Becoming more financially stable was the most popular goal of Americans, according to a ThinkAdvisor poll after the New Year. With the pandemic continuing to lay havoc to the American economy, many have turned to the internet for new ways to make money. Unsurprisingly, the entire US online economy is expected to eclipse over $1 trillion for the first time ever this year.
We found that there are many opportunities for individuals to participate in the online ecosystem, particularly in online retail.
That’s exactly how Seattle native Tiger Dorriz was able to make $100,000 in under 3 months, using the Shopify platform to host his various websites selling products ranging from face masks to air purifiers.
“I started with generic medical face masks back in March, and going into April found a supplier to sell customized cloth masks. The progression was just insane, if you were to tell me before that I would go from having 0 sales to over 1,000 orders a day in just a few months, I would’ve been blown away,” he says. He was able to hit $100,000 in total sales in May 2020, just 2 months after he had started. His company, Magic E-Commerce, generated over $500,000 in revenue for the entire year according to their 2020 tax report.
Tiger does warn that a large part of his success thus far can be attributed to luck.
“The massive demand shift for face masks allowed for a good 3-4 month window for me to sell masks, then more big companies began to get into it & competition increased,” explains Dorriz. “I began diversifying from face masks later in the year, and while there’s still plenty of opportunities to make money if you know what you’re doing, [online retail] may never be as lucrative margin-wise as back when the pandemic first hit.”
Despite generating 6 figures in revenue, Tiger never actually touched any of the products he sold. His business operates using a dropshipping fulfillment method, in which products are only purchased from a supplier after a customer has purchased an item. The biggest difference between dropshipping and the standard retail model is that the selling merchant doesn’t stock or own inventory.
“Dropshipping was very useful for me because I was able to order products after I already knew that I had a buyer for the same product, leaving me without any extra products laying around taking up space,” he explained. “It also saved money in terms of shipping, as I just had my suppliers ship products directly to my customers.”
Tiger gave us his top 3 tips to follow if you want to succeed in online retail.
#1: Create an LLC to host business operations under
“For legal purposes, this is the first thing you need to do,” Tiger said. “It makes filing in tax season a lot simpler, and protects you from being sued for your individual assets.”
Google Trends data indicates searches relating to LLC creation were up over 45% in 2020 compared to 2019. Some states reported that they saw over double the average volume in LLCs being registered in the months after the pandemic started, showing that many Americans have turned to starting their own business during these times.
#2: Get creative with your marketing
“For the average online retail store, they spend more money advertising their products than they spend for the actual product costs alone,” Tiger said. “With social media, there’s a bunch of opportunities for free marketing though. TikTok is my favorite personally, it’s very easy to go viral on there & get a bunch of eyeballs on your videos if you make it right.”
Tiger also believes that another underrated aspect of social media marketing is influencer marketing. “I’ve had specific influencer campaigns generate thousands in sales, despite only costing around $10-20 each. You just need to be careful with influencers because follower count can be deceiving, follower activity & other metrics are far more important.”
Tiger attributes his usage of free & cheap social media marketing to his store having roughly 40% profit margins, compared with the industry average for online retail around 25%.
#3: Don’t get ahead of yourself
Tiger described feeling ecstatic the first few days of opening his store, with orders pouring in on his phone.
“I was a college freshman at the time, and I was struggling financially as many other kids my age do. When that 1st direct deposit from Shopify hit my bank account, I couldn’t believe it. It was more money than I had ever seen in my account before,” he said.
However, the money he received for the goods was not all profit. He had to use a portion of his sales to pay for the actual goods from the supplier, which is where things got hectic.
“It was so stressful, I had a new Paypal account at the time & they immediately rejected my payments to the supplier because they were just too big. I was also having issues with the supplier’s website itself, thankfully I was able to get in personal contact with the owner & ended up just sending thousands via bank transfer,” Tiger explained.
“The sketchy part is that it was also my first time dealing with these suppliers & they had limited reviews at the time, so I also was worried that they might not be able to fulfill all the orders I had.”
Luckily for Tiger, the supplier was able to make good on their agreement & masks began going out to customers. He revealed that the supplier’s name is ThisNew, a company out of China that currently sponsors Tiger. However, at the time, this wasn’t the end of all the trouble for him.
“The flood of emails from customers inquiring about orders was overwhelming, and to be fair to them my websites at the time did not allow for order tracking so e-mail was the only option for them. Coupled with the fact that shipping from China to the US had some of the largest delays in the history at the time, I was just super backed up at the beginning. In the end, I pushed myself to do whatever I could that was in my power to keep customers satisfied, and I’m proud to say that I had to refund very few customers & didn’t lose a single chargeback case,” Tiger described.
Tiger says that the best way to avoid falling behind your orders is to establish connections with your supplier before you start selling.
“Reach out, make sure you understand their entire ordering process,” he said. “How much are their shipping costs? Do they have express shipping? Where are they shipping from? Is their packaging dropshipping friendly? What’s their minimum order quantity?”
Besides hurting your company with potential bad reviews & chargebacks, Tiger says that the biggest danger with this is to your personal mental health.
“I remember just having a hard time falling asleep at night for the first week, worried about if my supplier would come through & just hoping that my customers would be understanding,” he said. “Definitely be wary of getting in too deep too fast.”
If you are interested in getting started with online retail, Tiger has a TikTok page where he hosts financial & entrepreneurship content. You can find him at tiktok.com/@tdorriz