Key strategies and lessons learned with Ehsan Razaq

How did you get into e‑commerce? I know you mentioned before you started recording that you used to dabble in videog­raphy and editing, but what made you decide to get into e‑commerce?

I started doing videog­raphy and photog­raphy for a small cafeteria while also creating content on TikTok. As my followers grew, smaller brands started getting in touch and I started charging around 250 to 500 dirhams per video.

During a shoot, I received a promo­tional offer for a Jawline product from an e‑commerce brand. I agreed without negoti­ation because I liked the product. After completing the work, I received 800 dirhams — the most I had ever earned in one go. Curious about how he ran his business, I offered to make another video for free in exchange for learning about e‑commerce. He agreed to look after me for 500 dirhams per week. Although I stopped after the second week due to cost, I learned the essen­tials: setting up a payment gateway and managing shipping.

Six months later, I had saved 700 dirhams and noticed a trending product, the Sunset Lamp. Without test ads, I ordered 30 from Alibaba but realized I had no marketing budget. I reached out to Emirati influ­encers I knew and offered them a percentage to promote the product while keeping my brand hidden.

One of them posted a video and overnight we sold out with over 70 orders. I even had to retrieve parts I had given to friends to fulfill the orders. From there, I continued to scale and grow and move on to new brands and ventures.

You mentioned ecommerce and dropshipping together – can you explain the main difference? Is e‑commerce a broader industry and dropshipping specif­i­cally about selling products without actually holding inventory?

Exactly. E‑commerce is like the tree and dropshipping is just a branch of it. E‑commerce is where you really build brands and that’s where you can make the most money. Dropshipping, on the other hand, is more about testing products for success. With dropshipping, you don’t have to keep inventory or put your logo on the product because you’re often only fulfilling small, isolated orders.

In contrast, with eCommerce, you have your own inventory, branding, and control over the customer experience, including faster shipping times. While some prefer dropshipping, most successful businesses gravitate toward eCommerce because it allows for better branding, faster delivery, and higher customer satis­faction.

Doesn’t the choice between e‑commerce and dropshipping depend on the products you sell, especially if they are diverse or short-lived items?

Absolutely. Building a brand offers signif­icant benefits. For example, we once turned a hair removal eraser into a branded product. It is a simple tool that collects hair effec­tively and performs excep­tionally well.

Although it was not a long-term product, the fact that we were the first to launch it in the UAE gave us a big advantage. A friend showed me the product and after trying it, we received many orders.

Dropshipping every single order resulted in long delivery times – up to 15 days – which led to issues like charge­backs and payment gateway issues. To solve this problem, we branded the product and purchased it in bulk. Instead of just 500 pieces, we ordered 1,500 pieces. When sales declined, we offered special promo­tions such as “2 for 1” or discounts to clear out inventory. This strategy allowed us to better manage inventory and maintain control of the brand.

Do you process all products and orders yourself or do you use a third-party dropshipping warehouse?

I used to do every­thing myself from 3 a.m. to 5 a.m. — unpacking shipments, preparing and labeling orders. Now we have a warehouse in the UAE that does all of this for us.

Additionally, building a brand increases perceived value and makes the product more attractive compared to dropshipping. For example, if a product is available on Amazon and also on a website with a well-known brand, customers are more likely to choose the website with the brand. They perceive the branded product to be of higher quality because of its profes­sional presen­tation, including a strong logo, high-quality photos, and detailed descrip­tions. This creates greater value in the customer’s eyes compared to the lower cost, generic options often associated with dropshipping.

How many different products do you currently offer?

We have four different stores: two in Saudi Arabia, one here and one in Qatar, which helps us serve both regions. Although we generally offer the same products at all locations, their popularity may vary. For example, products in the United Arab Emirates tend to sell out quicker than in Saudi Arabia. This is because the UAE has a smaller population, so adver­tising reaches a larger percentage of potential buyers. We monitor the perfor­mance of each product and adjust our offerings based on its success.

Why do you need four separate websites instead of just one that covers all of these countries?

We use this approach because it is very effective. By tailoring each store to its specific country, we give the impression of faster shipping and locally sourced products, which benefits each country. Most of our warehouses are located in Saudi Arabia and the United Arab Emirates. So when customers place an order, the process is quick and smooth. This strategy helps us increase our value and build a good reputation.

Do you create your own websites or hire external profes­sionals to do it for you?

We have a dedicated team of 40 people who take care of every­thing from building and managing the websites, devel­oping the brands, monitoring suppliers and managing inventory. They cover all aspects of the operation.

I recently advised my friend’s brothers who are new to e‑commerce and starting out in sunglasses. I told them not to get too attached to their first product. Instead, they should research market trends and competitors to choose their next product. If something like dual jumpers sells well, maybe they should consider that instead. What do you think?

You’re absolutely right. Investing in a product without proper research can lead to failure. It’s important to reverse engineer the process first — for example, by running ads for a sample Amazon product to gauge interest. Based on these results, you can then order suffi­cient inventory for the next few weeks. Sunglasses, for example, can be a long-term product rather than something with quick sales. I’m currently working on a sunglasses brand called Iris and would love to show it to you if you’re inter­ested in exploring it further.

Here’s an important point I made: Marketing will likely be your biggest expense. Therefore, it is crucial that your product has a signif­icant margin. For example, if you buy an item for $1, you should aim to sell it for $10, not just $3, as marketing costs can be around $4 to $5 per sale. How do you ensure your product margins are high enough to cover signif­icant marketing expenses?

It is definitely important not to sell products that are too cheap, as the margins are minimal or almost non-existent after taking into account hidden costs, such as those incurred with dropshipping.

In general, we recommend that products should not be too small or too cheap — ideally the price should be over $10. This way, even after covering product costs, adver­tising, and shipping, you still maintain a healthy margin. Higher priced products also tend to generate more sales as sales increase.

What is the typical price range for your products and what gross margin are you aiming for?

Here’s a high-level overview of our pricing model, using dollars for clarity: If we buy a product for $50, we typically sell it for four times that amount, which is $200. However, the final retail price can vary slightly and is often around $150 or $120. To calculate profit margin, start with the sales price of $200 and subtract the cost of the product, which is $50, leaving $150. Next, deduct the shipping and delivery costs, which we usually cover ourselves to offer “free shipping” and are approx­i­mately 25 dirhams (approx­i­mately $7) in the United Arab Emirates. Additionally, consider marketing costs, which average about 25 dirhams (approx­i­mately $7) per sale. After accounting for these costs, you’re left with a profit of about $100, which is the same as the profit margin on a $200 sale.

Which channels do you use?

Mainly TikTok. TikTok ads have tradi­tionally been video-based, but now TikTok is intro­ducing photo ads, which is a game-changer. Previ­ously, creating a high-quality video ad for a great product took a lot of time and often required agency support or extensive in-house production. With photo ads, we can use product images from the supplier to test the product almost immedi­ately instead of having to wait three to four days. This shift will likely have a signif­icant impact on TikTok’s algorithm and streamline the testing process for dropshippers, making it much easier to determine whether a product is a winner.

Why do you prefer Tik Tok over Instagram or Facebook?

We’ve found that platforms like Snapchat and TikTok generally offer better adver­tising oppor­tu­nities compared to Facebook. This is mainly because Facebook has signif­i­cantly increased its cost-per-click (CPC) and often suspends adver­tising accounts, forcing you to create new accounts and new pixels. They do this to prevent their platform from becoming overly fraud­ulent, as they prior­itize large adver­tisers who spend $100,000 per day over smaller budgets. In contrast, ad setup on TikTok is much quicker and easier – connecting the Pixel only takes a few minutes and the entire process can be completed in under an hour.

How much do you typically spend on TikTok per day?

It depends on the product. During the trial period, we typically spend around AED 300 to AED 500 per day on product photos. However, if the product is part of an estab­lished brand, the budget can increase signif­i­cantly, poten­tially reaching 8,000 to 10,000 AED per day.

What promo­tional strategies do you recommend for dropshipping and how should one deal with a product that is not performing well despite signif­icant adver­tising expen­diture?

I suggest rethinking your product selection. If the product is not strong, even signif­icant adver­tising expen­diture will not bring good returns. Unlike large brands that can be successful based on their name despite product quality, smaller brands need a compelling product to attract buyers.

If the sunglasses don’t generate sales quickly—for example, fewer than five sales with a $300 adver­tising budget—that’s a sign that the product may not be successful. Promoting a product that doesn’t perform well can result in losses in both inventory and marketing expenses.

Instead of continuing to invest in a poten­tially failed product, consider selling the stocks locally in bulk to recoup some losses. If you don’t see positive results quickly, it’s better to cut your losses and avoid wasting more funds on ineffective ads.

If someone wanted to get into e‑commerce and you had to recommend one of three products for them to try, what would be a good starter product?

For the podcast, I feature a highly successful product that brings in about $100,000 every two to three days at various stores — it’s called the Fitness Board. This product performs excep­tionally well, partic­u­larly in the United Arab Emirates where it has become a best seller. Designed for exercises like UPS and running, the fitness board is quite affordable and offers customers great value for money. It is usually blue in color and with a quick search you should be able to find it easily.

When I think about the fitness slate, I’m reminded of the infomer­cials of 30 years ago — those late-night ads for bizarre fitness equipment that promised incredible results. For a younger audience, infomer­cials could be like the old-fashioned version of swiping through TikTok or Instagram.

With this in mind, are there certain sectors that consis­tently perform well, such as health, wealth or fitness? It seems that people are always inter­ested in improving their lives, whether it’s getting in better shape or finding new ways to make money. Do you think focusing on these broad sectors rather than specific products could be a more reliable strategy for success?

You’re absolutely right. While the basic principles haven’t changed much, advances have made things cheaper and more organized, from production to shipping.

The most profitable niches we see are:

• Female products: Articles that address personal insecu­rities or health concerns such as joint pain or weight loss.
• Baby products: Products that help parents make their lives easier, powered by the emotional connection parents have with their children.
• Gimmick products: Novelties that offer unique or enter­taining features, such as inter­active games.

Choosing the right niche and product is crucial as different markets have different require­ments. For example, pet products may not perform as well in the United Arab Emirates due to lower animal production, but they may thrive in the United States. Likewise, a product that is successful in a GCC country such as the United Arab Emirates is likely to perform well in neigh­boring countries such as Qatar, Saudi Arabia and Oman.

So when it comes to starting an e‑commerce business, I under­stand you also offer a course and mentoring groups. Can you tell me more about these offers?

We offer a range of mentoring programs with a global reach, including five different coaching packages. The standard package includes guided, recorded videos for self-directed learning. The Automated Package takes care of the entire e‑commerce setup for you, from product procurement to store management. Our newest offering, Elite Private Mentorship, provides access to all five of our coaches for highly person­alized support. Each coach has been with me since the beginning of my eCommerce journey and has gained extensive experience and knowledge under my guidance to ensure they are well equipped to support you.

You mentioned Shopee, which is similar to Shopify. Do you normally use Shopify or do you find it’s sometimes overkill?

Yes, we use Shopify, but our SaaS company is currently devel­oping its own platform as an alter­native. Although Shopify is excellent, the $30 monthly fee may not be for everyone. Our goal is to create a cheaper option that offers even more features and capabil­ities than Shopify, poten­tially providing a complete website solution at a lower cost.