In March of 2014, I set up a simple online business, automated my income, and set off on a permanent global vacation. While traveling the world, I published a short guide explaining the method that I used to establish my new business and lifestyle. Within a couple of days, my “Vagabond Business Case Study” went viral, and questions began to flood my inbox!

Since then, I have responded to more than 10 000 questions related to my automated online business model. While I love connecting with my followers on a one-on-one basis, it is becoming increasingly difficult to respond to everyone individually. Fortunately, I’ve found that almost everyone shares the same fundamental questions and concerns.

The purpose of this blog post is to provide quick answers to the most common questions that I receive. If you aren’t able to find answers to your questions in this list, feel free to leave me a message in the comments section below, and I’ll respond to it directly.

Physical Product Suppliers

Question 1: How do I establish relationships with eBay suppliers?

Because Arbitrage is a short-term testing strategy, you don’t need to form a relationship with the eBay seller. Start by marking up the retail price of the product that you intended to sell. Then, sell these products on your website without having them in your possession. Whenever you made a sale, manually recreated the order on eBay. Enter your customer’s shipping address during checkout and included the following order note:

“This is a gift. Do NOT include an invoice or promotional material.”

Once you’ve sold 20+ units and are satisfied with your product selection, I recommend moving away from eBay immediately and sourcing a professional drop shipper who will be able to fulfil your orders on a formal basis.

Question 2: How do I identify a reliable eBay supplier?

When users buy products on eBay, the platform automatically asks them to review the company from whom they bought. Collectively, these reviews make up the company’s “seller rating”.

A seller’s rating is critical to their long-term success on eBay. As a result, companies will often go to great lengths to protect it. In my experience, a good eBay seller will bend over backwards to ensure that you have a good experience.

With that in mind, I only chose vendors with a 98% + seller rating. By selecting only the best suppliers, Good service is almost guaranteed. I have shipped tens of thousands of products this way and have never experienced a problem.

Also, I am careful to select only suppliers who are based in the market that I am trading in. If I am selling to the US market, for example, I only use suppliers who are based in the US. Choosing international suppliers leads to slow delivery and customer complaints.

Question 3: What prevents my customers from going directly to my supplier?

In a word, “nothing”. As a matter of fact, we estimate that 5% of our would-be customers bypass us and go directly to our eBay supplier. Fortunately, the 95% of customers that we retain has proven to be more than enough to maintain $1000 per day business.

Customers will buy from you for two reasons:

Firstly, you are in front of them. In general, eBay sellers rely on the platform’s existing traffic to drive their sales; they seldom market directly to the end customer using other means. Ultimately, you are fishing in a totally different pool.

Second, your customers know, like, and trust you. Your business should add value to your niche market in the form of blog posts, free downloads, social media, and other content. Once you’ve established a level of trust with your market, they will happily choose you over an eBay seller nine times out of ten.

Question 4: Must all of my products originate with the same supplier?

No. eCommerce software, such as Shopify.com, is capable of sending order alerts to suppliers on a product by product basis. In other words, a customer may purchase ten products from your store, each of which is provided by a different supplier, and your eCommerce system will alert each supplier with a unique set of fulfilment instructions.

If you would like to set up a more advanced fulfilment process, you may do so using third-party fulfilment systems such as Ordoro.com.

Question 5: Is eBay the only viable source of arbitrage suppliers?

Any online store that trades within your target market is a potential supplier. In my experience, however, it’s best to partner with companies who list their products on shared marketplaces such as eBay, Amazon, Etsy, etc.

These platforms offer two significant advantages:

First, the competitive nature of a shared online marketplace forces vendors to sell their products at significantly reduced rates. As a result, you’re able to add a 50 to 200 percent markup while maintaining an attractive offer.

Second, any high-selling product that you find in a shared marketplace is sure to be available from multiple vendors. Having a group of potential suppliers gives you a level of insurance against stock shortages, poor service delivery, etc.

It’s important to keep in mind that some such websites forbid arbitrage in their terms and conditions. Be sure to read through the Ts and Cs before you start.

Question 6: How do I process returns?

While handling returns is a relatively straightforward process, it does require a fair amount of manual intervention. As a result, I recommend outsourcing the task to a freelance customer support agent on Upwork.com.

When one of your customers asks to return a broken or defective product, my support manager follows the following three-step process:

Step One: Contact the relevant supplier and relay the return request.

Step Two: Once you get the go-ahead from your supplier, approach your customer and ask him to post the product to your “warehouse”.

Step Three: Once the product has been returned, your supplier will refund you and you will, in turn, refund your customer.

On low-cost products, your supplier may well offer to ship a new product or issue a refund before the customer has even posted the unit.

Question 7: How long can I arbitrage?

Strictly speaking, arbitraging products through eBay or a similar product directory is a means to an end. While it can sustain a long-term business, it’s big strength is in helping you find products that sell. Once you know that your product is a winner, the next step is to establish a formal relationship with a professional drop shipping company.

Drop shipping is a supply chain management technique in which you, the retailer, don’t keep goods in stock. Instead, you pass your customer’s orders and shipping details to either the product’s manufacturer or a wholesaler. They, in turn, deliver the goods from their warehouse directly to your customer shipping address.

In other words, “drop shipping” is a formalised version of arbitrage. While eBay sellers are often willing to make a special arrangement for you, professional drop shippers are actively looking for partners to sell their products.

If you’re looking for a drop shipping partner, the below directories will give you a good starting point:

1. SaleHoo.com
2. WorldWideBrands.com

Question 8: What happens when the eBay seller realises that I’m reselling his products?

First of all, the fact that you’re reselling his product isn’t a secret. The reason I tell the supplier that “this is a gift” is to ensure that my subsequent instructions are understood.

In my experience, when your eBay seller realises that you are marketing and selling his products, he will do two things:

  1. Dance with joy.
  2. Add you to his VIP-customer list.

Question 9: What if the eBay seller will only ship to a confirmed PayPal address?

You can have up to nine “gift” addresses listed within your PayPal account. If your supplier will only ship to a listed PayPal address, you’ll need to add the address to your PayPal account, and then select it from the list during the eBay checkout process. Once the order has been processed, you may delete the address from PayPal.

Again, it is important to keep in mind that eBay will only be used to fulfil a small number of orders during the testing phase of your business. As such, I wouldn’t be overly concerned by the manual intervention that is required during this brief period.

Business Localisation

Question 10: I live in a third world country. Will this model work for me?

One of the great things about the Internet is that it removes geographic borders. You no longer need to sell to a particular group of people or earn a specific currency because of your physical location. Instead, you get to choose your markets and currencies.

As a South African citizen, this was one of the most revolutionary aspects of the business model. I started my first arbitrage business from my living room in Cape Town, but sold my products, in Dollars, to the far bigger and more affluent US market.

Not only was this far more profitable than selling locally, but it was also simpler to implement due to the culture and infrastructure of my target market. Since then, I have expanded by businesses and now sell to customers in the United States, Canada, the United Kingdon, Australia, New Zealand, and many more.

Question 11: Did you set up an offshore company and bank accounts?

Setting up an offshore company is seldom necessary. Provided you’re working with a payment processor that collects funds in your target currency, the jurisdiction in which you incorporate your business is of little consequence.

For example, though I sold my products to customers in the United States, my first company was incorporated in South Africa. Every month, I collected thousands of dollars using PayPal and then withdrew them directly to my South African bank account.

If you live in a third world country and would like to take advantage of a more stable or tax-friendly economy, you can set up an offshore company through OffshoreFormations.com.

It is, of course, critical that you consult with a legal advisor to ensure that you adhere to all applicable legal requirements.

Question 12: How do I set up a local address and phone number?

In my experience, having a presence in your target country doesn’t increase sales by much (if anything). If you feel that this is a necessary step for your business, I recommend holding off until you’ve built up a steady flow of sales and income.

The simplest way to set up a local presence is to arrange a virtual office with Regus.com. For a monthly fee, Regus will provide you with a local a phone number, answering service, physical address, and mail forwarding service.

Question 13: If I sell internationally, where should I pay tax?

Unfortunately, I am not a tax consultant and can’t legally give any tax related advice. If you want an accurate answer to this question, you need to talk to a registered professional.

In my experience, the rule of thumb is to pay tax in the country in which your company is registered. That said, because every country and company type comes with a unique set or laws, even this rule of thumb is often broken.

Marketing

Question 14: Do I optimise my websites for search engines?

“Search engine optimization (SEO) is the process of affecting the visibility of a website or a web page in a search engine’s unpaid results. This is often referred to as “natural,” organic,” or “earned” results.” ~ Wikipedia

For many, online marketing begins and ends with Search Engine Optimisation. While SEO can be a powerful long-term traffic source, it comes with three major problems:

1. It’s time-consuming
It can take a long time for your offer to rank on the first page of a Google, Yahoo!, Bing, or similar search. In the context of an arbitrage business, this poses a major problem.

When setting up a new business, you need the ability to test and adjust your offers ten times in ten days if necessary. Without an immediate traffic source, this is impossible.

2. It’s expensive
Because organic search engine traffic doesn’t come with a cost per click, many people mistakenly count SEO among their free traffic source. Not counting the cost of optimising your website in the first place, when SEO is used as the sole source of traffic, it carries one major expense; lost business.

My first AOB generated just under $12 000 in its first six weeks. Had I spent those first six weeks optimising my website, my effort would have cost me $12 000.

3. It’s out of control
I ran an online marketing agency for six years. During that time, I spoke with countless companies who had invested small fortunes into climbing the SEO ladder. In many cases, these companies lost their first-page rankings in one of Googles search algorithm changes and had to begin the climb once again.

While SEO does play a role in my businesses, I am not willing to stake their success against a traffic source that I don’t directly control. As such, my primary traffic sources include paid ads, email marketing, and social media referrals.

Other

Question 15: Is it possible to sell services using this model?

Absolutely. With enough creativity, it is possible to sell just about anything with this model. If your goal is income automation, however, I recommend selling products.

In general, selling services is more labour intensive than selling products. If you have a service to sell, I recommend thinking about how to convert that service into a product.

For example, if you plan to sell bookkeeping services, you could, instead, create a “Bookkeeping 101” course that teaches small business owners to manage their finances more effectively.

Question 16: How do I calculate shipping fees on my eCommerce store?

When it comes to charging your customers for shipping, you have two primary options: You could calculate shipping costs dynamically based on the package’s size, weight, and destination, or you could work with averages.

I’ve found that, while the former is offers greater precision, the latter is both simpler and more profitable.

I start requesting an average-shipping-cost estimate from my supplier. Once I have this, I pass the cost on to my client by adding the shipping fee to the product’s price, adding a fixed-rate shipping cost to the product on checkout, or splitting it with a combination of both.

For example, if I’m selling a $20 product that costs, on average, $5 to ship, I would proceed with one of the following options:

1. Sell the product for $25
2. Sell the product for $20 with a $5 shipping fee.
3. Sell the product for $22.50 with a $2.50 shipping fee.

Question 17: Where do I get product images?

If you are selling physical products, I recommend using images provided by your supplier. If you are still in the arbitrage phase of your business, you can take these pictures from your supplier’s product listing.

If you are selling information products, I recommend buying stock photography from a website such as iStockPhoto.com, GettyImages.com, Stock.Adobe.com, etc. and then applying them to one of the free templates available on PSDCovers.com

About The Author

My name is Ryan and I love adventure. I love it so much, in fact, that I spend around nine months out of every year traveling the world and crossing items off of my bucket list. The rest of my time is spent teaching others to do the same. Click here to find out how.

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75 Responses

  1. Eury

    Hello Ryan,

    Very inspiring story, I am a 25 years old French girl with the same aspiration for freedom and life ! I think sharing is really important, I hope one day I’ll help people like this if I successfully manage to write my own vagabond story :)
    Thank you again, all the best in your next projects.

    Reply
  2. Gabor

    Hi Ryan,

    My question would about advertising. I think i read from you that you put adverts on facebook and paying for them 30 euros per hundred click, and the ad goes to specific people you want to choose(basketball shoes for people who likes basketball for example.)
    Is it like this? Where could i get more info about it?
    Thank you for sharing your time,
    Have a nice day

    Reply
  3. Eva

    Hi Ryan,

    Thanks for sharing all this information! You’re awesome!
    My questions are:
    – How can I get inspired about what to sell? I know about Salehoo, but is there any free way? Apart from having a look at the “most selling” list in Amazon?
    – About creating the Facebook ad, you said that we must create “a good Facebook advert”. What do you consider as good? What should it include? I don’t know how to start…
    – Was it only using Facebook the way you advertised your cicling product? If so, it’s impressive how one simple ad can reach so many people! Do you recommend any other way?
    – If I am from Spain, should I consider first selling the product here? I mean, when Facebook asks me about my target, should I set Spanish people? And if it successes then expand it?

    Sorry it is quite a long list!!! Thanks in advanced :)
    Eva

    Reply
  4. Ignacio

    Hi Ryan,

    Doing some research on how to get a dropshipper for the product I want to sell, I found that most US dropshippers require you to have an stablished business in the US to work with you. Did you have this problem when you first stated working with the US? How did you solve that?

    Thanks in advance. Best regards, Ignacio.

    Reply
  5. Robert

    Hi Ryan,

    I setup a similar website as your bike safety store, and are on the verge of starting to promote my website. As you write in your case study, you only used facebook ads for this. I am selling really beautiful prints of original professional photographs of Amsterdam. Do you think that just promoting my webshop with facebook ads will do the trick and start the sales, or is there really more to it? It just sounds too easy for some reason.

    Looking forward to hear from you,

    Best,
    Robert

    Reply
  6. May

    Hi Ryan

    Hope this finds you well. Would you be able to tell me what products you used for your tripwire, core and continuity products for Buy Cycle Safety?

    Regards
    May

    Reply
  7. Nabeelah

    Hi Ryan,

    When you set up your cycling safety website, how did you create your Terms Of Use and Privacy Statement. I am not sure where to start with this. Do I formulate my own, and if so, how do I do this? Or is there a generic version that I could just copy and paste for my own.

    Thanks,
    Nabeelah

    Reply
  8. Iskra

    Hi Ryan, I have read your case study and I am fascinated. I have already few niche markets in mind but I have few questions, the same as Alisa, Armando and Isabella asked in the comments section.

    It will be awesome if you can answer them and add them in the FAQ section as I think a lot of people will be happy to understand the answers.

    Thank you for sharing your experience and I wish your family all the best!

    Reply
  9. Janice

    Hi, Ryan!

    Thank you for sharing all this info! I’m working on the research phase and read your case study. I was wondering how you went about asking the right questions to your friends and family when finding out that cycling safety was an issue. Are there any must-ask questions you would recommend? Thanks for your help!

    Reply
    • Ryan Sletcher

      Hey, Janice.

      I didn’t follow any particular formula. I simply asked them what their biggest concerns and desires were when cycling. I also did a fair amount of online research.

      Reply
  10. Alisa

    Hi Ryan!

    When you first created your cycling website, did you only have the one item (the tail light) for sale?

    Thanks for all your help!

    Reply
    • Ryan Sletcher

      Hi, Alisa.

      Yes. We started with one product and almost no other content. Our site was truly terrible for the first couple of months :)

      Reply
      • vance

        Hi Ryan,

        I was wondering how many products you had when you finally had your first $1000 day? At what point did you decide to add more products?And how did you choose them?

        I see that there are not many products on the buy cycle safety site right now. And all the products seem to be on sale? Did you have more products before? Are products on sale because you are phasing out this business? Or is that part of your marketing strategy? Is keeping the product line small and simple part of your strategy?

        Thanks in advance for your answers!

        Vance

  11. Elena

    Hi Ryan,

    Thank you very much for all the information. It is truly priceless.

    I have a question in regards to PayPal. How do you manage to withdraw money from PayPal in South Africa? I live in Bloemfontein. I was checking all the info, and it looks like if you live in South Africa you can only spend money from south Africa…

    Thank you

    Reply
    • Jan

      FNB offers the service to withdraw from anywhere in the world via your PayPal account.

      Reply
    • Ryan Sletcher

      Hi, Elena.

      You’re welcome!

      You should be able to withdraw money from PayPal to your FNB account. Once the money in in your bank account, you can spend it globally.

      Reply
  12. Claudio

    Hi, Ryan!

    This is my second question (the other just vanished and was never shown in your page).

    Congrats for all your smart work and thanks for these incredible tips for all the beginners like me.

    My questions are about dropshipping. I’ve been reading these possible dropshippers will want us to show them some prove we are a legitimate business. A wholesaler will do the same, as I understand. So,
    Question 1 – How can one prove he has a legitimate business if he has just started, if he has just opened his shopify store? I know you advise to sell on ebay and once on the 20 sales one should contact the supplier directly. Even so, I will still have the same problem, right?

    Question 2- On contacting a possible dropshipper, what should I tell him? I mean, honesty will kill my chances, no? Like “Hi, I will go to open an online store and I would like to sell your products, one by one”. Why will they drop their usual “minimum order” to me – a guy whose business has not even started?

    Thank you very much for your help.

    Reply
    • Ryan Sletcher

      Hi, Claudio.

      Sorry about the disappearance of your last question. I’ve never heard of that happening before.

      1. You simply need to have a conversation with the drop shipper to find out what they require from their buyers. We’ve never had a scenario in which a seller was unwilling to work with us due to the youth of our business.

      2. You don’t need to buy in bulk from a drop shipper; this is one of the advantages of working with them rather than importing inventory for yourself. Again, I recommend opening having a conversation with the supplier to discuss what they require of you.

      Reply
  13. Ali Rowland

    Hi, Ryan.

    I am almost ready to launch my first website. I’ve gone through all your info and it’s helped so much with all the beginning steps. Thank you!

    I do however have a couple of questions which I haven’t managed to figure out on my own:

    1. How do you get info for your blogs? Is it written by you or collated from other sources?

    2. How do you source your digital products that you have mentioned?

    3. Where do you get your images for things like your logo and facebook page cover photo? Did you just use google images, or were they photo’s/images you took/created yourself? I don’t want to end up getting into legal problems for using an image I was not allowed to do so.

    I would like to make my site as helpful and informative for my customers as I can and agree with you that the best way to do this is to add something to their lives with it.

    I would really appreciate any advice you can give.

    Ali

    Reply
    • Ryan Sletcher

      Hi, Ali.

      1. If I know a lot about the topic, I’ll research and write many of my own blog posts. If I’m unsure about the topic, I’ll hire a freelance writer to research and write posts on my behalf.

      2. Information products are basically premium blog articles; they generally come in the form of text articles, video clips, and audio recordings. As such, the answer is similar to the one above.

      If I know a lot about the topic, I’ll research and create my own information products. If I’m unsure about the topic, I’ll hire a freelance writer, video producer, voiceover artist, etc. to research and create the products on my behalf.

      3. I buy all of my images from royalty free image websites. You should be able to purchase a great image for just a couple of dollars on websites such as Adobe Images, Getty Images, and Shutter Stock.

      Reply
    • Flavia

      Hi, Ali.

      I see you are ready to became a professional vagabond. How it is going? I am a beginner too , so some help it will be great

      Thanks and Good Luck!!

      Reply
  14. Armando

    Hi, Ryan.

    Thanks so much for the useful info! I am excited to start my online business but do have one question that I haven’t seen here: How did you manage to sell the initial product on your site without the site looking fake or not trustworthy having only one product on it?

    Thanks!

    Armando

    Reply
    • Ryan Sletcher

      Hi, Armando.

      We created a good Facebook advert and a great product description page. Believe it or not, the lack of content on the rest of the site didn’t seem to make much of a difference to our conversion rate.

      Reply
      • jisela

        Hello Ryan,
        Thanks for your time and postings. I have a question related the shipping. You mentioned we can use differents suppliers to sell the products we offer, but that will mean different shipments will be made. I guess customer will assume he will have to pay only one shipment per order as he believes we are the real sellers. How do you solve this point?
        thanks in advance,

  15. Jane

    Hi Ryan,

    I would like to sell digital products, but does udemy allow someone to resell a particular course over and over again? And make profit on it?

    Thanks in advance.

    Reply
    • Ryan Sletcher

      Hi, Jane.

      If you want to sell information products, you’ll have to create them yourself or hire someone to create them for you. It isn’t always easy to establish a reseller agreement when selling information. More often than not, you’ll end up with an affiliate arrangement, which isn’t nearly as profitable.

      Reply
  16. Greg

    Hi, Ryan.

    This is great info and a great idea, thanks for sharing so much of your experience. My question is more of a legal one. If you are selling a product through Shopify or similar, how are you protected if it is a faulty product or there is a frivolous lawsuit? I’m sure this was a concern of yours, dealing with cycle safety. If there is an issue with the product, the customer will obviously come to you, and I’m not sure how you would be protected from them going after your personal assets. When do you become an actual business instead of just a guy selling something online? Thanks a lot.

    Reply
    • Ryan Sletcher

      Hi, Greg.

      Great question!

      I am a business owner, so I begin trading as a company from day one. I recommend setting up a simple company as soon as possible as a form of protection.

      Also, you need to include a Terms of Service which includes a basic disclaimer. This will further protect you from frivolous lawsuits.

      Reply
  17. Tanya Korteling

    Hi Ryan;

    These FAQs are really useful – however I also have thhe same questions as Mike and Nathalie have posted below on 24th April.

    It would be great if you could answer these please or add to your FAQs as I think the answers would be very helpful for many of people.

    Thanks in advance
    Tanya

    Reply
    • Ryan Sletcher

      Hi, Tanya.

      I just responded to Mike and Nathalie’s question in the blog post above. Let me know if my answers make sense :)

      Reply
  18. Isabella

    Hi,

    I think I read all your blog articles and comments and I have a few questions for which I didn’t find the answer.

    For both arbitrage and drop shipper how do you sent the paper bill to the customer?
    For example, you said in one of your articles that at the beginning to win the manufacturer trust you manually place orders on ebay and ask to be sent as a gift to the customer. But then how do you sent the billing to the customer? Do you send it only by email?

    And if the manufacturer sends the product, isn’t it written on the package the contact details of the manufacturer? (since he is the sender? )

    Reply
  19. Paul

    Hi Ryan,
    Love your site, very informative.
    I’m working my way through setting up a similar business and I have one small question; for your first business, did you need to set up a Facebook business page before you could place your ad?

    Reply
    • Ryan Sletcher

      Hi, Paul.

      Yes, you need to have a Facebook Business Page before you can use Facebook Ads. It takes less than five minutes to set up, so it shouldn’t be too much of a problem.

      Reply
  20. kelly

    Hi Ryan,

    I read some stories from people saying one thing to avoid is dropshipping website who charge a sign up/annual fee, but both the websites you recommend have such fees? This cost is also not included in your response about how much you’d need to get started, or mentioned anywhere in your article above, so are the fees a new thing?

    Thanks

    Reply
    • Ryan Sletcher

      Hi, Kelly.

      If given the option, I almost always choose a paid service over a free one. As a general rule, I’ve found that providers who charge for their services can deliver a greater degree of quality and professionalism than those who don’t.

      The fees are so nominal that I’ve never thought to mention them in the past. If I’m not mistaken, SaleHoo and WorldWideBrands charge $80 and $300 respectively.

      Reply
  21. Lily

    Hi Ryan

    This is really a great website, thanks for sharing all your expertise.
    Setting up my own e-commerce is also something I consider, as I am pretty fed up with the corporate world.
    I wanted to ask you a question which is not really related to e-commerce but more to how you organise your earnings for health care, emergency cases and the later life, when you are not able to work anymore.
    I am a security seeking person, so for me it is quite important to have proper healthcare (you never know), also I’d like to have some cash in the pot for emergency cases. When you are older, there will be a point of time when you can not sustain yourself financially anymore, so you need to live your savings.

    Not sure if you are thinking that far, but for me the above are quite essential things to think through before making this step forward. What are your recommendations regarding these?

    Many thanks. L

    Reply
  22. Mike

    Hi, Ryan. How are you and Amy doing?

    Thanks for putting up all that information on your website, we (Mike and Nathalie) have been looking into it for a while now.
    At the moment we have been travelling around for 11 months, currently we are living in Australia.

    We really love what we are doing and don’t want it to end, so working our way towards an automated income might be THE solution for us as it has been for many others.

    We’ve been brainstorming a lot and have been doing some research about what’s possible and what’s not. Since we are struggling with a few important things, we hope you can help us out with them…

    Our first step in finding a niche and the products we’d like to “sell” has been finalised. Now we are in a test phase, but we keep running into the same problem.

    1) Your tip of manually recreating the order on ebay or another platform and sending it to the actual buyer as a gift sounds great. Unfortunately, lots of ebay sellers only want to ship orders to confirmed ebay and/or paypal addresses.

    We have a confirmed Belgium address linked to our PayPal and eBay accounts, but does this mean we cannot have items shipped to other addresses (our clients) besides our confirmed Belgium address?

    Plus we are living in Australia (travelling around in a van) so we can not choose a residential address in Australia yet. How did you bypass this problem, since you were living in South Africa, sending “gifts” to the USA,?

    2) Let’s say my chosen niche works great and I have to recreate lots of manual orders with a certain seller. I can run into two different problems that can stop me from sending my orders out to the client:

    If he pays attention, he will certainly know after 5 or 10 orders that I am not sending “gifts” anymore, but actually making money with a business (dropshipping). What if he refuses to send it as a gift to another address?

    And how do you know that the supplier of your choosing has the right amount of stock available without getting in touch with them about your intentions? I understand you can not make a wholesale deal from the start without proving your worth, but it is much worse to lose credibility with customers by having to cancel their orders.

    Just wanted to know if you ran into some of these or other problems with your supplier at the beginning?

    Thank you very much for taking the time to respond our questions!

    All the best,
    Mike and Nathalie

    Reply
    • Ryan Sletcher

      Hi, Mike and Nathalie.

      Thanks for your message! I have answered your first two questions in the blog post above.

      To conduct a test, you need around ten units of stock. Fortunately, the product listing page will tell you if the supplier meets this requirement.

      If you want to know the exact number of available units, there is a way to get this information from the product listing page itself.

      1. Navigate to the relevant product listing page.

      2. If the product listing says “more than ten available,” enter a large number into the order quantity text box.

      3. If you get a message stating “Please enter a lower number,” you know that the supplier has fewer units available.

      4. If you don’t get the above message, you know that the supplier has more units available.

      5. Continue adjusting the quantity until you know the exact number of units that the seller has in stock.

      Reply
  23. Marija Brdjovic

    Hello Ryan,

    Great idea you infected us with :) thanks for details, tutorials and help!
    I still have some doubts about how it works. For example, do you have to arrange with the seller about the web-page you would open on Shopify, or once he gives you his approval to make it it’s up to you to set it up as you like?
    As well, is the seller the one who you will decide about the new price for the product or this will be just your calculation, that will depend on costs and shipping for example?

    Thanks in advance,
    Marija

    Reply
  24. Wesley

    Thanks, Ryan!

    I’m extremely excited to jump into this great direction soon. I wanted to ask you: How exactly did you go about marketing/advertising so well at the very start of your Buy Cycle Safety business that you were able to bring in $1000/day? And as well, how much did you spend on marketing/advertising?

    Thanks for everything!
    Wesley

    Reply
    • Ryan Sletcher

      Hi, Wesley.

      I just answered your question in the above post. Please take a look at the new “Marketing” section.

      Reply
  25. Mitra

    Hi Ryan,

    Many thanks for sharing your experiences with the world. Amazing that you put so much efforts to explain this in details. I am also so excited to try this out and been searching and thinking about this for a couple days now and have exact the same question as Jackie. How did you provide photos of the product on your website? Can you use the exact same photo from your supplier and do you need a permission to do so?

    Many thanks and looking forward to hearing from you soon.
    Mitra

    Reply
    • Ryan Sletcher

      Hi, Mitra.

      Thanks for your question and enthusiasm! I have answered your question in the above post.

      Good luck with the launch!

      Reply
  26. Keegan

    Hi Ryan

    I am working with an information productI have decided on all my offers and have got the first one being made now.

    How long should my core offer be and what can I price it? Because my micro offer is say 20 pages and say $10, this means if I want to make big profit my core offer needs to be considerably bigger but not what I can get away with. Because I don’t want my core offer to be too expensive to create. Also a similar ebook is on Amazon for $15 and is 350 pages, that would be a better deal than mine?

    Reply
  27. Milla

    Hi Ryan,

    I missed out on your academy offer, so I am starting up my website with blog and shop as cheaply as possible, using WordPress, WooCommerce, Ordoro, etc, until your next intake of “students.”

    My question is: when advertising someone else’s product on my site, how do I get hold of images, descriptions etc? Can I just right click, save image, directly from their site, and copy and paste the descriptions into the wordpress “add new product” feilds? And also, since I am selling first and buying second, how do I prevent my customers buying items which are actually out of stock when I go to purchase them from my supplier? Is there some way to get alerts from suppliers when their products that I sell are out of stock so I can label them as such on my site?

    Thanks for all the great info here.

    Reply
    • Ryan Sletcher

      Hi, Milla.

      I have added an answer to your question regarding text and images.

      Since arbitrage is a temporary solution, you’ll need to track inventory manually. See “How do I identify a reliable eBay supplier?” above for more details.

      As soon as you see that your product will sell, you need to move to drop shipping.

      Reply
  28. Nabeelah

    Hi Ryan,

    When selling digital products, besides the information I pay for on websites like udemy, etc.
    Do I need to create my own e-books or information. What would the process be with regards to sharing information collated from various resources and the legal aspects that come with it?

    Reply
    • Ryan Sletcher

      Hi, Nabeelah.

      You would need to either create the products yourself or outsource their creation to a freelancer using a platform like upwork.com.

      You can use as many sources as necessary to gain the expertise necessary to create an information product, but you can’t resell someone else’s work.

      Reply
  29. Jackie

    Hi Ryan

    Thanks for making such an awesome site with all this useful info! I just wanted to ask a quick question: where do you get your pictures for the products you sell? Do you use the pictures from your suppliers? And do you need permission for that? Also do you test out all of your products?

    I’m hoping to start doing this soon!

    Reply
    • Ryan Sletcher

      Hi, Jackie.

      I had added a reply to your image question in the above blog post.

      Yes, I test every product before investing money into manufacture or import.

      Reply
  30. Rouan

    Hello, Ryan.

    Thank you for all the great info. I have a couple of questions: Firstly, would you sell physical products first or create your own info products and sell those? Secondly, would you at all use Amazon fulfilled by Amazon using contract manufacturers and white labeling instead of arbitrage sites like Amazon. Thirdly, what amount of money would you need to start selling a good product?

    Reply
    • Ryan Sletcher

      Hi, Rouan.

      1. All of my new businesses sell information products. I recommend going the info-product route if possible.

      2. I prefer using drop shipping as my long term fulfilment model. It is easier and more cost-effective than importing and warehousing products yourself.

      3. To get started, you need $79 per month for your website and $5 per advertising test. You can test as often as once per day or as seldom as once per week. It all depends on your budget!

      Reply
  31. Stefano

    Hi Ryan,

    One step you don’t talk about is about taxation.

    How does it work in these cases? Do I have to pay taxes for every online shop I open? How do I do it if I am in another country?

    Thank you,
    Stefano

    Reply
    • Ryan Sletcher

      Hi, Stefano.

      I mention tax briefly in the above FAQ post. Unfortunately, because I am not a tax consultant, I am not legally permitted to give any further details.

      Reply
  32. Lenny

    Hey Ryan

    Great post! Answered lots of my questions. Im quite excited to try this out. Just two quick questions:

    I havnt started a shopify store yet, but im wondering how you get you website to reflect the correct shipping costs that correspond to the suppliers shipping costs on eBay?

    Then Facebook store or stand alone website? What are your thoughts?

    Thanks so much for the help!

    Lenny

    Reply
    • Ryan Sletcher

      Hi, Lenny.

      Thanks for the question. I have added my reply to the FAQ.

      Reply
  33. Mark

    Hi Ryan

    Thanks for a great post.

    A quick question about payment to suppliers. Each time an order is placed and confirmation sent to the supplier, I understand the item is shipped directly to the client. When and how is payment made to the supplier and can this be automated on shopify?

    All the best

    Mark

    Reply
    • Ryan Sletcher

      Hi, Mark.

      During the “Arbitrage” phase, you collect the money and then manually recreate the order on Ebay as described in the case study. Once you know that your product selection will work, you set up a drop shipping relationship with a wholesaler of SaleHoo.com or WorldwideBrands.com. At this point, you pay the supplier on a daily, weekly, or monthly basis.

      Reply
      • Jaques

        Hi, Ryan.

        I noticed that many of the drop-shipping companies ask for a resellers license? Is this something I need to apply for and if so how would you do that? Or is there a way around this being a non-US citizen?

  34. Ilse

    Hi Ryan,

    I’ll be attending your workshop in Cape Town in March and am really keen to get started with an online business.

    One of my concerns with using ebay etc. is not knowing how or where the products are made (and who is maybe being exploited during the production cycle). What would you recommend with regards to this? Is it easy enough to find a supplier on ebay or etsy and research the company’s policy from there? Any advice?

    Thanks,
    Ilse

    Reply
    • Ryan Sletcher

      Hi, Ilse.

      I look forward to seeing you at the workshop :)

      Unfortunately, this will be an issue no matter where you find your supplier. The only solution that I see to this problem is to start by conducting loads of research.

      Reply
  35. Mark

    Hi Ryan I think your a star and a great inspiration. Thanks for the advice, I’m gonna get started with my website first and might pull on your strings if I get seriously stuck. Your amazing for helping others and trying to help us all succeed. Keep it up and all the best. PS: enjoy your holiday. Thanks Mark

    Reply
    • Ryan Sletcher

      You’re welcome, Mark! I’m glad that I got a chance to play a part in your journey.

      Reply
  36. Liz

    Hi Ryan, is there any reason you only mention Ebay and not Amazon sellers as an option? I have something specific in mind and I can find an amazon seller for it, not an ebay seller. Is it the same thing?

    Reply
    • Ryan Sletcher

      Hi, Liz.

      Technically speaking, “arbitrage” is against Amazon’s terms and conditions. I have added some additional details to the FAQ. See “Is eBay the only viable source of arbitrage suppliers?” for more.

      Reply
      • Wesley

        Hi!

        Somewhat alone these same lines… How do I know whether or not an Ebay seller allows Arbitrage? For most shops I’m looking into, I’m having trouble finding any clear terms addressing this type of arrangement. Any advice as to the best way to know and find out for sure if it is acceptable?

        Have you ever run into this issue and had to either back off, change your plans, or negotiate an unsavory situation/problem?

        Thanks for all you do!
        Wesley

  37. Beatrice - Mademoiselle Nomad

    Such an informative post (like all those related to helping others set up an online business). Thanks Ryan, this gave me great in-depth insight into how this whole thing actually works and it doesn’t seem as daunting as I thought it would be. I definitely want to give it a go! :)

    Reply
    • Ryan Sletcher

      Thanks for the encouraging message, Beatrice.

      Good luck with your next steps!

      Reply
  38. Laetitia

    Hi Ryan

    The shopify store is an online store to sell goods/products. How do I set up a website to sell a service?

    Reply
    • Ryan Sletcher

      Hi, Laetitia.

      While it is possible, I don’t recommend it due to the fact that services don’t lend themselves to automation.

      Check out “Is it possible to sell services using this model?” for more.

      Reply
  39. Graeme

    Hey Ryan

    I’m sitting here in my Living room in Cape Town, setting up my future vagabonding funding business and have a question 😉

    I see your physical address for Buy Cylcle Safety is in the States, is that because you later incorporated the company abroad with OffshorFormations247.com

    Reply
    • Ryan Sletcher

      Hi, Graeme.

      BuyCycleSafety remained a South African business, but that didn’t stop me from setting up a presence in the United States.

      Check out “How do I set up a local address and phone number?” for more.

      Reply
  40. Shaun

    Hi Ryan, hope you are well. How did you set up the overseas business bank accounts when trading in other currencies and country’s? Did you have to register the business in the country that you were doing business?

    Kind Regards

    Shaun

    Reply

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