icon-folder-black Entrepreneurship 3PL Dropshipping Services

Dayu Yang - Ecom Ops, Fulfillment Partnership

icon-calendar 2021-09-30 | icon-microphone 1h 12m 23s Listening Time | icon-user Joseph Ianni

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The one major takeaway that sticks out to me in my conversation with Dayu Yang of Ecom ops is that he said on the program if you stick to a product you can see it through to success, some may agree with that some may not and that's what I appreciate about the accumulation of knowledge I've been a part of here. 

Dayu Yang is the Founder of EcommOps, a full-service China supply chain and fulfillment agency serving 7 and 8 figure ecommerce clients with more than 2 million orders fulfilled to date. Dayu has a wealth of experience in all aspects of the ecommerce supply chain. He has an Economics degree from Stanford, MBA from Wharton, was a management consultant for F500 companies at BCG and was featured on ABC’s Shark Tank where he walked away with a $500k deal for a fully custom developed IoT children’s product.



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Tags: #Debutify #dayuyang #ecommops #dropshipping

[00:00:00] Dayu Yang: If you are afraid to hire good people, you're afraid of kind of invest in your infastructure, then that's your limit, right? There's only so much you can do. Um, you want to be careful about you don't want to scale too fast, but you need to scale your backend as well. You need to scale your operation, you scale your people. Definitely need to scale your supply chain. So I think that is the biggest thing that's holding people back. Of course, after they get the marketing right. 

[00:00:28] Joseph: You're listening to Ecomonics, a Debutify podcast., your resource for one of a kind insights into the world of e-commerce and business in the modern age. This is Joseph. I'll be presenting a wealth of industry knowledge from interviews with successful business people and our own state-of-the-art research.

Your time is valuable. So let's go.

The one major take away that sticks out to me in my conversation with Dayu Yang of EcommOps, is that he said on the program, if you stick to a product, you can see it through to success. Some may agree with that. Some might not. And that's what I appreciate about the accumulation of knowledge that I've been a part of here.

Dayu Yang. It is good to have you here in Ecomonics. How are you doing today? How you feeling? 

[00:01:13] Dayu Yang: Ah, very good. Very good to speak with you, Joseph. I'm excited to share. She shares some knowledge and thoughts. 

[00:01:20] Joseph: And, and I'm happy to, uh, have the opportunity to acquire as much as that as I can get my hands on for this next hour.

Um, but before I do, I, I, I tend to not want to start with a fluffy question, but I'm going to start with a fluffy question specifically because it's geographical base. Um, my, my partner and I, we often talk about going into the states. Um, and, uh, Miami, Florida is like, uh, up there as one of like the, the places that we find appealing.

And you told me before we started recording that that's where you are right now. Is that your, um, place a permanent residence or like, it's like what, what drives you to stay there? Are you just in there a temporary? 

[00:01:56] Dayu Yang: Yeah, my, my wife is a professor at university of Miami. So she needs to be here. I can be anywhere in the world.

I actually prefer to be in China with my businesses. Uh, but because of COVID right now, I haven't been able to get back. I I'm a US citizen now. It's one of the first times in recent history, having a US passport is not a good thing. Um, and I haven't been on a plane for I'll always, I go on a plane recently.

I got vaccinated, but usually I'm traveling around the world, actually meeting clients, being in China, running operations. Home is where my wife is. So, you know, I have an apartment in Miami, so this is home for now. 

[00:02:34] Joseph: Well, you know, I might, I might just, um, come, come back to that. Cause I think there's some keen insights there and just, you know, handling the situation that it was presented to you by COVID.

But, um, well what was the, we can get back to that. So the actual true, uh, uh, opening question is for you to tell us what you do and what you're up to these days, which you kind of alluded to, but let's move. 

[00:02:55] Dayu Yang: Uh, yeah. So I'm the founder and CEO of EcommOps. Uh, we specialize as a premium supply chain sourcing and fulfillment service directly out of China.

So primarily we serve, uh, You know, we don't really do dropshipping any more in a traditional motto, but we really serve, uh, folks who were previously dropshippers, who saw a lot of success and are really kind of tired of working with stuff like Ali express or, you know, kind of the typical drop shipping agents.

And, you know, we really built up this, this whole operations to. Help them scale to the next level, you know, help them figure out at least on the supply chain side. Um, how can the supply chain keep up with their marketing? Keep up with our great stuff and, you know, scale from six, six figures to seven figures, eight figures, um, and also build that into a more sustainable store, more sustainable brand, and kind of get out of the grind if it's constantly testing new products, generic products, and just kind of the ups and downs of the classic dropping career would I think it's, you know, there, there is a still a lot there.

Um, but I definitely think that there's a lot of opportunities for the market to mature, uh, for strategies and mature both in the front end side and also the backend side. And this is where we think that, well, I think that, I mean, drop shipping has been an amazing industry in the last couple of years.

E-commerce in general and now it's just starting to really just get more advanced, especially on the marketing front end. And, you know, really, we're kind of just leading up the backend of that. Okay. Like you want to scale hard, you want to build a legitimate business. Well, we're here for you and we do everything from a factory management sourcing, um, direct fulfillment from China around the world with fast shipping speeds and, uh, you know, even stuff like to really get to the next level, um, help you customize products, like actually customize them, not just put a logo on it, like actually customize the, the product itself.

We do customized, uh, full products as well. And we worked directly with a factory to make sure that your supply chains as possible. 

[00:04:52] Joseph: Well, that's terrific. And it raises some, some observations that I've accumulated over the course of these many conversations that I've been fortunate enough to have. Um, and before I share those observations, I guess what I'd like to know for terminology sake is if let's just say I'm in a position where I can reach out to EcommOps and, uh, and have it, um, uh, be able to work with the company.

I, in my mind, I would still see it as shipping because it still seems to follow some of the same, um, rules or some of the same logic, which is I'm still not putting the, the, the, the boxes in my apartment, uh, or in, in the warehouse, perhaps. Um, there is still a backend or a fulfillment company such as yourself, which is, uh, handling that.

So that is, I think, one of the core rules that I identify as dropshipping. So when I see the my observations is when I, when I see that the, the, the stereotype of dropshipping is what's dissipated and probably for the best, really, because people would just set up these stores, uh, drop ship, a bunch of products, maybe they arrived, maybe they didn't, maybe they arrive broken.

Maybe they exploded on him on contact and, and, and I'm, and I'm happy to see that you can tell me if I'm wrong about this, but what I'm seeing is the drop shipping part of e-commerce is now being elevated to the same expectations of quality that really any business, um, worth its weight has to abide by customer service, quality dependency, and, and some sort of feeling that the company is working towards a greater purpose.

So I'll go back to the first question, which is how would you define, I guess, the entry level for when people are working with you, if they don't feel it should be called drop shipping anymore. 

[00:06:32] Dayu Yang: Yeah. So maybe you will start with, uh, what I, at least I, I believe traditional property is, uh, technically. You don't hold any stock, obviously.

Um, you don't have any risk and you know, you really have no control of the supply chain at all. Uh, the, the, the, the most, uh, sure. Model is something like dropshipping from AliExpress. AliExpress is, is basically China's Amazon. I mean, AliExpress is not a drop shipping company, right? It's like, China's Amazon.

Um, and what people do is that when you start out and AliExpress it, by the way as a great place to start out, right? Uh, you find some product you want to sell, it's going to be cheaper than you can sell it from, uh, when you sell it for, and you start marketing it. And basically you make money on the margin.

You just order a products, one by one, or are you some kind of tool like the Dsers for example, and ordering in bulk. However, just like ordering from Amazon, the seller on Ali express, like, you know, he or she is not preparing for thousands of units of products, you know, just to support you. Maybe, maybe they do, but it's not just for you.

Right? Like they are just standard sellers. Right. So, because of that, You really have no transparency into what you're actually getting. You have no transparency and their stock levels, uh, the stock that was all fake, by the way they say they have 999, you know, it's all fake, you know? Um, and, uh, but there's a lot of benefits to that.

You know, like beginners, I really recommend these notable from AliExpress because there's no risk. You can just find a product idea, find it on audio express, hook it up your store, go to a store and like a day and just start selling. Right. And when you sell a low volume, like a couple of orders per day, just to test for Facebook ads, that's totally fine.

I mean, it's just like selling, just buying a bunch of stuff from Amazon, right? Like that totally works. Right. However, if you really want to scale, like once you scale into like 5,500, you know, orders per day, like on express, like that seller doesn't even know that you're preparing to scale up, right? So they're not preparing you for you.

Not to mention you have no control over the brand name or very little control of the branding. Very little control over the product quality. Now, fast forward to working with someone like us, we. You know, kind of just one additional step where, you know, when you think about, you know, when you were mentioning, okay, look, obviously you don't have goods in your garage, for example, sending out.

Right. But you know what, if you're using like a US-based fulfillment center, like ShipBob, for example, you know, what, if you order a goods from the factory, put it on a, uh, uh, you know, a container ship, you know, arrives in the US and use a fulfillment center to fulfill your products. That's obviously not drop shipping.

And the way that we operate is that basically it's that same model, except we fulfilled directly from China. So when we all have clients that, okay, let's figure out what product you're selling and you're selling well already. We're going to work directly with the. All right, we're going to go to factory.

We were going to find the best version possible, you know, at a decent price, um, of this. And depending on your order volume, like if you want smooth fulfillment, you need inventory, right. We're going to order like 500 or a thousand of it so that your fulfillment just happens right away. And it's predictable as well.

And the great thing is that. Something that has to go on a boat to LA and go to your phone or how how's that going to take weeks and sometimes months to actually get there. Whereas from the factory to our warehouse, it's going to take like anywhere between 24 hours to maybe a couple of days, maybe five days.

Right? So, and then, you know, China shipping right now, like it can be as fast as like, you know, five to seven days that you paying us. Um, and it's highly efficient and it's pretty cost effective, especially if you compare the freight costs on the other side, um, this means that you get all of the benefits and the flexibility of the supply chain elements of drop shipping.

However, this is where you start getting more control in the process. And this is where, um, you know, we were a little bit different from other agents or suppliers who kind of have this model as well is because, you know, when I started this, one of the values that I really believed in was that you, as a store owner, you, you, you want to.

And the backend, you know, in the traditional, like let's say retail model, right. You're going to probably have like a VP of supply chain or something like that. Right. You're going to have a whole team handle the supply chain. Um, obviously you don't really need that anymore. Um, however, your supply chain shouldn't just be a transactional service, right?

Like we're not a transaction to our clients. We're true partners with them and we discuss with them, okay. How much inventory do you need? Um, is there any kind of issues you have the products when we work directly with the factory to improve it actually many times, even for generic products, because of the cycle of improvement, we often end up with the best even generic product on the market because we have so much volume with the factory and we're able to actually get them to improve the product and many times for free as well.

And so, you know, this is kind of where we started to transcend the traditional drop shipping model, but I have still a lot of the important benefits of much shorter lead times, much more flexibility. Um, and just much less risk in terms of holding inventory. Right. Because you're holding inventory in the US you might need like 10,000 units to support like your volume.

Whereas in China, we just wanted like, you know, 500 years at a time and then like, okay, it runs out. It's going to take three more days to get here anyways. So just keep ordering. So you get all that flexibility without a lot of that risk. 

[00:11:54] Joseph: And, uh, but I think in order for someone to be, cause I would have to ask you, okay, I need you to order 500 units of this product.

So in order to have that degree of certainty, that those 500 units are gonna move. Uh, the business has to have to made it to a certain level where there is activities, sales are coming in consistently. So one thing I made sure to check from the YouTube videos is the degree of transparency. And you obviously you protect your clients will, um, uh, interests.

So, um, it's up to you to how detailed you can get with the answer to this question, but are there, um, case studies or, um, instances to your recollection of the difficult process of, or like what state, state a businesses in, when it's mature enough to be able to work with. 

[00:12:41] Dayu Yang: Yeah. So generally we require a minimum of 50 orders per day.

Um, you know, a steady volume on a certain product because anything, or, you know, we're a little bit flexible, 30, 40 is close enough. Right. But the entire idea is that your business is stable. You might have used all express at first or some smaller agents or something like CJ shipping, for example, but your business is at a stable state to take it to the next level.

That's the point where clients work with us. That is what we're especially good for, because I think that before you get that consistency, you probably should be always testing. You should be testing new products. And this is kind of where I go back to the benefits of using something like AliExpress, because you get all that flexibility, right?

Like you can just test products like that doesn't work out, you kill it. Um, um, but you find you, you, you, you started to hit a winner, then you work with someone like us and you did kind of bring up a question about, okay, like, you know, maybe our, uh, clients might be thinking about, okay, like in ordering 500 times.

So this is kind of where, depending on what the client really wants to control or wants us to control, we also have a. No specific, you know, ways that we project inventory needs. Um, I mean, this is kind of where it's a tough, obviously have steady volume, right? So if you have like 50 orders per day and your lead time is going to be like three days to our warehouse, then maybe we get like five days where they inventory at a time.

Right. So it's like, it's not getting too much. Um, we have a little bit buffer just in case you scale up. And then this is also where our partnership and communications with our clients is really important. Um, one of the things that tends to happen, we don't communicate with your supply chain is that you start seeing.

And it's super, super exciting. Right? And we were preparing for 50 orders per day, and you scale up to a thousand per day. It's happened before multiple times, by the way you do the math, right. Your inventory is out. And then you're kind of back at square one and you have supply chain disruptions as well.

So, you know, one of the things that not only us and, and actually even if you work with another supplier, I highly suggest that you communicate with them, feed them information. We can only see your orders after they come in. We don't know what's going on in your plans in your mind. You know, if you're ready to scale, tell your supplier, you know, uh, you want to double your ad spend.

Maybe you want to double your inventory, right? Um, tell your supplier and work with them to just start getting that ready and on the way so that you're not facing sometimes week long disruption, something, because there's no more stock. 

[00:15:17] Joseph: I don't expect it happens very often, but has there been a situations where both parties were surprised at how things are suddenly surging, like thinks that this is his product just happens to go viral, then all of a sudden they keep sending you a 3:00 AM panic texts.

It's like, I got good news. I got bad news. And it's the same thing. 

[00:15:34] Dayu Yang: Yeah. You know what I, yes, yes. All the time. By the way yet. No. Yeah. 

[00:15:39] Joseph: I do find that surprising because it's, it's, it's just, it seems like such a, um, part of the pipe dream aspect of it, which is one of those bills we want to dispel is the idea that oh yeah.

All of a sudden you're just going to get flooded with all these orders. And it seems like to me, it didn't seem like it's going to happen that often, but sorry to cut you off. 

[00:15:53] Dayu Yang: Well, it, it, it happens all the time. I mean, especially during something like Q4, for example, like things seem to blow up, but not, not even just in Q4, sometimes things just blow up, you know, when someone, so when someone finds a winning.

Right. And, and honestly, even if someone else is selling already, right. If they find a really amazing marketing and go, um, that's one of the great things about like, you know, something like Facebook ads or something like affiliate marketing for example, is that if it's skill, you could just blow it to the moon.

Like, I mean, there's, there's no stocking, right? I mean, we all know that the more marketing spend you, you push your role as tends to go down. Right. It's kinda an equation, but the thing is like, especially as someone's experience and you see the numbers and you have so much room, just, just really scale it up.

Um, but yes, I mean, I've had situations where, um, a client, you know, The work with us. Okay. We're going to plan for like 200 orders per day. Let's get it ready. And, uh, but it could get bigger, you know, a be prepared. So like we'll have like kind of the factory already kind of just have being mentally prepared.

And the next day it's like, Hey, di you, like, we sold like 4,000 units yesterday. So like, can we get like more factories? Can we just get that ramped up right now? So yes, it does happen. Um, it doesn't happen all the time obviously, but I will say it is not a pipe dream. I mean, we've seen, um, I mean, we've seen like, you know, millionaires getting made over like a couple of weeks period where something is just extremely hot and this is also something that, especially if you want to take advantage of your experience, if you want to take advantage of.

You know what that hype is going to be, you know, like obvious success then, you know, just skill way up. And that's exactly why you need to work with someone who actually understands supply chain. Right. Because, you know, in that one case, for example, where all of a sudden scaled up to like 4,000 units per day, um, we reserved a factory.

Their capacity was 2000 units. Right. So like, you know, literally the factory has capacity. They couldn't make more than, I mean, you know, factories that physical constraint, they have physical people they have to deal with. So this is what we actually scrambled. And we got two more factories. I mean, at some point we had like a hundred something factory workers across like two and a half factories, all just working on this client product.

This is something that obviously the express is not gonna be able to handle. And, um, I would honestly say most, most suppliers, most agents, they just don't know how to handle that. You know, once you're going on to tell you guys is that the vast majority of suppliers out there, they don't even talk to factories really?

Like they order from Alibaba or like the Chinese version of Alibaba, you know, it's like, it's almost like drop shipping. You know, it's like, you know, they, one of the units, like just online, they don't even talk to them. They don't have any kind of plan with them. You know, that is obviously not the right way to do things.

If you really want that steady, steady supply chain in terms of like stock in terms of product quality, 

[00:18:46] Joseph: Yeah. As, as you were describing the relationship of, so there's ally express and then there's Alibaba. And then I, I should know this, uh, because I looked into it. I, my, my gut is telling me it's Taobao, but I, I'm not, it just reminded me of those Russian nesting dolls where each one there's like a small adult on the inside of it.

As you were describing, you know, the, um, the, the reality of how this happens. Okay. The opposite question came to mind and I'm asking you for the fun of it, which is. Has the opposite happened where somebody calls you up texts, you and says, you know, be ready. A storm is coming. And then it turns, it turns out nothing, nothing really happens.

And the reason why I asked that is because I'm wondering if there was any lesson learned where they realize maybe their ad wasn't quite targeted, or it wasn't quite scaled effectively. Maybe they mismanaged their budget, but there was something identifiable where they could actually extract some information and figure out what went wrong.

[00:19:49] Dayu Yang: Yeah, definitely. Look. Um, I think that, you know, we work with a lot of the most experienced clients in the industry and I will tell you that. Um, so scaling out to huge numbers is definitely not a pipe dream. However, uh, even the most experienced people we need industry are not going to have a hundred percent.

Um, they can feel a hundred percent confident about something and yes, there have been multiple situations, many situations, probably countless situations where there is a lot of confidence in a product. Let's get it ready. And, uh, well actually this kind of speaks to you also, like one of the benefits it's still being able to fulfill from China as well.

Right. Because traditionally, if you really want to take a big bet, you gotta wait like a month or two actually arrive, and then you gotta order like 5,000 units, right. Sell 5,000 units, right? Yeah. There's a boat involved. Exactly. Exactly. So for what we do with it, Hey look, your lead time is like three days anyways.

We've got a factory kind of standing by, right. Um, just get started and then like, um, as soon as you see the results, then you can up now, you know, so here's the lesson in terms of the advertising side. Right. I think. Um, especially like, as you get more experienced in marketing, you're going to get, you're going to start to get a really good feeling for if something works or not very, very early on, right.

You run ads for a day and like your role as is just like nothing. Right. Uh, top of the funnel stats look terrible, you know, like you just kill it. Right. Um, and, uh, yeah. So like in terms of any kind of pattern that I see, like with that happening, not really because like, in some ways everything is kind of a bet.

It's not gambling, you know, but, but everything has like a chance of success. I would say that even our most successful clients, um, they're looking at maybe something. Um, maybe like a 50% success rate, but just for kind of something that's not losing money, you know, for like kind of like break even, you know, uh, but something that becomes a huge, massive winner, like even the most successful folks, maybe 20, 30% or so.

Right. And I think the lesson learned here is that, like, you just got to do it. You got to just prepare like all of your knowledge, you know, everything, you know, about marketing your audiences and just, just throw ads at it and just see that works. I mean, that's one of the beautiful things about like, you know, something that Facebook ads, right?

I know a lot of people have problems with Facebook ads recently, but the most beautiful thing about Facebook ads is all the data, all the data across the entire funnel. So I think, um, the most experience looks like they have a full understanding of the entire funnel. They have that gut feeling that's based on logic and based on experience of like.

Let's assume every product is going to be a runaway success, obviously, but let's do risk as well. That's not what a 5,000 units, maybe several hundred units for now, and they're going to start seeing their top of the photo stats. And, um, that's already going to show them like how, like one to three days of ads, sometimes it's going to tell you if it's going to be a massive winner or a total done.

Right. Um, so, you know, that's just going to be my advice. Obviously learn as much as possible, get as much experience as possible, but just don't be afraid to just like, feel confident about something as long as it makes sense and just started running ads at it. Um, now obviously you don't have your supply chain prepared.

I've used AliExpress, then you should probably not like, just start crushing your, your marketing right away. But, but then you'd like, you know, find an agent, find someone like us and you know, he's still down for a week until you build yourself. 

[00:23:16] Joseph: And as you're describing these, uh, these challenges of scaling, um, one thing that I would like to, I guess, get more, uh, clarity on is, is it primarily around scaling from a five figure to a six figure, um, six figures to seven figure.

I imagine that, you know, you go from seven to eight, you go from eight to nine and you'll have to forgive me. I don't know what is the, the, the limit, uh, but w in, in, in the different tiers or the different milestones or whatever is the most, uh, equitable term to call it, um, what challenges change from like six to seven, seven to eight, eight to nine.

[00:23:51] Dayu Yang: Yeah. So I think that, I think getting to like six figures per year, um, low to mid six figures, I think that's, I wouldn't say it's easy, but it's relatively straightforward. As long as you kind of, you know, are diligent about learning what you're doing and kind of doing the right things. Right. And honestly, as you're like, you know, kind of low six figures, like that's at a point where.

You're not, and that's it, it's not so important to think about your operations, you know, not as your supply chain, even like I've seen plenty of faults, like Seattle to like six figures just by themselves and maybe like one VA or, you know, seeing folks literally just, you know, answering customer service is by themselves.

Like literally one person is going to six figures right now, beyond that. That's when you need to think about it as a real business, I mean, this is no longer just, you know, something that you're a fun hobby. We're kind of like get quick rich kind of scheme. Right. Once you get to that point, you have to think about your operations.

Right. And I think this is kind of where a lot of, um, folks struggle, um, not necessarily the fault of their own, right? Because you think about a lot of folks get into drop shipping without necessarily like a deep background in business experience. Most likely like no supply chain experience. Right. They haven't had experience hiring people, scaling up a team, managing a team and definitely not experienced like actually managing a supply chain.

Right. So this is where I see a lot of folks getting a little bit stuck. Right. Um, they started to try to juggle like the marketing side and trying to like know, handle customer service, or maybe they have some, uh VA's you know, but still like if they become too stretched and there is no structure, there's no organization for actually scaling up beyond that level.

So this is where actually like at that point, as we already want to start thinking about building a team. You know, even if it's kind of like a team of VAs, like you, you want to build up a solid team, a solid structure, a solid process with your SLPs and everything like that. And on the supply chain, this is where you're definitely going to outgrow something like Ali express or a small agent, because you know, a legit, like a seven figure business, eight figure business, you need a real supply chain.

You need a real business. It, I will tell you it is a pipe dream to, to imagine that you're, you're going to be like one guy paying like one VA and have a seven figure business and you get it all for yourself, all the margins for yourself, you know, that is the pipe dream. Um, so you really into you invest in your infrastructure and all of that.

Biggest clients, you know, they have sometimes massive teams. I mean, like, you know, like offices, um, like teams of VAs, like, you know, partners and media buyers, you know? Um, and obviously like, you know, one of the things is that, like, I definitely suggest that people who are kind of on that threshold level is don't worry too much about the cost.

You obviously have to be aware of the cost, but that's, what's going to hold you back, right? If you want to, if you are afraid to hire good people, if you're afraid to kind of invest in your infrastructure, then that's your limit, right. There's only so much you can do. Um, you want to be careful about you don't want to scale too fast, but you need to scale your backend as well.

You need to scale your operation, you scale your people and you definitely need to scale your supply chain. So I think that is the biggest thing that's holding people back. Of course, after they get the marketing right. 

[00:27:11] Joseph: You know, one thing that stuck out to me and that is as you're describing someone in the six figure range, that for them, it's time to, um, think about, uh, legitimizing their, their business.

I would have thought much sooner than that. Like if I, if I even got into like a, a five figure range or even four figure, like a couple of thousand dollars or over the course of the year, I say, man, I made that money. I'm legitimate. So I don't know if there's like a point where I'm going professional in a person's mind might be too early on in the game.

Like they start to like, I don't know, their ego gets ahead of them or something like that. But when the, when the earning six figures what's been the, the, the mindset that these people have when they, when they're coming to you and what adjustments do they need to make at that point? 

[00:27:55] Dayu Yang: I mean, I think that it obviously depends on the business.

It depends on your margins as well, right? Because we make like a hundred K over a year or your margins are very low, like 10%, then you're not actually making that much on that, you know, like actual gross revenue, right. The way that I think about like, um, how they want to scale up is you really want to think about what your core competencies are.

Right. And they're most likely going to be marketing. Um, once I think is need that. And then you, um, like as it gets ready to scale and, and actually the, the trigger for when you think about scaling of everything else is actually not this hotline revenue number. Right. It's all about, well, you gotta be aware of your actual margins, right?

Like I've seen plenty of folks that do like high six figures and not make that much money from it because like, it's just not a high margin business they're actually running. Right. Um, I've seen other folks where they own like, it's on track for five figures, but the rollout is amazing and this is such a scalable product.

And that's when they actually started investing in building out a team. Right. So I think the most important thing to think about, like, as you kind of like, you know, start seeing that rate, how success is you want to first confirm it's a brick house. Because it is also very easy to just look at your top line numbers.

Not really think about like how all the costs add up, not really thinking about your net margins quite as much, and not only thinking about the fact that like, look as you, as you pump, as, as you tend times your Aspen, your role as is going to go down, it's always going to go down at that level. Uh, do you actually have the margin to scale up?

You know, so I think that a lot of times, and I think this is something that, you know, if you, if you watch YouTube videos, weather, dropshippers, like they're all talking about the top line numbers, right. And, uh, but that's not the most important you want to, you want to understand what your margins are, you understand how, um, how it tends to look in terms of what kind of your, your profitability, right?

The more profitable you are, the more room that you have to scale up. And that's, you know, that's the real trigger. I mean, obviously like if you're being, if you're on track for five figures a year and your margins are really good, but like in a day, your net margin, And the margin dollar amount is probably not a right time to scale.

Um, but I will say this, I mean, again, this is one of the beautiful things about like something like Facebook ads is that once things start working and you have a feeling, a scalable it's so scalable, like obviously your role as goes down, but it doesn't go down as fast as people think as long as it's scalable product.

And I think that I definitely advise folks they'll kind of at that level, to be honest with yourself. Um, we've also seen folks who like, are super confident, but I think that maybe they weren't that honest with themselves, like, Hey, like my margins aren't that good? But I'm at six figures. Maybe if I just build a team, maybe if I just push it hard, maybe my margins will increase.

Uh, I, I don't necessarily know of like that math really works out. Right. There's other ways to improve your margins. Like, I mean, for example, right? If you're selling a generic. And you brand it right. And you brand it and you prove it so that you can actually like, um, differentiate yourself from the rest of the market.

You can charge a higher price on it because it's a better product. You know, those are really smart ways to improve your margins. Um, and you know, kind of like, like that makes the math make sense. However, you know, there's costs associated with that. You want to really commit to a product. So it's kind of a same kind of situation, right?

Unless you feel like super good about this product and it's not feel by the way, as you do the math and also feel it's, it's a super scalable product. I definitely suggest that you kind of figure out if this is still the right product. Um, I mean, look, I also think it's totally fine. If you say, Hey, look, I made some decent money from this, but margins aren't that great.

I don't know if I can really scale it up. Just kind of running with it for as long as you can, you know, kind of maybe like slowly scale down, but still make some good money and make it a little cash cow. And then, um, one of the things by the way, is that like what I always suggest. A lot of times, by the way, like we have folks who maybe get a little bit fortunate, right?

Like, like there is a certain amount of luck and it's not like gambling. Right. But like I said, even the most successful folks, they have maybe like a 50% rate. Right. And obviously newer folks are going to have lower than that, but still you have some chance of it. And, uh, we see, uh, sometimes when they get a little bit lucky and they scale up and, uh, you know, they buy a car or something, you know, uh, don't don't do that.

Don't do that. Um, you know, like, uh, reinvest that into your learning. Like, if it doesn't seem like this is going to be something that you're going to build a multi-year brand, save some cash, like move on to the next product, you know, get something that is much more scalable and kind of just like, you know, build from that, you know?

And, and ultimately like, I mean, you can keep doing that, you know, and still keep making money or are you, you finally find a product or a niche where you can really build a long lasting brand. 

[00:32:49] Joseph: Now talking about the, um, the testing of products, as well as testing as brands. And I'm going to throw myself into the crucible here because, um, you know, this is a part of what I figured, which is, so what I learned is test this product.

Maybe it's gonna work. Maybe it's not, don't put my heart on the product. Um, however, the brand on the other hand, I mean, it's, it's not like an excessive passion of mine or anything like that, but it is something that I'm enthusiastic about, which is working remotely. And so my thought process is proud. It doesn't work brand still has this elasticity to it where, you know, there's content involved.

Um, maybe there's an affiliate marketing as like a side revenue, which by the way, I'm also gonna ask you about, uh, we've, uh, we've identified if the businesses you've identified side revenue, but we'll get to that. So what would you say is the ratio of brands being killed? Because the brand didn't work versus products being killed because a product didn't work.

[00:33:43] Dayu Yang: Um, well, so I think at the end of the day, the product has to work. Um, if you brand a product, no one wants, no one really cares about anyways. Right. Um, I would say that. Hmm. Okay. You know, I, I'm also going to kind of answer a little bit different question as well. 

[00:34:03] Joseph: Is it just, there's just one thing that I just want to clarify just to make sure.

Um, so when I, when I say that, like, it wouldn't be like a one product branded store, like the brand isn't around the product, the brand is like a, a means to explore other product options. So even if the product were to go, there would be other products that was still fill some of the same ideology as the brand.

So I just want to make sure that was clear. 

[00:34:23] Dayu Yang: Yeah. Yeah. Sure, sure. Yeah. So, uh, I, I was actually gonna talk about that, you know, so this is a good reminder, actually. So I think generally, sometimes people, maybe a lot of people want to see be completely frank. I think about branding a little bit in an incorrect way.

Um, branding, like what what is branding? It's not just a logo. It's not just a color. Right? Branding, like, you know, branding is something like, I mean, imagine something like Nike, right? Nike, like just do it, you know? Or like, um, like find your greatness, you know, like great campaigns, right? I mean, they're not even talking about shoes, you know, like they're not even selling shoes at all, but a true brand that you want to build is something that you find with your audience. So if you can do that, I see a lot of success with that. And just like you said, then the product itself becomes probably is still important. You know, you're probably liking still important. Right. But if you have, and build that connection with your customers, then you can sell a lot of stuff.

Um, so, uh, we definitely have clients like that. You know, maybe they built up a brand, maybe one product didn't work quite as well, but actually like I wouldn't product still works a lot better than if someone else is selling with other brand anyways and they, and they sell the products. So once you get to that point, it's definitely like, you know, you have a high chance of success now, obviously that kind of rent.

There's a lot harder to do than just putting a logo on something, you know, finding a domain, you know, so, you know, this is kind of where I want to clarify. Whereas I do think that kind of like that more simple branding, that the more simple branding is just a little bit of a one-up beyond a generic product, basically.

Right. Because, okay. Then people are going to see this product. Oh, it's your brand. Okay. It's better than this generic version. Um, however, like that's just all they think about. Okay. Like it's probably better, but I don't really know the spray is, seems like it's nice, but I'm not, I don't know if I'm going to purchase from them again, but I like this product.

Right. So that kind of branding is going to be a little bit more similar and kind of success rates as if you were just selling a generic product because these days, like, even if you sell a generic product, you're probably not going to be doing something, you know, it's really ugly. Right. You're still going to have a nice looking store.

You probably have a brand in store name already. Just, this is not the product is branded. Right. Um, one of the things I want to say about testing as well, you know, cause you kind of mentioned like, okay, you know, maybe thinking about testing something really quickly and just kind of give it up, um, you know, can work out.

Um, one thing I've seen in industry is that I've just seen so many products that I may like, you know, we don't name products that our clients sell, but like so many of the standard generic products, like you probably see top 10 lists of like, you know, shipping products, um, that like everyone would like a lot of them say, oh, this is saturated.

Like it doesn't work anymore. And people test it. And immediately after a day, like, you know, they just give up on it. Uh, well, we've also seen our clients rate huge, massive numbers with the exact same product and with a different marketing angle. Um, and you know, like, you know, maybe they. They don't necessarily kind of like, uh, make a profit, for example, on the first sale.

But then, I mean, one really important thing that I want people to take away is that like, you know, part of getting away from this just simple traditional dropshipping mindset, is that you want to think about your customer LTV as well. Right? You want to think about like repeat purchases. You want to think about like add on products.

You want to think about like, okay, well what can you email market to them later? A lot of our biggest clients, they. Straight shave only admit that they don't even make money on the first sale. W we have a lot of clients who are like that. They use some kind of crazy funnel system. You know, a lot of, a lot of people are actually using click funnels these days as well.

Upsells, cross-sells, down-sells, you know, and then like email marketing afterwards. Like some of our biggest clients are totally happy if they're like even break even on the first sale. Right. So this is something that, you know, I want people to be aware of, you know, just because like breakeven on the first sale is not necessarily that.

And obviously like kind of building out the backend requires like more experience, but Hey, you know, like you want to be an e-commerce entrepreneur or like, you know, learned that experience and then figure out how to go to your back end and actually increase that value after the first sale. And that's where you really start to get really scalable.

Right. Because if you're, if you're so focused on our first sale, like that, that is exactly what happens in. Scale is up to like six, seven figures. And then it just kind of dies down because they have no backing on that, you know, because it's all just spoken for a sale. And if you do that, then your competition sees your ads.

They copy your hat, the copy of the same product. And then at the end of the day, Facebook is an auction system. And, uh, if you can't like outspend your competition, then you're just not gonna win. But having that, that can literally allows you to outspend your competition and when those customers. 

[00:39:03] Joseph: Yeah, yeah, it almost sounds to me like it's out, invest the competition in that while I'm spending an X amount on ads by accurately and wisely I'm investing my money and the ideal backend. Um, that means the money that I am spending is going is going a longer way. Exactly. Exactly. So you, you, you mentioned, um, you know, uh, throughout the, the evolution of, of being on AliExpress and I think ads are an extension of this evolution as well.

So it seems from my perspective right now, such as it is, I feel, I feel, I hate to use the word feel and was supposed to be a data driven industry, but I've done it that there's two levels of ads. Um, there's the, there's the ad that is like, if the alley express system were to be personified as a commercial.

It would be this it's this, you get the footage from the alley express, um, page, uh, but in some, some cheery music and then you're off to the races and, and I feel like those ads there's that word again, that those ads are an extension of the system, which to me doesn't seem to provide a lot of good long-term value as that on the other hand, and are our ads that are this whole campaign that stick out in people's minds to this day.

Um, um, stuff like Dr. Squatch or, um, dollar shave club, you know, these, these, uh, viral ads, uh, just a surge across the internet and they leave a lasting impression. Even if someone doesn't buy the product, there's something about them that's sticks. Now, again, I can't, you know, you can't, you can't say anything about the, about what your clients are doing specifically, but I'm wondering if you've ever seen like a middle point between these two is like, what, uh, what have been like the sharpest most focused ads that have really helped your businesses, uh, scale to the seven figure range, eight figure range.

[00:40:48] Dayu Yang: I think. The middle ground is definitely the best. So first of all, you can't build a business hoping as soon to go viral. Like, I mean, like that's great. Right. But, uh, the, the viral virality formula is honestly really hard to figure out. Right. So, so that, that is not a sustainable way to think about business.

Uh, so you should never hope for that. Um, you might, you might try, but like, you know, that's not really kind of like a reasonable target and in terms of just like copying ads, you know, like, uh, copying videos, um, that also doesn't scale. It works though. It definitely does work. And you know, this is kind of like, well, so you, you, you think about someone testing, um, on AliExpress using unexpressed, right.

I think it's totally fine. You know, just kind of use those ads for now user videos for now. Uh, you should edit it though. Obviously like edit out Chinese, you know, kind of put your own captions, put your own, spin to it. Um, because the thing is like, first of all, like, if you want to test quickly, you're not going to, you don't want to wait two weeks for the right to you for us to shoot your own ad.

Right? You, you want to invest that time and effort. Right. Um, and it's not just a video, it's not just a creative, it's not your copy as well. It's also your targeting as well. Right. Um, you know, people do the exact same things, literally same copied, slightly different targeting, you know, hugely different results were slightly different copies, hugely different results, slightly different angle, hugely different results.

Right. Um, what I actually suggest it just go ahead and just use those ads. And, uh, but as soon as you see success, I mean, similar to kind of, sort of starting to build out your supply chain, then you get samples of that product. Then you start shooting your own unique content. Um, but I will honestly say that sometimes I content is also like a little bit overrated.

Uh, you know, it's important if your product is really good, I've seen clients scale up to like a million dollars using. Like, like a picture and, you know, one ad like literally, you know, they probably got a little bit lucky there to be fair, you know? But, um, at the end of the day, I think on the marketing side, it's like what works for spokes?

And sometimes you just don't know. Right? Like, you know, sometimes crappy looking ads, like, you know, they just work, right. Because maybe they look more authentic, more real, whatever, you know? Um, so to kind of like, generally answer that question. It's like the test testings, I mean, constantly testing the best people in the game, constantly testings and do not.

Had any kind of preconceived notions of like what are supposed to be done? Like, I wouldn't even say, well, once you get more excited, I think that when you first started out, like, you know, obviously listen to the expert or try to emulate what they're doing. But as you kind of like get past that beginner stage, don't have preconceived notions of what you're supposed to do.

The more people who do the same thing, the more competition there is, uh, the more that you can actually test things that are completely different than we were, even if it seems weird, even if it seems like not best practice, you know, uh, once in a while, you're going to hit a huge winner that, you know, it's going to take a long time for your competitors.

[00:43:47] Joseph: I think that's a fantastic answer. And, and one thing I just wanted to add at the tail end of that, uh, because I didn't remember it when I said a dollar shave club, but I remember it now, which is that thing didn't go viral by accident. By the way, there actually was a lot of work and a lot of money spent getting into the right hands so that they all these different chain reactions would occur all at once. So yeah, it really was, it was a lot less luck than people think. And it's been a, it's been a while since I even, I brought that up, but just once to tag that one at the end there. 

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We're we're getting close. We still have some, still got some time. Um, but there's certainly like a wealth of stuff that I still want to talk about. And one of them is actually wanting to do a little bit of, uh, of history here, a little bit more about the history of, uh, of the company. So when exactly did it start, and it's amazing to think of, you know, where, where it is now compared to where it might've been when it began.

But I would really like to know about like at the, at the time of its inception, what were you guys doing? And what were you guys identifying was a problem that other people weren't solving. 

[00:45:15] Dayu Yang: Yeah. Yeah. So maybe, um, if you don't mind me, I'll start with a little bit on my, my background. Cause it's all very, very related.

Yeah. So I was, uh, I, I started my career in tech, you know, I, I grew up in, uh, in San Francisco, I went to Stanford. It was all about like tech. I used to be a product manager making mobile games. Um, and, uh, like I mentioned, that is because when I was making mobile games, like they were free to play games, like free to download.

And like, you get people to pay after the fact, right. This is where it really kind of drilled into me, like the importance of customer lifetime value. Like literally every customer or every player you acquire as a people game, you lose money literally. Right. And then you try to make it back, you know, to, to try to get them to buy more things.

Right. And then I moved on for that. Um, I, uh, got my MBA and then I was a consultant at BCG for awhile. And that's where I kind of really got this, uh, this urge to start my own company. And the first company that I started, uh, was child learning. Um, the product was Cody who was like a smart toy device, uh, for. And, uh, we're actually just last year, last December, we're actually on shark tank or actually luckily the deal, you know, it sounds exciting. Um, however, before we went on shark tank, there was kind of a period where, okay, like it wasn't like it was successful enough to keep running and kind of sell to customers.

Uh, but it wasn't really kind of making me a lot of money and I was spending my wife's credit cards and things. So I was like, okay, I really need to do something to make some money. And I was like, Hey, this is where I learned about drop shipping. And I was like, oh wow, this is so much. So the product I made, it was like, it was fully custom produced.

Like I was at the factories. I go is like half a million dollars in investment. And I was like, drop shipping. This is much easier than what I'm doing it. Like these 17 year old kids, like making a million bucks apparently, you know, on YouTube. Um, so that's how I actually started a couple of photography stores.

And that was probably back in 2018. So, and I was like, wow, like I'm actually making money here, like couple thousand dollars per day. Um, that was actually when I realized. Two things. One is that I didn't really like the creative side of marketing that much. And I think you kind of have to like, want like the enjoy at least like kind of making ads.

I was like, okay, maybe this is not perfect for me. And the other thing I realized was like, wow, this supply chain is broken. Like there is no supply chain at all. Right? Like Ali express is not a supply chain. Like, like what is this, you know, could cook because of my past experience, I was like, okay, so many people are making money.

And then also in a lot of Facebook groups and just hear about people just getting, just, just having their entire supply chain implode, you know? Right. When they scale, which is obviously when you want things to be the smoothest. Right. So this is where, I mean, I mean, it, it kind of hurt me because these guys were in my community, my friends, like, wow, these guys are like hardworking people and they finally started to scale.

And then bam, like, you know, their supply chain breaks down, PayPal like holds their funds, uh, Facebook shuts them down. So this is where I was kind of like, Hey look, you know, I, um, I think I want to level up isn't it. Um, it deserves to be leveled up because I see, you know, I'm a good, I'm actually very good friends with a couple of like, they've talked to him for his, uh, Jordan Welch.

Uh Gaybros and Jermaine, for example. And, uh, like I saw that, Hey, people are doing like really advanced things and like the whole front end was maturing, but the backend was not keeping up. And that's where I saw the opportunity, especially given my background in production and supply chain to then start e-comm ops.

That was like something, it was around 2019 or so, you know, so roughly two years ago. And when I first started, by the way, like, I didn't have a website, um, I was in Prague on vacation. I had this idea and I wrote a PDF in nature hours. And I started like just DM-ing people in Facebook groups, um, like kind of talking about my guy problems.

Um, which was, I mean, basically it's exactly what I told you. Like, I want to build your supply chain for you. And like, I got the first client and like, you know, like four hours. And I was like, Hey, this, this potentially has some legs, right? I mean, that's, to me, when you want to build a sustainable business, it's not about how much money that you hope to make from it.

Right? It's about the value you can actually bring to others. And the money comes naturally. If you think about the money first, that's exactly. We got to the point where, okay, maybe it's actually not that valuable. Maybe it's kind of artificial, but when you can actually figure out what that product market fit is or service market fit, what do people actually desperately need?

And, uh, that's where if you meet that demand and that's like, the money just comes naturally as part of serving that demand, but that's where you come up screw. And it just grew rapidly through the last two years. Last year we did over a million units in sales, you know, like. Estimated probably our clients may like, you know, 50 million revenue on, on that or something like that.

Um, you know, 50 million or more this year, we're probably on track for like, you know, 3 million units this year or, you know, hopefully more. Right. Um, so yeah, you know, so that's like, I think that we, uh, we got to this point because the value, the mission was clear and it was necessary, um, from the very start and, uh, you know, like all of this was from what started with a PDF.

And then I started a YouTube channel and a Facebook group, you know, like, you know, we might've spent like a couple hundred dollars worth of Facebook ads just to test it. But I was like, oh, you know, like, like clients are coming to us anyways. We don't need it. I mean, it just kind of really blew a grill, organically, you know, word of mouth.

Um, and, and yeah, you know, this is the example I didn't, you know, I'm very like happy that we're here, honestly, because the way I think about like, where. Where the comments are in positions itself is more of, like I said, we want to level up the whole industry. Um, and actually that's why the reason why I have that YouTube channel, right.

I mean, it's all free content, you know, like I don't ask anything other than check us out. Right. Um, I'm super excited to be part of this because I think that dropshippers e-commerce entrepreneurs, they deserve it. They deserve to at least have an option. To, to, to feel that, okay, if we work with you, come off, you can feel confident that they're not going to bullshit us.

You're gonna be transparent. They're gonna work with us. Um, if they're there and you know, I'm also happy for newer folks who might not be able to work with us yet, you know, providing them as much free content and knowledge as possible. So that, well, one it's a level, the whole industry, and hopefully eventually, even years from now, you know, they can work with us and we built something great.

[00:51:40] Joseph: There's two things that I find remarkable about that. Um, one is how evident the issue was, you know, to the point where people are saying that their, that their websites have exploded and not in a good way where their supply chains have fallen out from under them. And now they're, they're in serious dire straights.

They got to cancel ads and all of them, and they're probably losing money. So the things were pretty well. Not as like emergencies, no one was dying, but there was an urgency to it. Um, so that's the first thing I find remarkable. The second thing I find remarkable is. The, I think the, the sincerity of your, of your story and how the rules of what make it a success are the same rules that I've noticed are true about something as intimate, like a previous guest at a Keya James or a Paris Northcutt who were making skincare and candles, respectively, they, there, they identify a problem.

They found a solution and through a, you know, a mixture of reaching out to others, but also others reaching out to them. Um, they found that they, the success of their finding the success of your finding is based on your ability to serve others. And if there's any takeaway that really sticks out in my mind, um, it's that as, and, and I'm, and I'm certainly hoping that the audience would do this.

[00:52:52] Dayu Yang: Yeah, no, I, I appreciate that. And, uh, we also kind of see that pattern with some more clients as well. I mean, not, not, not necessarily every client, like you don't need to necessarily like put such a strong focus on your customer to see success. It's certainly not a requirement. However, it definitely, like we see a lot of, uh, very successful clients they're successful because they care about the customers.

They talk, they pick up the phone and talk to their customers and ask about what they like about the product, you know, how they can improve. Um, and you know, what's the ROI on that, you know, it's negative ROI, right. But, you know, that's how they continue to figure out how to better serve that type of customer.

And that's what becomes the most important. I mean, look at the end of the day, customers or clients are people, customers are people, you know, I think this is one of the things I think that is a point of kind of breakthrough as well for some is that like, remember that it's people like, it's not just purchases, not just add to carts, you know, like there's people on the other side.

And even if you don't like, you know, necessarily kind of like bend over backwards to kind of try to talk to them. Like the more you remember, they're actually people like that actually like humanizing that whole process, that funnel helps your marketing as well, because it allows you or forces you to think about a way that, okay, these are not just numbers.

These are people like, how do I think about like who the audience is? How do I put myself in their own shoes? What do they actually need? And that's going to help your marketing. 

[00:54:14] Joseph: This was a particular one that I'm curious about, uh, because there is competition. Um, and so, so much so that I've interviewed, um, you know, a couple of other companies, uh, in the, in the same boat as you, um, I haven't talked to anybody who officially works for Amazon, just people who.

You know, with Amazon or in some cases in spite of Amazon. And I'm wondering how much of the, you know, the, the competition between, um, you know, the, the Goliath like that, uh, other companies in the e-commerce space, even other ones, you know, in China who are doing their own fulfillment thing, how much does that competition have an impact on you?

And does the squeeze come from them? Or do you feel like you're more like you're carving out your own unique part of the industry that's uniquely your objective. 

[00:54:57] Dayu Yang: Yeah. So we're talking about Amazon first because that also applies to a lot of store owners who are worried about like marketing against Amazon.

Right. So think about Amazon these days is that, uh, like five, 10 years ago, if you wanted to buy stuff. You know, and like you're going to trust, going to be good stuff. Right. Um, more recently though, I think there has been decreased trust in Amazon products. Uh it's you know, I wouldn't be exaggerating to say that it's it's, it's, it's a lot of the problems is from China, uh, Chinese sellers, right?

Chinese sellers. They, they start selling a ton of generic products through like, uh, Amazon FBA. They have much lower margin expectations, so they can just like undercut everyone. And now Amazon is becoming a place where, okay, you could, you get two day shipping would be a fine, that's fine. Um, but like, uh, like, unless you're buying like a PlayStation, you know, like, okay, like, I don't really, this is a cool product, uh, some random brand.

I don't think I can trust them. And, but Shopify allowed people to build nice looking brands. Like sometimes in hours, if you know what you're doing. Right. So now you have situations where like you have the exact same product. We have a brand on it and it's, there's marketing on it. You can sell it for some, our clients sell it, like for double the pricing, Amazon.

And it still works, even though people are definitely searching for stuff on Amazon as well. And you know why it's worked because people are starting to get a little bit jaded with, uh, kind of unbranded goods on Amazon with brands. They don't, you've heard of, um, brands that don't have a website, you know, like there is kind of a feeling that, okay, this bit doesn't have a website.

Like, ah, like, you know, it's like, is it really legitimate? It was probably from China anyways. Right. Um, so this is where kind of like, I think for store owners, don't worry about Amazon. We're always worried about Amazon. People are like don't ever price compete with Amazon on the same product. You're never.

You're living. You never going to win, you know, do better marketing, do better. Branding them, show the customer. There is something better about your product, even though maybe it's the same thing. Right? So that's Amazon. That's why I don't think it's a competition in what we're doing. And what kind of these store owners are doing in terms of my competition.

There is a time, let me tell you, I mean, it is a ridiculously crowded industry, right? Because, okay. So last couple of years, a lot of AliExpress sellers, they smart enough and realize, Hey, there's this thing called drop shipping. Right? Uh, so, well, it's much easier to. Yeah, dropshipping agent then two. Okay.

Like run, you know, kind of like an Amazon like store and just hope that orders come in. So, uh, there's been a huge influx of folks who were just AliExpress sellers who are now like private dropshipping agents. Uh, so there is a lot of people like trying to compete for the same client base. So I will tell you it's one of the most competitive industries that I've ever been in.

Um, but similar to how a store owner should think about working as well in a supposedly saturated. Right. You do better. You do better than everyone else. And you are, you articulate your value as well. And this is where we actually do better. Right. Because the average, um, the other agent is like a guy or like, you know, like a couple of people, like in like, you know, an apartment or something, you know, um, you know, I've had the fortunate, um, I've been fortunate that I've actually had a business training.

So I actually like know how to scale up a business, make sure that we can actually support, um, increasing capacity that supports our clients. Right. What normally happens with most other suppliers, is that okay. Q4 happened, you know, like there are literally physical constraints to fulfillment, right? Like one fulfillment worker, like depending on what product it is, like a couple hundred, you know, orders per day, you know, like a thousand you get into like, just like flushing, like, and like, you know, like just working all night.

Uh, and that's it. Right. And what happens if a couple of your clients I'll scale up? You know, that's exactly what happens when they scale up. Um, you know, they, they. That now they're working in the private agent and everything's made better. You don't realize that they have higher vision, which is an old express seller, or maybe still AliExpress seller, to be honest, they might still have AliExpress store on the side as well.

So yeah, it is a hugely competitive industry and I think it kind of mirrors just shipping in general, like, look, I'm not going to lie drop shipping. You don't have as huge a competitor. I mean, such low barrier of entry. I mean, just like how it's so easy to be a drop shipping agent. It's so easy to sort of like a drop a, a sh a Shopify store and start marketing.

Yeah. But people still win and people win by doing something different. You know, people win by, um, finding the right angle, building up the backend, you know, caring about their customers, building a brand and articulating a brand. Um, so yeah, you know, so. Even with all the competition we've been scaling this morning and mostly organically.

And I think that's also, you know, kind of a good, good sign, you know, for kind of a good lesson for even dropshippers as well, store owners as well, is that, you know, just don't worry about saturation as much. Um, there's still a lot of opportunity, but try to do something different, try to do something better.

[00:59:57] Joseph: Well, I, I think that's a, that's a fantastic answer as well. And it reminds me just like every time I get an email from AliExpress about like a new product offer, something like that. I don't know. I just, I don't respond to it the same way I do when I get like an offer from a branded store or something like that.

I'm like, you guys, it takes forever to get things. Why are you marketing to me? It's just, I don't know. It's just, it's very uncanny valley. When I, when I do, when I get emails from AliExpress, because they are. You know, it's a marketplace, it's a, it's a, it's an online store. And yet I'm just so far removed from treating it like that.

Um, but on the, on the other hand, I also appreciate, you know, whenever I see a product being marketed to me now, and I like these arthritis, gloves that I, uh, that I wear every opportunity I get. 

[01:00:39] Dayu Yang: I think, oh, we've done a lot of those by the way. Yeah. 

[01:00:42] Joseph: Well, you know, being, being happy past the veil, you know, I, I see how much they're being marketed for and then to see how much they are in AliExpress. And I'm like, I'm going to go into AliExpress, kind of buy a bunch of their meds at the same price, but that's the luxury of knowing that not everybody has that.

 I'm going to, I just have one other like nugget question for you, and then we'll wrap this up. So this is from one of your Facebook posts and you have to forgive me if like it may be, uh, it was posted and you know, she didn't, didn't have chance to look at that.

So if that's the case, sorry, but as long as it's funny. Cause we just mentioned a long shipping times and you guys talk about some of the things that sellers can do to, I guess like soften the blow of these long shipping times. Um, is, is that to your recollection, did you want to touch on that for us?

[01:01:21] Dayu Yang: Yeah, sure. I mean, I, I don't remember the exact post. I talked a lot about that before. So you might have to remind me of a little bit more detail on the post or, you know, what did I actually say? Oh, okay. 

[01:01:30] Joseph: Uh, unfortunately I don't have the, the Facebook posts up. So off the top of my head is essentially like what it was advice to give to people who have to deal with long loading times as sellers and how they can, you know, ease the burden for the, uh, for the customers.

[01:01:45] Dayu Yang: Yeah. Okay. So look, uh, last year COVID happened. It was last year, right? It seemed like forever. Yeah. So last year it was the longest 14 days last year was COVID and, um, COVID was probably the worst thing that ever happened. Well, it's like. Uh, tragedy, like in itself, not just business, but, uh, in the industry, in terms diligence, these from China is it's drop shipping.

It's, it's the worst thing that has happened. Probably the worst thing that ever happened, you know, in the near foreseeable future, there were, um, there were curious afterwards where something that would normally take five to eight days going into the US sometimes got delayed up to 30 days, you know, sometimes even more.

Right. Um, and that, and that was brutal. Right. Um, but that is a perfectly good example of just extremely long shipping times and a lot of, a lot of dropshippers and even a lot of suppliers actually just completely got out of the game. Like, did they need to fulfill for their clients and, or like, uh, you know, their, their customers and, you know, a lot of stores, honestly, just didn't fulfill their orders.

That's actually why, like, there are a lot of Facebook bands might be in the last year because like a lot of like, it was, it seemed like scams basically. Right. Um, what are. Well, we always sort of clients during that time was look, um, well, first of all, it's COVID so like, there's some understanding as well.

Right. Um, but customers don't get pissed just because something happens. Right. Some do, but like generally speaking, like they get pissed, they feel lied to, they get pissed if they don't understand what's going on. Right. Even during normal times, sometimes there's delays. Um, and especially during the COVID delays, what I always told my clients is communicate with them.

We know, you know, it's not going to arrive any days. All right. Don't tell them it's going to arrive in eight days. Right. Put it up front that because of COVID because these delays, you know, there can be some extreme delays, you know, we're apologized. And even for the cases where, okay, like before we knew there were gonna be delays, there were clients already advertising five to eight day shipping.

Um, and then until they started emailing your customer, explain to them the situation. Right. Um, and the clients who did that, like it was pleasant. It was a huge pleasant surprise to see the actual fact. Um, there's obviously some that won't be fines, you know, but not that high of a rate, you know, I wouldn't say it would be like, you know, 50%, you know, maybe like 5%, one refunds, but still like most of the customers, they were completely understanding, you know, they got it and they appreciate the student owner, uh, the VA reaching out to them.

So that's really how you deal with it. Um, you know, if there's unexpected delays now, obviously like the other things that you do want as fashioning as possible. So like w do work with an agent and supply that offers you fast enough and efficient shipping lines as well. And then. Put it up, you know, on your site, you know, what they expect your shipping times are a lot of folks out there, especially when trying to compare the Amazon prime, like, oh, I don't have two day shipping.

Like, no one's going to buy it for my store. If I say like five to 10 days being like, that is absolutely not true. I mean, like, people may have like a figures, like, you know, promising 80 to, in shipping as you didn't take a eight to 10 day shipping, you know? Um, so, you know, definitely like as long as you put it up front, um, now obviously look, you know, if, if, if, if they want two day shipping, then they're not going to buy from them anyways.

But like, if you promise that they're going to be pissed off and report you to Facebook anyway, so that's not, uh, but yeah, you know, I think that, you know, this is kind of one of the great things about like why China fulfillment works is you obviously have to have the right product. Obviously, if you're selling a product that they can, they know they can just buy from Amazon.

That's not gonna work. Right. Like, you know, like, you know, like yeah. You know, whatever, like common product that, you know, you just buy from Amazon anywhere. They don't sell that stuff. Right. Those sell like Gillette razors, for example, you know? Um, but, but there are so many products in this world where like, uh, you know, people don't even know it exists, you know?

And you know, that's kinda one of the great things about running Facebook ads, right. Because, um, it's, um, it's not a tent base. It's like Demandbase, right? Like they see an ad and it is why they really want it. They might kind of shop around, be like, oh, like, oh, the Amazon has this weird brand, you know, this, these guys have like, kind of like a nice brand.

At least I trust these guys more, uh, five or 10 days, whatever. I don't need it right away. Right. It's not like toilet paper or something. Right. Um, so yeah, you know, I think that long shipping, as long as it's not like 30 days, it's totally manageable. And like I said, even when there are unexpected delays, uh, production delays, you know, Just manage your customers.

And enough of them will be understanding that you're not going to use money. Right? Like, I mean, you always got to kind of consider your margins, right? Like maybe if you get like 20% refunds and you start to like lose money. Right. But I guarantee you, like, if you do the right thing, as you communicate, even in unexpected delays, you're not going to get 20% refunds.

[01:06:56] Joseph: Terrific. Well, I think that's a, that really helps clear up, um, an issue that I, I know I've had, but I'm certain a lot of people, a lot of my audience would probably, um, I have that issue as well. So that is going to be, it's going to be it and diet. This has just been terrific. I've really learned a lot from you today.

So I really appreciate your time. I appreciate it. Our final question is, well, it's actually in two parts, one, if there's any last bits of wisdom that you'd like sharing, um, Johnny's proper. If something along those lines more than welcome to share it and then let the audience know how they can find out more of what you're up to and get in touch.

[01:07:30] Dayu Yang: Yeah. You know, no Chinese proverb, you know, I I've never been good at those. Um, one thing I will say that I was kind of reminded this when I was talking about, I know by my own experience as well, is that like, I mean, I failed so many times you might have a career and it's been such an up and down, like nothing is ever a straight line.

Right. And like, I failed so many times, like, you know, different stores, you know, like for a while, actually, like my Cody product was like always kind of like worried about me failure. They were on shark tank. Everything's better obviously. Um, you're gonna fail. You know, especially if you're starting out, like you, like you're going to fail in product testing.

Like selfish is not going to work, but in my experience is that every single failure is just an experience to just learn from your say, it's definitely learn from your mistakes. You know, don't just like move on and don't learn from it. But where we got today, where I am today is just based really just on the foundation of all of these failures and just learning from those and just really adjusting for the better.

And I think that lesson applies to any kind of business. And I think it particularly applies to something like dropshipping e-commerce right, because you're going to have a potentially high and fast failure rate, you know, like, and you want to do that, right? Uh, you, you want more chances at that and you want to improve everything.

So, you know, that's kind of like one thing that I definitely want people to take away and, and yeah. You know, I think that, um, I think that, um, Like I said before, we really specialize in helping people with scale up. And you know, the other thing that's kind of related to that as well, is that, um, Don't worry about failure, but also like don't aim too low either, right?

Uh, don't like think, oh, I have a mid six figure store. I'm pretty happy. I'm going to stay cushy. You know, like you can do so much more. Um, if you stay steady, like most likely than not, you're going to eventually fail with that store anyways, you know? So like always push it to the next level, figure out how you improve your operations, improve your supply chain.

And then, you know, I guess that's to us, you know, we, we specialize in that. We specialize in the folks to get you to the next level. We're not going to be part of it. We're testing, use all these friends for that. Um, but once you are ready to scale to that next level and really work with the experts, what, what over the partnering in supply chain, that's where you can find us.

So, uh, we're EcommOps we have a website ecommops.com. Uh, one really great way to, to, to communicate with us though, is that we do have a Facebook group, uh, just EcommOps Facebook group. Uh, that's where we have a community I'm always in there. We, we share a ton of knowledge. Uh, if you knew you're welcome as well, right?

If you are experienced common chat with us and we'll just start a conversation, right. Um, I think that in a spirit of this not being a transactional service, like, you know, we love to talk to you, you know, we love to talk to you about your issues. We love to talk to you. If you're a good fit, we're a good fit.

And if we're not as totally fine, you know, we were fine with talking to you anyways. So yeah. So go to our website, you know, go to our group. Uh, we do also have a YouTube channel or check us out. It's all called EcommOps, by the way, E C O M M O P S you know, so just look up. 

[01:10:45] Joseph: Awesome. Thank you so much. And, um, and finally to my audience as well. Uh, thank you all for listening. It is a great honor and privilege to be able to collect this information and share it with all of you. Um, and I look forward not only to the next time I get to speak to you Dayu Yang down the line, but you know what, when information, I'll be lucky to collect, uh, in a matter of a couple of days from now and going into the weekend, I don't do recordings. Got a rest of voice. All right, everybody take care and we'll check in soon.

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Joseph Ianni

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