Revealing My Niche and Failed Store: Super RC Shop

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Revealing My Niche

It’s a big secret, what I sell. I’ve hinted at it here and there, but now I’m going to share it with you all.

Here it is, my first store… Super RC Shop.

This is really it, and feel free to visit the site: superrcshop.com. I’ll keep the website up for about another month, so the curious among you can take a look, and then after that I’m going to stop paying for the hosting.

Bonus: At the end of this post are instructions on how to create a killer upsell for your store.

Revealing My Niche

If you don’t remember, I’m quite secretive about the products I sell and the stores I run. Here’s why.

So why tell you now? I mentioned previously that the store wasn’t doing so great. The last time I really talked about it, I was partnering with somebody who I was hoping would bring it back from the dead.

My partner had some good ideas and a fresh perspective, started social media marketing and a few other things. We got started just before the Black Friday buying bonanza, made quite a few sales, and then the site died again after that.

I was hoping the store would at least be profitable, so that we could sell it, but we just couldn’t get it to make any money. And with that, there was nothing else we could do except shutdown.

Sure, I could keep screwing around with it, pouring more time and money into the store, and eventually make a profit… probably. But my second store is actually doing very well and has a lot of potential for growth, so I’m not about to take time and resources away from it to put into a turd.

Since I’m shutting down the store, I thought it would be really fun to share it with you all, and use it as a case study.

A Brief Recap

Super RC Shop was my first venture into entrepreneurship. I joined the Dropship Lifestyle course on New Year’s Day 2014 to learn how to create drop shipping stores.

After a couple of weeks of research, I chose RC cars as my niche because it seemed to fit the course’s criteria and I thought it would be fun.

I spent about five months working really hard, nights after my daughter went to bed and weekends, before I got my first sale. I was working a full-time job and I staying up until about 1 AM every night.  It was exhausting but fulfilling.

When I started making sales I was super excited, and it was going pretty well. I was making money, and was working hard to grow the store into something bigger.

Eventually my wife and I quit our jobs, sold our condo, and took a long road trip to move across the country into my parents house.

The goal was to be able to spend more time together as a family and for me to be able to focus more on the business. For a while, the RC shop was growing nicely, and my top month in February of 2015 I made about $500, but then two things happened.

First, my sales just died. Second, after some hard discussions with my mastermind group and some serious thinking, I realized that this store wouldn’t get me to where I wanted financially.

This was not the store that would give my family financial freedom.

That’s when I decided to open a new store, which I documented with my 45 day challenge. The RC shop went on the back burner. I spent about 15 months working on the store before calling it quits. That was way too long.

If you want to follow my progress on the store from the beginning, I’ve created an archive of all the posts that I wrote about my experience creating and running it. Just click here.

Why Did It Fail?

In the end, RC cars – and even drones, are just not very good niche.

I thought the niche met the criteria from the Drop Ship Lifestyle course. The average product costs between $200 and $1000. The target market, was middle class, which I turned out to be wrong about. And there weren’t really any strong brands that I new about as a regular person – there is no Apple or Sony in this niche.

Competition

The RC market is incredibly competitive.

I should have realized that going into it, but I didn’t really know. The DSL course said you shouldn’t be afraid of competition. Competition is how are you know that there is a viable market, but this just had too much competition.

Here’s what the Google shopping listings look like for one of my products:

Revealing My Niche - High Competition

That’s just way too much competition. You can see that some of those listings have 10+ stores, and there are way too many products on the grid.

Low Margins

I’m actually quite surprised that there is so much competition for a product with so little margin. The dealer cost for most of the products is just barely under retail price.

Fairly often I would make as little as $5 on the sale.  $25-$35 seemed to be my average profit (even with the drones). On my best product (in the screenshot above), I would make $100-$130.  As a comparison, my average profit per sale with my new store is $600-$1000.

If you’re paying $.50 per click to get someone to your store, and only 1% of those people buy, you’re spending more on advertising than you’re making in profit. I was able to work the numbers, and make some money, but it was really hard.

Low Income Customers

I thought the customers would be upper-middle class, due to the price of the products, but that turned out not to be the case.

If anything, the average customer was low or lower-middle class.

Why does this matter? The market becomes extremely price-sensitive. If you’re only competing on price, you’ll never win, unless you’re Walmart.

My customers didn’t care at all about purchasing from a reputable website. They saw no value in the incredible service that I was providing, and the thoughtful information I gave on the website.

Tinkering Hobbyists

People who are into the RC hobby are tinkerers. They love getting grease all over their garage working on their RC trucks.

They would call in all the time, ask me a million questions, talk with me for an hour or more, then haggle with me, and still not buy. They would be just as happy buying from some serial killer on Craigslist.

Bad Suppliers

In this niche, most suppliers wanted me to have a physical retail store.  There were only a few that I was able to sign up with, which might have contributed to the terrible pricing that I got.

What Did I Do Right?

For the time that I was doing fairly well with the store, here are some things that made a difference.

Customer Service

I gave incredible customer service.

Several people told me I gave them the best service they’ve ever had in their life. No joke.

The funny thing is that it’s actually really easy to do. Most people just don’t try. All you have to do is be nice, friendly, joke around with people, and show empathy. Show them that you actually care.

That’s it, and people will love you.

Upsell

This niche is great for upsells, and I got really good at it. An upsell is when you sell add-ons to the main item.

I looked around at the competition and found a hole in the market. The confusing thing about RC cars, is that there are a million kinds of batteries, for example, but only one fits the car that you’re buying. Most other online stores don’t make it easy for you to figure out which battery to buy.

So I took advantage of this, and did the work ahead of time to figure out which batteries went with each car, and I made it very easy for them to buy extra batteries, and even encouraged it. I created bundles with popular accessories for most of my products.

Beyond giving them the option, you have to tell people why they should get the accessories, and really make them want what you’re selling.

Here’s a screen shot of one of my upsells – this is where you select your bundle.

Revealing My Niche - Upsell

Below, in the description, the first thing I wrote was why they needed to upgrade. Look at that compelling copy!

Revealing My Niche - Upsell

I fine tuned my strategy over time and eventually I got about a 90% conversion rate on my upsell. That’s an insanely good number.

The good thing about an upsell is that it can take a very poor profit item and turn it into a great profit item. For example, on this product I might have made $5-$10, depending on where I had to ship to (since I have free shipping) but if they selected the upgraded option I made $35-$50.

See the bottom of this post for more detailed instructions on how to do a good upsell if you’re interested.

Product Descriptions

I went above and beyond what my competition was doing with their product descriptions. I broke the features down to what a normal person can understand, no technical nonsense.

I told them why the product was great and why they should want it. Here’s a screenshot of one of my descriptions:

Revealing My Niche - Description

What Is Failure?

So the store didn’t work out. Is the store a failure? Am I a failure?

NO!

Failure is only when you quit trying. Failure is giving up and going back to being unhappy at my day job. Failure is saying I’ll never succeed.

Anybody who has any success, or achieves anything great has had lots of setbacks and failures to get them where they are.

How many Olympic ski jumpers landed every jump they ever attempted? Zero.

Failure is only feedback. It’s telling you something isn’t working, and you need to try something else.

What I Learned

Niche Selection Is Everything

In the end, though, all the things I did right didn’t matter because I chose a bad niche.

Nothing else matters as much as the niche you choose.

You can have the ugliest website and still make a killing if you choose the right product. Believe me, I’ve seen it.

Fail Fast, Fail Often

In my opinion, one in five drop shipping stores will succeed, and if you have a niche that meets the criteria it just comes down to luck. So improve your chances of success and pump out store after store as fast as possible until you have one that hits.

Skills

I learned so much from going through the process with the store, and it all transferred to my new store.

I learned technical skills and how to set up a store. I learned how to use the various marketing channels. I learned how to write compelling copy.

I learned how to sell myself to suppliers, which if you followed my 45 day challenge, you’ll know that I’m absolutely unstoppable on the phone now.

I learned how to give incredible customer service. I learned how to do bookkeeping and figure out profit for a product before I sell it. I learned how to hire and fire people.

I learned to be a businessman.

Best of all, I learned that it’s possible to make a living doing what I want, and have a great time in the process.

Focusing on the Future

I’m actually glad that this store officially done. It’s been on the back of my mind for months, and I’m glad I don’t have to think about it anymore.

Now I can focus all of my energy on growing my second store, and I really hope not to have another post revealing that store’s niche 😉

What Are Your Failures?

Have you ever “failed” at anything? If so, what did you learn from that experience? Share your wisdom in the comments below!

Screenshots

Since I’ll be shutting down the website pretty soon, here are some screenshots to give you a general feeling for the store.

Revealing My Niche - Collections Revealing My Niche - Product Revealing My Niche - Product

EDIT: How To Create A Killer Upsell On Your Store

I just remembered that way back in March of last year I wrote detailed instructions on how to set up the upsell that I described in this post, so it seemed fitting to include that here.

Most things you can sell have accessories, and I don’t think that people shop around for the best prices on accessories once they have decided where they’re going to buy the main product. That means you don’t have to compete on the price. Also almost nobody I have found actually does a proper upsell, at least in my niche.

If you have a product like mine that is sort of hard to figure out what accessory fits with the product, you can have a huge competitive advantage because your customer won’t know which one to get on your competitors’ websites. You should do the research for them – that’s a value add.

The RC niche is very competitive and I have to sell at MAP pricing, which often doesn’t leave much profit. BUT I don’t have to compete on the price of my accessories. I charge full retail MSRP, and often higher, for the additional items.

I made more on the accessories than I did on the main product sometimes.  By the way, that’s where all major retailers make their money.  Best Buy makes more money on cables than they do on TVs.

How successful is this strategy (I already gave you a hint)? I looked back and in February of last year, every single sale that that month on a product that had an upsell, sold with the upsell. Not a single person has bought the product alone.

That’s huge, and you can tap into that too, though mine is a bit of a cheat, because the product requires batteries and fuel, but it works on accessories that are optional too – I have sold them as well.  Just look at the example above.

I’m going to make it easy for you and give you the template for my upsell. I’ve been slowly iterating and improving this formula and this comes directly from my top selling bundled item, which you can see at this link, until I shut the site down in about a month: Redcat Racing Volcano S30

Instructions:

Make these bundle descriptions very short and sweet, and put it at the very top of your product description. But sell the crap out of your bundles (my actual descriptions are a tad longer than those below). Make sure your customers want them as much as they want the main product.  It’s hard, but you can do it.

Create a variant for each option (as if it were a different color) and make the title of that variant match the option text exactly, so people know what it is they’re selecting.

Pay careful attention to the formatting. I’ve used bold and italics to emphasize what’s important, and to make it clear that if they want to get the most out of their purchase they’ll have to buy a more expensive package.

Put the one you want them to buy at the top with bundles decreasing in price below. Make sure you charge enough so that you’re making more profit on the more expensive items. You don’t want to make more money on the middle bundle than you do on the top bundle. That’s just dumb.

Include an option that’s way more expensive that you don’t expect anyone to buy. That makes them think the other options are more reasonable by comparison.

Options – Select from drop down menu above
Product + Accessory 1, Accessory 2 & Accessory 3
– $269.95
Everything you’ll need.
Comes With – List everything (sometimes you’re including more than will fit in the short variant title)
Product + Accessory 1 – $249.95
Requires Accessory 2 & Accessory 3
Already have Accessory 2 & Accessory 3? Just get this option.
Comes With – List everything
Product + Accessory 4 – $394.95
Go Pro – Upgrade your product to top of the line.
Comes With – List everything
Product Only – $219.95
Requires Accessory 1, Accessory 2 & Accessory 3
The main product.

Here are screenshots of the product that this is based on:

Upsell 1 Upsell 2

And that’s it. Now go out and sell some accessories!

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Isaac

Some people like to be called mister. I prefer dude.

14 Responses

  1. George says:

    Isaac – this is a phenomenal blog post – so many great lessons for drop shippers -THANK YOU!

  2. drew says:

    Hey man, Great post. This is “real world” helpful and I’m sure it will come back to you in spades. Great job man!

  3. Suraya says:

    Excellent lessons here, great post and thank you for sharing it so openly.

  4. Anthony says:

    Thanks for that informative post about your fail store because I’m in the same predicament with wanting to close my store even although I haven’t made it live yet. In other words, it was dead before I can PUT life in it. And to make matters worse, I’ve paid to have the site made for $$$ before coming to the retreat last year. So the next time out, I’m making my own site myself!
    Once again, thanks for the informative post.

    • Isaac says:

      Hey Anthony, yeah sometimes it’s tough. But you learn and you move on. If your store is ready, you don’t have much to lose by just going live with it. Why not just turn your ads on for a couple of weeks and see if you get any sales? I would at least do that before you give up.I appreciate your comment man!

  5. Joseph Leung says:

    Ever thought about pivoting your dropship site store into an amazon affiliate store? If you have lots of content that ranks high on google for the long tail words you can convert that into amazon sales.

    • Isaac says:

      Hey, thanks for the idea! I have actually not thought about that, but unfortunately this store doesn’t really rank for anything. And even if it did, I just don’t want to spend anymore time on this store, especially since my new store is actually making good money and I am seeing positive ROI on my time there.

  6. shauna says:

    Fantastic post Isaac – thanks! Question: did you find a sweet spot for the number of competitors selling your same product (obviously < 10+)? What if they were selling in the space, but not the exact same products?

    • Isaac says:

      Hi Shauna, I’m glad you liked the post, and thanks for the question!

      As far as competition goes, my preference is to have most products in the niche with 6 or less competitors (on Google Shopping). I also don’t want to see a big grid on the shopping results. If your results come up as a list, that’s a good sign. Naturally you’ll have some brands that are more competitive, with 10+ stores, and that’s fine, as long as that’s the minority of your products. You probably won’t want to compete for those products because the clicks will be too expensive.

      For the second part of your question, that’s fine if you have competition selling other brands that you don’t have, since you aren’t competing with them directly. Ideally you’ll have all the products/brands in your niche, but you can start with ones that have low competition. It’s always a balancing act though, since maybe nobody wants to buy the unpopular products – it’s probably different with every niche. All you can do is test your assumptions and adjust as necessary.

      I hope that helps! If you have any other questions, feel free to ask.

  7. Joanna Walters says:

    Hey Isaac! I actually think I read this before meeting you in Kona–but now, it’s eve more meaningful. Thank you for sharing your story with us so that we could all learn from it!

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