October 1, 2020
If you’ve been around awhile you know we typically talk about creative entrepreneurship and personal branding here on the pod. It’s where we started our businesses, and it’s what we’re known for. However, today we’re throwing you a curveball. GET READY.
Though most of you are probably creative entrepreneurs, there’s an ENTIRE world of business and entrepreneurship out there that goes so much bigger than just creative entrepreneurship. And for today’s episode, we wanted to give you a bigger picture of the possibilities out there in business. If you’re a business owner looking to grow and scale your business, you’re going to LOVE this episode.
If you’re someone who’s just sick and tired of a boss telling you what to do… but you also hate the idea of putting your face in your brand and offering a product or service that relies SOLELY on you, keep listening. If words like investing, growing, scaling are new or scary, then this episode is gonna stretch you and blow your mind in the best way. Be prepared to get out of your comfort zone as we welcome to the show Joe and Mike Brusca.
Joe and Mike are brothers who have been working together online since 2014. Since then, they’ve succeeded at multiple different business models including Amazon FBA, Kindle Publishing, and E-commerce websites. They own a sellable online portfolio that consists of over 10 different businesses. They’re still expanding their current holdings along with buying and selling new businesses online.
Today we had these two brothers on the show to chat about their method of dropshipping high ticket products via online storefronts. They break down what the HECK dropshipping even is, what the benefits of selling high ticket vs low ticket are, how to figure out what to sell, high revenue vs low risk, and their biggest secret to how they’ve grown MULTIPLE 7 figure businesses since 2014. THEY’RE CRUSHING IT AND ARE HERE TO DROP THE DEETS.
It all started in 2014, Joe was working a regular job as a food scientist and didn’t like the whole grind. He was desperate to figure out something that would help him quit his job. He never considered himself much of an entrepreneur, and he now considers what they do as “investing.”
He was searching around for things to make money on the side so he could potentially leave his job. He stumbled across retail arbitrage, which is going to yard sales and clearance sections to buy things for super cheap and resell them on Amazon and eBay. This is how he realized you can make any sort of money on the internet. He did this for about a year and ended up quitting his job six months in. He wasn’t making an exorbitant amount of money doing retail arbitrage but he knew he could continue doing it.
After graduating from college, Mike got a job in Kindle Publishing on Amazon. (They still do this today!) Joe and Mike ran into a few issues with Amazon where they clawed back a few of their royalties, which is how you get paid on Kindle Publishing, and by this point, they had both quit their jobs and Joe had bought a house. There was no going back at this point. They got slapped in the face due to the issues that Amazon was causing them.
They had the Kindle business, which was going well, until all of a sudden the rug was taken out from under their feet, and their income was taken. Essentially you get paid for what you did two months ago. They lost two months of royalties, which was quite a lot of money, and they realized that they couldn’t be reliant on any particular platform or just one income source. This is what forced them into making their dropshipping stores.
If you search drop shipping online, you will most likely find people talking about getting items from China or getting something off of a supplier directory. Often they will make a Shopify site with smaller, trinket-like items and drive traffic to that through Facebook, Instagram, or TikTok.
Joe and Mike’s process is a bit simpler, with more powerful results. They contact brands that are already domestic that are selling expensive items that range from $500 up and ask to set up a wholesale account with them. All of a sudden they have access to a ton of products that they can sell on their website that they can make a profit on.
By selling expensive things, you have a wide margin to play with. They don’t rely on social traffic, but rather more query-based traffic such as Google searches. For example, if you’re searching to buy something expensive, you aren’t necessarily going to go to Instagram or Facebook. You are going to go to Google and search for exactly what you want. What will display is the shopping images with the price and product. This is what they focus on. Rather than trying to go the Facebook route and convince someone to buy a product, Joe and Mike hack that and put themselves right when someone is looking for exactly what they are selling.
The biggest one is Wayfair! If you look at Wikipedia’s article for Wayfair you will learn that they actually started as a website for Racksandstands.com. This website was dedicated to dropshipping racks and stands.
Any big retailer uses dropshipping, it is just a matter of when the item is no longer cost-effective to ship multiple times. Usually, this means that they are big, heavy, and expensive and will not be moving around from warehouse to warehouse.
To draw another distinction, you have to be very careful about this. The way big retailers and Joe and Mike use dropshipping is very different from the stuff you will find online. People online may do dropshipping by selling items from AliExpress and sell them on Facebook. This is more of a “gimmick” and a way to make a quick buck.
Wayfair, Amazon, Home Depot, Lowes, and Hayneedle are all companies that use dropshipping.
Especially when you get into expensive and bigger items, it poses a risk to warehouse something because it is an extra level of transit that must happen. If you are going to ship from the manufacturer to the warehouse it could break or have an issue, and then it has to have another transit to get to the customer.
Manufacturers understand this risk and also don’t want to do the marketing. They would rather onboard someone who can do the marketing for them and bring in sales. This allows the manufacturers to focus on warehousing and developing a great product. It ends up being a win-win relationship for everyone.
When you are dropshipping high quality, domestic brands, they are going to be giving you a better product and they are going to stand behind that product. If there is ever an issue, the manufacturer can step in and help out. Everyone wins.
This is why Amazon, Home Depot, and Wayfair all use dropshipping.
Dropshipping gives Mike and Joe the chance to focus on marketing, driving traffic, and giving great customer service without having to worry as much about the supply side of things. There is advantage to both parties. Both to Joe and Mike and the suppliers.
There is an extremely wide variety of items you can sell. The main thing is the price point. You want to sell things that are actually expensive. It can start by going on a site like Wayfair or Hayneedle and seeing what they have that is expensive. Search that item on Google and see what else comes up. Take note of the other brands of that particular product item.
Mike and Joe will create a high end store where they can sell multiple products. This way, if they find something new they can add it. Additionally, the supplier may mention some new products that they can sell.
Beginners tend to just look around them and take note of the expensive things they have purchased. It’s important to think outside the box and think not just of things that you buy, but what others buy. Especially keep in mind the customers that are happy to invest in expensive products.
Open your mind to all of the crazy things that people will buy.
An example of a high ticket item is an executive couch or chair. This takes from a generic thing in your home (a normal couch) and thinking about it from a commercial setting.
It’s a matter of tapping into a specific customer base. Once you get into upper-middle class and upper class, they have disposable income and they want nice things. They are easier to work with in terms of customer service.
It all starts with developing supplier relationships. Joe and Mike recommend setting up your website first. If you are a little more experienced, you may not need to do this.
If you are brand new, when you set up your website you need to make sure you have formed a business.
Then, you begin to call suppliers and open wholesale accounts. Many of them will understand that they are not going to ship the items multiple times, so you don’t have to call saying you want to dropship for them. You just need to become a dealer with them. The suppliers will send along paperwork and price lists. Once you fill this all out you have access to their catalog.
To make it simple, most people use Shopify. It is an e-commerce platform that makes it really easy to list items. List the items on your website that you are selling using the price list from the supplier.
Then it’s time to market! The first thing Joe and Mike start with is Google Ads. They will upload a product feed through a plugin on Shopify which will make it really easy to get the product feed on Google Merchant Center. This will then sync up with Google Ads. From there, people will start to see the ads on Google for the products on your site. Throughout the process, you want to refine the keywords to ensure that your products are showing up in the right place and that you are spending the appropriate amount on ads to be profitable.
Once you have the ads up, customers will start coming to your website and may also call and chat with you. Once a customer places an order, you send this order to the supplier to ship out the order. Once the supplier sends you the tracking number, you put that into your system, and you are set!
The manufacturer doesn’t want to have to deal with marketing, customer service, and figuring out how to get in front of customers. They pass this over to you in exchange for some margin on the product. Typically, you can get margins between 10-50%. Depending on how expensive the product is, that is a good chunk of change, and you aren’t even taking inventory. Your basic costs are the ad spend and tools you are using.
Shopify is one of the easiest tools. Joe and Mike like to stress to people that at the end of the day, the tools don’t really matter. What’s important is that you have stuff on your website and you are getting those items in front of people who are searching for it. Once you do that, all of the other details are less important. Shopify is easy because there is a plugin that will connect your catalog up to Google Ads and Facebook. It’s all about getting something in front of someone when they are looking for it. That is the easiest way to make sales. There is very little marketing to do because they were already looking for it. You just need to show up.
Everything they laid out in terms of how they get the suppliers and run their ads is literally what they do and where 80% of their sales come from. It is a matter of getting good at doing all these little things over time.
When Mike and Joe first started making websites they looked different than they do now. They’ve been able to develop their website skills and learn what aspects help with conversions. This is the same with Google Ads. There is a lot of depth to it. After doing it for several years, you get better at how to get better conversions and better costs per conversion. There is no secret sauce, it is about mastering a subset of skills and over time that is what is going to earn you a lot of money.
The most important thing they have done over the years is to invest in themselves and invest in different courses in order to piece things together. When they started, they didn’t have anyone to look up to who was doing 7-figures a year doing dropshipping. It came from Joe and Mike hiring multiple agencies to figure out what was wrong with their ads. You pick up pieces of knowledge along the way. It has been a combination of being willing to invest and learn new things.
You have to be consistent at it. If you fail at first, you have to keep going. If you are doing $10,000 a month in sales, you have to go even deeper to do the $100,000 and $1,000,000. It is a matter of analyzing what is in front of you each week and month. It isn’t a quick process, but it is a consistent process.
The way the business model works is that there is so much room for failure. This is why Joe and Mike don’t really call themselves entrepreneurs. When they think of entrepreneurs they think of the make it or break it scenarios on Shark Tank. With dropshipping, you can invest so little and see where it gets you. You can scale along with your profit. Because you don’t have to buy any inventory, there is very little to lose.
With all of the websites and different business models that Joe and Mike do, they don’t go into them if they don’t have the upside and a way to get involved and continue to fail with little risk. They know the first time they try something, it is not going to be perfect. If you only have one shot and lose, it’s not really worth it. They would much rather pursue something where they can continually put in effort and tweak and redo their process. Once you go through the initial year or two and have gotten really good at something it’s just a matter about copy and pasting it. This is how you get to do multiple 7-figures. You get close once and replicate everything you did right.
There isn’t necessarily one thing to say, it is all about your confidence. The supplier wants to hear that you will be able to sell their products. When you communicate with them, you are not necessarily selling yourself to them. They should want to work with you so they can get more sales and increase the visibility of their brand.
Often when people first start, they are so nervous to reach out to suppliers. All it takes is an email explaining that you want to join their wholesale company and become a dealer. Emphasize that you want to help out their brand and sell their products.
The more people you work with, the more people you can work with. If Brand X sees that competitor, Brand Y, is on your website, they are going to want to work with you.
It comes down to consistency. When they first started, they would get so discouraged if something they tried didn’t work. Over time, they have built up the muscle of being able to overcome roadblocks. They now know whatever they start doing is going to have 10x the amount of challenges than they expected and will require 10x the amount of work. Now, when faced with a challenge, they are prepared for it and are no longer discouraged by the little bumps in the road.
They have also learned to be very routine-oriented. When you are doing this day in and day out, you have to have a routine around it. No one else is going to force you to get your work done. You need to force yourself into your own routine. The more you do it and see results, it produces a nice feedback loop.
Outsourcing is so important. There is only so much you can do no matter how productive you may be. You only have 40 hours in a workweek and 24 hours a day. Be willing to let go of parts of your business that others may be able to do even better than you.
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WASSUP FRIENDS. We’re Evie + Lindsey, co-founders of this wild partayyy called The Heart University. Our goal is to empower entrepreneurs to kick freaking BUTT in their businesses, dive down into the heart of their why and how, and serve you with all possible tools you’ll need to up-level your business game and CRUSH those goals of yours.
Whether you’re coming to an in-person workshop, joining our online course, or soaking up all the strategies via this blog or our podcast, we’re STOKED you’re here + can’t wait to see you out there kicking butt.
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