Dropshipping Advertising – Why We Never Use Facebook Ads

There’s a good chance that you’re reading this post because that title caught your attention and maybe even confused you.

After all, if you’ve been doing any research into dropshipping and starting a successful online marketing business, you have probably seen lots of advice about how to best use Facebook ads and how important they are to driving traffic to your site.

In fact, you’re probably very familiar with Facebook ads as a consumer. You see them all the time when you’re scrolling through the site, so why wouldn’t you want to use them yourself when it comes time to sell your product?

I promise you the title is not meant to be click bait. We honestly almost never use Facebook ads for our site. If we do use them, it’s never our first stage strategy. It’s always for retargeting. 

Overall, using Facebook ads does not reliably drive enough sales to make sense as a first line advertising strategy for drop shippers—especially if you’re just starting out. 

In this post, you’re going to learn more about the different types of marketing. You will learn how to ensure that you are driving the traffic you need to your site.

This will result in real profit off the sales that come with finding focused, driven site visitors.

Understanding Query-Based vs. Interest-Based Marketing

Before we get too deep into why Facebook ads is not the best use of your advertising budget, it’s important to first understand the difference between query-based marketing and interest-based marketing.

Query-Based Marketing

A query is a question. Queries demonstrate that people are looking for direct answers to a specific question or direct solutions to a specific problem.

If someone is going into a search engine and typing in a question, they are already engaged and primed to make a purchase.

In query-based marketing, you are trying to get your product to show up for the people who are searching for solutions or answers related to what you sell.

This marketing strategy relies on targeting specific keywords and matching up your product’s listing with the words people are using when they search.

Interest-Based Marketing

In interest-based marketing, you’re trying to share your product with a group of people based on having shared interests.

You are hoping that the ad will catch their attention and lead them to explore the site and eventually to make a purchase. 

The funnel between seeing the ad and making a purchase is a lot longer because these are people who were not searching for the product or the keywords in the first place. 

Facebook: Interest-Based Ads that Aren’t for Beginners

Facebook ads use interest-based marketing. If you’re selling, say, a German Shepherd dog collar, you’ll be able to find people on Facebook who have a German Shepherd. It sounds great! You’ve found people with the specific interest that is related to your product. 

However, to make a sale, you have to take those people from not knowing who you are to being interested enough to click the ad to trusting you enough to consider the product to actually deciding to make a purchase.

That’s a long journey, and each step in the process results in losses. A lot of people may see your ad on Facebook, but far fewer of them will engage with it, and even fewer will make a purchase.

To learn that whole marketing sequence and effectively move people through it is actually very advanced. Really only the best marketers can do it successfully. We know people who have wasted thousands of dollars trying to make Facebook ads work. 

One of our drop shipping business partners—a smart, younger, hard-working guy—has lost thousands of dollars, but he won’t stop trying to make it work. Even though his drop shipping store with us is making him $10,000-15,000 a month, he just keeps throwing money away chasing Facebook ads that aren’t generating sales. 

Many people invest in coaching to make them better at using interest-based marketing. That’s even more money spent on a strategy that often does not pay off.  

The people who are successfully using interest-based marketing are sophisticated advertisers. They know how to craft an offer and make money on the back end. They know how to nurture a lead into a sale. This is not a strategy for beginners.

Query-Based Marketing: Better for Beginners

First of all, we would never be selling a dog collar as part of our dropshipping strategy to begin with. It’s a low-ticket item that doesn’t have the margins we need to see a real profit. 

We would be much more likely to sell a high-ticket pet-based product like an obstacle course for dogs. 

If a potential customer is in the market for a high-ticket item, they are looking to spend at least a few hundred dollars. It’s not going to be an impulse buy from a Facebook ad. It’s going to be something they are actively seeking out as part of their sales research.

Someone in the market is going to go online and search “dog obstacle course.” If we can make sure that our product shows up in those search results, we know that we have a potential customer who is already interested in the product we have and that is already considering a purchase. We have therefore overcome many of the first hurdles of advertisement without having to do any additional work.

Query-based marketing doesn’t require so much nurturing down the sales funnel. All you have to do is show up in front of the potential customers with an attractive website and a competitive price for the market. If you can master the right keywords, you will show up in front of people who are actively looking to buy. 

Interest-based marketing does not guarantee that the potential customers have a need for your product. Just because someone has a German Shepherd doesn’t mean they need a new dog collar. 

On the other hand, if you use query-based marketing strategies that focus on what people are actually searching for, you will make a lot more sales. 

A Note on High-Ticket Items and Profit Margins

Let’s take a closer look at the examples we’ve been using in this section. 

We have repeatedly advised focusing on high-ticket products when starting a dropshipping business. Some people may worry about selling a high-ticket item because it seems like it would be harder to sell something so expensive.

However, you have to remember that using query-based marketing puts your product in front of people who are already looking to buy that specific product. 

People make high-ticket purchases every day. It’s just a matter of getting the product in front of them when they are looking for it and showing them that it has value and solves their problem or meets their need.

It takes the same amount of work on your part to sell a dog collar as it does to sell an obstacle course through query-based marketing. However, your profit margins are going to be so much higher on the obstacle course that you will see a return on your investment much more quickly. Often, high-ticket items result in a return on your investment from the very first sale!  

If someone is actively looking for a high-ticket product, they’re much more likely to make a purchase. This fact leaves a lot of room for error. Even if your advertising strategy isn’t the best, if you have a good product, someone will buy it. 

In addition, people are often searching for specific brands when they seek out a high-ticket item. This means you can focus on getting your ad keywords associated with the specific brand or brands you sell for even more segmented marketing.  

In short, high-ticket items give you the highest profit margin and are more likely to lead people to online research. This makes them ideal for query-based marketing strategies.

What is the Back End? 

In the discussion above, we mentioned that people who are able to use interest-based marketing well know how to make money on the back end. People who are new to ecommerce businesses might not know exactly what that means, so let’s take a closer look. 

No matter what kind of marketing strategy you use, if you’re going to sell a low-ticket item like dog collars, you’re going to need a sophisticated back end in order to see any profit. What that means is that you’re probably going to either break even or lose money on that actual dog collar. 

Why would you sell a product at a loss? To get the customer’s email address. 

You know that this is a person who buys stuff online, so they make a good potential customer for future sales. Now that you’ve made that sale, you have their email address and can continue to market to them directly and indefinitely. 

That ongoing market strategy will include items that you sell at a higher profit margin. That’s the back end. 

If you are selling low-ticket items, you need a sophisticated and complex back end to increase their lifetime customer value (LCV). Setting this up requires a lot of skill and an ongoing marketing strategy that effectively utilizes the email addresses you get from a low-margin sale. 

Effective Advertising Strategies

If you are just starting out, it’s in your interest to start by selling something that’s more expensive. This gives you a high profit margin for each sale. 

Once you have a high-ticket product, you can focus on query-based marketing that gets your product in front of the people who are actively looking to buy it. 

It sounds simple, and that’s because it is. What’s even better is that you can always make it more complex as you learn more about marketing. 

If you are making high-ticket sales and also have a sophisticated back end marketing strategy, you’ll make even more money. However, you don’t need to have this kind of system in place to start generating profit, which makes query-based marketing on high-ticket items the best option for beginners. 

Easy Query-Based Marketing: Google Ads

Whenever you search a product on Google, you’ll see product listing ads. There will be a picture of a product with pricing. People are paying per click for these to show up at the top of the search results. There will also be some sponsored links at the top of the search results.

Basically, 70-80% of what you see before scrolling down is sponsored content. 

Selling products online really is pay-to-play if you want something profitable enough to allow you to quit your job and have a real business. 

People who are searching on Google are looking to buy, so these are the people you want to see your product. 

Conclusion

If you are just getting started out with a dropshipping site and want to learn how to maximize your advertising budget, this post has hopefully provided you with some important tips on how to get started and where to best focus your resources. Let’s recap the most important points: 

  • Focus on high-ticket items so that you can make a profit from the very first sale. 
  • Advertise using query-based marketing strategies like Google Ads so that you get your product in front of people who are already looking to buy it. 
  • Do not waste time on interest-based marketing strategies for low-profit items unless you have a sophisticated back end for ongoing marketing to existing customers. 
  • Chasing customers through Facebook ads can cost you a lot of money without a return on your investment. 

If you want to learn the real secrets of the people who are making profit through ecommerce businesses, we’ve created a free video series called the Online Assets Playbook.

Here you’ll see the actual business models and methods we used to go from $0 to over $1 million in online assets. To see these insider perspectives, head to BuildAssetsOnline.com/Playbook

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