Steve Chou’s Profitable Online Store – My Personal Review

Rhys

Rhys

I' m an internet marketer from New Zealand, traveling and making money online is my life. Reach out to me if you have any questions.
Rhys

If your looking for more information on Steve Chou’s, Profitable Online Store course then you’ve come to the right place. The course, similar to Drop Ship Lifestyle and Store Coach, claims to give you all of the training and guidance required to start your very own drop shipping e-commerce store within a few weeks.

There are now dozens of online drop shipping and e-commerce courses on the market and finding a trustworthy and up to date course that’s worth your investment can be a tough predicament. I’ve been building, growing and selling online stores for the last few years and have shared my experiences and reviewed most of the major courses too.

Like most of my reviews I wish to put it out there that I’m not an affiliate for Steve Chou’s course, nor am I going to throw in a competitors affiliate link and say don’t buy profitable online store, buy product X instead – I have recommended some cheaper alternatives below though with affiliate links. Truth be told, any internet entrepreneur that makes proper money online, doesn’t need to make a couple of dollars promoting a drop ship course.

Now that the basics are covered, let’s begin..

Profitable Online Store Review

profitable-online-store-review

Similar to other courses on the market, the course deals in great length about drop shipping. If your unfamiliar with this term then be sure to checkout my free guide on drop shipping which will introduce you to the concepts and benefits/disadvantages of such business ventures. In short, drop shipping is a way for you to sell other people’s products without purchasing them up front, and only once you’ve actually sold them to someone else for a healthy profit.

If you think of your local electronics store; the owner would go to the supplier of Logitech, Samsung and LG products and then purchase 50 units of each product (let’s say TV’s) and have them shipped to their store, cash most likely exchanges hand instantly or the month following. As soon as the TV’s arrive in the shop they are depreciating in value and must be sold.

Drop Shipping is different and allows you to bypass the inventory component and list suppliers products on your ecommerce store. If someone goes ahead and purchases a product, you collect the cash and then go to your drop shipper and have them ship the product in discreet packaging to your customer. If your items don’t sell, you haven’t lost any money – only the time it took you to list the products on your store (online tools make this process automated now).

Here’s a simple diagram to explain the process further.

how drop shipping works

Who is Steve Chou?

Steve Chou, an ex electrical engineer from Stanford University – like many other internet marketers that start their own drop shipping courses claim to have made millions through their own ecommerce drop shipping stores when they actually make most of their income through blogging, promoting their own course or reviewing other products. Below is a graph from his recent income report for 2015.

steve-chou-review

One of the blogs Steve Chou started is called, MyWifeQuitHerJob which you may have heard of especially if you’ve googled his course looking for reviews.

“Back in 2007 Steve and his wife were victims of a condition called complacency, which is something you get if you spend your entire life at a job you don’t like.” I’m sure some of my readers feel like this, especially if your reading a review on how to start a drop shipping business.

Steve refers to complacency in his course as an “illness and a debilitating condition” that causes you to get stuck in a daily grind, making someone else rich.

His blog complements his online course and both websites and one recommends a free 6 part guide where he then goes on to up sell his course. The story goes, Steve’s wife was pregnant with their first child and decided to stay at home and quit her job to look after the kids and started an online store and made over $100,000 in 12 months to replace her salary.

A classic life changing story to try and hook most people in.

Real Life: 95% of online businesses will fail within the first year.

 

Why Are There So Many Negative Reviews

Unfortunately, like most internet related products that don’t offer an affiliate program your going to get other internet marketers take advantage of that and offer ‘negative reviews’ with a comparison table to another affiliate program. The best example of this is in the ‘Wealthy Affiliate’ program where members pay a monthly fee to join and then get 50% commission of anyone else they refer on a monthly basis.

It works like this..

You can give an eBook or training course a bad review. You then add a comparison table and compare the two courses and give Wealthy Affiliate a better score and direct all your traffic there.

wealthy-affiliate-reviews

 

If Steve Chou offered an affiliate program, I can guarantee most reviews would be positive as his commission would be much higher than what Wealthy Affiliate pays. Take Drop Ship Lifestyle for example, how many negative reviews can you find for that course? Next to none, right? That’s because the commission is over $500 per signup.

 

So What Do You Actually Get?

It’s worth noting that the course is fairly outdated and was originally created many years ago. If your looking for information relevant to 2017 then you probably aren’t going to find it here. While most of the content is relevant in some aspects, the videos are dated and the website needs a good clean up.

A good way to confirm the course hasn’t been updated in years is to use Wayback Machine Archive (Jan 2015).

The course is split up into 9 key modules:

  1. How To Find The Right Niche
  2. How To Source Products To Sell
  3. How To Set Up Your Online Store Website
  4. How To Sell On Amazon
  5. How To Rank In The Search Engines
  6. How To Complete The Sale
  7. How To Use Pay Per Click Services
  8. How To Generate Traffic To Your Store
  9. How To Make Your Business Legal.

profitable-online-store-review

Course Modules

The course is split up into many different modules including:

  • Finding Your Niche
  • Product Sourcing
  • Choosing Right Shopping Cart
  • Setting Up Store
  • Shopify Training
  • Open Cart Training
  • Selling on Amazon
  • Legalize Your Business
  • Free Promotional Methods
  • Email Marketing
  • Google Adwords
  • Facebook Ads
  • Search Engine Optimization
  • Pricing Your Products
  • Website Optimization
  • Pre/Post Launch Tips

The course also offers member only features such as:

  • Checklists and Worksheets
  • Website Critiques
  • Lectures w/ Guest Speakers
  • Recommended Tools
  • Discounts/Coupons

 

How Much Does It Cost?

The cost of the course has sky rocketed over the last few years, similar to most other drop shipping courses. The content offered in the course hasn’t changed but the price is now $1197 for one time access or $1390 for multi payment access. In return you’ll get lifetime access, free updates for life and a 30 day money back guarantee.

profitable-online-store-review-pricing

In January 2015 the price of the course was $799.

profitable-online-store-review-2015

You see, like many courses that start to attract a large number of buyers, the price eventually goes up but the quality of the training stays the same. At nearly $1200 to learn about starting a store, I personally believe there are much better alternatives out there (see bottom of the article).

 

Why You Shouldn’t Buy The Course

Now that you know what you’ll get should you opt to buy the course, here are the reasons why I don’t like the course and why you can reinvest your $1200 into further learning on your own or with a different course. If you’ve already bought the course then you may have your own views.

Some of these points are similar/same as my review on Drop Ship Lifestyle. There’s no point rewriting the same content so I’ve taken some content from that article.

Expensive Investment

The course has come along way in price over the last 3 years but the content is relatively unchanged. For example the price in 2014 was $699, 2015 was $799 and is now $1197 if you pay at once. You can add a further $200 if you wish to pay with multiple payments. If you do buy in multiple payments be warned you won’t be able to access the course until all payments have been made, so it makes sense to buy once you’ve got your funds in order to save money.

If your really focused on building a drop shipping business you should sit down and cost everything out before you dive in and buy this course. As Steve points out you won’t become rich overnight and building an ecommerce business isn’t easy, although with drop shipping it is much more affordable. You will need to spend money in order to make money.

The biggest mistake my own clients make, is they buy a course, setup an awesome store with great products and then have zero sales. Yes, absolute Nada. Without a social media presence, promotional campaign or serious Adwords budget you will struggle to sell anything. Yes, search engine optimization is an option, but your site will take 3-6 months to rank for most of your keywords and search terms. Paid advertising is the only option to start making sales quickly, which requires heavy investment.

 

Shopify Costs Add Up Quickly

The course is built on two platforms, Shopify and OpenCart with a focus on Shopify. Should you happen to use Steve’s sign up links you’ll send 20% of your monthly bill to his affiliate account. If you haven’t already checked yet, Shopify charge over $300 per year to host your ecommerce store and if your planning on adding lots of products it’s likely you’ll need the $79/month plan which works out to be nearly $900 a year.

On top of the base fee you’ll need to pay 1-2% per sale if you use Paypal payments, a monthly fee for any third party apps ($3-$300/month) and a credit card merchant fee too if you aren’t using Shopify’s built in credit card payments. If you live outside the USA, Canada or UK then you can’t use Shopify payments, doh.

The default Shopify themes are pretty average as well so if you want a high quality store you’ll likely need to purchase a premium theme or get help from a web developer. I recommend using premium sites such as Themeforest or TemplateMonster if your looking for a theme ($60-$140).

To give you an idea of Shopify startup costs, which aren’t outlined in the profitable online store sales pitch.

drop ship lifestyle review shopify pricing

What if your not based in the USA?

One of the major flaws in the course is that Steve Chou doesn’t cover anything regarding starting a drop ship business from overseas or outside the United States. Are you aware of your legal obligations regarding tax and overseas business from your own country? If not you should consider seeking independent advice before starting your drop ship business.

To give you a better understanding, I’m a citizen of New Zealand and have never been to the United States but I have drop ship businesses there. If your an international business (i.e. New Zealand) are you aware of how you should structure your business in the United States? Probably not.

usa-tax-iconLong story short, you need to be a USA entity of some form or another to work with most American drop shippers. Similarly if you want to work with drop shippers in Europe you’ll need to be a registered European business or sole trader with a VAT number. If your from a foreign country like me, you’ll know that’s not possible unless you live there.

Steve’s course doesn’t offer any guidance on how you can/should legally setup your drop ship business using USA/European based suppliers. One way is to register an offshore company in a tax haven in the USA, i.e. Wyoming or Delaware where international entities can register USA companies without ever visiting the country. I wrote a full article on the topic here (Enter your email to get the full guide).

 

Store Coach, a drop ship lifestyle alternative does cover this topic in great detail and at a fraction of the price of Profitable Online Store. They offer much clearer advice on structuring your drop shipping business for Non USA Citizens. If you do end up buying Profitable Online Store you may not know how to set up your business correctly and could be very costly if the IRS comes after you in 5 years time!

Can You Make Money Drop Shipping?

I get asked this question almost once a week and my answer is always the same. Yes and No. Honestly, drop shipping is not the same as it was back in 2010 when it was hot and Amazon was growing at a slower rate. Back then you could compete with the prices Amazon charges and actually make a profit. Now, you can guarantee Amazon has the best price on 95% of products available to buy online. If not Walmart, Best Buy or another giant will be close behind.

Fast forward to 2016 and Amazon is one of the biggest online stores in the world with billions of dollars being spent every month through their site. If your supplier could choose a retailer to work with between yourself and Amazon who are they likely to choose? Amazon right. They will guarantee sales and line of credit to encourage suppliers to work with them.

With the launch of courses such as Profitable Online Store thousands of people are trying to start businesses in the same niche with the same suppliers, selling the same products at the same prices. Let’s say you find a supplier that offers a daily CSV file of the latest products, you can bet your life a hundred other drop shippers have the same file and are selling the same products.

The only way to make a decent income from drop shipping is to be different and I don’t believe drop ship lifestyle encourages this to it’s users. You need to find products no one else is researching, you need to call the supplier directly and you need to grab yourself a custom CSV file and automatically update your site every day. You need to spend money on developing a unique site, providing high levels of support and an experience your customer won’t forget.

Long story short, you can make money drop shipping, if you do it right.

Drop Ship Training Alternatives

These suggestions include affiliate links. This is the alternative to the course I recommend you take if you aren’t fussed about joining a community and would rather build a unique drop ship business using various resources with an emphasis on international business (as mentioned above)..

Store Coach

You might have heard of this site if you’ve read other reviews comparing the two services. The difference between the two is that much of the training is actually free over at Store Coach with further reading available through the paid pro plan. At $49 per month (cancel any time) the course is a fraction of Profitable Online Course and offers much more reading rather than just video tutorials.

store coach review

Other things you’ll find in the paid version include to-do lists, resources, advanced tips and tutorials, software to make certain tasks easier and a community forum similar to Profitable Online Store with direct access to the coaches. The benefits I see over Profitable Online Store is the niche research section and product sourcing information is far more diverse and helpful.

 

Salehoo

Next you could sign up for Salehoo which is a wholesale and drop ship supplier directory which has been around for over 10 years. With over 10,000 resources to checkout in a wide range of countries including the United States, United Kingdom, New Zealand, Australia and Europe you’ll be able to find drop shippers quickly.

salehoo review

Salehoo provide the contact details and minimum order quantities, setup fees (if any) and much more helpful information on all suppliers in their directory. You can get started for roughly $67 and ignore any upsells they promote to you on signup.

 

Shopify or Woocommerce

Just like Steve I do think Shopify is a good hosted platform for creating your website especially if your new to ecommerce. For around $29 you can get started but do checkout the pricing structure above as the monthly price will fluctuate depending on your sales level.

There are plenty of premium themes you can choose from when installing Shopify but they run around $180 each so I recommend checking out a third party vendor such as TemplateMonster or Themeforest where you can get Shopify themes from $80 – $140.

shopify vs woocommerce review

If you know your way around web hosting and wordpress then I’d recommend building a website using the Woocommerce platform which is a free plugin from Woothemes and is very customizable. For even better customization you can pickup premium plugins on Themeforest for $5-$12 each. You will need to host your own website using reliable hosting.

Both solutions offer credit card processing applications although Shopify is much easier to process credit card payments if your from the USA, Canada or the United Kingdom as you can use Shopify’s very own payment processor. If your like me and from a country where credit card fraud is still in it’s early days of prevention you’ll need a merchant account with your bank and a service such as Paypal credit cards, Braintree, DPS or 2Checkout. I personally use Braintree payments for all my drop ship websites.

 

Promotion

Now you’ve got your store setup and added products you should start to promote your store. There’s tons of free information out there on how best to do this but the best way’s I’ve had success with include:

  • Setup a Facebook page, post 3-4 times a week. Buy 300 likes from Fiverr to start your page off.
  • Setup Instagram, Twitter, LinkedIn and post 3-4 times a week.
  • Add your website to Google Maps. Use a PO Box if your worried about using a home address.
  • Guest post on blogs related to your website, offer freebies in exchange for reviews.
  • Print business cards or promo vouchers and leave them everywhere you go.
  • Start a Facebook ads campaign or Google Adwords simple campaign.

 

Profitable Online Store Conclusion

To conclude I have explained in detail what’s covered as part of this course. I believe the amount of information online that will help you succeed with drop shipping is there and doesn’t need a $1,197 price tag. If you do want training and a complete step-by-step guide, with help and support I would recommend Store Coach due to the reduced price ($49 a month) and additional assistance with operational measures rather than just building your business.

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Comments

  1. says

    Hey Rhys,

    Have you actually taken my class before? If so you’d know that new material is added weekly. And the way back machine is not a good indicator of content because everything is behind a pay wall.

    In any case, if you are in my class, I’m happy to have a discussion with you. Otherwise my class is nothing like drop ship lifestyle or your other comparisons at all.

    It is a personal project of mine with lots of student interaction.

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