physical pain prevention are usually an
4. Pleasure
Pleasu - Have you ever noticed easy sell. The goal of this value is to
how indulgence-based products prevent pain by providing
advertise to their audience? They something that will balance the
rarely focus on the product feature. odds in the customer’s
customer favor.
Instead, they focus on showing people Popular products in this niche might
enjoying themselves, smiling, and having help prevent theft, help contact
a good time. These types of products emergency authorities, and help
speak directly
di to our id, which is prevent or alleviate ailments such as
driven by the pleasure principle. It is in back pains or arthritis. Some of the
our nature to seek pleasure, but best dropshipping products of all time
overextended pleasure can lead to work to alleviate and avoid physical
guilt. Consumers associate a particular pain.
feeling with a specific product. Once
this product/feeling connection occurs, 6. Fear - Fear is a natural reaction that
the psychological phenomenon known kn encourages self-preservation or
as repetition compulsion takes place. survival. In the course of human
This is when a person repeats an existence, those who responded to
action or event with the goal of the right fear in the right way usually
re-experiencing a certain feeling. That survived. Guns can be purchased out
is why you want to buy a new car of fear for safety. Wearing facemasks
before your old one wears out, or why during COVID-19,
C or even buying out
people want the newest
n smartphone all the toilet paper in the grocery
every year. Selling products that trigger store, are done out of fear. We
this repetitive, positive feeling is a great experience fear when we are about to
way to build audience longevity and a encounter pain or when something
base of repeat customers. I would threatens our lifespan longevity.
highly recommend this value point for Alleviating fear isn’t so much about
brands with extensive product lines. FOMO, but rather providing a product
FOM
The objective
objecti is to make sure a whose value calms someone’s fear.
first-time buyer has the ability to
become a repeat customer because
CHAPTER 3
EMOTIONAL VALUES
70% of buyers purchase a product out of emotion, which means your product has a
better chance of selling if you can appeal to the customer’s heart. To make this
happen, your offer needs to enhance the value of the product and appeal to the
customer’s emotional needs.
If you can appeal to someone’s need for emotional fulfillment, you can build insane
loyalty and extremely high AOVs.If your product delivers on the emotional
gratification the customer is looking for, then you are sure to increase the lifetime
value of that customer.
There are four emotional values that products can fulfill in order to increase
conversion.
Four Emotional Values:
1. Personal Wellness - This value can 2. Empathy - Showcasing empathy
be broken down into physical, spiritual, towards the suffering of others usually
or emotional well being. For involves emotions like compassion,
dropshippers, physical well being is the sympathy, tenderness, championing,
easiest to tackle. According to GWI, and the feeling of being moved.
the global health and wellness industry
is now worth $4.2 trillion. People’s Mirror neurons activate when we
desire to feel good can also be
desi observe an emotional reaction in
exploited by selling fat burners, another person, and so provide the
steroids, or products with sketchy neuronal basis of empathy. Mirror
guarantees and no scientific backing. neurons thus help to create the
When selling feel-good products, contagious behavior that is so integral
ensure the post-feeling or long-term to social life—the shared grief at a
effects of the product are also funeral, the shared joy at a birthday. 2
fune
beneficial to the customer.
custome Selling Regardless of the price/value, humans are
alcohol or drugs is usually a mega-hit as wired to choose a product that allows
they make the customer feel good, but them to feel empathy towards another
they reduce wellness in the long run.You being or situation.That is why we say
can find a massive market in products “yes” to products that give a percentage
like essential oils, hemp, anti-aging of earnings to causes and charities we
creams, at-home fitness, and even CBD. might not be able to help directly.
CHAPTER 3 EMOTIONAL VALUES
EFFICIENY VALUES
In a western society infected with high expectations and a desire for instant
gratification, consumers seek products that will make them more efficient. Ever
since the industrial revolution of the late 1800s, companies have strived to make
products to help consumers to streamline every aspect of their lives.
As human beings,
beings our nature to sustain life has driven us to become more efficient,
effective, and adaptive. As societies continue to develop, the consumer will demand
products that provide more efficiencies. I have broken down the third group of
behavioral tendencies into five values we constantly seek in the products that we buy.
Five Efficiency Values:
1. Friction Reduction - We want to partake, Stripe for payment processing,
find products that help reduce any Apple with a cheap iPhone alternative,
hassle or inconvenience. Taxis are too or even Corvette with the first-ever
expensive, and you don’t want to wait ‘exotic car’ priced under $60k are just
for one in the rain? Get an Uber. a few examples. Products that give
Sweeping is too tedious and customers easy access can appeal to a
time-consuming? Adopt vacuuming massive group of people and are often
robots. The examples are endless.
robots the go-to option for the masses.
Operational efficiency is a constant
product selling point. New and 3. Targeted Information - People want
innovative products that help people easy access to accurate information.
save time, money, and energy are Products that provide this value tend
harder to sell in the beginning due to to monetize through small fees,
the adoption phase. However, when minimal subscriptions, or transaction
accepted as a mainstream
mainst value fees. Most of the companies that have
provider, they become a widely mastered targeted information include
accepted, must-have alternative to the likes
li of Google,Yelp, and Expedia.
the current options. Whether the product is online or off,
it usually requires a foundation in tech,
2. Simple Access - Products that lower and requires proficiency to properly
the barrier to entry or acquisition are navigate the space. I have seen too
highly valuable. These are products or many projects turn sour when they
services that counter the current are outsourced to companies that
status quo and allow customers to exploit your lack of understanding,
CHAPTER 4 EFFICIENCY VALUES
SOCIAL VALUES
We buy products every day to help us look a certain way to others. We are
constantly in need of validation. Even the most mature people still struggle with the
inclination for acceptance. In some way, shape, or form everyone cares about how
others perceive them. In a society influenced and exposed to public opinions, social
values are highly effective to sell against, if channeled the right way.
I have broken down the three social values that I find most important to consider
when searching for a product and crafting a message for said product.
Primal Values
Survival
Lifespan Longevity
Reciprocity
Pleasure Emotional Values
Pain Avoidance Personal Wellness
Fear Empathy
Reward
Efficiency Values Nostalgia
Friction Reduction
Simple Access
Targeted Information
Financial SFavings Social Values
Social Hierarchy
Trends
Clan Incorporation
CHAPTER 6
IMPULSIVE BUYING
Impulsive purchasing has often been impulsive, but in reality, the decision is
equated to unplanned purchases. rooted in primal instincts seeking
However, we cannot neglect that physical and emotional ease, also
‘impulsivity’ is driven by a known as the pleasure principle.
psychological process that is easily These less-analytical
less-ana decisions we
influenced by external circumstances. make tend to be labeled as “impulsive”
because they appear to be sudden and
While some claim an importance
impo to not predetermined.
finding products and curating offers
that drive consumers into making These purchases
pu are usually
impulsive purchases, other marketers accompanied by a rush of emotions
argue how there is no such thing as an people often describe as a dopamine
impulse buy. Whereas homo hit of excitement, only to have them
economicus (the economic man) leans frequently followed by a sense of
towards making rational purchases
to regret for having acted in an
based on cost vs value, most “impulsive” manner. We often describe
individuals rely on their primitive this feeling as “buyers remorse.” This
behaviors and tend to be guided by remorse is the super-ego kicking in to
the subconscious decision-making establish the boundaries that are
process driven by the id. Because less usually influenced by societal standards
thought goes into the behavior, it may and one’s past experiences.
be perceived
pe as
Attitude Toward
Act or Bahavior
Behavioral Bahavior
Intention
Subjective
Norm
CHAPTER 6 IMPULSIVE BUYING
STUDYING TRENDS
Understanding the importance of trends and how to easily spot them will allow
you to select products, craft offers, and tailor your ad delivery so you can scale
more effectively.
Most of our winning products have done well because they were launched when
the product’s value was congruent with relevant or up and coming trends. In this
chapter, we will cover the platforms my team uses to search for trends.
Google Trends is one of the popular application to see what gets people
choices for finding potential product talking.
niches. In my eCommerce business, we
use Google Trends to identify seasonal Pinte
Pinterest boasts over 330 million
trends that emerge consistently every active monthly users and has been
year. consistently growing for the past two
years. This app is popular among
If you focus on seasonal offers, I women ages 25 - 44. For eCommerce
recommend testing and perfecting entrepreneurs who understand the
your creative four weeks prior to the importance of this audience, Pinterest
expected uptrend to ensure your should be at the forefront of your
operations are stable and your trend research.
campaigns are optimized for delivery.
You can also use Google Trends to
keep a close eye on your competitors
and what their customers are taking One of my favorite trend searching
interest in. tools is Social Mention. This search
engine allows you to quickly see
trends on specific keywords, recent
mentions, public sentiment, similar
Pinterest is one of the hottest keywords, and more. This search
platforms to find emerging trends and engine is largely focused on Reddit and
tracking internet chatter. Pinterest Flickr activity.
activit
thrives on people sharing stuff they
love, which is why I enjoy using this
CHAPTER 9 STUDYING TRENDS
SOURCING WEBSITES
Newbies to the dropshipping space often find themselves sourcing from Aliexpress.
We are usually left in the dark about the websites top-level eCommerce experts
use to find potential winners. In this chapter, I’ll share the websites my team and I
use to find products and what I like most about each of them.
Most of these websites are lackluster as they have very complicated user
interfaces, and some of them are entirely in Chinese. However, many times these
are the websites that have winners listed before anyone else. If you can get around
the complicated UI and use the robust Google translate option, you will find
yourself finding a lot of untapped products that have a great potential to be good
sellers.
This website was built for the This may be one of the more
merchants from the city of Yiwu and complicated websites to maneuver if
Dongyang, south of the popular you do not speak Chinese. 1688 is the
manufacturing city of Hangzhou. B2B domestic online market of
Alibaba. Even though this website was
Even though it may not be popular designed for wholesalers, you can
with most US ecom entrepreneurs, usually find a lot of the suppliers on
you can find almost anything on both Alibaba and 1688.
Yiwugo. With over 70,000 merchants
on the platform, you are sure to find I like this platform because I can often
new and innovative products. find better pricing on it.Yes, Alibaba
inflates their prices for European and
If you are looking at working with a Western customers, so consider using
merchant who can withstand high this website to negotiate your COGs
volumes of orders, then this website is rates. The low prices were so
a good place to start scouting for worthwhile, I hired an employee who
good wholesale prices. spoke Chinese, and his only job is to
spo
find products for me and put them in
direct contact with my Chinese
supplier to get the best price possible.
CHAPTER 10 SOURCING WEBSITES
DHGate keeps the payment you make Regarding payments to merchants try
to the merchant in escrow until you and stay away from Telegraphic
confirm the receipt of the purchase. Transfers in advance (advanced
When testing suppliers with bulk payments) and make sure you are only
orders, protecting your payments is a buying from verified sellers who
massive risk management tactic you accept small orders as test batches.
need to implement.
When hunting for your next winner, it
Apa from that, they are global, they
Apart is important to cross-reference
accept multiple payment methods, and multiple sites for the best possible
their UI is very similar to that of price, shipping times, and quality. Once
Aliexpress.You may overpay for safety you have found something that you are
and reliability (just like Aliexpress or satisfied with, make sure your supplier
Alibaba), but it is a good tool to have is informed about where you are
at your disposal while you find a getting your COGs and never accept
reliable supplier.
supplie the first price they offer you. The more
volume your store produces, the
greater negotiating power you have.
I like this platform for their hassle-free If you see it on Aliexpress, there is a
payment protection. Global Sources is good chance you can find it on
based out of Hong Kong, so be another B2B Chinese marketplace for
cautious of any up and coming changes cheaper. A 5% difference in COGs will
in their Terms and Conditions because make an impressive dent in your
of China's desire to take back the bottom line at the end of the year, so
city-state. be sure to fight for every percent
while maintaining good risk-mitigation
My team does a lot of product
p and product integrity.
research on this platform, and we have
noticed many products listed here
were nearly impossible to find on
other sites. They are very user-friendly
and probably the most
Western-friendly site from the entire
list.
list
CHAPTER 11
PRODUCT PRINCIPLES
All of the products we test need to Before we discuss how we determine
abide by our set principles. In this a product's virality, let's get the smoke
chapter, we will be discussing the and mirrors out of the way. Not every
“must-have” principles, why they are post with high engagement equates to
important, and why we refuse to scale a winning product.You need to look at
any products that do not pass these the quality of the engagement and
highly critical standards. realize that a lot of dropshippers run
price per engagement (PPE) campaigns
The seven
s principles apply to general to boost social credibility before going
dropshipping as it is where I have into a conversion campaign.
found most of my success. Not every
single principle needs to be met in It is acceptable to run a PPE campaign
order to determine if the product has along with a conversion campaign, but
potential. We do not like playing stay away from PPE ad spend unless
guessing games, instead, we prefer you have determined the product to
stacking the odds
o in our favor so that be a winner.
we can have a higher success rate.
We determine virality by analyzing
Once we set these principles as the competitor ads where we consider a
standard for our products we saw a few factors. We look at the
massive increase in our winning engagement-to-share ratio, if your
product ratios. Do not be the product has equal or higher shares
entrepreneur who tries to justify why than engagements, you have a strong
a product could work, instead, do sign that people are liking what they
everything in your power to find out see. Then, we look at the recent
se
why it can fail. Do not be an ally of the
wh engagement on their post to see if
product, be a cautious skeptic and people are actively commenting about
make sure that you intricately probe the product. Finally, we look at the
each product before choosing to run main country they are advertising too
it. and find out if the comment section
language matches that of their main
Virality - Can your product go viral? Is source of traffic or if they are getting
sou
it the type of product that people want cheap engagement campaigns coming
to share because they are in awe of from third world countries.
how many values the product meets?
CHAPTER 11 PRODUCT PRINCIPLES
In order to ensure a low break-even If your cost of goods accounts for 25%
point (BEP), you need to work on of your sales price, you have mitigated
reducing your total fixed cost (TFC) substantial risks while trying to scale. If
which is a number that you can we cannot negotiate a price point with
somewhat predict and control. On the our supply chain that meets this
other hand, your total variable cost principle, we do not test the product.
(TVC) is somewhat volatile as it has
variables that are hard to calculate I have
h attached a link to a ROAS
(such as paid traffic or disputes). Allow calculator Google Sheet that you can
for a higher margin of expenditure duplicate and begin using. Be sure that
which can be accomplished by reducing when you duplicate it you set it on
your COGs. private for safety reasons and do not
edit or adjust anything on the original
sheet.
CHAPTER 11 PRODUCT PRINCIPLES
If we come to a unanimous conclusion not rule it out simply because you saw
that the product does not meet the it “fizzle out.”
customer’s expectations, we stop
running the product on principle, Remembe you never know why a
Remember,
regardless of how profitable it may be. competitor stopped running a certain
product. If you believe that it was
If you damage the dropshipping saturated in the past, let a few months
experience for a customer, they might pass and revisit the product to see if it
stop buying from any dropshipping can be rekindled.
websites. Do not be the entrepreneur
who makes a front end dollar at the
expense of longevity, integrity, and
consistency.
On many
ma occasions, you will be
confident in a product’s potential. The
product meets your standards, maybe
it had a good run, but it fizzles out for
some reason. There are so many
variables in play for a product to
become a winner that not allowing it
to have
h a second run may be a foolish
decision. If you’ve had a winning
campaign that has dried up, make sure
to revisit it again in the near future.
If a product
p did well in the past, it is
possible that it may perform again in
the future.You may have to test a new
offer, creative, or demographic, but do
CHAPTER 12
SPY TOOLS
Many eCommerce “experts” speak realize how several small slices of pie
negatively about using spy tools. They amount to a beautiful bottom line at
ask: “why would you settle for a piece the end of your fiscal year.
of the pie when you can have the
whole pie to yourself?” The fallacy in I have selected a free and paid spy
this belief is that many dropshippers tools that my team uses on a regular
lack the resources, infrastructure, basis to supplement our product
supply chain, or experience to outright
supp research process:
catch fresh winning products all the
time.
Leveraging spy tools is important, but For people who lack financial
it should only supplement, not resources, this is a great Chrome
substitute your product research extension to start with. It allows you
process. If you are new, I recommend to filter out all the posts on Facebook
leveraging spy tool software as except for your ads. The only caveat is
frequently as possible, as they can give that you may need to create an alias
you insight into competitor products, profile that focuses on reproducing
pricing, creatives, and their landing
pricing online purchase
pu behavior so you are
page structure. fed relevant sponsored posts filled
with competitor dropshipping
There are hierarchies and ranks in the products. With all free tools, you get
world of eCommerce. If you are at the what you pay for so please be mindful
bottom of the food chain, you need to that this tool may get buggy from time
use every tool at your disposal to to time.
understand how the sharks behave,
hunt, and grow. If you need capital and
can’t afford the luxury of testing
hundreds of products, make sure you
hund While this tool scans ads more
leverage spy tools. effectively than other free options, it is
not on the cheap side of monthly
There is no shame in only getting a subscriptions. The image below is the
piece of the pie. If you have the proper specific filter system we use when
structure set in place and your focus is trying to find products on Ad Spy.
on a linear scale, you will quickly
CHAPTER 12 SPY TOOLS
ESTABLISHING A PROCESS
One of the foundational elements that qualitative and quantitative data
allowed me to effectively find and sell collection.
winning products was documenting my
actions and establishing standard Consistency is a big issue for any
operating procedures that could be dropshipper. Being able to establish
replicated at scale. standard operating procedures (SOPs)
to duplicate your success is a tedious
Your business decisions should be process but once established will
supported by facts and evidence. The streamline how your business is run.
objective is to reduce what you
believe to be true of a product and The negative
negati impact of not knowing
what the customer really wants and what factors played a role in you
feels. finding a winning product can be very
high. If you did something right, why
If you are building a brand, knowing wouldn’t you record the flow of those
your audience is pivotal to the actions to then duplicate them at
development process of your product scale?
line. If you wait until the last minute to
know what your key demographic is Building your product research
looking for, you are increasing your systems is crucial to saving training
risk of failing. costs, maintaining quality and
consistency throughout your process,
Quick surveys
su can allow you to know increasing productivity, and upping
how your customer is feeling, what your odds of replicating the same
they want, and what expectations they outcome.
have. Data collection will allow you to
research and develop products As you grow in your eCommerce
tailored to what the consumer wants business it is of utmost importance
and not what you as a seller “feel” is that you document the whole process
best.
best if you intend to scale.
I truly
tru believe if you apply the Thank you for trusting me in this
information I presented, you are well process; I hope your expectations
on your way to having success in the were met. If you have any ongoing
eCommerce space. My hope for you is questions regarding product research I
that you understand that this process am in the process of launching a
is long, tedious, and only those who Facebook group where you will be
persevere will see the fruits of their able to join and continue growing and
labor.
labo learning as an eCommerce
eComme
entrepreneur.
No single piece of information is ever
useful unless it is internalized, For more details about this private
personalized, and applied. As you begin group, message me on Instagram and
to search for your next winner, use I’ll make it a priority to respond.
what you have learned, and revisit this
document regularly.You will not make
it very far if you run your eCommerce
business like
li a side hustle. Focus on
building a sustainable, long-term
business and I guarantee you will meet
your goals.
3. Rob Henderson (May 24, 2017). The Science Behind Why People Follow the Crowd
Psychology Today. https://www.psychologytoday.com/us/blog/after-service/201705
/the-science-behind-why-people-follow-the-crowd
Luke Belmar - 2020