From Sun Tzu “to subdue the enemy without fighting is the acme of skill”, to Bruce Lee “the art of fighting, without fighting”, I heard of this concept several time during the past years.
You can apply it to many things in life, and today I’d like to use it to make a simple point, business related.
There is an easy pattern to observe when there is a new “Gold Rush”:
1) A few people discover something that makes money.
They are the first and exploit what they discover, making a ton of money
2) More people hear about it and dive in successfully.
They potentially make good money from it
3) The masses who are scared of missing out all try to catch up and dive in too.
They fail, run away and burst the expectation bubble
We saw this 170 years ago with the gold rush.
We saw it last year with crypto currencies.
And we see it this year with drop shipping.
“Is drop shipping dead?” is the most frequent topic I have seen on the mainstream eCommerce facebook groups for the past moths.
Now, the reason why things follow this schema is simple.
The more people fight to get the juice from the same fruit, the less juice there is for each person fighting to squeeze the fruit.
The more people were digging to find gold, the less supply there was per person digging.
The more cryptos became trending, the lower the potential gain became for those arriving late at the party.
The more people are drop shipping the same products from AliExpress in China to USA, the harder it gets to sell from your store to the same pool of customers who see the ads of all your competitors.
Short answer: no.
However, you need to be smart.
You need to avoid the war in order to win it.
Last year, when 90% of the drop shippers were focused on selling their products to the US market, we found ourselves successful after starting to sell our products to the French market, which people were ignoring because it was “too small”.
This year, I could probably name 25 people in my own circle who are all finally selling to the French market.
Which is precisely why, if I were to do drop shipping again, I would focus on an even less popular market, such as Denmark, or Norway (a friend of mine is currently killing in in Norway with x10 ROAS when others keep complaining to have x2 ROAS max on the US market).
The people I know who are killing it with cryptos this year aren’t the ones stacking up their ETH and BTC anymore, but the one trading, shorting and educating themselves about smaller cryptos with real applications.
It was the same pattern during the gold rush, when those who ended up making most of the money were those who “sold shovels and pickaxes”. Or later on, those who transformed the gold into jewellery.
You can’t win if you fight with everyone else in the same battle (except if you control the battle, but this is another story).
You need to either be the first to discover your own gold rush,
or to use a current gold rush and be the one “selling shovels and pickaxes”.
An easy example with drop shipping is the proliferation of “ecom gurus” who suddenly popped up from nowhere on facebook and youtube, pushing videos of them in their rented lambos and villas to convince the greedy miners that they know the secret to their financial freedom and the perfect dream life.
Exploit an existing gold rush, change a variant, and be one of the first ones exploiting it.
For drop shipping, the most obvious way to do this is to focus in any other of the 200 countries there is in the World and penetrate small markets nobody cares about.
You could also sell products that are not from AliExpress or any of the other mainstream suppliers, so you would be selling products no one else is selling.
Or you could even create your own products, there’s no limit.
Try it out, and see how simpler life is when you aren’t in the middle of the battlefield trying to outperform everyone, decreasing your margins, your results and your amount of sleep.
You can apply this concept to almost any market or business.
Keep it in mind: “the best way to win the war, is to avoid the war.”
Have a great day,