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Dropshipping and PPC: is it ever feasible?

by Sonny Am
5 replies
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Hi guys,

Just had a quick question,


It seems to me that for most niches the profit margin to be made in building an ecommerce store and selling via the dropship model is not large enough for people to be able to profitably use PPC as their traffic generation technique.

Obviously there are exceptions for items with low PPC and out of the ordinary high dropship profit margins...but for most people operating under the dropship model of business, id assume most of their traffic comes from SEO?

Would that be a fair assumption to make?

Id love to hear your views on this..
#dropshipping #feasible #ppc
  • Profile picture of the author Auctiondebteliminator
    Yeah, it can.

    Not all PPC is done with Adwords.

    There are other avenues such as 7search and Miva - but make sure you have a very robust tracking service (like Prosper202/Tracking202) where you can track which sites/keywords/ads are converting the best and exploit those.

    In fact, if you see a site is doing particularly well on the display network, you can approach them and work out a banner ad/media buy deal where you can bypass the PPC platform all together and just work with them directly - many times getting a lot more clicks for less money - offering to buy just the space monthly.

    But you won't know that unless you track it. (And create a robust negative keyword list)

    But it's all about keeping costs low.
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    • Profile picture of the author dburk
      Hi Sonny,

      I have many web stores that are using both PPC and SEO with dropshipping. In every case we make the most profit from PPC, the profit margins are even better with PPC in some cases. It all depends upon the competition level for each of the segments.

      If for some reason you are unable to make a profit with PPC then you are either doing it wrong, or you do not have enough gross profit margin in your products to allow for marketing.

      If you are involved in a dropshipping club, or using a distributor for dropshipping, then you are probably paying too high a price for the products. That is something I see a lot of folks caught up in. Most of those dropship distributors take too big a cut and leave too little profit for the retailer to do any kind of meaningful marketing. If all of you competitors have a lower cost than you, then you will have a hard time in a competitive marketplace.

      You need to have a cost that is close to, or better than most of you competitors if you want to make a serious dent in market share. Otherwise you will get out bid on PPC as well as any other competitive marketing channels. Your best bet is to deal directly with the manufacturer, or find a distributor that can offer a lower cost than dealing direct.

      If your profit margins are decent, then you might need some help learning how to manage your PPC campaigns. Tell us what percentage you margins are, and average selling price range of your products, it will give us an indication as to where your issue lies.
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  • Profile picture of the author GTC1187
    If I have 50% margins with average orders of $135, will I need a redesign of my stock big commerce templates to make ppc work for me?
    Any other advice?
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  • Profile picture of the author ampeloi13
    It seems to me that for most niches the profit margin to be made in building an ecommerce store and selling via the dropship model is not large enough for people to be able to profitably use PPC as their traffic generation technique.

    Obviously there are exceptions for items with low PPC and out of the ordinary high dropship profit margins...but for most people operating under the dropship model of business, id assume most of their traffic comes from SEO?
    Look at this differently and analytically. I am giving you a direct quote from Ron Rule: "#1 is to re-engage past customers - it's free and easier to sell to someone who's already bought from you than to find a new customer.

    You need to set a budget aside to do some Pay-per-click testing using AdWords. And I don't mean $50 or $100, I mean a minimum of $100 per day for the next 30 days (so about $3,000).

    You need to be prepared to lose this money ... this is to establish your baseline conversion rate and drive enough traffic to have some actionable data. Use the keywords that are the most specific to your products, so you know you're getting 100% targeted buyer traffic and see how your site converts. This will also tell you which keywords brought you the most sales, and other valuable information about how your customers interact with your site.

    Once you've done that, you'll have the data you need to make profitable marketing decisions on the next buy - and what keywords converted best. So next month, do the same thing but focus ONLY on the keywords that actually made you money. Meanwhile, you can work toward optimizing your site for those keywords organically to offset your PPC spending.

    Forget about blog networks and cheap ads and all of the other B.S. ... none of that stuff will help until you know what your customers want and how well (or poorly) your site converts. AdWords is the fastest way to figure that out and, once you know, THEN you can deploy some of the other recommendations made here to drive traffic. But you need the data first." (Ron Rule post #27 how are you driving traffic to your ecommerce site?) Hope this help you Sonny Am.
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