How Much You Should Spend To Test A NEW PRODUCT | Dropshipping Guide

How I generated over $700,000 with one store!

Hey everyone welcome to a new video my name’s chris wayne and in this one i’m going to be showing you three different products with three different price points and explaining to you exactly how much you need to be spending when you’re testing them with a drop shipping stuff this is a question that i get asked all the time with facebook and instagram so hopefully

By the end of it you can have a better idea of how much you need to spend and when you should actually stop testing their product and move on to another one but before we get into the content i just want to give you a quick update on what’s been going on i obviously haven’t posted on this channel for a couple of weeks now and that’s because i’ve been working on

Something pretty big and i’ve also just got back from the shopify noble or 20/20 summit over in berlin i was on stage out there speaking in front of their entire business unit to basically talk about the state of drop shipping and where it couldn’t be going in the future we also spent some time talking about sort of the potential changes shopify and all below can

Make to their platforms to make your lives easier my lives easier you know they’re all about econ platforms and drop shipping and the whole event was to try and figure out what they can do to improve the lives of drop shippers so there was some really really good ideas thrown around at that event so make sure you watch out because there are some big changes coming

But yeah it was a great event it was amazing meeting all the team again you know obviously i went out last year to do that youtube video with all below this time was all about getting on stage all about speaking in front of their entire business units to talk about the future of drop shipping so yeah i mean i’m hoping to get a video on youtube about it you know so

You can see behind the scenes and everything like that so keep an eye out for that one but yeah that’s the end of this update one to go you know what’s been going on so let’s get into the video so like i said in this video we’re going to be going over the budgets you need to spend with different products when it comes to your testing phase i get asked this question

A lot and although there isn’t really a definitive answer there isn’t a sound so far it you know there is a certain guideline that you can stick to to make it a lot easier for you when you’re making those decisions now when i first started dropshipping obviously some of you already know the story but i didn’t have a lot of money you know i was running 5 pounds per

Day in tall i say tall not 5 compr i’d set 5 pounds total across each day because i couldn’t afford anymore now obviously if you have a bigger budget you have more money so i can a thousand dollars two thousand dollars it’s gonna make this a lot easy because you’re going to have a lot more room for trial and error so i mean by that is assume if you’re just dying

There’s a human fail assume that your second product i mean even assume your third products gonna fail because not everybody hits this big first time you know i had five failed store attempts before i got going with this so it isn’t always one product wins you know you got to go through a number of different products and this is where the trial and error comes

In and this is why the bigger the budget you have the more chance you have a final success with it there is a lot to learn with advertising you know so spread your budget out over a two to three month period don’t stay so your budget is going to be blown in that very first week because the chances of you finding a winning product in that time pretty much slim to

None you need to be able to spread this out so you can spread your budget and you can test slowly and then scale as soon as you know what your facebook pick so it stands afire and your whole conversion funnel within your store and within yourself correctly to allow you to convert a high enough level to make profit so the first product i want to show you is this

Pawprint pendant now this is actually a product i was someone on my own store very early on in my dropshipping journey it was one of the very first products i was running and it did quite well you know it did a reasonably bumm amount of money bought it didn’t really scale to the point that you wanted to now i was picking this product up for two to three pounds per

Piece that’s including the shipping and i was selling it for around 1995 now fluctuated on the price a little bit but most the time it was about 1995 so the product itself was cheap and so was the selling price now the benefit with selling something that’s quite cheap to the customer is that doesn’t cost you a lot to actually make sales in advertising so the first

Thing you need to consider when you set in your budget for a particular product is how cheap it is for the customer to buy the cheaper is for the customer the less money you need to spend on advertising to try and find sales far like i always say you need to be spending up to your break-even point per ad set to really test a particular interest deceive is working

Now if you say you’ve been running the campaign has five interests in there on five different concepts it’s been running over a three to four day period you’ve made no sales from it then you need to stop you need to figure out what’s going wrong you know is it your ads is it your landing page is it your product is it the price you know there’s a lot of things you

Need to check before you carry on spending because if you haven’t made any sales on a cheap product like this over a three to four day period and you’re actually putting a little bit of budget in then you know there’s something not quite right you know whether is the point might just be the product you know whether it’s a store whether it’s the the ads themselves

You know something isn’t working so spending more and putting more money into that campaign isn’t gonna make it star sell it’s just going to mean you’re going to spend more with no results so if you’ve gone 3-4 days on a campaign with a product without getting a single sale then you need to stop and you to figure out where it’s actually going wrong i’ve done a

Video about why you’re not getting sales on my youtube channel so if you haven’t seen that go and check that out as well but really it comes down to three points it’s either your ad it’s your landing page slash website or it’s the product you know those are generally the three reasons why people aren’t buying you use a figure out what point you know it is failing

And whether you can actually fix those issues you need to figure out where things are going wrong before you carry on spending because if you carry on spending it’s going to blow your budget and you’re not going to find any success in drop shipping so figure out where it is failing make the changes and then carry on and see if you can improve it that way so the

Second product i want to show you these snow goggles now this again is another product i was saying in my store i was picking these up for 15 pounds and i was signing for 45 so this is a little bit of a mid-range price point when you come to selling something and with that means you need to spend more in your budget to acquire those customers and get those sales

However a little trick i like to employ when i’m starting to sell something in the mid-range stock price point is i like to lower that price so with this product i like to sell it 45 but i knew you know i’d have to spend more to reach to us so what i did was actually to lower the price to 35 pounds so i was buying it 15 and 17 for 35 and that allowed me to spend

Less to acquire that customer because the cheaper the product is the more sellers you going to get or the more sales you should begin because it doesn’t cost as much of the customer they don’t to think about it as much and it’s not a big of a risk to them the benefit of lower in this price and increase in the amount of salvaging gap is that it starts to fire your

Pixel mark which means facebook know who your customers are it tells you that your ads to work and it tells you that you stores convert it allows you to to test these are things like this these really important factors of your of your business cheaper cost so you don’t have to spend as much advertising to make these sales so you can figure out if this product is

Even worth going for in the first place so once you make 50 100 150 sales at that price point facebook knows who your audience is it knows who your customers are which means when you do increase your price and you do start to scale it bigger facebook already has an idea of who’s more likely to buy it so again the cheaper the product the cheaper the product price to

The customer the less you have to spend on advertising to figure out if it’s gonna work so in these moguls examples you know i’d probably spend 2 to 300 pounds during my testing to see if it’s even to be something i can like to scale during that time i’ll be testing different interests different ad copies different sar price points london pages part of descriptions

I’ll be testing a bunch of different things to see if i can actually get that product it’s a high enough conversion value to be able to scale it and this is really something you should be doing with all your privacy should be testing different sort of angles and different creatives to try and figure out which one is working the best for your products and fight your

Business so the third product is this personal air-cool and now some of you may have already seen this is that this was a big product a few years back people were selling this upwards of 80 100 120 pounds no but you could buy it for 25 pounds of aliexpress so there was a very very decent margin on this you know people were making a lot of money off them when when

The assaf came around and it hit a trend that people want to buy them but when you’re selling a product like this you know a general rule of thumb is to be spending a third of that product price each day it doesn’t have to be exactly a third around that price point so say if you were selling this for 80 you’d want to be spending around say 25 pounds or so per day

On your budget now that’s not 25 pounds per day and tall that’s 25 pounds per day per ad set so if you’re running 5 ad sets within a campaign with 5 different interests you want to be spending 25 pounds per ad set so that would be 125 pounds across the campaign if you’re using the cbo campaign which optimization now 125 pounds a day is going to be a lot of money

For a lot of people so this is why you need to be focusing on those cheaper products if you’re just getting started and you don’t have a big budget because gonna be a lot easier for you to start to find profit and start to scale those products so going back to the pawprint pendant you know selling that 20 pound a day if you’re looking at a third of that per ad set

You’re looking around what six pounds just over six pounds or something so you want to be spending around thirty pounds per campaign if you’re doing five interests 5 ad sets within that campaign so you’ve got 5 i’d sets in there and you’re looking at spending a 6-pound on each one then you shouldn’t all be spending 30 pounds a day on that campaign now obviously

Over a month or two 30 pounds a day even at that level does add up and this is why it’s very important to understand if your pixel is working if your websites convert making sure everything is ready before you start spending money on facebook advertising once you do start making sales obviously you going to be making a little bit you put back into your advertising

Which extends our longevity of your advertising budget and this is gonna allow you to get more accustomed to the platforms you’re working on and allow you to understand it more to be able to scale a lot more efficiently so if you don’t have a massive budget to get started with this start with a lower price product that you’re trying to sell and stretch your budget

Out over a month or two don’t blow it in a single week because you need to spend time understanding this you need to spend time to to figure out how to best optimize your campaigns to allow you to get more sales and more profit whatever you do don’t become emotionally attached to a product there is no shame in switching products if it doesn’t work you know i’ve

Tested hundreds and hundreds and hundreds of products over the years and you know not many of them worked but the ones i do work for the ones that really start to grow your business so you need to test you need to evolve you need to try different angles different creators you need to figure out what works for you and your business and the products you’re trying to

Sell remember there’s no rush with this take it slowly if you can take it slowly and you can control yourself and not become emotionally attached to it you’re going to have a far greater chance of seeing success so in essence the budget that you need is part your testing strategy in the room but this is just a guideline it’s not a set figure or anything like that

You want to be spending around a third of the actual price of the product per day so if you’re selling a product for thirty pounds you want to be spending at least ten pounds per ad set per day to be able to figure out if this is working properly now remember this is still a guideline this is just a guy that you don’t have to do this this is just something that

I found works quite well and it allows you to figure out if something’s going to work over a two three four day period you know within that time you should be seeing sales and if you’re not stop what you’re doing then figure out where it’s going wrong you know if it’s going wrong with your ads try a different ad creative trying different market angles if people

Are clicking your ads but they’re not buying when they get to your page and look at your page look at your product description improve the trustworthiness of that site and improve the reason why people should be buying from you talk about the benefits of the product not just the futures why does somebody need this product in their life that’s what you need to

Be getting across to them when it comes to your product descriptions and it’s very important you figure that out you know if people are add in to your car but they’re not buying check if you’ve got any shipping conditions on by mistake because that happens a lot you sometimes overlook the fact that you’ve got international shipping use you’re charging them twenty

Thirty pounds per shipping then by they’re going to abandon so go through the process yourself and see where you can improve every single stage because if you do that you’ve got more chance of being successful so yeah hopefully you found that useful if you did please drop me a like on this video it really does help with a youtube algorithm and i really do appreciate

All your support if you’re new to the channel or you’ve been watching for a while you’re not already please hit that subscribe button and if you have any questions about this video drop them in the comments down below i’m still answering everything hopefully i’m giving you guys value on the turner because that’s what i’m here for i want to give you value if you

Want to learn more about drop shipping then make sure you check out all the links in the description because everything you need to know it’s down there but yeah i think that’s the end of this one i hope you enjoyed it i’ll catch you in the next one you

Transcribed from video
How Much You Should Spend To Test A NEW PRODUCT | Dropshipping Guide By Chris Wane