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COVID-19 Pandemic & Recession: Essential Drop Shipping Tips with AJ Jomah

Uncategorized Apr 02, 2020

In this blog, I'm going to show you how to start an online business during this recession, and how you can benefit from it and actually thrive in this economy.

I'm seeing you guys dying out there left and right. So I’m going to show you all about the different models of dropshipping in what I think is going to thrive- not just succeed, but thrive in a recession.

But first, take a look at my video below:


Businesses Are Closing

I’ve been walking around in Austin, Texas and stores are closed, businesses are closed. There are these closed signs everywhere. Restaurants are closed down for the next eight weeks. Businesses have shuttered. If you're a retail business owner, I feel sorry for you. So right now it's the best time to start an online business.

There are some models that are not going to work in this economy and this recession. Drop shipping in AliExpress and Amazon, for example. If you're thinking about starting those types of business, you want to pay attention as I walk you through the different models of drop shipping online and what I think is the best approach.

Alright, now let’s go over why high ticket drop shipping from domestic suppliers is now the only method of e-commerce that will prosper in 2020.

The COVID-19 Pandemic and The Economy

We're already seeing a massive impact from the effects of the Coronavirus and what it's doing to our economy with shelter and state rules in place around the world. There are three big fires that are going to affect how existing drop shippers make money and alter the way you and I start a brand new business online from scratch.

To be clear, we're going to learn how to build a hyper profitable online business around one sale a day using domestic suppliers, sourcing from domestic suppliers on a drop shipping basis.

Look, the stock market is crashing even worse- it has since 2008 during the financial crisis. Honestly, it's probably as bad as it was during the great depression, even with the stimulus package that they just passed in the United States. And if you're abroad, you probably have a stimulus package passed from your country as well.

But even with that, that's not enough to get the economy back to where it was. I don't think it will go back to the way it was in a long time, but there's still a great opportunity to make money online. With people losing their jobs now more than ever, you're realizing this is the time that you should be supplementing your income with an online business that's not affected by the economy directly through retail and physical presence, right? You want an online, omnipresent business that you can run, even if it's raining, if there's a hurricane if there's a pandemic because people will always buy things online.

Did you know that eCommerce sales have actually increased by 33% since the pandemic started in March of 2020? It's going to continue to increase because this is where now people are forced to buy online.

Now there are methods for building a business online that are not going to work, and they're already not working right now. Meaning, there are people that are dropshipping from AliExpress or Alibaba sourcing from China that are losing their businesses. There are people selling on Amazon that are literally closing shop or being forced to sell, and they're dying. It's a dying industry right now and I think it's going to have a ripple effect for years to come. However, domestic high ticket drop shipping is the only thing I've noticed that still works in this economy.

Millions of people are already losing their jobs around the world. The U.S.  Bank of America already released a statement saying 3 million people in the US alone have lost their jobs as of March of 2020 and it projects that, oh, another 3 million every week are going to continue filing for unemployment.

So let's go over the economy and this demographic of people losing their jobs, and how it's going to affect the way you build a business online.

How Does This Affect Your Online Business?

This brings me to an important point to drop shipping when you're thinking about who to target for your products, or what products to sell. From my experience during the 2008 financial crisis, the first group of people that suffered tremendous hardship and that had to cut back on spending and had to spend less was basically low-income people. Now, these are people who make less than $60,000 a year total household income. They will be the first to cut back on spending online.

They will be the first to more than likely ask for refunds and chargebacks on products that they purchase online. If you're selling products that target, let's say the upper-middle-class or wealthy, these are people that are more than a hundred thousand dollars a year in household income.

If you're wealthy, you're considered someone who earns $250,000 or more in total household income every year. These people are going to be in a good position to ride out the recession, and they're the perfect people to target on a dropshipping basis.

We focus on selling high ticket products, only targeting people in the upper-middle-class range. So this group has three, four and five and above and wealthy households. We also target businesses. And we did this because we sell $502,000 products or more literally the products we sell, we drop-ship, right? So we don't buy inventory.

These are boring products, but everyday products people need. And so we target those people that can afford it. So, fire number one was the economy. It's affecting people who are making and living under $80,000 a year. These are people that are going to lose their jobs first. They're going to pull back.

So the people that are not going to be affected are the upper-middle class, the wealthy. And businesses, especially now with the stimulus package passing, fire number two is Amazon. Amazon recently declared and said it will stop warehousing, non-essential products or medical products.

This means that anyone selling on Amazon who is selling anything that's not essential will not be allowed to go ship products to Amazon to sell it.

Don’t Do Amazon, Aliexpress, or Alibaba… Save Yourself

I feel bad for these Amazon resellers. Guys, right now, if you're selling on Amazon and you're watching this video, you're not selling an essential product or medical product, you're about to experience an immediate drop in sales and business, and I predict thousands of thousands of Amazon sellers will go out of business.

My members and I do not sell on Amazon. We do not resell on Amazon. We don't even go to Amazon. We use our own website that we own using Shopify primarily, and we drive our own traffic. We own our own leads, we collect our own data and email so we don't rely or depend on Amazon. We also do a great job of staying competitive with Amazon because we offer value Amazon can’t compete with. 

Now, I'm not saying we're putting Amazon out of business or anything like that. I'm just saying we will. We still successfully managed to get new customers, despite the Amazon's of the world and the big brands of the world.

Fire number three is AliExpress or Alibaba. Basically anything that's coming from China, which represents most if not all of the drop shippers using the drop shipping model except for me and my members.

We do not use any suppliers from China at all.  It's not any better if you’re drop shipping from China using Alibaba or AliExpress. I've already seen a trend of Allie express stores closing down or selling their businesses to on broker sites. Products are out of stock. Shipping is delayed by months if not longer. It's already delayed now shipping for.

With shipping from AliExpress or China using AliExpress, there’s always been a delay in delivery- so that's already been an issue for a long time and especially if you're selling in a different country. One of the things you've noticed is like it takes weeks, if not months to get your product. But now DEMEC delays are lasting months if not longer. There has already been a massive decrease in ad spend from these AliExpress.

People selling from Alibaba, you've seen their ads decreased, they're not running as many ads. If not, they've shuttered down and closed down their ad campaigns, and are literally losing their businesses. So right now it's the worst time to be a drop ship or selling on AliExpress or China.

Don't listen to these gurus telling you this is the best time. It's not. Don't listen to the Amazon gurus telling you this is the time. It's not... It's not. They know that, but they still have to sell courses. So they're going to promise you the world, right? But you got to use your common sense and understand what makes sense.

So to be clear, I'm going to discuss high ticket drop shipping from local domestic suppliers in first world countries. So it's not just the U.S. built around your own website. Driving your own traffic is the only thing that's going to work in 2020 now with this new environment we're in, and we're already seeing a massive impact from the effects of the Coronavirus and what it's doing to our economy.

Don't do AliExpress. Don't sell on Amazon. Not right now. Not for the foreseeable future. I mean, what business do you know that you start and you have no control over? Amazon can tell you what to sell, when to sell, how to sell, and it, you know, it's your livelihood. So I just don't understand why people put their livelihoods in the hands of another company that doesn't have your best interests at hand.

This Is the Best Time Ever to Start an Online Business

This is the best time ever to start an online business now because even Warren Buffet said, “Be fearful when others are greedy, and be greedy when others are fearful.” And right now people are fearful. So this is the best time to invest and start an online business and retail around the world is shutting down.

So the type of business you start is what matters most. Obviously you don't want to go open a retail store, a furniture store, a restaurant, etc. You don't want to do that right now. And honestly, you want to step back and reflect on that and say, “Hey, do I really want to start a business that's location-dependent where the government can shut me down?” Where if there's a crisis or a hurricane or, or you know, anything like that that my business can be. Or do you want an online business? Right? But even with online businesses, what are the types of businesses that you should start? And we already kind of went over Amazon, AliExpress, I wouldn't touch them with a 10-foot stick. I wouldn't take them if somebody gave me a store for free.

If this is a good time to start an online business, what business should you start? Well, what business online should you start? Why not start a business online where you can drop ship products from local suppliers? Why not start a business online using a business model that allows you to earn an insane amount of profit from every order?

When we see people telling you, “hey, sell this, you know, cup for $10” or  “Look, I got this thing that lights up that allows me to record and have great lighting. Yeah, it's a good product, right?” It costs about hundred-something bucks, but maybe you make a $30 profit. No, I don't want to sell something that I'm not going to make money- or if I need to sell thousands of it. I want to sell high ticket products where I can resell for $1,000 and make $300, $400, $500 in profit.

And that's what we do every day with high ticket drop shipping. So how about a model that revolves around drop shipping products that resell for $1,000 or more targeting the upper-middle class wealthy and businesses?

Finding the Perfect Customer

We focus on the upper-middle class and wealthy people who earn a hundred thousand or more a year. Or, if you're wealthy, you're earning $250,000 or more a year.

So we literally target our products in our ads to only those people. And honestly guys, these are the ideal customers for thousand dollars products. These are the ideal customers that will not ask for refunds. They'll not chargeback because they can afford it. Additionally, they're less customer service, fewer headaches because they're used to making bigger purchases. They will not be as affected by a recession, and they’re the last group to struggle on pulling back on spending. So this is the perfect customer.

Also businesses, we sell products to businesses for restaurants, offices, you name it. Selling B2B products or business-to-business is essential, especially in this economy. They have a higher rate of repeat business, meaning they'll come back, buy more and more of your products and they need to purchase business equipment and furniture to grow their business. They will also have the ability to finance easier and purchase assets. Unlike consumers, especially with this new stimulus package that's just passed.

Now, by the way, if you'd like a deep dive into how to start your own high ticket drop shipping business in 30 days without inventory, without any prior experience, I put together an online masterclass that's two hours long and if you can block out about two hours, just click the link below to pick a time to show up and join me for two hours where I'll show you how this business works and how to start your own business in 30 days or less- even if you're brand new to building an online business.

So this does mean we drop ship only products that earn us $300 or more in profit from premium domestic suppliers and we drop ship it in the US. We work with suppliers, even abroad, but only in first world countries.

So if you're in the UK, this works, you can drop ship from UK suppliers or European suppliers and sell to the European market. If you're in Australia, this works if you're in Canada, this works. As a matter of fact, there are over 3,500 members that implement what I teach in over 30 countries.

So the likelihood that it might work in your country is high. And to be clear again, the drop shipping model that allows me and my members to drop ship with precision without inventory, building our own website, selling our own products on our own stores.

Earning $300 or more per sale is the high ticket drop shipping model. And in this training, I'm going to show you what to sell, what not to sell. We focus on selling expensive but everyday products and our model has a long term approach and many of our stores stay in business for years and years.

Start a Business From Scratch

China selling great quality products that we can resell, and we don't buy inventory or warehouse anything. And I'm going to show you how my client built real businesses providing a real asset in the marketplace and generating serious profits from a single sale where the products we sell are in demand year-round.

Now guys, what really set me apart in how my members started building businesses successfully the first time was this high ticket launch funnel process that took me four years and over $5 million in a lot of trial and error to put together. And when I started helping and showing up in this funnel, the results were pretty crazy. So I spent years testing this method.

I tested many niches and products. I tested different platforms. Should I use Shopify? Woo-commerce, WordPress? I started testing which suppliers I should source from and there were a lot of sketchy ones. Many middlemen suppliers would tell me no. I even had the phone hung up on me like a hundred times until I figured it out. Then I tested ads, I tested Facebook ads, Pinterest ads, YouTube ads, blogs, magazines to see if I could get customers to buy these high ticket products.

So I spent years testing niches, website platforms, testing suppliers, premium suppliers, low-end suppliers, Chinese suppliers. I tested ways to get customers and most of it fell or one-piece would work in the other wooden. And it was so frustrating. Although I was doing okay with some of my stores, there were stores that just didn't crack the code, they didn't make money and I tried to figure out why.

So the easiest way I can explain high ticket drop shipping guys is to compare it to Wayfair is the largest, most successful drop shipping business in the world. They built their entire business around selling everyday household and business products. People in businesses need year-round. They source from domestic suppliers, usually directly from the manufacturers on a drop shipping basis. So no inventory.

Now with my drop ship Academy, one solid day system, we focus on only products that can earn us $300 or more in profit per sale.

That generally means selling products in the range of $500 and all the way up to $5,000 or more. We work with domestic suppliers to source our products and yes, it works if you're in the UK, US, Australia, Canada, and most first world countries. So unlike Wayfair, I decided to focus on just niche-specific stores to be the best at one thing.

Not Just Your General Store

We're not trying to be the Walmart or Amazon of everything. We build niche specific stores. We have products that sell from a thousand to $5,000, and I didn't have to buy any inventory and the supplier ship to my customers. So do you see how just one sale of any of the thousands I've researched that make money can really make you some serious supplemental income or replace it outright?

There was one case where within one day, we had six orders for $22,000 in sales, That's the power of high ticket drop shipping. We made about $8,000 in profit this one day. But it involved fewer customers, fewer orders, and less hassle. We didn't go to China. We're not running random Facebook ads. We're not selling on Amazon. Nope. Our own store.

Even though we had successes with a few stores, there was still something missing. I couldn't put my finger on and I was launching the store successfully and some weren't successful.

An example that I tested that did well and we continued launching niche-specific stores was a barbecue store. We targeted people passionate about barbecue and we worked with manufacturers of these products that were drop ship friendly and negotiated profit margins around 30 to 40%. We knew in this space there's about 80% of our buyers were going to be men.

So the branding of it, the color scheme, the style of it was targeted towards people who we think we're going to buy that product, and we also knew that we were targeting people who can afford $5,000 grills.

I figured out how to reach people who are willing to buy $1,000 products and how to target the right people for the right niche and products, and that's what I'll show you in my training.

I also discovered that the stores that were performing the best and made me the most money had common traits. Breaking it down into these categories allowed me to launch with precision.

Once I figured this out, I started to finally launch my training program, my blueprint, my coaching program with amazing results from our clients. So again, there are three main strategies I discovered with my most successful high ticket drop shipping stores. And if I skipped one of these strategies or steps, it just didn't work out for me.

But fortunately for you, although I don't have time in this blog to go over those strategies, if you click the link below, you'ss save your spot to my training session-again it's at no charge.

Join My Free Training

I'll walk you through this entire process that I discovered that helps me and my members consistently build stores successfully. And like I said, I have a two-hour masterclass free of charge to attend to learn this entire process.

It's how to start your online business profitably in the next 30 days and you're going to learn the blueprint, the system that we've used thousands of times to find profitable niches, source suppliers, create a great website and get customers to our stores fast.

Like Louis, one of my students, Lewis used my drop ship Academy system, attended my training and after learning my process to find a winning product, it took them only three days to identify a niche validated and build his store. And he went on to build a store around a niche, secured suppliers, ran Google ads.

And now on his very first day of launching to an audience, he made three sales. $8,580 from three orders. And then over the next, I think the very next day, he did 14,000. And then over the course of a month, $120,000 in sales from 43 orders. So that's a one-point $5 million a year business- and he started without prior experience. Now he's not smarter than you or me. He wasn't just lucky either. He put in the effort, but he had the right method. And especially in this economy, this has never been more true than now to have the right method.

So if you got value from this blog and video today, please be sure to follow these blogs and subscribe to my YouTube channel. Until next time, thanks for reading.

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