Making $10 Million in One Year With Dropshipping
When Andreas and Alexander first started dropshipping, their goal was to hit $1,000 per day in turnover.
It took a year of trying, failing, and making absolutely no money, but they eventually got there.
Today, their business is absolutely thriving. When we spoke to them around two years ago for a blog feature, their pet business was making $500,000 per month. Now, they've hit the $10 million-per-year mark.
If you need a hit of inspiration, this is one interview you want to tune into. Alexander and Andreas join us on this episode to talk about their mistakes and experience and also share with us some tips and secrets behind their success.
Want to learn more about dropshipping and running a business? Hop on over to our blog for more practical, informative articles and inspirational stories.
Here's a seven-point TL;DR version of our chat with Andreas and Alexander:
- They decided on the pet niche because of the emotional connection people have with their pets.
- Their first few ventures failed because they were inexperienced with Facebook ads and marketing.
- Today, they have around 50 people on their team working on their business together.
- Dropshipping is a real business where you invest time and energy into aspects like legal, marketing, etc. It's not just setting up a website.
- You don't have to invent the wheel. Just look at what works, make it better, and you can be the market leader.
- It's important to have a good relationship with your agent and supplier because they're integral in the running of your business.
- At the beginning of your journey, don't expect to make money. But don't give up.
Start Yours is a podcast about ecommerce, dropshipping, and all things launching a business.
Join us as we meet entrepreneurs who have gone through the triumphs and headaches of running an online store, and learn how they managed to survive and thrive.
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Getting Into a Business Partnership Together
Aleisha: Andreas and Alexander, thank you so much for joining me on Start Yours, where you have been, both have been featured on the Oberlo blog previously, and it's been really great that you have been so transparent with your journey.
Let's start from the beginning, though, if people haven't read about your story. How did you guys meet, and then come to be managing such a profitable dropshipping store?
Alexander: Yeah, the Oberlo blog, I think Andreas, it's already one year ago? I'm not sure.
Andreas: Yes, over one year, yeah.
Alexander: Yeah, over one year. And since then, there have been a lot of changes.
Aleisha: Oh, good, well, let's catch up on the changes, that's great.
Alexander: We build it from the ground, with nothing, I would say. And then we scaled it up. And I think the interview from over one year ago, that was at the point... I think, at this point, we made $500,000 per month, Andreas, yeah?
Andreas: Yes, $500,000 per month, it was, definitely, yeah.
Alexander: Yeah, and then we changed it to over $1 million per month. And now, we hit, after two years, to $10 million.
Aleisha: That's crazy, and that is, I think yeah, you've probably... I definitely say you've reached the sort of heights of... The dizzy heights of profits that a lot of dropshippers would absolutely just dream of hitting.
Now, what really intrigues me about your story is that you have now got this very profitable store in the pet niche. But in the blog and the interviews that you've done previously with Oberlo, you really share a lot about how you started previous stores, like so many other dropshippers, and that you maintained the drive.
And you, even though those stores weren't as successful as this store, you kept going. So can we get back to how you guys started your friendship, and then also progressed into being business partners as well?
Andreas: I can explain it a little bit. I think I met Alexander some years ago already, I'm not sure, about five, six, seven years ago. We started many different businesses. So we were in sales, we were in cryptocurrency, we tried so many different things, but the big deal was not there.
And yeah, Alex and me, we lost money many times.
And then Alexander came up with an idea. He wanted to do dropshipping. And I have heard about this once or twice, but I was not sure what it was, really. And Alexander sent me some links, and then we started to get into this topic.
And that was also the time where we heard the first time of Oberlo and Shopify. And so we registered our first Shopify store, and we really started finding products with Oberlo and... Or we found them on AliExpress and connected them with Oberlo and built our first stores, but we really had a hard time. I think, Alexander, maybe you can explain a little bit for our first time.
Alexander: Our first store, I think we made a turnover of $200, maybe not more. It was selling seven or eight products, it was not really special. Then we closed the store, we sold it for $300 or $400 on the exchange market rate.
Aleisha: Right, yeah.
Alexander: And because this was in the niche about rings, in the jewelry niche, and we quit the store. We sold it because at the first moment we thought, “Okay, in this niche, there are too many stores.” So, we say, okay, let's search for a new niche, and then we make a new store.
I think we had maybe one sale from the new store. This was really bad, it was a general store with all that stuff from China. This was a bad idea. Then we also sold this store, I think for $200, not much money.
And then I came up with the idea to make a pet store, in the pet niche. Because at this point, I did some research about the market, and I came across some blogs and when people have... For example, when you are a pet owner and you have $100 in your pocket and this is the whole money for your month when you've already paid all your bills.
And most pet owners don't buy a TV or go out with the money, they buy some stuff for their pet, and that was my decision to hit this niche and try this niche because the people love their pets. And then we started the store, what we own now.
Aleisha: That's really interesting to me, that you think about the emotional connection that people have with their pets.
Alexander: That was the point of that story, yeah.
Aleisha: Yeah, and I think it's a really interesting point to sort of hit on because a lot of people who have successful stores, especially when they are looking at a niche store. I spoke to someone recently who he, again, not revealing too much about his product that he was talking about, this is a product you can use in a relationship, you can use to snuggle together in winter if you're in a couple or a friendship.
He was sort of saying the marketing really set him aside that he could hit on the emotional points of selling this product rather than just going, "It's a vegetable cutter," which is great. Not dissing the vegetable cutters, but it's hard to really connect emotionally with something that's gonna cut vegetables.
But as you said, people love their pets and wanna spend money on their pets and any other situation. He said, people love to snuggle on the couch together, especially during COVID 'cause we've got nowhere else to go and nothing else to do, so.
Alexander: I think the relationship from the pet owners to their pets, especially in the COVID time, got stronger. Of course, I think so.
The Decision To Go Niche
Aleisha: That's so interesting. And so, just jumping back to your other general store situation, 'cause a lot of people are given the advice early on when they're launching dropshipping stores that general stores can be great, which I still think they can be.
But can we go back to some of the products that you had before you hit the pet store, and it really was a success, why did your general store not hit the marks that you thought it would?
Alexander: This is a simple answer because at that moment we did not have the knowledge about Facebook ads and all the stuff. I'm pretty sure that at the moment when we started the general store, we would have gotten it profitable. What do you say, Andreas?
Andreas: Yes, for sure. I think, in the beginning, we had no idea about Facebook ads and all the other channels and of the product pages and conversion rate, things to optimize everything.
So, yeah, and we started with general stores with no knowledge, so there were really no sales and no profit.
But if we were to start it now, I think we could get it profitable. But I think it's time for niche stores, it's time for brands. There are big, big competitors out there like Amazon and, yeah, general stores are for... In my opinion...
Alexander: We also know people, they make a lot of money with general stores. You know, Andreas, the guy from Paris?
Andreas: Sure, sure. Yeah, I know, yeah.
Alexander: They make a lot of money with general stores too.
Andreas: Also, a business partner of mine has at the moment a small team, and they have a general store, and they test a new product every day. And they do it as long as they find winning products, and they already found two winners, and then they start to build out niche stores for that, and that's a very good tactic.
Aleisha: Yeah, and just for people listening who might be new to the concept of a general store, can we just break down what a general store is? I probably should have done that before that, but let's just explain to everyone quickly what a general store is.
Andreas: Yeah, it's just a store where you can find different kinds of products. For example, pet products, technical products, or gadgets, home and garden products. So, you can find different stuff, and it is one name reseller.
For example, 24hoursales.com or something like that. It's just a general overview of different products and not like a garden brand or a home and gardening brand with one specific product.
Hitting $10 Million and Working as a Team
Aleisha: Thank you for that. Let's move on to then, you've started this pet store, and as you both said, it's been incredibly successful. I'm sure you had the drive and the goals to make it that successful.
But did you have any idea that you would hit the $10 million mark? Like that is bonkers to me. It's so much money, it's so much profit, it's amazing.
Andreas: Our first goal was to hit $1,000 per day in turnover. So, that was not so hard after we were a little bit better in all these things. Then our next goal was $100,000 in sales till the end of the year, and we really achieved I think more than $100,000 in sales, in around three months. So that was really, really fast.
And then the next big goal was the first million, so we hit that after I think, nearly one year.
And then we added another year and I think two months, so 14 months, and we hit $10 million. So when you are in it, and when it's running, and you build your team, and you put all of your energy and effort inside it, then it grows much faster than in the beginning.
Aleisha: Let's talk about your team then, because a lot of people start as solopreneurs, you know, entrepreneurs on their own, and you are lucky enough to have each other and the support of each other. How do you work together?
And then also, who else have you got on your team to help you out? Because obviously, you have a lot of orders coming in, you’ve got a lot of customer service to work with, and I can imagine there are probably quite a few people involved in your business. So can you talk me through how that all works?
Alexander: Yeah. We started small first, we were only together. We answered the support emails from the customers. When we had some issues on the home page, we fixed it by ourselves, because the home page wasn't, in the beginning, really special.
But with time and time with more sales, more website traffic, and all that stuff, the team also grew. We hired some customer support agents, I think at the moment we have... How many, Andreas? I don't know.
Andreas: In our best time, we had around 17 full-time employees for customer support. At the moment, it's around 10.
Alexander: And the whole team grew with a developer. The first time we met this developer, he helped out with some technical issues, and at the moment, he's already, I would say, a full team member of our team because he works every day on the brand.
And yeah, the team grew with time. So it's also a point, if you earn more money, you have more money to spend for the team, for more professional developers, for more professional SEO specialists and all that stuff.
Andreas: We also have an email marketing team, we have a legal employee, then we have a design and video team, then we have the management, Alexander and me, and also the... As he said, the head of development.
Then we have Facebook marketing guys, then we have the conversion optimization guys who optimize the funnels and the web page, and everything, with us together.
So all in all, in good times, we have over 50 people working on the brand together.
Aleisha: Is that overwhelming, thinking about you having to manage all those people?
Andreas: These people are very good at it. So we hired agencies, for example, so they know what they do, and they just work very... They are more or less self-employed and doing this for different companies mostly, and they show us the stats and the numbers, and we see if it's fine, they can make small decisions by themselves, only the big decision with us. So everything works fine, now.
Aleisha: It must feel really good to be able to palm off some of those tasks. 'Cause I know, when you first start and you're doing everything, and I did an episode recently about five things that you could outsource immediately when you first start a business, and even if that means taking a bit of a hit to your profits. You can sometimes get very involved in a certain task and realize you've been through a whole day of activity because you're trying to fix a little bit of code or something if you're not a coder.
So it is, I'm sure, very satisfying to be able to hire people to do some of those tasks, so you can plan and do other things, which leads me to my next question. Talk me through what you guys both do day-to-day in the business? And how that works, how you work together, and help keep building this wonderful business?
Alexander: Everybody has his, I would say, to-do list, and everybody works on their to-do list. And there are some, I would say, some bigger points that we've done together. This is the day-to-day work with the big things on the page or on the shop we've done altogether with the developer, me, Andreas, and all the team.
And there are some small points, for example, I manage the products in the stores and when I have time, I set up a new product. And everybody has his work in the company, so my work is to set up new products, searching for new products, product research, which products our competitors use and I look at that stuff.
Yeah. This is all my part in this company, setting up new products, searching for new products, I would say marketing for new products, and yeah. Andreas, you can talk about your part.
Andreas: Yes. I speak with the agencies mostly with the Facebook marketing agency or with the sales tax employees in the US to be sales tax compliant or with things like bookkeeping things or management things with the government or something like that.
I also have my list, I work on my list every day, and this list is getting longer and longer because it never has an end. I think the same as Alexander's list.
And then I check all the groups, we have Skype groups, WhatsApp groups, Slack channels, all the different kinds of communication tools with the different partners and agencies. And if there are any questions or invoices to pay or something like that, I check these groups. I do my tasks, Alexander is doing his tasks and this is the same every day with new challenges.
Aleisha: It's really nice to hear that you guys are both still very busy. It's a hugely profitable business, but you are... Obviously, the work doesn't end.
And one of the goals of this podcast, and I know that the Oberlo blog used to say, "Hey, dropshipping and ecommerce is a wonderful business to be a part of, but it's also not a set-and-forget business. It's not something you can just set up and walk away and not have to check in."
And it's really great to speak to entrepreneurs like yourselves that, really, have achieved amazing results, but also are saying, "Hey, there is still a lot to do every day. And every day, the list gets longer and longer."
Andreas: Yeah. So they should see dropshipping, really, as a real business where you invest money and time, and where you really have to see all aspects of business like legal, marketing, financial things, employees, human resource, all together, and not just setting up a website.
Okay, it's easy to set up the website and set up a Shopify store and start. But if you really want to gain profits or make a brand out of it, you will need all this other knowledge, as well.
Differentiating Themselves From Their Competitors
Aleisha: And can we talk through when you first started the pet store, what were some of the key things that you think made your store stand out and become the success it is? I know this is a very general question. You've really tinkered and you've worked hard to build it.
But what made it different from the other stores that you'd launched, and also your competitors? Because clearly, you're doing a lot of right things to make your store the go-to place for pet supplies.
Alexander: There were points in the marketing, there were points on the product, and every part of the company. Because we, we also had a product that our competitors have, but we improved that product, I would say.
So we take products, what's on the markets and improve them.
And we also, we check out the pages from the other guys, and we search for their mistakes on the sites, and we improve our site so that the... I search for the right words in English. For a person that uses, for the first time, his MacBook or his laptop, something like that, when they go on our site, that they can order.
So it's not complicated all that stuff; it's really simple to order a product. For example, when I give my grandmother my computer, and I would say, "Order this product there." And if she is able to order the product, I know the page is made for everyone because when my grandmother can buy it, everyone can buy it. And...
Aleisha: Yes. That's such a good point. Alexander, I just wanna stop and say that, again, everyone, listen, this is such a great point. Send someone that's not as technically as capable, perhaps, as yourself or your friends, to your website and get them to see if they can buy your product. If they can't, you're missing out on a whole demographic.
It's such great advice. It's so simple, but I think a lot of people would completely ignore that and then assume that their website's fantastic. That's really great. Sorry, please continue. I just got very excited by that.
Alexander: And yeah, and the marketing we... We make a lot of good marketing videos. Andreas, maybe you can tell more. And one big point is, we learn a lot about Facebook marketing. So this is also a big point of it, yeah.
Andreas: But what we saw out there, there are so many competitors out there, and you will never be the person who'll launch a website with one product and no one else has this product. This will never happen. So we analyzed all the competitors and we saw, "Okay, on that website, we would make this point better, on the other website, we want to make that point better."
And our website was just a mix of all the competitors' websites, but only the best things made better with perfect marketing.
So yeah, that's it. You don't have to invent the wheel. You just look at what works and makes it a little bit better, and then you can be the market leader. And with our product, we are the market leader online in the United States, and that was not easy to reach. And we built this bigger and bigger in the next few years, yeah.
Aleisha: Is your business still 100 percent dropshipping? Or have you gone into white-labeling and product manufacturing?
Alexander: That is a good question. In January or February, our plan was to buy a big stock, big stock for our warehouse. And so at this point, we would change from a dropshipping company to a real ecommerce company because we have all our products in stock in the warehouse. But then, Corona was coming. And this destroyed our plan. And so yeah, we are back in the dropshipping business and...
Aleisha: Yeah, right.
Alexander: We are waiting for the whole situation in the whole world to return to normal. And then we get back to the topic and yeah. And we try again, yeah.
Andreas: We invented new products from scratch. So we have product designers now, who make with us together, new products of our actual winning products. And yeah, so we also have warehouse partners. So you need a really, really reliable seller or supplier. So we found that in combination with a warehouse, which is doing the packing and the shipping and the quality control, and everything.
So everything is really optimized, so everything goes very smoothly, and we can send thousands of pieces per day. So in our best days, we sold over 1,500 products per day, yeah.
Andreas: And this needs a really good structure in the background.
If there is anything with Excel sheets or unreliable suppliers or warehouses, you can forget it.
Communicating With Suppliers
Aleisha: Tell me a little bit about that communication. I had a wonderful guest on, Kian, last week, who was all about working with wholesale manufacturers. He goes to China all the time. So, he was sort of talking a little bit about exactly what you were going to do in January, that you would take hold of the product and then maybe white-label it or manufacture it from scratch. But he was sort of far down in the future saying, if it works, you can then make it your own.
But tell me a little bit about how you developed those relationships with your manufacturers to make sure you could fulfill those 1,500 orders a day ‘cause that's a lot to go wrong if they don't do their end of the deal.
Andreas: It's very easy, it started really small. So, we tried different suppliers, we started with ten pieces per day, 20 pieces per day, and then many suppliers failed to be reliable. So, they really made mistakes and it was horrible, so we switched suppliers and we had some of these switches until we found a really perfect supplier and factory and warehouse partner.
And then we scaled up a little bit more and more, and now we have a 100-percent reliable partner, so we can pay a lot before they ship the product, so they have a pre-payment from us in a high amount and they ship, and everything is perfect now, yeah.
Aleisha: That's great. So, you've really maintained those relationships over the last couple of years to really build this business then?
Alexander: Yes, it's a really important point, to have a good relationship with your agent or supplier, because if they do a good job, the business is running. If they make big mistakes, it can destroy the business.
Andreas: We even got a Christmas present from our supplier.
Aleisha: Oh, that's great. Yeah, 'cause Kian also said in that interview, he said he sends gifts, he's on WeChat talking to them, really talking about his life and their lives. So, they've really developed a friendship.
Alexander: Yeah, we're also talking on WeChat and Skype with our supplier.
Andreas: WeChat and Skype, yeah.
Looking Ahead and Some Advice
Aleisha: So, what's next for both of you? Is this a long-term business for you both, or is it something that you are also tinkering with other stores or you found your brand, you found your niche and this is it?
Andreas: I think we've found our brand with this. And we have a person we admire, so we both like Ezra Firestone, so maybe you know him?
Andreas: And Ezra Firestone did 100 million with Boom, was his brand in four years.
Alexander: I think for one week, he hit 100 million.
Andreas: And the main turnover of this 10 million came from the past one and a half year, so we are on track and our goal is also to reach 100 million in the next few years. We don't know when, but this is definitely the goal, and we produce new products, we search for new markets, we make better marketing, we make a bigger team, and it's definitely possible. So, that's what we do the whole day.
Aleisha: That's amazing, and Ezra is such a great, I'd say mentor and someone to look up to. We had him on the show last year, and he is just a giver when it comes to things like this.
Alexander: He's Jesus. He looks like Jesus.
Aleisha: He does look a bit like...
Alexander: Ecommerce Jesus.
Aleisha: Ecommerce Jesus. I totally agree though, and he's also just someone that you can go back and read all of his past blogs and watch his videos and get so much information for free, and feel guided and supported along the way, so it's really great to have people to look up to you like that.
Any sort of last advice, if you are listening now and thinking, "Gosh, Andreas and Alexander have really put their all in", and do your best advice you can give to new dropshippers and ecommerce merchants to keep them going and hopefully get them to get to where you are right now?
Alexander: Do not give up because at the start, in the first weeks or maybe months, I'm sure you are not earning money, because we were not earning money for one year, approximately. And I would say most people, when they don't earn money for one year, they would give up, but yeah. If we had given up, the brand would not be here. So the $10 million where...
Most people give up too fast.
Andreas: Yeah, I have an example. So, in the past, we did some coaching too, but we stopped this because we had no time anymore for that. But Alexander and I, we recorded a video course, so we sold it sometimes, and two or three people I coached personally, one-to-one, and they knew that this would be a hard task to be successful in dropshipping and ecommerce. They’ve been on it for one year, I think for one year.
The first person, he got a store with around $80,000 in turnover over the first 10 months but no profit. So, he spent around $90,000, so $10,000 loss over 10 months and a lot of work. But now they have a new dropshipping business for three months, and he found another partner, and in the last days, he generated already, sometimes over $700 profit per day.
So, this took him one year and he earned nothing.
And it's always the same. So, when you start dropshipping or ecommerce, you have to keep in mind, you will need a lot of time and a lot of money first, and after a long period, you will see results. And this is the time you have to stay, you have to be strong at this time and don't stop. If you stop, you will lose over 90 percent. Now, that's the thing.
Aleisha: You are 100 percent correct. I think that it is the momentum, and it is just not... It's staying in your lane in the sense that you're not looking at what everyone else is doing, you're just trying to keep your thing going and building up, yeah. It's wonderful advice.
It is so great to hear that you've had this amazing success, but also you have a friendship as well that seems to have been able to be sustained throughout all of this, so congratulations on that. I'm excited to see where you go in the next year. As you said, you've got these huge goals, and I have no doubt you will achieve them.
Now, if people wanna get in touch, you seem very open to people learning more about what you're doing, tell me where people can reach out and follow you and learn more?
Alexander: Yeah, it's really simple, and I am on Facebook and Instagram. Everybody can reach me there. My name is Alexander Pecka. Everybody can find me there. And yeah, sometimes I need a little bit longer to answer all their questions, but I answer all, with time.
Andreas: I'm also on Facebook and Instagram, and they can find me on Instagram or Facebook under Andreas Koenig, K-O-E-N-I-G, yeah, and I will also reply.
Aleisha: Fantastic. That's very kind of you. And if you want to learn more about Alexander and Andreas's wonderful journey, you can head to oberlo.com/podcast, where you can find today's show blog. I will also link to the previous blog that was written, as you said, about a year ago, and we'll be able to provide all the links to your Instagram and LinkedIn as well within that blog.
It was so nice to share the time with you both and thank you so much for being so giving with your information as well, I'm sure people have learned a lot from today and feel really motivated to get back into their stores, do some tinkering and hopefully reach the dizzying heights of success that you have both reached as well. So, thank you so much for sharing and being on Start Yours.
Andreas: Sounds good.
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