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

Our largest customer has 1.3 million products.

Holy

how?

I can't even picture that.

Just drop shipping from Amazon Treebank.

He would take over the whole platform at that many products.

Anything you can Google, he has.

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And here's the episode, ladies and gentlemen.

I'm here today with my co-host Wayne Lewis and our guest today, Liar Pausan.

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.

Yes, 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, retail dropshipping arbitrage.

So that's how I basically combined both schemes 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.

Autodes 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 are doing.

Damn, 100 employees dropshipping.

I assume the space was kind of dying off because I used to drop ship 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 we 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 Samrash or any others, you can see that consistent growth of the dropshipping space.

Wow.

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 you're actually shipping to your customers you can't just ship random products yeah um

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 right so

i i'll say even more than that we see today large brands that adopting drop shipping as part of their business model yeah but what actually style concept of drop shipping because i know like i was telling you some merchants don't like the concept of drop shipping because there's no quality control.

So they more so like you to have the product on hand.

So there's a seven to ten day shipping and you can do quality control, make sure the sizing is right.

Or is there a certain style of drop shipping or has this always been the same, just going direct straight from manufacturer to customer?

So drop shippers 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 drop shipping.

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 different concepts.

See, I told you.

Wow,

it's a different concept, bro.

That's not straight from China, straight to customer.

No, 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, that it adds to the shipping, the overall, we also brand the products, we brand the package, we can put thank you card in

wow,

yeah, that's awesome.

So, would that be still considered drop shipping though?

It is because it's you're still

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you're still not seeing the product no he there they are seeing it we see he's not a seller though but not a seller oh the seller is not seeing it the dropshipper never touched the product okay and so that's one way to do that the other way to do that 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 joins the 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, and some of them have multiple stores.

But wow, and you self-funded those customers?

Yeah, we are 100% bootstrapped.

You don't want to raise money?

We don't want.

We keep growing over doubling each year.

Yeah.

It started as a business for myself.

I didn't even think that it will go that big.

Like I understood it in some part.

Now we want to go to IPR 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 need it.

Yeah, you don't need money now.

You just need strategic partners.

Yeah.

Initially I started without connections, without anything.

So this is why I was just a developer, a dropshipper.

That's how I 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 drop shipping software right now because we keep focusing always on product.

We keep hiring developers.

We keep always involving.

It's something that we see that like 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 that they say

my friend recommended me about autodesk,

which is crazy.

It's free marketing just because you have a good product.

Yeah.

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 a few blog posts every week.

So that's how we bring in our customers.

Amazing, man.

What's the most you've seen someone make with dropshipping?

I would say 100K a month.

Wow.

That's our largest dropshipper right now.

Nice.

That's not bad.

Yeah.

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, yeah, youngest.

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.

Yeah, it's not bad.

You started at 14, though.

Yeah.

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 and same product same picture same title same everything so i just tried i just copied it manually from the site it called tinydeal.com now it doesn't exist anymore wow 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 wow that's a lot at that age man it was addicted ever since yeah it was amazing what do you think about tick tock shop there's a lot of hype around it do you think it's gonna stick around 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 kind of overnight success.

They have good creative and boom, 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 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,

they'll take your algorithm.

They'll shadow ban your ad and still take the 10,000 a month.

You won't see any ROIs on them.

It just got more expensive.

Yeah.

More competitive.

It works more for high-ticket products.

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 dropshipping is people who are doing dropshipping to Facebook Marketplace.

Yeah.

Oh, yeah, yeah, yeah.

I heard that.

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.

So 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 go gets a car

the auction and just sells it double.

Buys it 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.

Yeah, drop shipping cars.

Yeah.

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.

Yeah.

Like we got banned, but we got recovered when we proved that we are a real

ban your IP.

Yeah, yeah.

Facebook banned your IP.

We are a software in the end.

So

I meant when you were dropshipping.

Oh, my career was dropshipping to eBay.

So it's more return 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.

Right.

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.

Yeah.

Yeah.

And again, you create multiple stores, tens of thousands of our largest customer has 1.3 million products.

Holy shh.

Wait, wait, 1.3 million products?

Yeah.

On his store.

It's like,

how?

I can't even picture that.

Just drop shipping 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 we'll 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 to search he has right yeah so amazon has 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.

I'm already done Christmas shopping.

You serious?

Damn, you planned that shit early.

Yeah,

I started in September.

Wow, yeah, that's hella early, bro.

Why do you do it so early?

It makes me anxious, really.

Yeah, so I just get out.

When do you do your Christmas shopping now?

Yeah, yeah, Black Friday is when I do it.

Yeah, some people wait the day of.

I'm like, dude,

Christmas shopping is just so much.

Yeah, so I just get out of the way.

So you live in Israel, right?

Yeah, I live in Israel.

Basically, you ask about gifts.

So when you go to the U.S.

from Israel, you're back with like whole suitcases.

Oh, yeah,

because there's stuff you could buy here that you you can't get there.

Yeah, so now I live in Israel.

I will 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 like tech hub.

So everything is closed.

A lot of high-tech companies,

very good community for software companies.

It's basically the second place after the Silicon Valley.

Wow.

Yeah.

And it's very Tel Aviv.

Yeah.

I know that.

Yeah, I had no idea.

I don't know we're big in tech.

Well, yeah, it's a tech company, right?

Yeah.

So you said you want to IPO.

So what's the plan from here?

So we keep growing for now.

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.

But that's the goal to be bootstrapped at dropshipping software company that turn to IPO.

It's something that never happened.

So it's exciting to me.

So you guys want to be like 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 that dropshippers or e-commerce sellers need.

Actually, 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 the 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 do 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 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, an affiliate conference where like

everything was about drop shipping.

So it's really exciting to see that companies like Shopify support drop shipping until today.

Nice.

Yeah, that's good to have them back in it because the payment processors aren't they hate it.

But I mean, I don't know.

I think it's PayPal mainly.

Like, 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 have the authority and then it's fine.

But yeah, then that's a problem.

I then gave all the tracking numbers.

They still held it for 60 to 90 days after everything was delivered.

Oh.

Yeah, you need some.

cash flow for for that in the beginning that's true but today it's mostly like stripe and payoneer very strong now okay yeah i like stripe i use square right now I like Square.

Yeah.

Yeah.

I like EMS.

I haven't heard about one.

It's just a bigger processor.

It mitigates risk better.

They'll start you off on a rolling reserve.

That makes sense.

So, with 50,000 stores now, what's the goal?

Like, do you want to hit a million stores one day?

Yeah, we keep doubling.

Soon, we will, like, next year we plan to pass the 100k stores

or not stores again, paying users.

So they're all paying?

It's all paying users.

Oh, what is the monthly?

The monthly

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 a year?

Yeah.

So 20 million in subscriptions and 100 million in products.

Yeah.

And the margins are probably insane on the subscription.

That's crazy.

Right, because it's just software costs.

Yeah.

Developer cost.

Yeah.

Wow.

We keep spending everything for growth, like not for marketing, marketing, for software.

Yeah.

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 dropshipping, where brands add more dropshipping products to increase their their AOV.

Yeah.

We really want to go deeper also into this market, so they need more tools, more development.

Yeah.

Yeah.

Are you embracing a lot of AI lately also?

Yeah, we did now 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, their entire description and titles.

Wow.

So, automatically, when it goes to the store, it already has it already written for them.

Yeah.

Yeah, because before they copy the Chinese title, so it's weird, but now the AI is 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,

like in the middle of the world or something like that.

And I know there's AI for product images now, too.

Yeah.

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.

Like 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 we are also taking some pictures in our warehouses when we repack the products.

Oh, smart.

So that also helps.

Yeah.

So how big is your warehouse in China?

We work with a partner there, so it's hard for me to say the exact like our part of the warehouse.

It's a huge warehouse.

Got it.

Have you been there?

No.

Oh my gosh.

You never even ever seen a warehouse?

No.

Only videos and stuff like that.

But that's how I manage.

Like I really trust people and really work.

Like, our company is mostly a remote company.

We have over, like, 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 AutoDS as a dropshipper, and that's part of our DNA.

Everyone can work from everywhere.

Yeah.

Even before

didn't affect us in any way.

So it probably amplified it because more people was shopping online.

True.

Doing impulse buy-in.

Everyone was shopping online.

Yeah, all that money was going to be.

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 said, I didn't have the connections before or someone to consult with it.

So I had to go over everything by myself yeah but you learn from that you learn how you can mitigate all these processes and how to like how to do all this risk analysis yeah so what was the scam a supplier just didn't send you product or something yeah and we worked with the supplier who didn't send over 50k damn of product value Our luck is that we have all these analytic

systems, so we figured out it very fast and the customers, like our dropshippers, shippers didn't have any effect from that oh yeah yeah oh you you floated the money for them yeah oh wow wow most companies wouldn't do that no they wouldn't well some you get some companies that do like a net 90 or net 60 yeah some net 30s do you do do you do those what net net 30s or net 90s and no we just ship the products and we pay upfront yeah and but the reputation is the most important yeah like well you're moving enough volume now where you could start doing net terms if you wanted to probably yeah we can now now we can.

But when you're just building the relationship, it's more complicated because that's how the market works.

Yeah, my friend has a hundred milliar on Amazon and he has net 180

because he just moves so much volume that his suppliers are willing to wait six months.

That's crazy.

Net one, I never heard of a net 180.

Yeah, yeah, that makes sense.

But now we already have the good relationship with one partner.

He's actually employee of AutoDS, so it's not like external partner.

Yeah, he came with all this experience with warehouses, with China suppliers.

We just added him to the company.

That's how it works.

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.

Yeah,

and that's how he joined.

He's one of the most experienced and old dropshippers in AutoDS, and he's our head of content.

Most of our marketing team, we are dropshippers.

So, we see that someone is working well with us, and then we just hire them.

That's cool.

That's fine.

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 the experience.

So the motivation is the most important part for us when we choose the employees.

Wow.

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.

Lior, 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?

Um,

yeah, AutoDS is an all-in-one drop shipping platform.

Everyone can follow me on Instagram, Lior Posin, and join Autodesk.

Autodesk,

thanks for coming on, man.

Thank you.

Thanks for watching, guys.

As always, we'll see you tomorrow.

Peace.