Had I known about SaleHoo back when I was first starting, it would have saved me a lot of headaches and hassle. You guys have access to the top network of suppliers and everything else, which saves a lot of time and the headache of individually building that network or finding all these people myself. I can just come through you guys and make that transition from dropshipping to wholesale so much more seamless.

If you’ve searched for dropshipping on YouTube, you’re bound to come across the name, Nathan Nazareth. He’s known for sharing dropshipping and eCommerce secrets, and revealing step by step how he makes tons of money with his online businesses. In this interview, he talks to us about how he built multiple successful dropshipping stores, what his biggest challenges were, and how he ultimately became successful.

Sean: Hey guys, it's Sean again from SaleHoo, and in today's video, we have the opportunity to interview a seven-figure entrepreneur, Nathan Nazareth. He also does dropshipping, and we will be asking him a bunch of questions and getting insights from him on how he became successful.

You guys can get a lot of value from this interview. So yeah, thanks, Nathan, for accepting the interview. First, can you give us a bit of background on your eCommerce journey?

Nathan Nazareth: Yeah, for sure. So, I've been in the internet marketing and eCommerce space for about three and a half to four years now. I got started when I was 18, as a freshman in college or university.

I came across social media marketing, which involved offering services to clients or businesses, running their social media pages, and potentially running paid advertising for them. One of my clients was selling a digital product, and we generated around $75,000 in the first two weeks. It was life-changing money for her, and I got paid well for it too. That's when I realized I should also be selling a product to the masses if I want to make that kind of money, like $75,000 in a couple of weeks.

That's when I naturally looked back at dropshipping and thought it was the next step. Around that time, I became obsessed with dropshipping and had my first winning product, which was a UV sterilization wand. This thing is supposed to kill all the viruses, germs, and bacteria that are on your high-touch areas like a phone, keys, laptop, or whatnot.

It was the perfect product at the perfect time because it was the very beginning of the virus situation that was going on at the time. So, the product was flying, and I was getting a four- or five-fold return on ad spend. I wasn't well seasoned with media buying or dropshipping, but I was still making crazy money.

After a month into that, I made more money than I'd ever seen in my life. I purchased my first car and other luxury items, and I started to live that entrepreneurial lifestyle that I had craved for so long that everybody my age was living it and sharing about it online.

The challenges in dropshipping

Nathan: However, I did a few things wrong. I had logistical issues with third-party fulfillment centers and the actual suppliers themselves. Products weren't arriving appropriately to customers; they were damaged, and in some cases, they weren't showing up.

There were issues with the supplier, which led to chargebacks. Chargebacks started taking over my business, and I was losing money. Eventually, I received a cease-and-desist in the business because I used content that wasn't mine and that I found online. It was pretty devastating, going from making three, four, or five thousand dollars a day, the most money I'd ever made in my life, to just zero overnight, pretty much. It crushed me a little bit.

For a month, I took a step back, losing money from all these chargebacks coming in. I had spent all my money on the new car I bought, buying luxury items, and partying—not in the best headspace. I put my head down and went back to work aggressively every day to try to make it work.

With the new skills I learned and learning from the biggest mistakes I made with the UV sterilization business, within a matter of months, I started to find other successful stores. Around the same time, one of the people I reached out to to get back to me became a good mentor and friend of mine. He helped me reach the next level with some of the stuff I was doing.

How Nathan would scale his dropshipping stores

Sean: Do you recommend transitioning from dropshipping to wholesale once you find a winning product you've tested with the supplier? Do you recommend moving from a dropship supplier to a wholesale supplier, or maybe using a dropship agent or 3PL?

Nathan: I think 3PL is the way to go. Once you're making sales and validating that you're making money, move the product into a third-party fulfillment center in the US. There are plenty of 3PL companies out there, like Red Stag and ShipBob. Yeah, I don't know plenty of 3PL companies out there, and you can order the units in bulk from your supplier, the same supplier you've worked with before, typically in China. Sometimes, in other places, you can order them directly from that 3PL.

They will pick and pack all the products that come in, and you can get two- to three-day shipping to your clients, assuming you're targeting the North American market, which is probably the best market for e-commerce. Once you have the product in the fulfillment center, you're much less likely to run into issues like chargebacks that can tank your business.

Sean: That's actually something we advocate: transitioning from dropshipping to wholesale. But basically, what SaleHoo does is have two products. One is SaleHoo Dropship, where we help merchants integrate their dropship products from dropship suppliers seamlessly into their Shopify store. Once they've tested out the product and found that it's a winning product with dropshipping, they can move on to the SaleHoo directory.

The directory has over 8,000 pre-vetted suppliers from all over the world. You can source a supplier locally to get faster lead times and get the product to your warehouse or house if you're going to store it there. You can even brand the products with the suppliers on the SaleHoo directory.

Nathan: Yeah, for sure. No, that's such a valuable service. Had I known about SaleHoo back when I was first starting, it would have saved me a lot of headaches and hassle. You guys have access to the top network of suppliers and everything else, which saves a lot of time and the headache of individually building that network or finding all these people myself. I can just come through you guys and make that transition from dropshipping to wholesale so much more seamless.

How Nathan marketed his stores

Sean: In testing this product, were you using Facebook ads, tick-tock ads, or organics?

Nathan: Yeah, at the time, I was using Facebook ads. I think TikTok was very, very new. I don't even think they had an ads managing platform at the time. Once TikTok rolled out ads, I started looking at TikTok as well. I also started realizing the power of TikTok Organic.

I've leveraged TikTok organically in multiple ways, both for my own social media following and for my educational company. We've had a lot of sales and achieved impressive numbers just from TikTok as well. So, I would say TikTok is a really powerful tool going into 2023. But Facebook ads are what started it all for me.

The best social media platform for dropshipping right now

Sean: And would you still recommend beginners go into Facebook ads in the beginning? Because nowadays, I notice Facebook ads kind of restrict accounts a lot. They already ban ad accounts quite a lot. What do you have to say about that?

Nathan: It's still very viable, and it depends on the product as well, but I would recommend that beginners start on TikTok. TikTok is still in its infancy as far as advertising goes, and lots of big companies are switching over daily. You're still generally seeing cheaper ad costs on Facebook.

And the most powerful thing about TikTok is the organic reach because TikTok isn't like Instagram or Facebook, where you have a community of people who view your stuff and follow you.

Every single post has a chance to go completely viral. So if you have a cool product and you're good at making videos, which, in my opinion, isn't too difficult to learn, you should be posting videos of this product until one of them goes viral. Once one of them goes viral, you have views, you likely have sales, and you have customer data to work with.

Then you can take those viral videos, move them over to the ad management platform, and scale them. This makes it dirt cheap to get into dropshipping because you cut out the cost of the product and the cost of marketing. You're essentially marketing the product for free, especially if you have the product yourself and are filming videos of it.

Your costs are minimal, and you don't have to spend more until you've collected money. It does take time to sharpen your skills, make a viral video, and find the right product.

Top dropship marketing tactics

Sean: "What are some useful things you did in marketing your store, and what type of experiments did you run? Also, in one of your videos, you talked about not using stolen content. I think that's something we could talk about too."

Nathan: "I mean, when it comes to marketing, there are so many different forms; obviously, traditionally, it's like Facebook ads, tick-tock ads, or even Google ads. There's been a big push lately towards user-generated content, and even some of the biggest brands in the world are kind of catching on to this.

So you don't need thousands and thousands of dollars, like a super-high-budget production team, to create exceptional ad content that's going to convert. And I honestly think tick-tock and short-form content are kind of shaking that whole industry up because people are creating native videos on their iPhones constantly. Which means that's what we're all accustomed to viewing online.

We're just accustomed to viewing the content of people picking up their iPhones and filming themselves. And this isn't high-budget stuff; this is the stuff that's going viral. So when you're scrolling through TikTok and you see an ad pop up that looks like a super high-budget TV commercial-looking ad, you're just going to scroll right by it because you're just going to know right away it's an ad and you're not going to be interested.

But if you scroll and it's like your favorite TikTok creator showing off her wardrobe haul of some products, makeup, or whatever she purchased, you're probably going to watch it.

So those are the best ads to run, and they're actually called Spark Ads. But basically, it's when you get user-generated content from a particular influencer. It doesn't even have to be a celebrity or anything, just any creator on TikTok.

They post the ad for your product, and then you get the code as the advertiser, and then you run it on the ads platform, and it just shows up in the feed like any other TikTok video from that particular creator. And from there, you can go straight to the link to purchase the product, and it's just so much more natural and native to do things that way.

And the results tend to far outperform the traditional high-budget ad creatives that people have made in the past. So that's one thing. And then, as far as the stolen content stuff goes, you want to be really careful with the ads that you're making online because obviously, the content isn't yours, especially if you don't own the product.

It's a third-party product, and you're scraping content online and posting ads. So this is why, even after your first couple of sales, I always recommend making sure you get a hold of your product and then making video ad creatives for it yourself.

It could even be your mom or your grandma, depending on what the product is. So that way, you don't have to spend tons of money. I'm sure there are people you know in your network who will help you out and film little videos of your product.

And you can even cut them in on percentages if it's a good ad as well. And that kind of leads me to another form of marketing, which is affiliate marketing. You see, lots of big brands have blown up this way.

It does require a bit of work upfront, but later, when you have money, you can just build systems and teams to take care of all of it for you. But basically, what these brands do is reach out to thousands of creators on Instagram.

They just scrape DMs, and they blast the same message saying, 'Hey cutie, we'd love to have you on our team. We're going to send you a free bikini. And if you can put this code in your bio and post a picture with it, then you can make a commission.

You can make 20% on every single sale.' So why that's so good from a business perspective is because you are guaranteed to make a profit on every single sale. You're also getting free content, social proof, and validation from every single influencer or person that receives your product and posts. So it's kind of like a win-win.

Though usually, if it's a bigger creator or influencer, they're not going to want to work with you like that because they have hundreds of people in their DMs and hundreds of people in their emails. So they typically want to work on a fixed rate, so you're going to have to pay them upfront and then maybe give them commission as well. But you can take advantage of micro-influencers.

These are people who only have somewhere between 5 and 10K followers, maybe a little more depending on who they are, if they're willing to do that. But typically, people who don't get a ton of brand deals and requests all the time are the people you want to target for that affiliate marketing strategy."

Winning product criteria

Sean: What would you say is your product bacteria to find winning products?

Nathan: "Yeah, so let's keep it pretty simple. For Facebook ads, if you're running Facebook ads, you want a problem-solving product. Something that alleviates a particular pain point for a client. You really need a wow-factor product, right? Because TikTok ads are creative, they have to catch people's attention in order for the video to go viral. You need the time; you need engagement.

The types of products you see that do really well on TikTok are typically the ones that can be made into the most interesting ads. If that makes sense, then the ad creative has a chance to go viral, and lots of people can see it and then buy from you. So problem-solving and the wow factor are the main two things that you look for."

How to find a reliable supplier

Sean: Once you've found the product, how do you decide what type of supplier you should go with?

Nathan: "Honestly, in the beginning, I would say it's okay to use AliExpress. I mean, I try to use Express Logistics, so shipping's a little bit faster. Usually, there are options.

But once you've kind of validated that the product is selling, you're going to make it go with it, and you're kind of getting some orders, you want to switch over to a private supplier or a private agent as quickly as possible. And from there, you pretty much want to message every supplier for that product, and you can find all the listings on AliExpress or Alibaba.

You just want to chat with all these suppliers and ask them questions about their factory, the price of the product, the shipping times, and all the other important stuff. And then you basically have a list of these suppliers and a list of options to work with, and you kind of just pick the best one and go from there.

But even moving forward, you should still always be on the hunt for new suppliers and always have a backup because you never know. Sometimes, you know, there can be a halt in production or issues with their factories, and products could be defective. So the most important thing is that you build a list and have options ready to go."

How much do you need to get started dropshipping?

Sean: "If you were starting over, would you start with $500, $1000, or $2000, especially with the current climate because Facebook's getting kind of expensive, but then again, there's TikTok? What would you advise others to do? And yeah, if you were to put yourself in other people's shoes,"

Nathan: "So, yeah, if I were starting over again, the more money, the better. It does increase your chances, it does help, it can save you time, and you can get into paid ads quicker. But you don't need more than a thousand or two thousand dollars. Just a little bit of starting capital, especially if you want to go more organically, which I would recommend. That way, you're not breaking the bank to get started. If you have even a few hundred or a couple of thousand dollars, that's all you need, as long as you're really willing to put the time, effort, and energy into finding success, especially the organic route. If you did want to jump into paid ads right away and go that route, yes, it could be faster for you to find success.

But it will be more costly. So, I would recommend anywhere from three to five thousand dollars plus in terms of spending money on ads and stuff like that. Because you're likely not going to strike gold with your first product. You're going to need some time; you're going to need to optimize and see where you went wrong, try new products, and keep improving."

Adapting to today's dropshipping climate

Sean: with dropshipping changing what is your advice on adapting to the changes in the next one to two years and what do you think those changes are

Nathan: "One of the big changes that we're seeing is that traditional dropshipping, like finding a super hot winning product like a fidget spinner or something that went crazy, throwing up a landing page, and running some Facebook ads, is becoming more and more difficult. So, you need to do things differently than 99% of people who are still attempting that old form of dropshipping.

And by differently, I mean you need to improve everything in the customer journey. You need to build a lot more social proof and trust with your customers, and you need to appear right off the bat like you're an established brand and business that's been around for a while rather than somebody trying to make a quick buck. So, I think we're definitely moving more toward a branding approach. And what I mean by that is that it is heavily skewed toward getting better content. So, you should be ordering the product yourself, making custom photos for your website, and making custom video ads that haven't been seen before out there. That way, you can have unique content and a unique brand that is uniquely your own, and you're much more likely to find success that way.

Because let's say it's a good product, but if there are hundreds of people testing it, hundreds of people using the exact same ad creatives, and hundreds of people out there with more or less a very similar website, then nobody's really going to find success with it. The only one who will be remembered is the one who kind of ventured out and spent more time building it into a brand and doing things differently.

Maybe they've also spoken with suppliers about getting custom packaging, and that reflects in the product photos on the website. Maybe they have custom logos on the product as well. Maybe they have faster shipping because they have the product in the U.S. You can't just scrape what's out there online anymore. You can maybe do it for an initial test, but beyond that, I don't think there's a whole lot of room for success anymore by simply copying what's already out there. You do have to become a better marketer and do things differently."

Sean: "Anyway, so that's it. Nathan, thanks for taking the time to hop on this call. I really appreciate it, and I'm sure our viewers would also really appreciate all the value that you've given in this interview. Yeah, so thanks, Nathan."

Nathan: "For sure, thank you very much, Sean. We'll be in touch, and I hope you enjoy the rest of your day. You too, have a great day!"