January 12th, 2009
Special occasions and holidays are great time for online retailers (as well as for offline). And your dropship business is no exception – you should follow the same steps as big and reputed online retailers make to get ready and benefit from holiday season – the time when 90% internet users are in a buying mood and commercial intention tool is not needed to gauge that.
Another to approach this is to run some holiday website combined with party supplies sales. You have a far better chance to achieve great search engine rankings with this store and save or spend less on PPC and other sort of advertising. The drawback is that you are likely to get enough sales for 2-3 months – then the traffic would dry out.
A seasonal project similar to this is ok if you have other dropship portfolio – or probably it is a cool idea to build your entire dropship portfolio around holidays? You are likely to use the same party supplies dropshippers for all occasions so it would be easy to manage your merchant relations. I think this is worth to think over.
Now it is time to get acquainted with our latest dropship case study and see how to make money with Halloween costumes and party supplies droship site…
Halloween24.com ($70,000 sales in 6 months)
PR3, dropshipping site, 46K revenue in October, high potential
• URL: www.halloween24.com
• Established: Mon Jun 30 2008
• Uniques/Month: 20,000
• Page views/month: 80,000
• Monthly Revenue (USD): 10,000
• Google Pagerank: 3
It is a dropshipping site for halloween costumes and party supplies products. The custom design and all the integrations with the supplier were done by our own team of professional web developers. We have also done unique product descriptions for all costumes (3000+ products). We have invested more than $4000 on these descriptions alone. It took more than an entire month to develop the site which is fully integrated with the supplier’s system.
The domain name is 8+ years old. We paid a substantial premium for it on sedo a year ago. For what it’s worth, the price of the domain name on www.dnscoop.com is $33,000.
The site is very easy to run. The stocks are automatically updated. The orders are automatically passed to the supplier and the response with the delivery info comes directly to the system. The email with the shipping info is automatically sent to the customer.
We will help the buyer move the site to a different server and will help with any additional technical work you may need (up to 40 hours).
The party and costume industry in general is huge, so there are still lots of potential. Here is an extract from one major web site:
“Want a piece of a 7 billion dollar industry? Costumes are not just for Halloween. We operate successfully all year round, and so can you! Christmas, birthdays, Mardi Gras, Easter, St. Patrick’s Day, 4th of July, themed parties, conventions, theater productions, and more . . . “
Why am I selling?
We are working on another big project right now and need to redirect our attention from maintaining this site to developing our other work. Also, we need to generate capital for a new project, so we are parting with this site because it is one of our strongest cash-flow generators. We believe it should have a good market value.
All the traffic is generated 100% free from Google, Yahoo, and Google Products (Froogle). To increase traffic, we implemented a strategic link building campaign with other SEO work. The search engine positions and number of pages indexed have been growing steadily, so even if you don’t do anything, you are looking for much higher traffic and a much better Halloween season this year than 2008. Here is a breakdown of the website’s traffic by month:
2008.08 – 8, 157 unique visitors (40,600 page views)
2008.09 – 23,731 (114,819)
2008.10 – 119,548 (551,012)
2008.11 – 17,077 (73,910)
2008.12 – 13,864 (50,707)
We launched the site in June, 2008 and expected minimal if any revenue for that year. It was a big surprise how fast the site grew; between June and the end of the year we got about $70,000 in sales. The Lion’s share of the sales was in October, of course. Here is a breakdown of revenue by month:
2008.07 – $1493
2008.08 – $2083
2008.09 – $10213
2008.10 – $46556
2008.11 – $6178
2008.12 – $3221
The current profit margins are about 20%. We have chosen a competitive pricing strategy. We could sell the products for higher prices but we believe we would probably see a slight reduction in total sales as a result. Industry-wide, profit margins are typically higher than 20%, but as a drop-ship retail site, this site is doing quite well. This site lends itself well to taking and supplying direct stock of some of the more popular items, whereupon profit margins would be around 80%.