AI-generated Black avatars flood TikTok to dropship Shein goods at 4x markup

0:00You're listening to a podcast right now. Driving, working out, walking the dog. If you're into podcasts, chances are you have something to say too. With RSS.com, starting your own is free and easy. Upload an episode and we distribute it to Apple Podcasts, Spotify, Amazon Music, and hundreds more. Track your listeners, see where they're from, and start earning from ads like this, even with just 10 listeners a month. If you've been thinking about starting a podcast, this is your sign. Start free at RSS.com. today we want to talk about the fact that there is a bunch of ai there's a report that came out basically and they're like there's these researchers they tracked 100 new ad accounts all of them are using ai generated well this is what the researchers said they said ai generated black ad avatars fled tiktok to drop ship sheen goods at a forex markup so we want to get into that story and see how you can use ai generated avatars to drop ship products or to sell products or where their place in the ad market is.

1:03I think this is an interesting place as someone that's worked in marketing a lot. I'm kind of excited about what's going on here. So we're going to cover the story. Before we get into that, Jamie, you want to tell them about the school community? Yeah, if you've ever been really serious about wanting to learn how to make money online using AI or grow your business, you're going to want to check out our school community called AI Hustle, just like our podcast name. But each week we release bonus content over there, breaking down specific strategies. Jaden and I are actually using to make money online.

1:33This week, I released a special episode over there. I got access to the beta of OpenAI ads. So I've been running ads to grow my business over there. So I break down my exact copy, my strategy, my targeting, how it all works. It's pretty fascinating. And it's definitely simple for someone like me who doesn't have a lot of time to learn how to run ad campaigns and things like that. It's pretty basic. And it definitely relates to this story, which I'm interested to talk about as well. So, but anyways, it's only$19 a month and you can lock that price in today. Join our community of over 300 members and people who are also in the industries that you are making money using AI.

2:16So go check it out. But this is very interesting, you know, in the world of ads, specifically this article, So the idea of running AI ads to sell Sheen products on Shopify storefronts. So it's basically a new model of dropshipping. If you're familiar with the term, you basically buy something really cheap from China, sell it online for a markup, and then ship it directly from the factory to that customer, and you collect the difference. So this, I would love to hear the economics, like the numbers breakdown behind this, because it seems like credits wise, it's quite expensive to make AI generated video content.

3:02And plus, when it comes to running ads, you want to have, you know, a bunch of different ad groups, different creative for each one. And so if you have 30 different ads you have to make and then also pay to promote them, I feel like you have to have a pretty good profit margin on your product to actually make a profit. But Jaden, what do you think about this whole business model idea? Would you try it? I think that there's so much potential in AI-generated ads. And I've been digging into the story a little bit more while you're talking. And it's actually kind of a crazier story than I thought.

3:38So I said we weren't going to cover like the, you know, how they were saying it was like black creators. I wasn't sure how that was super relevant to dropshipping it. This story actually is. This is actually wild, guys. So here's what happens. Basically, there's a research firm and they identified that there's basically a pattern. So these AI generated sellers are making AI generated basically like crying videos claiming that the person making them is a has a marginalized identity and no one's buying from them. And so basically anyways, the reason why this particular thing is interesting is not because they're like they're making AI generated ads and selling stuff, which I actually think you you probably you can do all of that.

4:20And I see a lot of people doing that. But because in particular, they're making like a black avatar, like a black person, and then they're crying saying, I'm marginalized, no one wants to buy my stuff, could you please help me out. And so they're calling it empathy bait. So anyways, I actually went and found one of these TikTok channels. So so it's it's pretty crazy. It's Yeah, it's one girl. And it looks like they might have used like the same picture to seed all of her but they have like, it's a black lady. And they have her wearing like a cowboy hat. and she's in um she's making apparently cowboy belt buckles but they honestly just look like drop shipped chinese belt buckles that you can go buy on sheen like it mentioned and they're doing a 4x markup but they have like all these like really handcrafted looking videos where she's like in a workshop like working on them by hand but like they're clearly just sheen products so anyways um that is wild the empathy baiting i mean i'll just read you some of the i'll read you some of the captions on the video one says even as a black woman I have more faith than country men will stay 13 seconds to save my failing belt business um POV your husband tells you to give up on your failing belt buckle business uh why are people so mean are my belt buckles really that bad even as a black woman I have more faith okay anyways yeah so so it's like very emotionally charged ads.

5:49Jamie, what's your take? Do you think this is working? Yikes. I mean, I honestly, you look at the views, you got 15 ,000, 23 ,000, 50 ,000. So 6.5 million, 6.5 million. Wow. That's the second post that this account made, which is crazy. So, I mean, I would say it probably is working, which is definitely a moral, I would say, I wouldn't even say gray area. It's probably definitely morally wrong. Black hat area. Okay. So what's interesting about this, because I think there's a bunch of things we can learn. One of them is if you look at this account, brand new account, second post gets 6.5 million using this format.

6:29So obviously they've identified a format that works good. Follow up posts after that got 41 ,000, 50 ,000, 26 ,000. They kind of drop off a bit. And we have one that got like 8 ,000 a little bit further down. So they have a format that works really good. Is it unethical? Yes, this is not ethical. We're not condoning doing this. And we'll break down in the article later, some of their strategies that are even crazier. But one thing I do think you can learn if you are running ads is the fact that the second post on this channel got 6.5 million views. And I've actually seen a ton of people that make TikTok content, TikTok ads to grow products.

7:04And they're basically saying they're using brand new accounts because because TikTok gives you an algorithmic boost when you're a brand new account. And so they'll warm up the account by commenting or liking on some stuff for like a couple days. And then they'll make, basically, they've figured out this ad format that works. So this one's unethical, but you should do ones that are ethical and ad format that works. They post it new and it goes super viral and they just start a brand new account after they've done a bunch of these. So apparently that's what this company is doing. In this article, it says basically that they're creating a hundred new accounts per day using this exact same format and they're just launching them.

7:39So they found an unethical ad format and they're using the strategy, but you could use a strategy with an ethical ad format that works. And you just are putting out like a ton of different ad accounts that, uh, or, you know, you're, you're putting out, I mean, they're probably automating that they're definitely automating this whole thing with AI because there's a hundred new accounts per day doing the same strategy. Yeah, that's crazy. But I mean, there's, there's gotta be a lot of expenses with this business model as well, because from my experience, at least, you know, fairly recently, I tried doing some AI video content.

8:13And I think it ended up being like three or$4 a video when it comes down to credits, unless maybe you subscribe to a higher tier, but for some of these like decent models, which I'm assuming this one is a pretty good model. Cause it looks fairly realistic. You're going to be paying quite a bit in credit. So, which again goes probably back to their, the angle they're trying to do to, to boost, to get the most amount of views per video, which is the unethical, you know, way to do it. But, um, yeah, I don't know. Some of these, some of these new, um, like arc ads, I know is when I always get advertisements for they use C dance 2.0, but they're like really, really good looking videos, but still kind of expensive.

8:59Yes, they are a bit expensive. I know that there's cheaper ways to do it. I would recommend Google flow is honestly pretty good for a lot of these AI generated videos and Google has some new, some new stuff that they've dropped. And I think it's a little bit subsidized too. So I like the, I like some of the Google video generators are some of my favorite, but seed dance is good. You get it kind of built into you get it built into some of the AI video things like CapCut, which is pretty cool. Just on like the economics of this whole thing, in this particular strategy, the belt buckles that that lady was selling, she's selling them for$40.

9:34And they're listed for$9 on Sheen. So they've basically 4x the price and then try to get emotion like empathy to sell them at a 4x price. It's an interesting strategy. Apparently, there's 30 ,000 comments on some of those videos, 800 ,000 likes on that top video that she made that we were showing off of the company. So there's a company doing all this research on what's going on. It's called riddance.ai. And what's interesting is they said that most of the avatars were created in the last two months. So it seems like a very new strategy. And instead of all the ones that they've tracked, black woman characters draw the highest engagement.

10:07So that's interesting. And as well, there's also just I mean, it's one point of reference, but Giselle Bryant, who is on The Real Housewives of Potomac. Sorry, don't watch it. Hope I pronounced that correctly. But she said that she bought two crocheted bags from an AI generated avatar two weeks ago. So people know that these are AI generated, but they're like, eh, I still like that product. I'm still going to go buy that, which is kind of interesting because I think it puts into question, I don't know, like what influencers place in all of this is if people know that they're seeing an AI generated avatar talking about a product and are so willingly buying it because they like the product.

10:45Maybe the product's good. So a lot of interesting questions happening with all of that. Yeah. I mean, I, I don't know. I think I would like to try this personally, but, um, not maybe the empathy bait as they're calling it now. I've actually seen a worse one than this. I've seen, uh, someone did it with like a down syndrome kid an AI generated and they're trying to, so like that's when it gets real. I don't know. It's, it's all pretty bad, but yeah, that's pretty messed up. Yeah. For sure. That's crazy. So I think it's interesting. People are obviously exploiting it, but it's interesting because at the same time, like you actually can have like a good use case for doing this the right way.

11:24So I would say do it the right way. There's some good strategies that work. Anyways, thank you everyone so much for tuning into the podcast. As we talked about this wild story, Hope you guys all have a fantastic rest of your day. And if you haven't joined the school community already, we'd love to have you as a member. There's a link in the description to all of our AI content that we produce on how we grow and scale our businesses with AI. All right. Catch you guys all in the next episode. You're listening to a podcast right now. Driving, working out, walking the dog. If you're into podcasts, chances are you have something to say too.

11:58With RSS.com, starting your own is free and easy. Upload an episode and we distribute it to Apple Podcasts, Spotify, Amazon Music, and hundreds more. Track your listeners, see where they're from, and start earning from ads like this, even with just 10 listeners a month. If you've been thinking about starting a podcast, this is your sign. Start free at rss.com.