Two years ago, Erin Rafferty could define herself as a lot of things. She was an employee at a bank. She was a Finance Manager at a car dealership. And, she was a single parent. Little did she know, she was about to embark on a lifelong journey of entrepreneurship that has changed her life completely. Through the success of her dropshipping business, she has been able to quit her jobs, travel the country, and buy her dream home all within the span of a few years.
Incredibly, Erin Rafferty's dropshipping business managed to sell $2.3 Million dollars' worth of products in her first year alone. She entered the eCommerce industry after quitting her job without a safety net, and hasn't looked back since.
With Erin being among the most successful users we have on DropCommerce, we reached out to her in December of 2020 to set up an interview. We were hoping to unpack some of the habits, tactics, and perspectives that have contributed to her success, in order to share them with our other users. Our hope is that by sharing her story, her experiences, and her lessons, that we will be able to help some of the other dropshippers on our network attain as much success as she has.
During this conversation, Erin was kind enough to explain how she structured her business, her unique sale/marketing strategy works, what her profit margins are, and more. She gave us her opinion on the best product niches for 2021, her approach to putting together a team, and her advice on starting a dropshipping business for beginners.
We've made the conversation as actionable as possible, so you can create your own dropshipping success story if you would like to.
Below, you will find a written summary of our conversation. We hope you enjoy it as much as we did.
To start off, I was hoping you could tell me a bit about yourself and your story.
For sure. Basically, I was a teen mom, so money was always a problem for me. I worked two jobs and I was always away from my kid, which was heartbreaking for me. It was either babysitting, daycare, or he was at my parents. But, whatever, I did what I had to do. And I began working in the corporate world. I was working in a bank throughout my early twenties and I had a really respectable job.
Even though I was promoted a lot and everybody congratulated me, I was miserable inside. I hated trading my time for money, and I hated playing the corporate games. Every day I was pretending to be someone I wasn’t, and then there was office drama. All of it was just exhausting, and I was drained all the time. Plus, I had my son very young, so I didn’t get to do any traveling, and I felt like my life experiences were lacking. And because I had to work so much, I felt like I would never get to live the life I wanted to live.
In 2019, it all came to a head and I decided I realized that I couldn’t do it anymore, so I quit. I quit both jobs, and I didn’t have a backup plan at all. I was so stressed. All I had in my bank account was about $2000. I still had all of my expenses, so I knew I had to find another job. Even though $2000 wasn’t going to cut it, I was trying really hard to be really picky about the next job I was going to take because I was so miserable at the last one. I didn’t want to get involved with something that I wouldn’t be happy with long-term. I wanted to find something that was a better fit for me.
One of the first things I did was order a bunch of ring lights from Aliexpress. I spent like $800 on them, which was super risky obviously given the amount of money that I had, but I listed them on Facebook Marketplace. And the response I got from those ring lights was ridiculous. I knew that people were moving towards the online space, and that everyone wants to be an influencer. I knew because I was one of those people. So, I ended up selling out. I made back my money and then some. And it made me realize that I can order stuff from Asia and sell it locally. Since I had already done it once with the ring lights, I began to understand the process more, and my vision became more detailed.
I thought about it and asked myself “if I can sell ring lights, then why can’t I sell something else?”. So, I started doing some research on dropshipping, and I opened up my first dropshipping business on Shopify. My first store was in women’s clothing, which I chose because I knew I could relate to the customer. I knew I understood the customer because the customer was essentially me.
And, well I never got another job. I’ve been doing it ever since. I started with the first store, then started a second store, and altogether I’ve opened 6 and closed two. Overall, our first year’s revenue was $2.3 Million (in 2019).
How did your prior work experience play a role in the success of your dropshipping business?
My two corporate jobs were at a bank, and as a Finance Manager at a car dealership. So, my background traditionally is in finance. This helped me understand the ins and outs of money. But, more specifically, you’re not really working in finance when you work at a bank – you work in sales. And I went to very many corporate summits, conferences, and seminars on how to handle sales, overcome rebuttals and push for upsells. I learned a lot about the mental aspects of marketing. Like, how to mentally control a conversation to get the outcomes you are seeking. Corporate America/Canada teaches you that very well. I would say that contributed to my success in marketing and sales.
And how did you approach the stuff that you were less familiar with?
When I first started, I did everything on my own. I went through the steps, Googled what platforms I could use, and I first started with Ecwid. I used them because they were free, but I quickly realized that there were some limitations in building out my store. So I quickly switched over to Shopify and I went through it slowly.
I took baby steps and asked myself “what’s next?”. So, I opened an account, chose a domain name, and constantly asked myself “what now?”. Youtube ended up becoming the mentor that I needed. So, every time I came to something that I didn’t understand I would go down a Youtube rabbit hole, and figuring it out became my task for the day. And I did that day after day, every single day. I would implement something, then I would do some research, then I would implement something, then more research, and so on.
What has your success allowed you to do now that you couldn’t before?
My whole life has changed. So, because my business is in eCommerce and dropshipping specifically, I’m not location-specific when it comes to my work. I’ve been able to take my mom to travel through Europe. I don’t trade my time for money anymore. We just bought the house of my dreams. I spent one year living in an RV while driving across Canada. My family is better off, and I’m better off. My life is just completely different.
Also, I don’t have to wake up with an alarm clock anymore. I wake up when I want to. Every day is on my schedule. There are, of course, daily things with my dropshipping business that I need to take care of. There’s probably an hour or two of mandatory work per day, but the rest of the day is for me. My now-fiancé (we just got engaged) doesn’t need to have a job. He used to go door-to-door selling cable in the middle of (Canadian) winter, but now he works for me and supports me. He can stay home and take care of our household and family.
So, I’ve mentioned the trips, the house, and financial freedom, but my success with my dropshipping business has also allowed me to branch out to other industries. I’ve bought real estate properties, and I have a really bustling investment portfolio as well. I’ve been able to diversify my wealth in a way that will sustain me for the rest of my life. Overall, we’ve been able to make decisions that I never really thought would be possible in my life. It has been completely amazing.
In the past, you stated that your primary form of marketing was through something you called ‘personalized sales conversations’. What do those look like?
Yeah, for sure. So, our strategy, and this is still our strategy today, is to create what I like to call ‘magnet content’. For instance, if I’m selling pet stuff, I would put together an article like “Ten steps to obedience training for your dog” or something like that. I would then package that into an Instagram post. Even though it has nothing to do with my products, it helps me build authority. Other times I would reach out to people and ask them “hey have you seen this article?” and I would pull up some like random article on obedience training for golden retrievers. I do this to build rapport with that customer. It isn’t a sales conversation yet, I’m just reaching out as a regular interaction on social media.
Next, we have a flowchart where we record all of the messages we send and their reactions. If we continue to see engagement from that person then we’ll reach out and say “you know what, we know that you follow us and we really love your content, and we think that your dog would be so cute in this outfit. What if we sent you 20% off? Do you think that that would be something you would be willing to consider?”. And we get a really positive result from conversations like that.
People are sometimes like “Well, we’re on a tight budget”. So, we’ll say “You’re right, how about 30% off? Or 35%?”. And we basically offer a discount incentive and say “we really like you, and we’re glad we interact with you and that you like our content. Do you mind if we send you a discount on our products?”. That's the whole strategy.
Now that you have 3 or 4 stores running, have your marketing strategies changed at all? It must be a lot of conversations to get to $2.3M in sales.
It’s so many conversations. But now I have employees that are working in our inboxes, and on other Instagram accounts that are still marketing and working as well. So, I have employees that are doing these personalized human-to-human contact sales discussions. These people are paid an affiliate commission to close sales. So, like, if I worked for me (Erin) I would go in and be like “oh, cute golden retriever”. We would have some fun banter, then I would go “here, my discount code is ‘Erin10’.” When they use the code in the store, I can track who got that sale at the end of the day because it shows their discount code. So yeah, I pay out a percentage of the sale as an affiliate commission. It’s a system that took a while for me to streamline, and it’s basically a lot of manpower.
At what point did you actually begin to systemize everything in your dropshipping business?
When I first started it was the Women’s clothing store, and I did what I understood, which was talking and having sales conversations. I was doing it alone from my Instagram. I was like grinding out making content, and someone would interact, and I would go “Oh hi, I’m Erin, this is my boutique. Do you like it?”. I was trying to have human-to-human interactions with all of these people, and I would document the results in an excel spreadsheet. I took note of what type of conversations resulted in sales and which ones didn’t, because not everyone was receptive. Obviously, we had people that were like “hey screw you, get out of my inbox”.
So, I developed a long-term flowchart where I essentially tracked what types of conversations worked and what didn’t. Since I had the foresight to do that early on, when I did hire someone it was easy for me to say, “this is step 1, this is step 2, this is step 3, these are the rebuttals you can expect, and this is how to handle them”. Ultimately, it was just a flowchart on how to end up with the conversion through discussion.
How did you know that it was a good time to start a second dropshipping business?
Well, I wanted more results, and I knew it. I was already working full-time, so I had time to invest in it. I knew that once I had a marketing system that worked I could implement it into any niche and any product. That's why I always say in my coaching that you should start backward. Figure out your marketing strategy first. First, you have to understand your target customer, then you have to implement and test your strategy on how you’re going to market to them, and then you can build out your store. Because you can spend so much time building out your store just to end up having no conversion and sales if you don’t have a solid marketing plan in place. So yeah, I just found something that worked, and I knew I could translate it into other categories.
How did you handle hiring your first employees or contractors?
I found a remote working group on Facebook that had about 26,000 members, and there were a bunch of people who were alternative forms of work. Some of them had disabilities, others just wanted to work remotely, which wasn’t very common back then. I put out a post that said “Hi, I own a store, I run a boutique, and these are the types of jobs that I need. I need you to interact on Instagram, or I need you to help me write product descriptions” or whatever. And I would source people from the group and pay them as freelancers. We would negotiate a rate, I would send them a contract (to protect both sides), and each freelancer was responsible for their own taxes. Most of my girls are American, some were Filipino, and the rest were from all over the world.
One of the criticisms that we hear about dropshipping is that it’s not very profitable. What was your profit margin like after all of that discounting?
Yep, so our profit margin on that $2.3M worked out to be 35%, so about $800,000 (for that year). And 35% is a great profit margin regardless of the business you’re in.
People say that to me all the time too, and ultimately, it’s all about what you choose as your marketing strategy. You are in control of your prices. You’re the one who has to convince your customer that your product is worth its price, and nobody else can tell you how much to charge for your product. You can have good profit margins in your dropshipping business if you design your systems in a way that allows for it.
How do you go about creating your listings? Do you use the product descriptions and photos that are offered by the suppliers?
Yeah, when I first started, I didn’t have a lot of money. So, I had to find a solution to that. I didn’t want to use the product photos that were given to me by DropCommerce because I knew that customers could back-search them. They could find my suppliers by simply Google searching the images. So, what I did to mitigate that risk was to encourage people to send me pictures of them using the products they ordered from me.
At first, I basically would send out products to people in return for photos and content which I then put on my website. However, if I were to restart with a bit of a bigger budget, I would absolutely do professional photo shoots with the products. If you want a fully fleshed-out, beautiful website then you should absolutely do professional photography in the tone of your brand. You want your product photography to match the aesthetic that you are going for. I think that’s a really valuable piece because it will make your store stand out in a really impressive way. I couldn’t afford to do it when I first started, but yes, I would do that now if I could go back.
As for the product descriptions, we rewrite them ourselves. We basically take the bulk of what you’re saying in the ones that DropCommerce provides and we adjust them to fit the tone that we’re going for on our website.
When you first started using DropCommerce, what were your initial impressions?
With a dropshipping business you are usually selling Asian products or something similar, and they come with lower quality & longer shipping times. So, trying to find a manufacturer within the United States or Canada has always been a really big struggle in the industry. When I found out that DropCommerce only sends American or Canadian-made products, I was like “there definitely is a need for this” so I was really happy to go and check you guys out.
My initial impressions were that I liked the design of the platform. I think that it’s really easy to use, and it’s common-sense. You guys have a lot of really amazing product descriptions, high-quality product photos, and you’re covering a lot of different product categories. So, overall, I was impressed when I first started.
The only thing I will say that might be a little detractor is that the price point can be a bit high for a dropshipping business normally. But I do recommend you guys a lot to students, and I tell them “yes, the price point is higher, the quality is better, and you’re going to be targeting a more affluent customer with your marketing”. So yeah, I like the platform. It’s super easy to use and it’s smart.
If a friend asked you if they should use DropCommerce to power their dropshipping business, what would you tell them?
I would say “yes, use DropCommerce!”. There are unique products, and you’re guaranteeing that you’re going to get a higher quality item. You’re going to have faster shipping times, and you’ll be selling American and Canadian-made products.
What I love about the platform is that I don’t feel as though there is an ethical concern with the products that I'm sending my customers. And I think that’s something that the market and the consumer are moving towards. People want to know where their products are coming from, who made them, and what the working conditions were. And I love that when I work with DropCommerce I don’t have those types of concerns. I don’t have to do any digging. I know that you guys are choosing ethical manufacturers, and I think that’s really important.
Are there any books or movies, or any other pieces of content/media that have been influential in you taking the jump towards entrepreneurship?
The 4-Hour Workweek by Tim Ferriss is a must-read.
Besides that, the Nasty Gal documentary series (GirlBoss). It’s on Netflix. That was also really inspiring for me. Basically, it’s a true story where a woman is super poor, going through some hard times, and there’s a bunch of negative stuff going on in her life. But she loves to thrift shop. So she found a jacket that she knew was valuable, and after she fell on hard times again, she posted it for sale on eBay. She ended up getting a huge return, like $800 or something, and a light goes off for her in her mind. She ends up turning it into a multi-million-dollar empire called Nasty Gal. I remember sitting in my apartment with my little kid watching it and getting inspired. So yeah, Tim Ferriss and the Nasty Gal miniseries (GirlBoss).
You’ve trained a lot of people on how to run a dropshipping business, as you mentioned. What are some of the most common mistakes that you see people making?
That’s an easy one - a convoluted general store. As a dropshipper, you’re a marketer. You’re not necessarily a product developer or anything like that, you are a marketer. And when you have a general store I think that it becomes really complicated to try and market to everybody. In your effort to appeal to everybody with your general store, you’re actually going to be able to market to nobody. So I think that that’s a big mistake.
I also think that a lot of people start a dropshipping business because they think that it’s a get-rich-quick opportunity. And you can have amazing results as I did, but you need to work really hard. I worked 16-hour days for the first 6 months of my business before we had tangible results. We had sales here and there, but it took so much work to get the point of replacing my full-time income. So, if you’re going into dropshipping thinking that it’s easy, that’s a mistake. You’re setting yourself up to fail if you’re not ready to work really hard.
If there was somebody coming from the corporate world who wanted to get involved with dropshipping or eCommerce but isn’t quite ready to make the jump yet, what would you say they should do or learn to help prepare them to make the jump?
That’s a really good question, and I’ve thought about it a lot. So this is what I always say: “if you want to eventually be an internet entrepreneur then you have to stop using the internet as entertainment and start using it as an educational tool.” And that comes in a lot of different forms. Consume content that is good for you. Follow people that are educating you and that have the same type of success you are seeking. But, more importantly, be really objective about the internet.
When the internet shows you something, or you see a viral post, or an ad pops up on your feed, instead of just being like “oh that’s a cool product”, ask yourself “why did this go viral?”. Why did this company pay money to get this post in front of me? Be really, really objective about what the internet is showing you. Ask yourself questions like “how much did it cost to get this post in front of me?”. Why did it convert? Why did it catch my attention? What does the set up on the company’s end look like? What steps did this company have to go through on the back-end to get this in front of me? And by being really critical about the content you’re seeing you can begin understanding how these cycles are working.
This way, when you are actually ready to implement them for yourself, you'll have a clear understanding of what you’re up against and what you need to focus on.
What niches do you think are the least saturated, and present the most opportunity?
I would have to go with Arts & Crafts. Arts & Crafts has an average conversion rate of like 4.8%, which is crazy. Also, people are bored at home right now. I think it's really on-trend for 2021. I’m out here looking at opening an arts & crafts store myself.
Another great option, that comes with some difficulties for a dropshipping business, is sustainable products. These are alternatives to single-use plastics, such as shopping bags, reusable straws, etc. I have a whole store dedicated to them, and we do pretty well. The difficulty comes from not being able to choose your packaging as a dropshipper. You can come off as a hypocrite if you have a whole conversation about reducing single-use plastics but ship your orders in a bunch of plastic mailers. But although there are some challenges with that piece, I do think there’s still some potential there too.
If you were to completely restart, without any of your stores or social media accounts, would you do anything differently?
If I was starting again, I would completely skip overseas manufacturing. I would completely skip Aliexpress, and I would move towards American and Canadian-made products and/or shipping facilities from the start. I ended up having to close my first store (women’s clothing), because we ran into an unimaginable trainwreck of long shipping times and poor quality items. It ruined my store with bad reviews. It was heartbreaking to have to close it because it was my baby. But yeah, hindsight is 20/20.
Going into 2021, is there anything you would like to say to the people who are thinking about starting a dropshipping business?
Just because you think that it’s oversaturated, or overdone, doesn’t mean there’s no opportunity in dropshipping. You just have to be creative with how you’re approaching it. Maybe the traditional “pick a product, build an ad, and hope for sales through Facebook” strategy isn’t going to work, but there isn’t just a one-size-fits-all approach to creating a dropshipping business. You can be creative.
Ultimately, it’s just a supply chain, so don’t get stuck in a box, and don’t be afraid to try to get your own little piece of the pie just because you think it's oversaturated. Because I would much rather have a little piece of a big pie than have nothing at all.
Wow, what a story!
We hope that you were able to find some value in it. We certainly did.
If you're looking to try dropshipping for yourself, then you should check out our dropshipping app DropCommerce. Our dropshipping app is the most user-friendly on the market, and we have over 20,000 products to choose from. Our app is available on Shopify, BigCommerce, and Wix. We only partner with suppliers in North America, so you can be sure that your products will be high-quality and will ship quickly. You can sign up for a free account to browse our selection, or jump right in to a 14-day free trial. The choice is yours, and we're just here to support you on your entrepreneurial journey 🙂
If you enjoyed this article on Erin Rafferty's dropshipping business, then make sure to check out:
Zennen Leggett has been working with DropCommerce for years, and has generated over millions of impressions through his articles. When he isn’t writing about dropshipping, he is likely building Facebook ad campaigns for DTC brands while sipping an ice latte. You can learn more about him on ZennenLeggett.com.