If you’re somebody with limited knowledge of Facebook advertising and a relatively small budget, then we’re a lot alike. You and I likely have the same reservations about spending our hard-earned money on advertisements, especially when getting it right might take a few hundred extra dollars.
That’s why I decided to be your guinea pig.
As part of Oberlo’s support team, I love when we showcase Oberlo success stories – merchants who have learned to gamify Facebook Ads and turn seemingly generic products into goldmines over the course of a few months. It does happen. In fact, every day someone reaches out to us through our social media channels to tell us about their wildly successful strategy.
It always leaves me thinking, “I really should be able to do that.”
But I think it’s fair to say that for every success story, there are many more who slip because they don’t persevere long enough through the trials of the process. Expect to struggle before you succeed.
So with that in mind, over the course of the last month, I jumped in head-first so that you can see exactly what $10 a day can earn you – if anything at all – when just starting out.
And I’m here today to show you exactly what I did. The successes and the facepalms. All of it.
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My plan was to advertise one product that I felt had good potential, and that I could clearly define an audience for. Given my $10 per day budget, I didn’t want to spread myself too thin and dilute the audience, so my thinking was, “One product, one target audience.”
I used a storefront that I built a little while back but hadn’t done much with it. The store’s name is Walling In Love (www.wallinginlove.com). It’s a basic general store, but without much success and with zero Facebook presence. There are some home decor products, and some jewelry that aligned with the brand and mission of the store.
The store was originally positioned as a philanthropic business with a portion of profits (should there be any) donated to a local homeless shelter.
The slogan was, “Give someone a home. Decorate yours.”
Here’s what I did
I chose this “Home is where the heart is” van life charm:
It’s a rather generic product, but there is a big subculture of people with wanderlust who pack up their stuff into small camper vans and travel around for months on end, especially during the summer. I live on the West Coast of Canada where adventure travel, camping, and exploration are not only huge industries, but a way of life for residents all up and down the Western seaboard.
So I knew (or at least hoped) that there’d be a market for these.
We often tell people to sell what they are interested in selling. I think that if there is an audience for it, then you should be able to sell it. So it seemed fitting to me that I should put my money where my mouth is.
Aspiring entrepreneurs often want to know what the next hot product is: “What will be trending in the summer of 20XX?”
I think it’s great if you want to chase trends and try to be ahead of the curve! It’s certainly a proven strategy. But I also think that you can carve out a space for yourself with virtually any product that has an audience if you manage to create advertisements that end up tapping into the audience you’re looking for – that’s the real challenge.
Speaking of Audiences…
I decided I would keep a very large audience over the course of the first few days of my Facebook ads campaign. The thinking here is that the charm could appeal to a fairly broad audience, and until I’d seen some data, I didn’t want to exclude people that have the potential to purchase.
I decided I’d run two ads for the same product to start…
Ad 1 Parameters – Camping Interests
- Men and women
- Age 25 – 35
- Interests (no method to the madness, just intuitive choices)
- Outdoor Enthusiasts
- Adventure Travel
Ad 2 Parameters – Jewelry Interests
- Men and women
- Age 25 – 55
- Interests (no method to the madness, just intuitive choices)
- Online Shopping
Woke up to a sale! Booyah. Definitely, maybe, doing something right.
The ads are just barely breaking even, but in the early days, while the Facebook Pixel is learning, I’m not necessarily thinking that I’ll be above water. I’m hoping to make it up on the backend with a more focused audience that Facebook develops as time passes.
It’s only been one day of data, and while I could make some decisions based on the fast results I’ve seen, I don’t think that it’s worthwhile just yet to exclude huge swaths of people. So I will sit tight.
Woke up to another sale. Okay, at this point I was thinking that I might know what I’m doing. (Spoiler alert: the pain train was soon to follow.)
Based on the data I saw on that day, I decided to kill the jewelry interests ad and funnel all the budget into the camping interest. I noticed that the two purchases have come from the age bracket 18-30, so I have also excluded all other age brackets. The two purchases were also from men, but for now, I’m going to leave that factor as-is.
I decided not to make any changes for a couple of days and see what happens. Might not have been the most astute approach, but given that the first two days had started off fairly well, I thought it was clear the Facebook Pixel was sending a reasonable amount of traffic that was converting. I decided to white knuckle it.
Oh, I haven’t explained the Facebook Pixel yet. How rude of me. The Facebook Pixel is a little snippet of code that lives on your website and matches the characteristics of your customers with the characteristics of Facebook uses. That way, when someone comes to your site from Facebook and makes a purchase, Facebook can get more surgical with its ads by finding people who are similar to your customers.
Only one sale occurred, and at this point, it’s time to make some decisions about this ad and think about how to test other audiences and campaign structures.
After taking a look at the results and speaking with some esteemed colleagues, I decide to change up the strategy. At the outset of this experiment, I began running a campaign for traffic in order to get cheap clicks and see how people interacted with my ad.
Generally speaking, a traffic campaign will display your ads to more people and drives more people to your site, but the quality of the visitors – meaning the likelihood of a visitor turning into a buyer – tends to be lower than running a conversion campaign. If you’re looking to drive more sales, then you might start with a conversion campaign. But, it’s important to remember, there’s no one formula that is the silver bullet. I decided I’d try both to see what happened.
After doing a little research, I determine it would be best to run a campaign focused on conversions and target a significantly smaller, more focused audience.
I lean into the “van” aspect of the product and target those who like to camp in RV’s and/or camp in campervans. The age range is kept broad because this activity is indiscriminate of age.
The new parameters are below.
My Zero-Dollar Sales Day
Uh-oh. Disaster strikes! Well, not really. But there certainly was an unfortunate turn of events…
When a product is out of stock on AliExpress, the platform will sometimes set the price of the product to zero before restocking the item on their system. Just one of those AliExpress quirks.
This means that if you’ve got your price multiplier settings set to float with changes on AliExpress, then you’re at risk of your price going to $0. The price multiplier, if you’re not familiar, is a setting you control inside of Oberlo so that your store automatically charges a certain price in relation to the cost that you’re going to pay for the product.
Is this scenario, a product that costs $3 would then cost $9 at your store (you could make that $8.99 if you want). But as I learned, and learned the hard way, is that if a product momentarily goes out of stock on AliExpress, it can make the multiplier screwy by resetting the cost to $0. After all, $0 x 3 is… 0.
This happened to me and caused an influx of completely free orders! Not ideal.
It’s kind of funny, I know my way around the Oberlo system, but I certainly did not foresee this happening. Of course, it’s all part of the learning process, but be careful not to have this happen to you. This was my biggest facepalm moment, no doubt. A stark reminder that running a business isn’t easy and the road to success is paved with lots of lessons along the way. To be honest, it was a little embarrassing and I felt silly for letting this happen to me – I’m a customer success manager at Oberlo! But hey, we march on.
What you need to do is set your price and then select “Do Nothing” in your Auto Update settings, otherwise you might be giving products away for free.
This setting will leave the price as is, and then shoot you a note so that you can adjust if you want.
Now that this new ad had been running for 10 days or so, it’s clear that the results are not as good as those in my initial strategy. I managed to get more add to carts, but fewer sales, and the conversion rate was lower. I suppose you can’t know until you try, and throughout the process you’ve got to test, test, test.
This test was a fail, fail, fail.
For me, the ongoing urge was to build out a variety of new audiences and split the daily spend four ways so that I was spending $2.50 per audience per day. It was hard to resist doing this, but to spread out an already thin budget seemed like it wouldn’t be a wise decision.
With an average of 20-30 visitors per day and my current cost per click (CPC), intuitively it makes more sense to run ads for seven, ten, even fourteen days before killing them. This way at least 200 people click on the ad before killing it. The cost per click through can range anywhere from $0.10 to $3, $4, $5 per click or higher. Fortunately, my cost per click was around $0.30, which meant that with $10 a day, I could capture around 30 clicks.
I think the interests I’ve chosen are aligned with the product, so it’s just a matter of collecting data and watching to see what happens. The reality is that you need to white knuckle it, while simply losing money every day in order to collect data.
After 40 Days, Here Are the Results… Not Pretty
Over the course of the 40 days, I ran two types of campaigns. The first campaign was for traffic. I chose to run a campaign for traffic rather than conversions at first because my intention was to drive lower cost clicks to the site in order to help my pixel learn who my audience was. Here was the outcome…
- Run time: 9 days
- Amount spent: $82.76
- Cost per click: $0.37
- Impressions: 13,390
- Unique link clicks: 223
- Add to carts: 9
- Purchases: 6
- Cost per purchase: $13.79
The product I’m selling is $9.99, so clearly this ad is underwater: For each sale, I’m losing at least $3.80 just on the advertisement alone. Not to mention the additional costs like my Shopify subscription and the cost of the product.
After running this campaign for 10 days and conferring with some colleagues, I decided it might be time to transition to a campaign geared towards conversions. Clearly, the results weren’t stellar, but the campaign had certainly gained some traction and made sales and had a conversion rate of 2.69 percent. Not terrible!
Results from the Conversions campaign
- Runtime: 30 days
- Amount spent: $277.14
- Cost per click: $0.31
- Impressions: 58,000
- Unique link clicks: 950
- Add to carts: 40
- Purchases: 8
- Cost per purchase: $34.64
Unfortunately, this campaign was far less successful than the original strategy, and it just goes to show you that there’s not one right way to run Facebook ads. There are too many variables at play for there to be a single set formula that is going to work for you. The conversion rate for this campaign was 0.8 percent.
Looking back on the month, I thought I’d have been able to garner better results than what transpired. But, the reality is that this business – the dropshipping business – is about trial and error. It’s about continuously testing both products and audiences. And more often than not, it takes a little bit of a bankroll to find the right products and the right audiences.
I also thought that throughout the month I would have been testing more audiences with a variety of different variables through the ad sets – different locations, different ages, different interests, and so on. But when you’re spending just $10/day, it’s important not to dilute your efforts by stretching your ad spend across a variety of ad sets. For example, if I wanted to test four different audiences concurrently, it would have meant splitting the ad spend four ways and allocating just $2.50 to each ad set, which would have meant very few clicks per audience/ad set.
Conventional wisdom also suggests that you ought to test an audience for a couple of weeks so that your pixel can optimize, so making constant changes can also inhibit your pixel’s performance. I learned that the hard way, “optimizing” my original ad and creating something… much worse.
The next time around, I’d do things a little differently. Firstly, my inclination is that it makes more sense to sell a product that costs a little bit more money. I thought that initially selecting an inexpensive product would make for quick and easy sales. However, the reality is that when you’re selling an inexpensive product, you’ve got a smaller margin for error because if you receive lots of clicks and no sales, you’re profit quickly dries up. But, if your product costs around $25-$50, then you’ve got the opportunity to capture more clicks, and if you receive a sale, you’ll make up the cost of your advertisements.
As far as audiences go, it’s a little harder to say. I think I picked a relatively niche interest product and was able to define an audience. That said, it was just a simple necklace. Maybe next time I will pick a product with a defined application that I know people will use for a specific purpose. That way, I’ll be able to get more surgical with my audiences.
I’d also test more audiences throughout the month. I’d still use the $10 a day on each audience, but I’d likely run the test for just a few days and if I don’t receive any sales, then I would make adjustments. In addition to all of that, I would use a niche storefront and have a more defined look and feel which would allow me to create stronger brand affinity.
Overall, this exercise has helped me to understand that the process is not about hitting it big with one product on the first try. It’s about taking the valuable lessons you learn and applying them to the next store, and the one after that, until you get it right. Oberlo releases a lot of content about Facebook Advertising because we understand that learning the ropes is part of the process and we’re committed to making sure that you stumble as little as possible.
I hope you learned some lessons – I clearly did – so that when you take the plunge you’ll be better prepared for what is to come.