If you read my last post about my annual dropshipping income, you’ll have noticed I used a year to date gross figure of $617,218.36. This figure will soon be updated to include November and December number, and will likely exceed $800,000. I did receive a few emails asking me, however, what my net income was. I decided to include this in my December income report.
This will be my final income report.
The purpose of my posts initially was to encourage some of you who were on the fence about dropshipping to go ahead and try it. It certainly wasn’t to keep giving Wall Street reports about my income and earnings.
So what are my ecommerce goals for 2017?
- My goal is to open 12 new ecommerce stores. I do have many other types of sites, whose goals are different and won’t factor in this post. I want to dedicate this post strictly to dropshipping.
- I need to get more sleep, I have a hard time sleeping, which in turn affects my work in ecommerce. I need to hunt for a solution, including meditation. My competitive obsession keeps me awake when I should be sleeping.
- I need to hire on 5 more full time staff to handle volume.
- I need to hire a dedicated CPA. Currently, I do all the accounting and use an external accountant for taxes.
- I need to revisit my business structure in order to keep my income taxes in check.
- I want to purchase 2 successful, ecommerce stores in a niche with a high barrier to entry (budget 50-70k each).
My December dropshipping net income, after everything is paid and accounted for, is $44,502. In addition, my cash back credit card earned me $2,995.67 (see screenshot further down), for a net grand total of $47,497.67 in December.
What are the advantages of the type of work that I do?
- I get to set my own schedule
- I get to control every aspect of my business
- I get to rack up cashback rewards from my cards
- I get to work anywhere; all I need is my laptop
- No dress code (although I do recommend you dress for success)
What are the challenges of the type of work I do?
- I tend to work extended hours (very)
- I work every day of the week
- No job security
- Constant banking issues
- Scaling available credit to meet order needs
Nothing comes easy. My banks and credit cards are constantly verifying and re-verifying me. SunTrust bank closed one of my accounts–they just don’t like ecommerce. I’m also having to beg for credit line increases. It’s not uncommon to see up to 15-20k charged on my cards in a single day and as I open new stores this will become problematic.
Frankly, some banks are afraid of ecommerce and I’ve had to hunt for those that are ecommerce friendly. A account shut down even for a few days can cost me thousands of dollars in income.
I do get to set my own schedule,
But I found I work a lot more.
However, I work for myself and no one else. It’s my business, my work, my life. But I think part of the problem is that I’m a workaholic. I love working to a point of fault. I don’t take vacations unless I force myself to, and my eyes automatically open at 7:30am every morning. By 8:30 I’m working. Between going to the gym, running errands, etc, my work becomes interspersed throughout the day until about 11pm–sometimes longer.
I don’d mind the work hours, I love what I do. It’s a pleasure doing it and I schedule my work around my life. But this also means my work has become a way of life and it’s hard to just disconnect.
My credit card cash back rewards for the past two months have allowed me to:
- Travel to Bangkok for New Year for free
- Pay for my hotel and food
- Buy a new top-of-the-line 15″ MacBook Pro
- Buy an iPhone 7 (love the jet black!)
- Pay entirely for my rent
- Pay entirely for my office
Sometimes the whole thing feels surreal, but then I remember all the hardships I went through to get here. I mention some of these in my 13 Tips for Dropshipping Success. However, I want to make something clear. None of what I talk about here is to sell you a digital lifestyle.
If you choose to dropship, I recommend you have at least several years of retail experience or you’re likely join the 95%+ who failed.
Why am I being so negative about such a positive experience?
Because, until I actually started doing it and joining ecommerce groups, I wasn’t aware of the immense failure rate (and the masses of discouraged/negative people who’d tried it).
I attribute this to a serious lack of retail / management experience.
There are some things books, videos, and courses just can’t teach you. You have to be on the ground in retail, working for years, gaining valuable experience. It’s just the way it is; there’s just no way around it.
What kind of retail experienced tremendously helped me in dropshipping?
- I was the top retail banker for SunTrust Bank five years running
- I was the top team manager for the same bank for several years
- I ran one of the most profitable branches (and the largest one) for Countrywide/Bank of America for five years
- I eventually became the Head of Retail for a market leader in home finance; I experimented with multi-million dollar marketing budgets for several years
Instead of having to take a course and trying to figure things out as I went along, experience helped. I did what I did at the bank. I gave customers the service and sales experience they deserved. As far as competition, it has a lot more to do with psychological warfare than simply playing with prices, adjusting Adword bids, and writing pretty text. I sunk all the competition in one of my niches (except for major brand names like Walmart) and formed a business alliance with my top suppliers to block new entrants. If too many try to enter, I flood the niche with stores and flush.
What I’m trying to say is you are dealing with a lot more than just prices. You are dealing with competitors that may get creatively aggressive and that possibly have A TON more hands-on, face to face experience. Many may have been trained in retail consumer psychology. It’s important to keep these things in perspective before you open the door.
So if it sounded like I was giving you a sales pitch in some of my previous posts, I’m not. I’m here to tell you ecommerce is very hard but anything is nowadays. I did it, however, because retail was what I knew. If you have a specialty in something else, you should pursue that and not dropshipping.
There’s great income in all kinds of things.
Playing sports, painting, photography–and much more–you can make tons, millions even, if you’re great at anything.
If you still feel like dropshipping is for you and you have a proven, successful retail track record, then go for it! But remember, nobody plays clean. If you have no retail experience, you could still be the one of the few, gifted folks who possess that natural retail oomph. I still say proceed very cautiously and be honest with yourself. If money is your prime motivator, don’t do it.
There is a whole world of things to do online and so many talented people out there. Plug away at what you love to do; plug away at what you can do better than others. Don’t do anything because everyone else is doing it–do it because you really, truly love doing it and you are good at it. Telling yourself “I’m good at it” doesn’t count!!
Translate that boring office job you keep talking about into an actionable business.
Translate your personal past and experience into your own version success.
Ignore everyone else and all the background noise and I promise you’ll be all the better off for it.
Have you translated former office work into a traveling business? What were some hard-learned business lessons that helped you develop on the road?
Additional resources I highly recommend:
- Do Most Dropshipping eCommerce sites fail?
- 5 Best Cities for Digital Nomads in 2016
- 7 Challenges of Life in Thailand
- Shopify — the eCommerce platform I use to build my stores