Digital Social Hour - Future of Dropshipping, Using AI with eCommerce & Scaling AutoDS | Lior Pozin DSH #315

Episode Date: February 24, 2024

Lior Pozin comes on the Digital Social Hour to discuss how he scaled his dropshipping company AutoDS, where he see's the future of dropshipping and how he is using AI. APPLY TO BE ON THE PODCAST: https://forms.gle/qXvENTeurx7Xn8Ci9 BUSINESS INQUIRIES/SPONSORS: [e-mail] SPONSORS: Opus Pro: https://www.opus.pro/?via=DSH Deposyt Payment Processing: https://www.deposyt.com/seankelly Factor: Use code "DSH50" for 50% off your order at https://www.factormeals.com/dsh50 Digital Social Hour works with participants in sponsored media and stays compliant with Federal Communications Commission (FCC) regulations regarding sponsored media. #ad LISTEN ON: Apple Podcasts: https://podcasts.apple.com/us/podcast/digital-social-hour/id1676846015 Spotify: https://open.spotify.com/show/5Jn7LXarRlI8Hc0GtTn759 Sean Kelly Instagram: https://www.instagram.com/seanmikekelly/ Learn more about your ad choices. Visit megaphone.fm/adchoices Learn more about your ad choices. Visit podcastchoices.com/adchoices

Our largest customer has 1.3 million products. Holy shit. How? I can't even picture that. Just dropshipping from Amazon to eBay. He would take over the whole platform at that many products. Anything you can Google, he has. Wherever you guys are watching this show,

I would truly appreciate it if you follow or subscribe. It helps a lot with the algorithm. It helps us get bigger and better guests, and it helps us grow the team. Truly means a lot. Thank you guys for supporting, and here with the algorithm. It helps us get bigger and better guests, and it helps us grow the team. Truly means a lot. Thank you guys for supporting, and here's the episode. Ladies and gentlemen, I'm here today with my co-host, Wayne Lewis, and our guest today, Lior Pazin.

What up? Hey, I'm good. How are you? Good. All the way from Israel. Yeah. Wow. What was that like? 13 hours. 13 hours. Damn. Direct flight to Miami,

and then from Miami to here for the F1 and for this show. Nice. And it's pretty hectic in Israel right now, right? Yeah, it is.

But it will be good. I'd love to talk about your company AutoDS, the dropshipping space, where you see it going and how you

got started. Yeah, so I started with dropshipping and e-commerce 14 years ago. Currently, I'm 28, so I was 14. Wow. I started as a dropshipper for dropshipping from Chinese sites to eBay. It's kind of retail arbitrage. Seven years ago, I decided to develop a software for myself that will just automate my own dropshipping businesses from Amazon to eBay.

Again, written dropshipping arbitrage. So that's how I basically combined both skins that I've done all my life, which is development and e-commerce. I went to some conferences in Israel. I showed the software. Back then, it was just a black screen that did everything automatically and people really liked it so that's how we got our first beta testers since then we currently were over 100 employees in AutoDS AutoDS is an all-in-one e-commerce dropshipping platform we automate everything from side to side from product finding to

inventory management, order fulfillment for multiple dropshipping selling channels like eBay, Amazon, Shopify, Wix, Facebook Marketplace, and some TikTok shops. So yeah, that's what we're doing. MARK MANDELMANN, Damn, 100 employees dropshipping. I assume the space was kind of dying off, because I used to dropship and I left the space.

But you're saying it's still increasing right yeah so basically it always changes so back then it was Amazon to eBay now it should be a bit more creative if you do drop shipping to eBay for example but if you check Google Trends or any search analytics sites like SEMrush or any others, you can see that consistent growth of the dropshipping space. So it always involves, it always changes, the marketing strategies are changing, the products you sell are changing, you should become more quality seller today. So we need to check what you're actually shipping to your customers. You can't just ship random products.

It should be more creative with marketing. So it means that more people are doing it today, but still much like you have more competition, but you also have more people who buy online. So I'll say even more than that. We see today large brands that adopting dropshipping as part of their business model. Yeah, but what actually style or concept of dropshipping? Because I know, like I was telling you, some merchants don't like the concept of dropshipping because there's no quality control. So they more so like you to have the product on hand. So there's a seven to 10 day shipping and you can do quality control, make sure the

sizing is right. Or is there a certain style of dropshipping? Or has this always been the same, just going straight from manufacturer to customer? So dropshippers still don't see their products. But what we do for them now is that we do quality insurance in China, in our warehouses. So before we ship the product to the end consumer, it's called two-step dropshipping. Basically, we ship it from the supplier to our warehouse, we do the quality insurance, and then we send it to the end consumer.

See, it's a different concept. See, I told you. Wow. It's totally, it's a different concept, bro. That's not straight from China, straight to customers. Yeah. That's smart because there is quality issues in China sometimes. Yes. And the other benefit of it is that it also helps you to brand your products. So within this one day of shipping in China, it adds to the shipping overall. We also brand the products.

We brand the package. We can put thank you card inside. Yeah, that's awesome. So would that be still considered dropshipping though? It is because you're still… Shout out to the Science of Scaling podcast hosted by Mark Roberge. It's brought to you by the HubSpot Podcast Network,

the audio destination for business professionals. Each week, Mark, founding CRO at HubSpot CRO and senior lecturer at Harvard Business School, interviews some of the most successful sales leaders in tech to learn the secrets, strategies, and tactics to scaling company growth. He recently had on the head of sales from open ai and that was a very interesting episode on the future of ai listen to the science of scaling wherever you get your podcast today you're still not seeing the product no he there are they are seeing it we see he's not the seller though but not the seller seller. Oh, the seller's not seen it. The dropshipper never touched the product.

Oh, okay. So that's one way to do it. The other way to do it is that we have our own, we call them private suppliers. It's suppliers that connect to AutoDS directly. We check them one by one. And if we see that their statistics are not good enough, we just block them in our

system. Wow. So we vet them manually. Each supplier that the joints to AutoDS. And that's how we ensure that our dropshippers provide the best customer experience to their buyers. And this is why you asked me before about payment providers. This is why payment providers don't have problems with these dropshippers. We monitor their chargebacks. We monitor the speed of their shipping.

We monitor everything. How many stores are using your software right now? Over 50,000. Holy crap. This is like the paying customers. Some of them have multiple stores. Wow. And you self-funded this?

Yeah, we are 100% bootstrapped. You don't want to raise money? We don't want. We keep growing, however, doubling each year. It started as a business for myself. I didn't even think that it will go that big. I kind of understood it in some part. Now we want to go to IPO one day.

Wow. But initially it started as a tool for myself. This is why we didn't raise money. And when I already understood how it all works and investors and everything like that, we already didn't need it. You don't need money now, you just need strategic partners. Initially I started without connections, without anything. So this is why I was just a developer, dropshipper.

How did you grow? How are you doubling every year? Are you running a lot of paid ads towards this product? was just a developer or dropshipper. That's how it started. So how did you grow? How are you doubling every year? Are you running a lot of paid ads towards this product? No, I think that if you, that's what I believe, that if you focus on a great product, the customers will come. This is why we are the number one dropshipping software right now because we keep focusing always on product.

We keep hiring developers. We keep always evolving. It's something that we see that a lot of our competitors during the way just stuck in the basic product that they created. We always kept involving, always kept going to more markets. And we see now over 25% of our customers are coming from referral friend, not paid, just we see on the how did you Hear About Us that they say my friend recommended me about Autodeals, which is crazy. It's free marketing just because you have a good product. So that's one of the methods. The other one is SEO. We have a lot of content,

over 100,000 subscribers on our YouTube channel, over a thousand videos blog posts every week every like few blog posts every week and so that's how we bring in our customers amazing man what's the most you've seen someone make with drop shipping um i would say 100k a month wow that's our largest dropshipper right now nice that's not bad That's realistic. I feel like most people gas their numbers. Of course. Always gas. That's not bad. What would you say, as far as kids,

what's the youngest age that you've seen get into the e-commerce space and dropship? Like our youngest customer? Yeah, our youngest customer. I know only about the VIP customers, like people who really became successful with dropshipping, but to me I've seen 15 or 16. Wow, you started at 14 though, so you're technically the youngest. How did you

find out about it 14 years ago? That's so early. It was an accident. I was looking to buy a cell phone online, so I went to some Chinese sites and I was looking for the brand that I wanted to buy and then I said okay I want to buy it on eBay because I trust eBay and I searched for the same model in on eBay and I saw the price differences it was like 40 dollars same product same picture same title same everything so I just. I just copied it manually from the site. It's called tinydeal.com now. It doesn't exist anymore. But I copied it from that site to eBay.

And I got my first sale within three hours for $40 in profit when I was 14 years old. That's a lot at that age, man. He was addicted every day. Yeah, it was amazing. What do you think about TikTok shop? There's a lot of hype around it. Do you think it's going to stick yeah it really works um you need to be a bit

creative uh and and then you can like the good part about tiktok is people have really an overnight success they have good creative and boom and they just get a lot of sales yeah i've never seen an opportunity like we have now not about tiktok shops but about tiktok in general as organic traffic just amazing insane yeah yeah some of our videos get millions of views all organic yeah tiktok and then some guys that we know from tiktok one guy says he's doing like 75k a day or something like that wow yeah and and the good part of it is that people are multiplying their accounts so one account works for them they just create 10 accounts right and a lot of free

organic traffic yeah it feels like the good old days of facebook ads back in like 2016 remember those days it's too regulated bro facebook uh they'll take your algorithm it will they'll shadow ban your ad and still take the 10 000 a month you won't see any ris on them it just got more expensive yeah more competitive it works more for high ticket products yeah you need margin you can't do that remember the free plus shipping days those are the days you can make money just launching free products literally one of the opportunities now with drop shipping is people who are doing drop shipping to facebook marketplace yeah oh yeah, yeah.

I heard about it. It's also free traffic. It's a marketplace. You don't need to bring any traffic. You just need good keywords, good pictures, and basically that's it. Yeah, my boy sells cars on there. On Facebook Marketplace? That's all he does.

People actually buy on there? Yes, all the time. Wow. All the time. So he just flips them? About five to six cars a week. Wow. Yeah.

That's insane. I guess you could buy it if you know how to fix them up a bit, fix it and then sell it. He has a broker license so he goes and gets a car from the auction and just sells it double.

For double? Yeah, he'll buy it for three, sell it for six, buy it for four, sell it for eight. Wow, that's cool. Drop shipping cars. Or no, he's not drop shipping though.

He's just flipping, yeah. But on Facebook Marketplace it's a good space. Wow. So have you been banned on Facebook ads before? No.

Wow. That's the first time I've heard that. We got banned but we got recovered when we proved that we are a real company.

Yeah, they'll ban your IP. Facebook banned your IP. We are a software in there. No, I meant when you were

dropshipping. Oh, my career was dropshipping to eBay. So it's more written dropshipping where how it works is completely different than Shopify. This is why it was also complicated to create a software that works for both marketplaces and private sites. Because how it works for dropshipping to eBay or Amazon is that you post tens of thousands of products

and something just works. So you're bulk uploading just thousands of items and then one of them will... And again, you create multiple stores, tens of thousands of products. Our largest customer has 1.3 million products. Holy crap.

1.3 million products? I can't even picture that. Just dropshipping from Amazon to eBay. He just bulk uploads them. What? He takes entire niches. That would seem like he would take over the whole platform at that many products. Are you interested in coming on the Digital Social Hour podcast as a guest?

Well, click the application link below in the description of this video. We are always looking for cool stories, cool entrepreneurs to talk to you about business and life. Click the application link below and here's the episode, guys. Anything you can Google, he has. Or anything you look up, he has, right? Yeah, so Amazon has it.

Remote? Got it. His store has it. Yeah, so we, actually what we do is that we scan all products on Amazon. Yeah. And when we see that something is trending, we offer it to our customers to import to their stores. Wow.

That's smart. So your AI can detect if it's a trending product? Yeah. And then that goes straight to eBay. Yeah. And then they can just say, hey, I want 10,000 products. Boom. It's in their store.

I might need that just for like Christmas shopping, honestly. Yeah. Just to buy some good gifts. That's pretty cool. Yeah. Yeah. Because I'm about to go hard this Black Friday. Oh, you are? Yeah.

That's when I buy all my Christmas gifts. Because you save like 40%. Yeah. It depends on what you buy, though. Yeah. I'm already done with Christmas shopping. You serious? Damn, you plan that shit early.

Yeah, I start in September. Wow. Yeah. That's hella early, bro. Yeah. Why do you do it so early? It makes me anxious. Really? Yeah. So I just get it out the bro yeah why do you do it so early it makes me anxious really yeah so i just get it when you do your christmas shopping now yeah yeah black friday's

when i do it yeah some people wait the day of i'm like dude yeah christmas shopping is just so much yeah so i just get out the way so you live in israel right yeah living is basically asked about gifts so when you go to the us from israel you're back with like a whole suitcase of gifts. Because there's stuff you could buy here that you can't get there. Yeah. So now I live in Israel. We'll move to the US one day, but now I live in Israel. So you like it better here though?

Each country has its own benefits. So in Tel Aviv, we have a huge tech hub. So everything is closed. A lot of high tech companies. Very good community for software companies. And it's basically the second place after the Silicon Valley.

Tel Aviv? I didn't know that. Yeah, I had no idea. I didn't know they were being in tech. Well yeah, it's a tech company, right? So you said you want to ipo so what's the plan from here so we keep growing for now uh because we are bootstrapped we need to organize a lot of things like finance and stuff like that it takes time but also we need to get some more growth until then yeah but that's the goal uh to be bootstrapped dropshipping software company

that went to ipo it's something that never happened. So it's exciting to me. So you guys want to be kind of like Alibaba in a way? No, we don't really hold stocks, but more software for automation. But we're really trying to do everything the dropshippers or e-commerce sellers need. Gotcha. Yeah.

Product finding. Because we have also all this data, now we have a marketplace that our ai automatically sorts by demand of products so our dropshippers can see really what works the best for other dropshippers and then as i said they can import all these products with a click of a button what happened to oberlo i used to use that one back in the day are they still around? No, so Oberlo was acquired by Shopify. Oh they were acquired? Yeah mostly for SEO purposes. So Shopify is still monetizing the blog, they still use Oberlo's blog but the software is not there anymore. How much did they get acquired for?

I don't know. Wow that's exciting for you though that companies like that are getting acquired right? Yeah. Yeah they were like a pretty much a competitor. Yes, they did like a small part of what we are doing today. But it's good to see that companies like Shopify support dropshipping. I've been to Shopify's conference in New York like three months ago. Yeah. An affiliate conference where everything was about dropshipping. Yeah. So it's really exciting to see that companies like Shopify

support dropshipping until today. Nice. Yeah, that's good to have them backing it because the payment processors aren't a thing. They hate it. But I mean, I don't know. I think it's PayPal mainly. Have you had money frozen with PayPal before?

Yeah, PayPal, they froze. Yeah. Yeah, everyone has. So PayPal froze the money until they see that you know you have the authority and then it's fine but yeah then that's a problem i even gave all the tracking numbers they still held it for 60 to 90 days after everything was delivered oh yeah you you need some cash flow for for that in the beginning that's true. But today it's mostly like Stripe and Payoneer are very strong now.

Okay. Yeah, I like Stripe. I use Square right now. I like Square. Yeah. I like EMS. I haven't heard about one. It's just a bigger processor.

It mitigates risk better. They'll start dropping from the rolling reserve. That makes sense. So with 50,000 stores now, what's the goal? Do you want to hit a million stores one day? Yeah, we keep doubling. Soon, next year, we plan to pass the 100K stores.

Or not stores, again, paying users. Oh, they're all paying? It's all paying users. When is the monthly sub? Our ARR is over 20 million just for the software. Yo, this dude's balling out here and over 100 million for cost of goods that we are processing for our users wow a year 100 million dollars a year yeah damn so 20 million in subscriptions yeah and 100 million in products

yeah and the margins are probably insane on the subscriptions crazy right because it's just software costs yeah developer cost yeah wow we keep spending everything for growth like not for marketing for software yeah and the marketing budget is almost the same always so oh yeah so you're just reinvesting into the software mainly yeah we're really trying to go to more niches as i said before like the the brand to brand drop shipping where brands add more dropshipping products to increase their AOV. We really want to go deeper also into this market so they need more tools, more development. Are you embracing a lot of AI lately also?

Yeah, we did now. So because the dropshippers import tens of thousands of products to their stores, now we introduced a feature that automatically rewrites their entire ai and their entire description and titans wow so automatically when it goes to the store already has it already written for them yeah yeah because before it's they copy the chinese title so it's weird but now yeah i was writing it it also optimizes so you say okay i want it to be 100 characters so now it will cut it in the right place. Wow. In the middle of the world or something. And I know there's AI for product images now too. Where you can choose the background and everything.

Now we want to see how we can optimize the picture so it will be really unique and you can't even understand that it's the same product that you have. The only problem there is that you need to keep it as real as possible. You need to show the real product that you're saying it can be something very different so that's the only challenge there but we are working on that right because that is one hurdle people will see that it's the same photo from like aliexpress and then they'll just buy it there yeah but if you could figure out how to change the image to make it unique that could be big yeah now now we are also taking some

pictures in our warehouses when we repack the products oh smart it also helps yeah so how big is your warehouse in china um we work with the partner there so it's hard for me to say the exact like our part of the warehouse is a huge warehouse got it have you been there no oh my god you never even seen you ever seen a warehouse no uh only Only videos and stuff like that. But that's how I manage. I really trust people. I really work. Our company is mostly a remote company.

We have only 17 employees in Israel. Wow. All the rest are full-time employees. But worldwide, over 15 different countries. Crazy. So they are remote. Yeah. Different one.

Yeah. I really believe in that. Like that was how I established TotalDS as a dropshipper and that's part of our DNA. Everyone can work from everywhere

even before like didn't affect us in any way. So I probably amplified it because more people was shopping online.

True. Doing impulse buy-in. Everyone was shopping online. Yeah. All that money was going around. Yeah. So with you being so trustworthy and trusting people,

have you gotten scammed before? Yeah, I had it. We introduced someone who is doing like a lot of risk analysis and stuff like that in our company after we got scammed. But that's part of the journey. Like you always learn, as I i said i didn't have the connections before someone to consult to it so i had to go over everything by myself yeah um but you learn from that you learn how you can um mitigate all these processes how to like how to

do all this risk analysis yeah so what was the? A supplier just didn't send you product or something? Yeah. And we worked with the supplier who didn't send over 50K of product's value. Our luck is that we have all these analytic systems. So we figured out it very fast. And the customers, like our dropshippers, didn't have any effect from that. Oh, yeah?

Yeah. Oh, you floated the money for them? Yeah. Oh, wow. Wow. Most companies wouldn't do that. Oh, yeah? Oh, you floated the money for them? Yeah. Oh, wow. Most companies wouldn't do that. No, they wouldn't. You get some companies that do like a net 90 or net 60. Some net 30s.

Do you do those? What? Net 30s or net 90s? No, we just ship the products. We pay up front. But the reputation is the most important part. Well, you're moving in a volume now where you could start doing net terms if you wanted to probably. Yeah, we can.

Now we can. Yeah. But when you're just building the relationship, it's more complicated because that's how the market works. Yeah. My friend does 100 million on Amazon and he has net 180 because he just moved so much volume that his suppliers are willing to wait six months. That's crazy. Net 180. I ain't never heard are willing to wait six months. That's crazy. I ain't never heard of a net 180. Yeah, that makes sense.

But now we already have the good relationship with one partner. He's actually an employee of AutoDS, so it's not like an external partner. Yeah, he came with all this experience with warehouses, with China suppliers. We just added him to the company. That's how we work. Like our head of content, how he joined AutoDS is that he just offered me to help me with one LinkedIn post, just with my English there. And that's how he joined. He's one of the most experienced and all the dropshippers in AutoDS and he's our head of content. And most of our marketing team,

we are dropshippers so we see that someone is you know working well with us and then we just hire them that's cool that's fire you don't even care about resumes you just if you like the person you're hired i think that the potential is much more important than experience so the motivation is the most important part for us when we choose the employees. We don't really care about resume or something like that we know how to interview people we know how to set up expectations with them so they know that they have some kind of trial period with AutoDS. If it works it works if not so. That's cool. We are it's been fun man

learning about dropshipping it's been a few years since I've been in the space but I'm glad to see you anything you want to promote or close off with yeah Autodesk is an all-in-one dropshipping platform

everyone can follow me on Instagram Leo Pozin and join Autodesk let's do it thanks for coming on man thank you thanks for watching guys

as always we'll see you tomorrow peace