What is dropshipping?
To briefly summarize: Basically, dropshipping is an e-commerce store where you sell products that you don’t actually own, you don’t have a warehouse. So when you sell a product, you buy it from a third-party seller and they ship it directly to your customer. Everyone’s a winner – the third-party seller gets a sale from you, you get a sale from the customer, and the customer gets a product.
On the internet and especially on YouTube you can find a lot of tutorials, explanations and guides regarding dropshipping. Some platforms like Shopify, Oberlo or Alidropship also have a lot of helpful guides for you.
Advantages and disadvantages of dropshipping
- You don’t need a lot of capital. I think this is the biggest advantage. You don’t need to manufacture a product, you don’t need a team, you don’t need a warehouse, etc. So basically you don’t have to invest thousands up front. You can literally start with no money at all.
- It’s super simple. All you have to do is register a domain, create a website, add products, make the website look good and that’s it.
- It’s easy to scale. You can easily scale by just adding more products to your store and it costs you nothing. Just a little bit of work. If you find a good product, just drive more traffic and you’ll have more sales.
- You can sell anything. Anything at all. On Aliexpress and other platforms, there are a lot of products in a lot of different niches.
- You are absolutely flexible. That’s probably one of the most attractive advantages. You can work from really anywhere. You only need an internet connection and a laptop.
- Extremely high shipping time. Most people are now used to having the product in their hands after two or three days after ordering. If you buy the products from China and ship them to the US, it can sometimes take as long as two weeks or more. To Germany or Europe, it sometimes even takes up to 4 weeks.
- Inventory. Since you do not own, manufacture or store the product, you have no control over the inventory. So if you want to scale a product, it might suddenly become unavailable.
- Competition. Since there’s been a lot of hype around dropshipping in recent years, there’s a lot of competition. But don’t panic, everyone has their own way to generate traffic. Besides, there are tons of different niches and products.
How to use Instagram for dropshipping?
There are three methods:
- Your own profile or company profile to generate customers.
- Buying shoutouts from influencers or profiles that have a high reach in your niche.
- Buying advertising on Instagram or Facebook
One thing is for sure though, Instagram has enough users that there is something for everyone. No matter how high the competition is, no matter in which niche and no matter what product it is. Whether you’re selling car parts or pet toys. You’ll find a clientele for every niche.
According to Statista, the number of users exceeded one billion per month in June 2018. You can safely assume that the number will be even higher in 2021. Not only because Instagram has become even more popular, but also because of the pandemic.
Most dropshippers use Facebook or Instagram Ads to place ads. But this then results in high advertising costs because there are many advertisers in the same niche and for the same audience.
In this post, I want to focus more on shoutouts. There is much less competition there and it is also much easier!
Advantages and disadvantages of Instagram Shoutouts
- Wide range of profiles and influencers
- Not really costly
- Not much competition
- Easy to start
- Good profit margin
- You make connections with influencers etc.
- Hard to scale
- You have to carefully evaluate Instagram profiles
- Possible low conversation rate as the audience is not targeted
How much startup capital is needed?
It all depends on your skills and what platform you use. If you already have experience with creating websites, you can use WordPress with Woocommerce. The big advantage of Woocommerce and WordPress is that you can customize your website and be independent of Shopify. If you are a beginner and not so knowledgeable, I recommend Shopify. There has also been a lot of hype around Shopify in the last few years.
Costs for a WordPress / Woocommerce online store
- Hosting with SSL certificate: $10-30 in the first year
- Domain: $10
- WordPress and Woocommerce software: $0
- Alidropship plugin to import Aliexpress products: one time $79
- Optional Premium Plugins
- Optional Premium Theme
Cost for a Shopify Online Shop
- Monthly fee of $29.99 for Shopify Basic
- Oberlo: $0
- Domain: $10
- Optional Premium Theme
- Optional Premium Plugins
Shopify vs. Woocommerce
Shopify also offers a trial version where you don’t have to pay anything for the first month. From time to time there are also trial versions where you don’t have to pay anything for two or even three months. That means you have enough time to create your store. Generally, I recommend Shopify, because it is much easier to use. You also don’t need external hosting or an SSL certificate, because the store runs completely through Shopify. Thanks to Oberlo you can easily import products into your store.
WordPress is mostly used to create real websites. Woocommerce is just an extension that allows you to create a store. Shopify, on the other hand, is exclusively designed to create stores. On top of that, Shopify also offers good support. With WordPress/Woocommerce, you’re mostly on your own.
Find a niche and products for Instagram Shoutouts
If you just want to use Instagram Shoutouts to attract customers, you should think about what products you offer beforehand, because not all products are suitable for Instagram. There are certain niches with which you will not be successful. One of them is the tech niche. While there are many tech accounts on Instagram, most of the time the engagement rate is very low.
If you have already thought about a certain niche, you should try to understand who exactly is your target audience. How old are they? What do they want? Are they willing to pay a certain price? Search for accounts in the niche and look at the comments and followers. See how high the engagement rate is.
What kind of niches are suitable?
- Passion and interest. This can be niches, for example, which concern the hobby, or even if it is about pets.
- Problem-solving products. If people have a certain problem and you can offer them the solution, they will buy it.
- Trends. The best example is the “Fidget Spinner”. These products are very popular over a short period of time.
- Hard to find. Products that you can’t buy in normal stores.
- Products with the wow factor. These are products that are amazing and exciting.
It is important to mention that most people on Instagram make impulse purchases. They buy products in niches, which triggers a certain emotion in them. This can be either positive emotions like joy, empathy or ambition, but also negative emotions like envy. Your goal is to find such a product. What you need then is a suitable post, which triggers exactly these feelings.
This is a rather complex topic, for which I will create an extra post. There are many different ways to find profitable products. Ideally, the products should have at least two of the above characteristics.
Where to find products?
There are many different methods:
- Search on Google
- Search on Aliexpress
- Look on Facebook
- Look on Amazon
- Use Oberlo on Shopify
- Brainstorm and think about your own hobbies
- There are product idea providers that will constantly give you the latest successful product ideas
A little insider tip: On Facebook, you can search for successful products from other sellers. To do this, simply enter phrases such as “Buy now!” or “Get yours now!” in the search box and select that only posts or videos should be displayed. You will then find products relatively quickly.
Here are two examples of very successful products:
Waterproof Shoe Protectors
Hard to find in traditional stores, solves a problem, unique product and probably most people who see you will say, “wow, where did you get that?!”
Clothing and accessories for couples
People buy based on emotions. They see the product and think of the partner and imagine how they will use it together. These products are not easy to find in the store. And there’s also a “wow” factor. Some are even envious and think to themselves, “I need that for me and my boyfriend too!” The good thing about this niche is: you can sell all kinds of products – clothes, jewelry, stickers, etc.
Create a store
As mentioned a bit above, you can use some WordPress with Woocomerce or Shopify. Shopify is the fastest and easiest solution. With the extension Oberlo, you can easily import the products you want. Still, there are some things you should pay attention to when creating the store:
- It should look as professional as possible and include the necessary pages
- It is advisable to create a logo or trademark
- You should inform your potential customers about how long the shipping time is, otherwise, it will lead to many cancellations
- As payment methods, you should definitely consider Paypal and credit card payments
- Product images should have a white background like on Amazon and should not include a watermark
Shopify itself offers some very helpful tutorials on how to create professional stores. Here you can find a step-by-step guide from Shopify on how exactly to create an online store.
If you need some inspiration, here are 50 stores that look really good and were created with Shopify.
Whether you use Shopify or Woocommerce. Both platforms allow you to set the desired price. Either choose a price similar to your competition or decide on your own price. What I can recommend is: don’t make it too cheap, because otherwise, you won’t be profitable. Don’t make it too expensive either, because otherwise, no one will buy it.
Here are the prices I usually charge:
|Price on Aliexpress||Price on my shop|
|$0.01 – $2||$9.95|
|$2 – $3||$12.95|
|$3 – $4||$14.95|
|$4 – $5||$16.95|
|$5 – $6||$18.95|
Remember that you will also have costs for the influencers or shotouts. Therefore, you should calculate everything correctly beforehand.
Shipping time and costs
You should definitely choose products on Aliexpress which have “ePacket” as the shipping method and are free of charge. EPacket is by far one of the fastest shipping methods when it comes to Aliexpress. Also, I recommend you offer “Free Shipping”. If you don’t want to do this, you can try other models such as “Free Shipping for all orders above $30”, then you may be able to sell more.
Create posts for the Shoutouts
Assuming you have now found a niche, one or more products and created a store. Now it’s time to create posts for Instagram. These can be either videos or posts. In addition to that, you can also create a story. You can either create your own Instagram profile for your online store or contact the influencer with your private account and negotiate a price.
What do you need?
- Images and videos to create posts
- Other content for stories
Posts should have a dimension of 1080x1080px. Stories should have a dimension of 1080x1920px.
Very important: Instagram is not an online store like Amazon, it is a social network. People don’t go to Instagram to buy products. From there, you should make sure that the post doesn’t look like an advertisement, but like an interesting post, which triggers a feeling in the potential customers.
Finding good posts for shoutouts
First of all, we have to ask the question of whether videos or images are better. It all depends on your product. If you’re promoting clothing, then you can use photos of the clothing. If you are promoting jewelry, then you should use photos of someone showing it. If you are promoting beauty products, then you probably need a video.
If the product is easy to understand, you should use a picture. If it has some special function, you should use a video that demonstrates that function. It is important that you use high-quality posts. The more appealing the image is, the higher the engagement rate will be. Here is how to find viral content!
What works well:
- Before and after pictures for beauty products
- Attractive people wearing your clothes or accessories
- For videos, make sure they are attention-grabbing
- Videos and images that create a “wow” effect
Where do you get these images and videos?
- From your competition (which they probably have themselves from their competition, remove watermarks and edit the images)
- Order the products yourself and take pictures or videos
- From Aliexpress (remove the watermarks)
- Send the products directly to the influencers, who should then take pictures or videos
Here are some examples of popular videos and pictures:
Create captions for the shoutouts
The caption should be short but informative. Ask followers to click on the link in the bio. For a little motivation, you can also leave a coupon and write something like, “20% off only for today!” Also, don’t forget to use emojis.
Here’s an example from one of my posts:
It is best if it is as easy to understand as possible. Do not use too much text. Everything should be clear.
Here’s another tactic:
This increases the reach and could even create a viral effect. The idea behind this is that you offer the product for $0, but set the shipping cost to $9.95. However, this is only worthwhile for very inexpensive products.
Find influencers and profiles on Instagram
Now we have everything that is needed: a store, a product and of course advertising. Now we just need influencers and we’re ready to go. First of all, the following is important to understand. There are two types of influencers/accounts: Personal accounts/influencers and niche accounts/influencers.
These are profiles of real people. These people are often very well known and therefore have a high reach. They can be athletes, streamers, celebrities, singers or people who have gotten a high number of followers through Instagram alone.
Important: Many of them do not accept shoutouts and most of them ask for incredibly high prices. Also, they have high demands your product and shipping time. Most of the time it’s also like you have to send them the product and then they create their own post.
If you don’t have a high budget and control over your product or shipping time, you shouldn’t use them.
These accounts have a particular focus on a specific niche. The big advantage for you: If you offer cat products and you buy shoutouts from a cat niche account, only people who have an interest in cats will see the post. The shoutouts from these accounts are also cheaper and there are almost all possible niches. Whether accounts are for dogs, technology, gamers, fitness or anything else.
Here is an example of a niche account profile:
Prices for influencers and shoutouts
It really depends. There were influencers I contacted who had under 100,000 followers and wanted $300 and then there were influencers who had over a million followers and asked for $50. In my experience, Americans and Europeans ask for a higher price than Africans or Asians. You will quickly notice that most niche accounts are created by Indians.
How do you find influencers?
When I first started out, I tried to find big Instagram pages to post shoutouts on, but then I figured out a much better way. Instead of looking for influencers, I looked for competitors and their already posted shoutouts. With this method, you get three big advantages: You find a good niche, competitors, and influencers.
If you don’t have a niche or product yet, you can simply search on Instagram’s Explore page. On the Explore page, you can often find posts that are currently trending. Among them are sometimes products. Just scroll down and eventually you will start seeing products. In the Explore page, you can also choose the niche, such as fitness, travel or beauty.
Another method is even easier: you already know your niche and just enter the keywords in the search. For example, if you search for “Cats”, you should quickly find this account and many others:
How do I evaluate the price?
- It depends on the account quality (biography, verification, profile picture, age, how many posts)
- How many followers and what kind of followers (Yes, I scroll through the list and look at the profiles)
- Quality of the posts
- How high the engagement rate is
- How often this account sells shoutouts
- Who comments among the accounts (sometimes it’s other niche accounts!)
Also, there are helpful tools like Socialblade.com or IGBlade.com which give you stats on each profile.
Avoid the following accounts:
- Accounts with fake followers
- Fan or fake pages of any celebrities or athletes
- Accounts with poor quality posts (blurry pictures, violence, etc.)
- Memes, food and DIY profiles
- Accounts that make promos or shoutouts every day
- Accounts under whose posts only other niche accounts comment (it may be a network of niche accounts and they are trying to artificially increase the engagement rate by constantly commenting on each other)
- The ones that write to you first and ask if you want to buy a promo from them. Most of the time these accounts have a very low reach, ask for a low price and their entire business model is to constantly sell promos.
Contact the influencers
I usually contact influencers directly via direct message. Then I ask the following, “Hey. Do you do paid promo? If yes, what are the prices?”, “Hi. I see you do shoutouts. How much is it?” or “Hello, do you offer paid shoutouts? Please let me know the prices.” You don’t need to introduce yourself, because these accounts really don’t care who you are. You don’t need to give them compliments either. For these accounts it’s all about business, they don’t want small talk. Chances are you won’t get a response if you first send a message with “Hi. You got a nice profile. How are you?” is very high. If they haven’t replied after 24 hours, you can send another message with “Hi. Did you see my message?” Usually, they reply within 72 hours. If they don’t reply, just cross them off your list and find a new influencer. Not all of them reply.
Here are some conversations I’ve had with influencers:
As you can see, I negotiated and wrote that I want to test the traffic first. This allowed me to lower the price a little.
I recommend paying with Paypal. The best way is that you have buyer protection. In no case, you should give your account data or credit card number. Bitcoin or crypto is also not recommended. In my experience, however, most accept payments via Paypal.
Keep an overview
I recommend creating an Excel spreadsheet to keep track of all influencers and to compare them with each other. For example, you could create a table with the following columns:
- Link (which you use for shoutouts)
- Paypal Email
There you enter all the information once you have contacted the influencers.
Important: Use a URL shortener like Bit.ly to check exactly who, when and where clicked on the link! This way you can see exactly how effective the shoutout was. It’s best to use a new link for each shoutout and then add it to the Excel spreadsheet.
Here are 5 more methods on how to earn money through Instagram!
If you have any questions or suggestions, feel free to leave a comment.