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Side Hustle Show Episode 704: $500k in Sales in 6 Months - A Dropshipping Case Study
Episode Overview In this episode of The Side Hustle Show, host Nick Loper interviews Holly Finnefrock, who achieved an impressive $500,000 in sales within just six months of launching her high-ticket dropshipping store. Holly specializes in selling ponds and water features and shares her insights into the dropshipping business model, from niche selection to supplier negotiations and marketing strategies.
Key Takeaways
- Is Dropshipping Still Viable?
- Holly asserts that dropshipping is not dead; she has seen significant success in the model.
- The focus is on high-ticket items over low-ticket ones to build a sustainable business.
- Niche Selection
- Importance of Competitors: Finding a niche with 5-10 competitors is ideal. Too few competitors can indicate a lack of demand; too many can signal saturation.
- Market Validation: Use tools like keyword research to ensure there is search volume for potential products.
- Supplier Relationships
- Building Relationships: Establishing strong relationships with suppliers is crucial. Holly emphasizes approaching suppliers with the intention to build mutually beneficial partnerships rather than simply seeking to become a dealer.
- Identifying Contacts: Know who to talk to (e.g., sales managers) and ask insightful questions to differentiate yourself from others.
- Marketing Strategies
- Google Ads: Holly recommends starting with Google Shopping ads and using an inverted tier funnel to target bottom-of-funnel buyers.
- Ad Strategy: Focus on customers who are ready to make a purchase rather than those still in the research phase.
- Sales and Customer Interaction
- Proactive Customer Service: Being available for customer calls and inquiries is vital, especially for high-ticket items. Holly initially managed calls herself to better understand the customer needs.
- Follow-Up: Utilize CRM tools like HubSpot to manage leads and follow-up tasks efficiently.
- Key Challenges
- Learning the Product: Holly faced challenges due to the technical nature of the products. She encouraged new entrepreneurs to embrace the learning curve and seek clarification when needed.
- Transitioning to Full-Time
- Holly shared her journey from a secure corporate job to fully committing to her dropshipping business. She emphasized the importance of evaluating the potential of her side hustle before making the leap.
Actionable Insights
- Niche Validation:
- Conduct thorough research to validate your niche before investing time or money.
- Aim for high-ticket products with proven demand, tracking monthly search volumes to assess interest.
- Supplier Engagement:
- Create a demo site to present to potential suppliers, even if it’s not fully operational.
- Prepare a list of suppliers in advance and practice your pitch to build confidence before making calls.
- Ad Strategy:
- Focus on targeted advertising strategies that align with your product’s price point and buyer intent.
- Personal Development:
- Overcome fears of judgment and failure to pursue entrepreneurial dreams.
Closing Thoughts Holly’s success story is a testament to the potential of the dropshipping business model when approached with the right strategies, focus on customer experience, and strong supplier relationships. The episode emphasizes the importance of taking action, learning through experience, and building a network in the entrepreneurial space.
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For more insights into dropshipping and entrepreneurship, check out Holly's work at [dropshipbreakthrough.com](http://dropshipbreakthrough.com). If you enjoyed this episode, share it with a friend or fellow aspiring entrepreneur!
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:00Let's be real. Nobody starts a business for the joy of calculating tax withholdings. That's where our partner Gusto comes in to take the stress out of payroll, benefits, and HR, so you can focus on why you started your business in the first place. Gusto is online payroll and benefits software built for small businesses. It's all-in-one, remote-friendly, and incredibly easy to use. So that means you can pay, hire, onboard, and support your team from anywhere. I'm talking about automatic payroll tax filing, simple direct deposits, health benefits, commuter benefits, workers' comp, 401k, you name it.
0:34Gusto makes it simple and all with no hidden fees, no surprises. Plus, if you have any questions, their team of certified HR experts are standing by to help. It's no wonder why more than 400 ,000 small businesses already trust Gusto and why it's the number one rated payroll software for fall 2025, according to the review site G2. So try Gusto today at gusto.com slash side hustle and get three months free when you run your first payroll. That's three months of free payroll at gusto.com slash side hustle. One more time, gusto, G-U-S-T-O dot com slash side hustle. Is dropshipping still a thing? My guest today says yes, having taken her dropshipping store to$500 ,000 in sales in her first six months.
1:21Stick around in this one. We're covering niche selection, negotiating supplier relationships, and marketing the business to make profitable sales. Now, in addition to running the e-commerce business, she helps new dropshippers get started. From dropshipbreakthrough.com, Holly Finnefrock, welcome to The Side Hustle Show. What's up, Nick? So excited to be here today. I am excited for this one. This is a side hustle that gets a lot of attention, and we want to figure out whether or not it's going to be a fit for us. So let's talk niche selection. You're in the outdoor space, specifically ponds and water features.
1:57But how'd you land on this? So obviously I'm in dropship breakthrough. So in the course, there is a lot of guidelines around what makes a good niche. The big ones are look at the competitors. A lot of people think, oh, there's no competitors here. That means it must be good. And it's actually the opposite. That's a red flag if you don't see any competitors, because normally that means that people have tried it before and it didn't work. Maybe the supplier doesn't allow people to advertise on Google Ads and they're the only ones to get to. Maybe you have to have a physical presence in order to sell.
2:36It's unlikely that at this stage of the internet, you have stumbled upon a never before seen niche. It's more likely that somebody tried it and it didn't work at this point. Yeah. And even if you did, like, let's say you are selling something that is new to the market. That's still a red flag because no one's proven it out yet. So I'd rather someone else prove it out first and then go and do it once I've seen it work a few times. I like to try and not be the first to the game, but also not be the last to the game. Finding something with five to ten competitors is typically the sweet spot. When you find something and it's like 20 competitors, 30 competitors, that's normally showing that it's probably a little too saturated and you need to choose something else.
3:20They appear to be dropshipping sites versus manufacturers on the 5 to 10? Yeah. So here's a good telltale sign that something is a dropshipping store and not a supplier is that you see that they have multiple brands. And so you go to their site and you can see the 3, 4, 5, 20, 50 brands. That normally means they're a dropshipper that's representing multiple brands. I like to look and see if they have any sort of warehouse that might give me a sign that maybe they're not a dropshipper, but they have a physical established warehouse. So it takes a lot of sleuthing and figuring out like, okay, who exactly is this and what I count them as a true competitor versus, you know, an established traditional business model that is just doing something entirely different.
4:05Yeah. Would you consider that warehoused business with physical inventory to be a competitor? I would not consider them if they're not doing drop shipping because at first you're not going to be housing any inventory. You're only going to be doing drop shipping. And so if you can find that it's okay if they can, they have a warehouse because maybe that means they're more established. But the question is, are they doing drop shipping? And if so, then that's a green flag. That means they made it, they figured it out. I can too. Okay. Right. And then in addition to that, you want those competitors to be in the same country.
4:42You want to find suppliers in the same country as you. So if you see that all your suppliers are in Germany, but you're trying to start a U.S. business, that's a yellow flag. There's probably going to be other roadblocks that are involved and wouldn't be at the top of my list. So I want to see multiple suppliers that are in the same country as me, multiple competitors that are in the same country as me. And then one of the big things is I actually think high ticket and low ticket dropshipping, they're entirely different business modalities. Because low ticket dropshipping, you're looking for like the trendy products, you're looking for what's hot now.
5:16And that's going to change every three months, which means you're gonna have to have a new site every three months, which means you're going to be dealing with Chinese suppliers, you're not going to be able to establish real relationships with them, you're not going to build a creative true asset online, versus high ticket dropshipping, you're finding local suppliers, you're building relationships, you are building an asset that you can eventually sell for multi-million dollars. When I say high ticket dropshipping, what I mean is anything that's going to be over$1 ,000 USD in value. And anything under that is either going to be low ticket or what we call no man's land, which is$600,$700.
5:54That's really hard because it's not an easy, quick impulse buy, but it's also not a high ticket. And so it's really hard to market and advertise at that level. So that's why we say anything under a thousand, stay away from as one of your number one rules. What do you recommend to just narrow down the potential breadth of products, niches, categories? I mean, did you have an interest in water fountains or like how did you like even even coming up with just to narrow down the scope? So I did have an interest. I really just one of my favorite things is being at the lake house with my husband and just it's very peaceful and relaxing for us.
6:33And so it just so happened that I had an interest, but I wouldn't say that was like the sole reason why. The main determining factor is that you find a market need. At the time, there wasn't as many competitors. Of course, now there's a ton of competitors. It's really, really saturated. But at the time, there wasn't as many competitors. And so that was a major green flag. Okay, there's clearly a need for more vendors in this space. and so how can I differentiate myself and personally I knew coming from a background of where relationships were what I was taught was the most important thing in the business world I went in with the decision that I'm going to make the relationships the leading force and drive behind what makes us different is we give our customers an experience they've never had anywhere else.
7:27We go in above and beyond with our relationships with our suppliers. We're disrupting the market from the traditional sense of what people have been doing for 20, 30, 40 years. And we're coming in with a fresh perspective, especially for me as a female, very, very high male dominated industry. And so really look at like, what experience do you have? Are you a nurse? If you're a nurse, oh, you have such a gift that you can bring into this to a any business as an entrepreneur because you have a unique gift of being able to be so empathetic and caring about people. So looking at what your experience and your gifts are and then being able to apply them to whatever you're deciding to do and saying, how is my unique personality able to disrupt the market and give this market something it's never had or seen before?
8:17Yeah, this is an important point when everybody, all the competition has access to the same suppliers at the same price. And it's like, well, how am I going to stand out? How am I going to differentiate and say, well, we're going to go above and beyond on the customer service side, on the supplier relationship side. So they want to do business with us versus random competitor X, Y, Z. But going back, are you able to share any of the product selection criteria from inside the program? Yeah. So the main thing is it needs to be over$1 ,000 in value. Yeah. And then if there's search volume for that product, then there's a potential for that product to be able to sell really well.
8:51I use keywords everywhere and you search certain keywords and normally those keywords are going to be the names of the products. And so you want to see how much search volume does this product really have. Let's say there's 10 different product types in this niche that you're looking at. You want to see a cumulative of around 50 ,000 monthly searches for all of those product types. And that's where you know, I mean, if you can get over 50 ,000, even better. And there would be like the parent keyword of, you know, something, something, you know, kind of pump or filter or whatever. And then there is the child keyword, like the specific brand name.
9:34Is that what you mean by cumulative? Yeah. So let's use a really like an example of like surfboards. So if I wanted to sell surfboards, you know, I would look at all the brands and maybe the model names of the different surfboards, and I would want to put those into Google. And I would want to see number one, how many times a month is someone just searching for the word surfboard? It's not going to be your highest converting keyword, but it definitely will contribute to some of your traffic. And then you want to look at how many searches are being done with the brands. So let's say you have three brand names.
10:07You want to say Ed's surfboards. Put that in. See how many searches you get with that. And then you get to just start playing with it. And you get to start discovering what people are actually searching for. You might discover this different product because Keywords Everywhere gives you like a lot of recommendations. You know, if you search this word, you might be interested in these words. And so you're just kind of discovering at this point what keywords people are actually searching for in this industry. And I use the tracking spreadsheet. And, you know, you just add up all those keywords, put how many monthly searches, and then if it's under 50 ,000, that's typically like a red flag.
10:45You don't want to go for something there. Yeah, you want to go where there's some level of proven demand that you can step in front of instead of trying to create demand. That makes sense. Exactly. So what happens after that? You say, okay, it checks the price point box. It checks the search volume box. And now it's kind of the chicken or the egg problem of like, I need suppliers in order to have a website, but I probably need a website in order to convince the suppliers to work with me. Where do you go from here? Yeah. So once you pick out your niche and you're like, this is it, I decided. I remember when I landed on my niche, I was so relieved.
11:22I was like, I found it. It was raining outside. I was at my lake house and I ran out and told my husband, I was like, I did it. I found it. I was so excited because that's such a big milestone. And then from there, you want to build out a demo site. You need to get a demo site built out so that you can show your suppliers, basically give them an idea of who you are and what your business is, what it sells. This doesn't need to be a functioning website. It doesn't even have to have real products. Just put fake products on it and show them something that you are, you know, what you're working on.
11:56So I use Shopify and I built out the demo site. And at that point, you are ready to call suppliers. So during the niche selection phase, that's when you're going to get your whole list of suppliers, right? You're going to have 20, 30, 40, 50 suppliers. And now starts the process of calling your suppliers, which is really scary for a lot of people, including myself, because it's really intimidating when when you're like, you don't even have a real business and you're asking them to be your partner. You know, you're like, hey, let's partner up. And they're like, wait, who are you again? Why am I taking your call?
12:38Yeah. Who are you? Oh, I don't have a real business yet. But so it's definitely a mindset. It will really challenge your mind, all of your fears, you know, around judgment and being accepted and worthiness and all of that. But I will say once you make a few calls, always call the suppliers that you want the least amount, that you don't care about. Call them first. Start at the bottom of the list. Yes. I made the mistake of calling my top ones first. I regret that to this day. But call your suppliers. And this is now one of my favorite things to talk about and coach people on is the supplier calling part because I'm really passionate about relationships and I've learned that if you go into this with the intention of being just as equally valuable as they are and go into it with the not even with the desire to win them over as a supplier.
13:40If you make your intention establishing a relationship instead of winning them as a supplier, you are much more likely to actually win them over as a supplier. And it takes the pressure off and it allows you to not come off as desperate and needy. Because let's be honest, you don't need them. If you're really passionate about what you're doing, if you're really excited about going and starting a business, if you've decided in your soul that this is what you want to do, and you've gone through the steps and validated your market idea and you know that you're going to make a difference in this industry, there's no reason why you should be anything less than very particular about who you allow to come into your space and your business.
14:22You should only partner with the best. You should only partner with people who have the same values as you do. And so that's another thing I would say before you call your suppliers, decide on what your three values are going to be. You know, create three values for yourself, you know, honesty, integrity, relationships, whatever it is for you because those are going to be your talking points. And the supplier's not going to ask you, hey, what are your values? But if you bring up that information on a call with them, nobody else is doing that. And those are the little things that suppliers will see that set you apart where they see that you're not just in this to make an extra dollar, but that you actually care about your business and you care about your customers.
15:01And those are the things that are going to make them then want to ask you to be a dealer for them. And so my intention was go in, create a relationship. Hey, Joe, this is Holly. Hey, I came across your business. You know, I'm starting one myself. I'm looking for people to start a relationship within this industry. And I've seen that there's a lot of popularity about, you know, for you guys online. I want to understand why. What makes you guys the way you are in the industry? What are your values? What is your experience in this? What's important to you? Because ultimately, we're looking for three to five partners to take with us to our launch, and we're trying to decide if it might be a win-win.
15:42It's an invitation to them instead of, hey, we want to be a dealer. What do we need to do? More with Holly in just a moment, including the specific roles to look for inside your target supplier companies, getting past the gatekeepers to get your first yes, and the marketing strategy to land your first sales. All that and more coming up right after this. A lot of side hustlers suffer from what-if-itis. What if it doesn't work? What if I don't have the skills? What if I pick the wrong path? But one thing 100 % of our amazing guests have in common is they took their shot. They phased down those what-ifs and they got their answers through taking action.
16:18Our partner Shopify helps turn what-ifs into why-nots. Shopify is the commerce platform behind millions of businesses around the world, from household names to the very guests on this show. What if I can't design a website? Shopify's got you with ready-made templates to match your brand style. What if people haven't heard about my brand? Shopify helps you find customers with easy-to-run email and social media campaigns. And what if I get stuck? You can tap in to Shopify's award-winning 24-7 customer support. Let's turn those dreams into and give them the best shot at success with Shopify. Sign up for your$1 per month trial and start selling today at Shopify.com slash side hustle.
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18:15Yeah. Yeah. Is it common for these companies to have, you know, that become a dealer, become a partner, partnerships like, you know, in the footer of the website and it's, you know, send us an inquiry and it goes to some email black hole versus I want to call up. And what's the job title or role that I'm looking for? If I get that 1-800 number and the receptionist picks up and like, oh, can I talk to purchasing or who do I look for? You want to look for sales, the director of sales, sales manager. The bigger the company, the bigger the role title is going to be. If it's a small company, you're going to talk to the owner.
18:49But what I do is if you get a receptionist, they're going to say, oh, yeah, send us an email and we'll tell you if we want to move forward. That is the call of death. You never will hear from them. And so what I like to do and what I tell people to do is instead say, okay, yeah, I can absolutely do that. And after I send that email, I do have a few questions for Joe. So what would be the best way to actually get a follow up meeting once he's had a chance to review the application and make them questions that the receptionist couldn't answer? Like, hey, what trends are you seeing in the market right now with sales?
19:28Where do you see this business going in the next five years? What are some unique ways that, like, just questions that no one else could answer but them that's going to give way to a conversation with them? Yeah, and it shows that you're forward-looking, future-looking, and maybe it avoids the inevitable, well, what kind of sales volume are you going to drive for us? And you're like, well, I don't know yet. Well, they will ask that question. You know, what are your forecasted sales? And I say$50 ,000 a month within 12 months. That's our goal. And then from there, we reevaluate every year. So that would be a good answer to that.
20:05And for them, at what point does the dropshipping question come up? And by the way, I don't want to actually buy an inventory up front. Could you ship this on my behalf to customers? Yeah, that definitely comes up a lot because people want to know that you care. People want to know that you're not just some dude who's living in his mom's basement and just wants to make a dollar and doesn't actually care about them or their customers. so you have to really think why would they be asking me this question because here's a little trick I will tell you there's no rules in this everybody's going to have their policies but the only real policy the only real rule is relationships are above everything if you can get in with the right person if you can show that you care enough people are willing to go above and beyond and outside of any of their policies for you so what I like to do is anytime they ask me a question I like to think, why are they really asking me this?
21:03And that way I can drive my answer that way. And so when they say like, oh, you need to be able to install, you need to have a physical presence, you need to have a warehouse, you need to have been doing this for 12 months, whatever, you might get asked that, especially with the larger suppliers. And that's really a fair question, because they're probably getting a lot of calls for people who are asking to be dealers. And so what I like to do is, number one, like answer their question. I don't like to just say, hey, I'm a drop shipper because I'm not. I'm more than that. I'm a leading online brand who is going to change the market over the next 10 years.
21:43And so I like to minimize the downside to maximize like the upside in my answer. So I'll usually acknowledge by saying, so yes, because we're new, we are starting out with just dropshipping because we're first trying to figure out exactly what our customers are looking for. within the next five years, we do plan to open a warehouse or where we will be selling for our brands that we have the closest relationships with. And so what our intention is with this launch is to start exploring what our customers are looking for and what sort of relationships we think are going to take us through the next five years.
22:21And so it's almost like I'm putting it back on them as like a test. You know, I'm testing you. Now you get the chance to prove to me that I should store inventory for you because it's a truth, but it also positions me as having a higher status than just being this little drop shipper. Sure. Yeah. We want to start lean. We want to start low risk for everybody, but down the road, we're definitely open to warehousing. Yes. Yes. So the goal is to get three to five suppliers to say yes, so you can launch the site. You can import their inventory and put these products up on the Shopify site and open the virtual doors and say, we're open for business.
23:02Yeah. Yeah. So once you get your suppliers, the last step is to load your products on your site, then turn your payment processor on and go live. And of course, you have to set up your ads. So once you've done your initial setup, then the last piece is just getting your ads set up. I always recommend using Google Shopping ads first. That's how I was taught to do it. That's the way that pretty much everyone who's doing high-ticket dropshipping should start out with Google Shopping ads and specifically, not Performance Max. Don't do Performance Max. Performance Max just means Google will just use your budget however it thinks it should and you don't get any control.
23:42We recommend using the inverted tier funnel. And it's three individual campaigns that allow you to meet the buyer where they're at in the buying journey. So if you think about the marketing funnel, you have like awareness, desire, interest, desire, buy. The more closer you get to the decision, the more information that they're going to know about what they want. And so I'm not interested in people who just want a surfboard, but I am interested in people who know the brand they want, the color they want, the model they want. That's where I want my ads to serve. for those people who know exactly what they want.
24:19And so with this method, it allows for the majority of the budget to be allocated to the people who are actually ready to buy. This is great. At the beginning, we want to make sales right away so we can make our suppliers happy and say like, oh, yeah, this person is delivering on what they said they were going to do. And we're not going to sit around and wait for SEO content. We're not going to even target broad educational content about surfboards. We want to target the very bottom of the funnel, people who already know what they want. They're looking for the best price or they're looking for where to get it.
24:52It was the same thing. Like I ran a shoe business for years and years where it was like, you know, New Balance model 995, something very, very specific. Women's in, you know, in gray and in Google ads, they would always be like, you should really target, you know, women's shoes. Think about all the traffic you could get. It's like, those people don't know what they want yet. I don't have a good landing page for that, but I do have a great landing page for this specific model. A hundred percent. The more specific, the better. That's why, you know, looking at the traffic early on and making sure that there's the search volume to support that is critical.
25:24Because if you're running ads for this keyword, but no one's searching it and you're not going to get any visits to your site. Do you ever run into the issue of, you know, brand name bidding where the supplier is like, we want to own that keyword if we're going to be shipping to the customer anyways, or they don't want you stepping on their toes or outbidding them for that search traffic? Yeah, very rarely. I will say the best suppliers that I work with, they're focusing on manufacturing and creating the products so I can focus on marketing and creating the customer experience and winning the actual bidding for the ads.
26:02So yes, it is out there, but more and more I'm seeing suppliers kind of become the supplier and allow the vendors and dealers to be the dealers. Okay. So it's more common for them not to sell direct to consumer. That's our dealer channel for that. Correct. Yeah. I would say there's certain niches where the suppliers are the only ones that sell and that's a red flag. You don't want to go in a niche where the suppliers are the only ones that are selling their products. Okay. So you get these ads running. How quick was it for you to start seeing sales? It took me a little bit to refine my ads, but then I think I really start after a week or so is when I started consistently spending$20, $30 a day and three days after going live fully with that budget is when I made my first sale and I will tell you it is the coolest feeling when you hear like the cha-ching on your Shopify and I remember exactly where I was at.
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27:05I was in my kitchen at my old house and I was making breakfast and it had only been three days. I was fully expecting for it to be two weeks, you know, before I even thought that that would happen. And like, you know, did the little cha ching. Yeah. You're like, what was that? Yeah. My husband was in the same room and I like looked at my phone and it was like a$2 ,000 sale and I just freaked out. I was like, I was just crying. I was like, this is the best feeling ever. It was so, it was such a good feeling. Yeah. This moment where, where it like finally becomes real. Somebody paid me money on the internet.
27:37I know. Yeah. Like it's such a cool feeling knowing someone just paid you that out of their bank account. Is it common at a$2 ,000 price point for customers to want to do a live chat or get on the phone or something was like, I had this domain I never heard of. Sure, the website looks good. Sure, the copy looks legit. The trust signals are there. But I don't know. Who is this person? And I was going to punch in my credit card and make a$2 ,000 purchase. It's going to depend on the niche. Certain niches don't really involve as much research to go through the cycle. Mine, it was a lot. These are highly, highly technical products that have so many different electrical requirements and things that are needed beforehand.
28:24And, you know, there has to be certain panels and wiring already set up and voltage requirements. And so I do personally experience a lot of people who call in and they're months away from actually needing, ready to buy. And they're just like, hey, I need help. I don't know what to buy. They don't even have, you know, electric out yet. So depending on the industry, these are longer buying cycles because you have to think if someone's going to pay, you know, over$1 ,000 for a product, they're not going to be scrolling on their social media at night and just buy it impulsively. That's not what products we're selling.
29:01We're selling products that people are going to research heavily online, which is why SEO is so critical for this modality. And being able to answer the phone and answer questions and create relationships is also so important because you are going to need to be following up with this potential customer multiple touch points before they inevitably buy. So is that you answering the phone? Was at first. I was working a full-time job at first. And so I wasn't able to answer, you know, most of the time during the day. And I would just call them back on my breaks or in the evenings. And I had no idea what I was talking about.
29:44No idea. I was like, I need to just quit. This is not for me. This is too, like, I feel so, I just felt so ignorant because I didn't know anything that people were talking about. It felt like a foreign language. That was the next question. Like, do you know what the technical requirements are of these products? This was one of my big challenges. Every niche is going to have certain, you know, downsides to it. And this is one of them for mine is just a lot of technical jargon and it's very male dominated. So I'll have like, you know, an electrician of 30 years who calls me and is talking to me and I have no idea what he's saying.
30:20And I remember I was like scribbling down notes and just being like, oh yeah, definitely. Yeah, that makes sense. Okay. Yeah. So here's what I recommend saying, because this is what I said that worked really well for me. I'd write down all their notes and I would say, okay, this is really good information. I have a few ideas for you. Is it okay if I do a little bit of research and then call you back with some recommendations? You know, you're not having to say, oh, I don't know any of this. You know, you're leading the conversation rather than reacting to it, which is exactly what the space you want to be in.
30:53Yeah, you're buying yourself some time. Yes, and you're showing the customer that you have the confidence that you're going to figure it out and that you're going to get it handled. And if they ask me a question I didn't know, I would say, that's a really good question. This is a newer product for us. So I don't know everything about it yet, but let me find that out and I'll add it to our agenda for our next call or something like that. Okay. Did you find it was like individual homeowners or was it more like commercial customers that ended up buying this stuff? Yeah. So there's a lot of B2C, there's a lot of B2B, and there's a lot of B2G, business to government.
31:28Oh, okay. So most of the niches, you're going to have a mix of one to three of those selling cycles for, you know, they're all going to be different. If you're selling to government agents, you know, municipalities or whatever, they're going to have a strict bidding process and you have to submit a proposal. You have to submit a formal bid by a certain date. So you can't just handle them the same way you would a 70-year-old farmer who calls and he just wants to talk to you and be your friend and will buy from you on the same call. Or a business where you're talking to the assistant and they're trying to get the information to the owner.
32:08Every single customer type that you encounter, you learn to navigate differently and that really affects your success as a business. But to answer your question from earlier, I did take all the calls in the beginning. And I think everyone should do that because you learn so much about your product, so much about your customers, which is the main thing. And eventually, after about six months, I hired a assistant who just took phone calls for me. And they started answering the phone. And I taught them everything about the products and the policies. and now, of course, it's been about three years and I have two full-time employees who just answer the phones and do all the day-to-day stuff and they're great.
32:53They handle all of it and now I only get involved when there's an escalation or if it's a deal that's over 10 ,000, then I will get involved to actually help to add some muscle into the negotiations and things like that. Okay. Do you find people negotiating price on you? hey, it says it's$2 ,500 on the website, but what kind of deal can you cut me? Oh, yeah. All the time. Yeah. People love to negotiate. Just by virtue of it being a higher ticket thing where it's like, I'm not going to call up Amazon and be like, hey, it's$2 ,995. Could you give it to me for$2 ,700? Yeah. I think maybe that's just the nature of a lot of these.
33:32I really don't know. But people will call and I tell them like, we'll call us for the best price because with most of these niches, you're going to follow what's called map pricing, minimum advertised price. So you can't compete on price. And so what I like to say is like, if I can't compete on price, I have to compete on service. And so I'll tell the customers this like, hey, we can't advertise lower prices. What we can do is give you an experience you've never had anywhere else. And nobody can beat us on price. So we will give you a lower price, but we don't want to win on price because if we win on price, then we don't really win.
34:10We want to win because you're so impressed with us as a business. So yes, give the lowest price, but also give them the best experience. So you are allowed to make a private deal. You're just not allowed to publicly advertise that. Correct. Yeah. So you can have them call you and I can say, I'll give you a hundred dollars off and you can use that to leverage the deal and say, if you move forward right now, we will give you$100 off. How much margin do you typically have to play with on a product like that? Every niche is different, but average is 10 to 30 plus percent, maybe even 10 to 40 percent, like 40 percent when you get up there and you have some experience with your suppliers and you've proven yourself.
34:55But net margin anywhere, I would say 15 to 20 percent. Okay. So if every$100 ,000 worth of product you're selling is$15 ,000 worth of profit at 15%. Exactly. Got it. So you've got some room to play with because it's higher ticket. We're not selling $10 things at 15%. We're selling$1 ,000 things. So there's some room to play with. There's room for ad spend. There's room for marketing, or there's room to answer the phone and be proactive on customer service. And it sounds like calling people back too. It's not just, of course, the holy grail. Somebody clicks on the website, maybe they found an SEO article, they clicked on it, we didn't have to pay for that click, and then they bought the thing.
35:34Yeah. That's great. But more often, multiple touch points and sometimes being proactive about calling the customer back to close that deal. Yeah. And so I use HubSpot for that. Anytime someone calls in, my employees are required to create a deal in HubSpot and add a next task. So they create the deal, they say, hey, here's our contact, here's the deal, and then they add a next step. So the next step is we're touching base tomorrow to review all the information that we talked about on today's call. That might be the next step. So then the next day they get a task that'll pop up in their HubSpot dashboard that says, call this customer, and they call them up, and then they complete the task, set the next one.
36:14And so it allows for scalability when you just are having to always think about the next task instead of managing every possible historical deal that you've had, because that's just not even possible. Yeah, you're going to figure out some way to organize it. Otherwise, you're just going to go crazy. Things are going to fall through the cracks. Yeah. When I first started out, though, it was all on a spreadsheet. So I would say you don't need to use a system like HubSpot until you're a year in. At what point did you feel comfortable saying, I'm going to go all in on this? The side hustle is going to become the main hustle.
36:48Holly's response and lots more coming up right after this. One of the tools I personally see make a huge difference for business owners is Quo, formerly OpenPhone. It's the same great business phone system you've heard me talk about before, just with a new name. When you're running a business, you know that every missed call is a missed opportunity. So Quo, formerly OpenPhone, this is the number one business phone system that streamlines your customer communications. It works through an app on your phone or your computer. So no more using your personal number as your business line. No more carrying two phones around.
37:20With Quo, your team can share one phone number and collaborate on customer calls and texts just like a shared inbox. So anybody can jump in to keep response times fast. And this is where it gets super cool. You can set up Quo's built-in AI agent in just a few minutes to handle calls after hours, answer customer questions, and capture leads on autopilot. I want to invite you to get started for free. Plus, Side Hustle show listeners get 20 % off your first six months at quo.com slash side hustle. That's Q-U-O dot com slash side hustle. Look at them getting that three-letter domain, Q-U-O dot com slash side hustle.
37:59And if you've got existing numbers with another service, Quo will port them over at no extra charge. Whoa, no missed calls, no missed customers? Yeah, that was about a year after I started. I'm a big risk taker, but I'm also very skeptical. And so it's a unique mix because I'm constantly fighting myself with wanting to take the risk, but also being very skeptical of the outcome. And I was raised in a household where it was very performance-based, but also very anti-risk, like work really hard, don't have any expectations and don't do anything that could cause a major loss. My family didn't want me to do this.
38:41They advised against it, specifically my dad, because I had a very, very secure corporate job, benefits and 401k and 401k matching and lots of sick time and just a dream job. Tough to walk away from. Yeah. And so that was a really big thing for me to actually quit my job. And I had to do it in spite of what people told me, oh, this isn't going to work. This is crazy. And I decided, I don't even know why, like what it was about that moment, but it was just a moment where I knew this is what I, this, I can quit my job. The biggest thing was like, I now am able to support myself financially, but it had only been a year.
39:23There was no evidence that this was going to just continue to grow the way it had. So there was definitely some fear. I had to just decide, okay, I'm going to go for it. Yeah, you had some track record of revenue and profits. Yeah. A relatively short window. Yes, relatively short. One of the main reasons I started this, I had to think about what was my intention for doing this. And for me, I wanted to have freedom, the freedom to choose. That was my biggest goal. I'm okay working harder than anyone else. I'm okay doing hard things, but I want to do it because I want to do it, not because someone's telling me I have to do it.
40:00And so after I crunched the numbers and I'm like, all right, I'm doing better than I am doing at my job. It actually makes more sense. The other thing is like, I realized it actually made more sense to leave because I was missing so many phone calls, not being at my job. How can we improve the sales numbers if we actually were fielding those calls on the first ring? Because my employee couldn't keep up by himself anymore. And so I either had to hire a second employee or I was just losing that. So I realized I could actually make more money if I was just at home answering the calls. So everything just lined up and I'm like, I'm going to go for it.
40:34I can always get another job if I have to. Yeah. What's the realistic worst case scenario? Yeah. And so I went for it. I will say one of my most memorable moments in my life was like making that call and putting in my two weeks to my boss. I was sitting in the parking garage and I was so scared and so nervous. And cause I had, I had been doing this for 10 years, you know, doing sales and specifically for this company for six years, I was in a really good position, a really good place. And I went out to the parking garage and I was like sweating and I made the call and I'm, I'm a very non-controfrontational person.
41:17I, I consider myself like an introvert. I don't like to do things that are going to make people cause people to talk about it. So I just, I, I, that I knew I was like, I have to do it. So I called him and I was like, Hey, I have some news. And I just told him, I'm like, I I'm, I'm putting in my two weeks. I'm so sorry. But I, I started a business cause I hadn't told anybody at my job. And so this was like a big surprise to everyone. And so it was a very short call. He was very understanding. And then I remember after I got off the call, I just sat there and I had this spiritual moment where I'm like, wow, I really did this.
41:58I really did this. And then all those moments flashed through, like me at the lake house running to tell my husband about the niche idea and me being afraid of calling my suppliers and making my first sale. And all these moments are flashing through and I'm like, I really did it. Yeah. I mean, think about how the trajectory of your life, think about like diverging paths in the forest. Like in just one year, we went from, you know, 10 years, corporate sales, all in, out, like on a completely different path. Yeah. And like, I'm just such an average person. I don't have extra special skills that other people don't.
42:33And so it was just so, so special for me because I'm like someone just normal, like me, like I did it. And so in that moment, that's when I knew I wanted to go become a coach for Drop Ship Breakthrough because I was like, I want to help as many other people in my life make that phone call and put in their two weeks and have this moment of just pure like gratitude and joy. It was a really cool moment. Yeah. I think everybody who's well, maybe I imagine some people are just like, you know, go out blaze of glory, throwing stuff off of the cubicle walls or whatever. But for most people, it's kind of like this nerve wracking moment of like, ah, can I really cut my own paycheck?
43:12Am I really going to go on my own way? At least it was for me telling my boss. We were out to dinner and it's just like on my second beer before I got up the nerve to drop the news. Like, I'm out of here. And he knew about the side business at the time. So it wasn't like as big of a surprise, but he's like, whatever, good riddance. But it was a burden off of the shoulders. It was very freeing in that way. So that's super cool. So you're doing the coaching with Dropship Breakthrough, obviously still running the site. What's like a day in the life if there is such a thing these days? When you first start out, it's totally different than where I'm at now, which is three years in.
43:47So now that I have a team of three full-time people, two of them that are handling the day-to-day and customer facing, and then the other one who's doing back-end administrative work, I have a bookkeeper and I have an SEO team and just people who get to do that stuff. So I'm not having to be in that day to day. So I would say my whole intention and my goal was like, I didn't want to have to get up and just work an eight hour workday. I didn't want to do that. And so I often find myself getting back into that because my performance based conditioning will, I'll feel guilty if I wake up and, and don't do anything during the day.
44:23You know, I'll feel like I have to work. I have to do something. So I've had to kind of play with that since I've quit my job and find a routine that I can feel good about. I actually like to work. I just don't want to feel like a prisoner to it. So I have this trick if you want to hear it. It's the secret to not having a to-do list. Do you want to know what it is? Yeah, let's hear it. So every Sunday, I take my whole to-do list and I disperse it throughout the week. So any meetings, you know anything that's the most important I put it on the calendar first like I do Pilates twice a week any workouts like I put them on the calendar number one and then any meetings any coaching calls those get put onto my calendar automatically so then I take my to-do list and I write it all out I prioritize you know what's the most important to least important the most important things I put on Monday those have to get done and then the rest of the to-do list I'll spread out like Monday Tuesday, Wednesday.
45:20And then Thursday, Friday, I try and keep as light as possible so that it's just there's not a lot of scheduled things. No, that makes a lot of sense. I like the idea of front loading the week by Thursday, Friday. It's like, I got some free time to go hang out. And there's a line I want to attribute it to Tim Ferriss. I don't know if he's the first to come up with it, but it was luxury to me is feeling unrushed instead of this. I got to get up and go, go, go. I can afford myself some breathing room in the budget and in the schedule. And so I really like that stuff. I love that. Are you actively trying to find new suppliers to drive new traffic?
45:55Is it primarily still ad driven or has now the site been indexed and there's a body of content that people are finding organically? What's going on there? Yeah, that is one of the things that I will never outsource is my supplier relationships and in constantly renegotiating your margins, you know, whatever they give you up front, that will change. After you've made a few sales for them, you can then call them back and say, hey, let's talk about this. Would your 10 to 30 % include like your ad cost? Or is that kind of like, I need to be, I need to have profitable ad spend out of that margin. You would want to have profitable ad spend out of that margin.
46:31So that's why I say the net profit is usually 15 to 20%. That's after ad cost. Okay. Got it. Got it. Yeah. So I'm consistently trying to get new suppliers for me that I usually start calling. I do my supplier calls in the winter because that's the slow season for me. Ads are constantly being managed. We're constantly having to adjust our bids because of seasonality changes, changes in the competitors. And I would say our SEO efforts have paid off a lot. We're getting a lot more organic clicks. We still have a lot more to do there, but that's the long game. That's something that you're just going to get a little bit better each year.
47:10What's next for you? What's got you excited for the future of this business? So we're working on starting to do some private labeling. So we're going to create our own brand and private label so that the products can be kind of our own versus our suppliers. So that's something that's exciting for me because that's going to open a lot more doors and just really build on our brand itself. It's going to create, we're going to expand from just being a drop shipper to being a true brand online. Yeah. And this is a big shift because instead of low risk, I don't have to buy the product until it sells.
47:48Now, all of a sudden, I got to work with the manufacturer to buy many of the product before it sells. And hopefully, there's some demand. But in exchange, much better margins, hopefully. Definitely. Yes. So it is. It's higher risk up front. And that's something that I haven't faced yet. It's going to come with its own set of challenges, but we're excited for it. And that'll hopefully be coming within the next 12 months. And then we're also going to be getting on Amazon and starting to sell a lot. I don't know why we're not on Amazon yet, but we're working on that. For the private label stuff or for the existing supplier products?
48:26Right now, it's just for the existing. Okay. But eventually it could be for the private labeling too. Is that just a special approval? Like, hey, we've been working together for years. We'd like to be your retail representative on Amazon, even if they're not selling directly or if there's not other dealers already selling. Or yes, even if there are, you can throw your hat in the ring too. Yeah, there's always other dealers selling. So it's just very similar as Google Ads. You just go and compete. And that's why FBA is really the only way you're going to win the click because everybody does FBA.
49:01So if you don't do it, then you're never going to get awarded, you know, the click on Amazon. Meaning Amazon is warehousing, Amazon is fulfilling the thing, and it becomes Prime eligible. Yeah, exactly. Even for the high ticket stuff, that's somewhat surprising. I would have figured like, ah, for the really high ticket stuff, it's going to ship from the supplier. Yeah, at least that's been in my experience. I don't know if it's different for other niches, but that's how it's been for me. So in that case, do you have to convince your supplier to send some stuff into the Amazon warehouse or do you have to kind of front that or how are you doing that?
49:33We would have to front it. Okay. So that would be a large investment. And so it's, it seems like it would be worth the risk, but I don't know. We just, we're still in the middle of the conversations and trying to figure out if that's the direction that we want to go, but I'm pretty sure it is. Yeah. If nothing else, it's worth an experiment, worth a test. It's hard to overestimate the transaction volume that flows through Amazon. Even just my own little experiments and clearance arbitrage and stuff. And I was like, I swear I just sent this in like yesterday and it's already sold like it's crazy the just sales volume that they do I know it really is.
50:07Yeah, it's kind of scary Actually, yeah, those those two things and then we won't have kids soon So my biggest goal is start raising my kids and not having to be consumed by this all the time I definitely still want to be involved. I want to continue setting goals and growing the business but I would love to just raise a family and not have to constantly worry about, do I have to go into an office somewhere and have a job? That's such a gift. Yeah, I mean, every year that goes by, I imagine that fear becomes less and less. You're like, oh, we're still okay. So very cool that you built that lifestyle.
50:41Yeah. Well, Holly, this has been awesome. Dropshipbreakthrough.com. I believe there is a on-demand webinar. If you want to learn more, maybe dropshipbreakthrough.com slash side hustle may or may not be my referral link. We'll double check on that. put it in the show notes. Let's wrap this thing up with your number one tip for Side Hustle Nation. Don't let the fear of judgment from others stop you from pursuing your dreams. We run our entire lives based on what other people think about us and trying to win the approval of other people. And I think my biggest regret would be if I'm laying on my deathbed and and thinking back to all the things that I wish I would have done that I didn't do because I was scared that I was going to fail and people were going to laugh at me or judge me.
51:28And being able to actually work towards the personal development that was needed to take the risk anyway and accept the potential defeat and be comfortable with failing in certain scenarios, be comfortable with people thinking that you're stupid and that you suck and talking about you behind your back. because most of the time they're not actually doing those things. We just think they are. Yeah, most of the time people are too occupied with their own issues and problems to even be paying any attention to what you're doing. Exactly. But in the times when they really are, those aren't the people we want in our lives anyways.
52:04Those aren't the people that we want to sit next to us, that we want to have as our support network. Absolutely. Well, this has been an awesome takeaway for me before we wrap is like, if everybody, again, if everybody has access to the same suppliers at the same price, What is going to set you apart? It's got to be this differentiation. And in Holly's case, done an excellent job of building those relationships, building systems around the customer support. And like, I've got some ideas for you. Let me do a little more research. I'm going to get back to you. And kind of being really proactive about that.
52:36Even if you don't speak the language at the start, it's like, this stuff is learnable. You can figure it out. So I think that's really powerful. We have another episode if you're wondering what to listen to next with Ben, also from the Dropship Breakthrough team. That is number 558 in your archives. I'll link that up as well. Episode 558. Ben had a cool story of earning$40 ,000 a year, driving a forklift for his day job to this$40 ,000 payday from one of his dropship sites. So cool story about some of the successes and failures. Pretty transparent about the niches that didn't work in the dropshipping world.
53:09But beyond that, I also send out my best side hustle ideas and updates to 125 ,000 people every week. if you would like to get that stuff too all you got to do is go to side hustle nation.com slash join and i'll get you on the list big thanks to holly for sharing her insight big thanks to our sponsors for helping make this content free for everyone you can hit up side hustle nation.com slash deals for all the latest offers from our sponsors in one place thank you for supporting the advertisers that support the show that is it for me thank you so much for tuning in if you're finding value in the show the greatest compliment is to share with a friend so fire off that text message.
53:44Hey, I think you should check this out. Until next time, let's go out there and make something happen. And I'll catch you in the next edition of the Side Hustle Show. Hustle on.
From the publisher
Is dropshipping dead? Not according to Holly Finnefrock, who hit $500,000 in sales within her first six months of launching a high-ticket dropshipping store.
Holly runs a successful dropshipping business in the outdoor space, specifically selling ponds and water features. Today, she's pulling back the curtain on dropshipbreakthrough.com to show exactly how this business model works, from selecting the right niche to negotiating with suppliers to making those first sales.
Tune into Episode 704 of the Side Hustle Show to learn:
How to validate a profitable dropshipping niche before investing time or money
The relationship-building approach that wins over suppliers (even without inventory)
Proven Google ads strategies to target bottom-of-funnel buyers ready to purchase
Full Show Notes: $500k in Sales in 6 Months: A Dropshipping Case Study
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About The Side Hustle Show
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