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FAILURE 0-10k in 60 days, Building a Unsellable Business

Rickchise23

@clickpickRick
I've Read UNSCRIPTED
Speedway Pass
Mar 25, 2017
80
399
187
35
Scottsdale, AZ
In 2013 I started an e-commerce business using Shopify on a whim. A friend of mine had recently launched a Vape business here in Phoenix. I had never "vaped" but I went to a local smoke shop, bought a vape pen and tried it out. It seemed interesting (back then anyway) and I decided to stay awake for about 72 hours, start a shopify free trial, join the "build a biz" contest and begin to look for manufacturers.

I basically just listed some of the cool vape pens I knew I could get and at least break even on with drops hipping or that had good margins I could buy a small amount of inventory for. I built an Instagram page and posted 30-40 images I found around the internet (not recommended). I setup ninjagram to like every #vape post on Instagram and built up a following of 500 or so followers quickly.

I added about 50 products to the site, which in retrospect was way too many. About 2 weeks in I made my first sale and rushed to fulfill the order. I think I ended up losing about $4 on the order but I had my proof of concept and knew I could dramatically lower my cost of inventory.

In the next two weeks I averaged a sale every two days and even though the store wasn't profitable yet, I could see the demand was there. I made a $300 order from China of the top product we had added to cart which was a very simple Ego Starter kit that we could buy for $5 a piece and sell at the time for $30.

Black Friday was fast approaching. I decided to go black hat and bought 2,000 fake followers on Instagram to give a bit of reputability to the page. I also took the products that had arrived and went to parties all week that my Girlfriends friends were having. I made sure all the interesting and cool looking people at every party took cool photos using our products.

I used all the vaping hastags and made posts every 3 hours of all the content I'd backlogged that week. We also got a bunch of the "herb vape pens" in and with legalization spreading quickly these became a hugely interesting product to our followers. I built the Instagram account from 2k fake followers to around 10k real followers within 2 weeks. This was before the IG limits on likes and follows were prohibitive.

Black friday came and I discounted the dry herb vape pens to $19.99 after making another $900 order from China. At this point we were into the business maybe $1500, but a whole lot of time.

From Black friday through the following week we grossed over $10,000 in sales. So we went from 0-$10k in sales within 60 days with a $1500 investment and a whole lot of hustle.

The business continued to do well eventually hitting $28,000 in gross revenue in our best month all at over a 60% profit margin, sometimes higher.

The trend started to die down in 2015 as these devices became much more readily available and regulations and taxes squeezed the profit margins. The inability to do what I used to do on Instagram because of the new restrictions also factored into our declining sales.

In July of 2015 with sales at just $4500 a month I sold the business to my friend for less than $30k.

I F'd up in a few different ways with this business. I know people selling businesses that grossed much less in sales for 100k, which would have been a hell of an exit.

I chose an product that I couldn't use Adwords or Facebook Ads with effectively as it was considered a tobacco product making my only ad methods difficult, expensive and sucking my time dry.

I never delegated shipping my inventory myself from my basement and creating a job for myself that could have been done by a robot in a fulfillment center.

I built a business in a niche where regulations were fast changing, taxes were being imposed as the big tobacco companies hired lobbyists to protect their interest and stomp out the little guys.

These 3 factors made my business very unsellable. I failed to adjust correctly to the changing factors in the industry and never pitched the tobacco companies for an aquisition which may have been the most profitable way out.

I learned from this failure to pick a niche that won't likely be blackballed by the industry. I also learned to build a business I could actually sell one day. I also learned that if you create a business and take on every role, you are really just creating a new job.

I learned a whole lot from the experience and it has helped me in my new ventures, forcing me to make my current business 100% location independent and delegate accordingly. Hope this can serve as a warning to those considering a risky niche or who haven't considered the external factors surrounding your business.

I hope it can also inspire those to just get out there, build it, test it try it and then cash checks! It was hard and I had to add products until the sun rose and my eyes were ready to pop out of my head but you can go from 0-10k on a new business in 60 days, it has been done before!
 

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oimate

Bronze Contributor
Read Millionaire Fastlane
Speedway Pass
Jul 8, 2015
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I added about 50 products to the site, which in retrospect was way too many. About 2 weeks in I made my first sale and rushed to fulfill the order. I think I ended up losing about $4 on the order but I had my proof of concept and knew I could dramatically lower my cost of inventory.

Credit to you for giving it a shot and going for it. I too started a business in the living aids sector and built a website (mostly to see if I could and for increased personal learning-Wordpress)

Got the website up and running and made a sale on the 2nd day of going live.

Like yourself I dont believe I made any real profit on the 1st sale-However it did give me a buzz and sense of achievement that I had made something and obviously bought/met a need and solution to someone.

The rest of the story however is one of frustration (In summary I have made approx £5000 in sales (approx £1000 profit) but finding it increasingly difficult to meet/be competitive in the marketplace when the big boys are selling for less than I am capable of buying the product for-Add this to the fact I dont have any real passion for the industry I know myself I need to focus on either one product or move to new industry)
 

Rickchise23

@clickpickRick
I've Read UNSCRIPTED
Speedway Pass
Mar 25, 2017
80
399
187
35
Scottsdale, AZ
Credit to you for giving it a shot and going for it. I too started a business in the living aids sector and built a website (mostly to see if I could and for increased personal learning-Wordpress)

Got the website up and running and made a sale on the 2nd day of going live.

Like yourself I dont believe I made any real profit on the 1st sale-However it did give me a buzz and sense of achievement that I had made something and obviously bought/met a need and solution to someone.

The rest of the story however is one of frustration (In summary I have made approx £5000 in sales (approx £1000 profit) but finding it increasingly difficult to meet/be competitive in the marketplace when the big boys are selling for less than I am capable of buying the product for-Add this to the fact I dont have any real passion for the industry I know myself I need to focus on either one product or move to new industry)

I agree having some passion for the industry is essiential in the long run. I don't agree necessarily with the whole follow your passion idea everyone preaches, but being atleast interested in your niche makes the day to day grind a lot better. Good luck moving forward!
 

ddzc

Gold Contributor
Speedway Pass
May 22, 2012
576
1,222
388
Toronto
In 2013 I started an e-commerce business using Shopify on a whim. A friend of mine had recently launched a Vape business here in Phoenix. I had never "vaped" but I went to a local smoke shop, bought a vape pen and tried it out. It seemed interesting (back then anyway) and I decided to stay awake for about 72 hours, start a shopify free trial, join the "build a biz" contest and begin to look for manufacturers.

I basically just listed some of the cool vape pens I knew I could get and at least break even on with drops hipping or that had good margins I could buy a small amount of inventory for. I built an Instagram page and posted 30-40 images I found around the internet (not recommended). I setup ninjagram to like every #vape post on Instagram and built up a following of 500 or so followers quickly.

I added about 50 products to the site, which in retrospect was way too many. About 2 weeks in I made my first sale and rushed to fulfill the order. I think I ended up losing about $4 on the order but I had my proof of concept and knew I could dramatically lower my cost of inventory.

In the next two weeks I averaged a sale every two days and even though the store wasn't profitable yet, I could see the demand was there. I made a $300 order from China of the top product we had added to cart which was a very simple Ego Starter kit that we could buy for $5 a piece and sell at the time for $30.

Black Friday was fast approaching. I decided to go black hat and bought 2,000 fake followers on Instagram to give a bit of reputability to the page. I also took the products that had arrived and went to parties all week that my Girlfriends friends were having. I made sure all the interesting and cool looking people at every party took cool photos using our products.

I used all the vaping hastags and made posts every 3 hours of all the content I'd backlogged that week. We also got a bunch of the "herb vape pens" in and with legalization spreading quickly these became a hugely interesting product to our followers. I built the Instagram account from 2k fake followers to around 10k real followers within 2 weeks. This was before the IG limits on likes and follows were prohibitive.

Black friday came and I discounted the dry herb vape pens to $19.99 after making another $900 order from China. At this point we were into the business maybe $1500, but a whole lot of time.

From Black friday through the following week we grossed over $10,000 in sales. So we went from 0-$10k in sales within 60 days with a $1500 investment and a whole lot of hustle.

The business continued to do well eventually hitting $28,000 in gross revenue in our best month all at over a 60% profit margin, sometimes higher.

The trend started to die down in 2015 as these devices became much more readily available and regulations and taxes squeezed the profit margins. The inability to do what I used to do on Instagram because of the new restrictions also factored into our declining sales.

In July of 2015 with sales at just $4500 a month I sold the business to my friend for less than $30k.

I F'd up in a few different ways with this business. I know people selling businesses that grossed much less in sales for 100k, which would have been a hell of an exit.

I chose an product that I couldn't use Adwords or Facebook Ads with effectively as it was considered a tobacco product making my only ad methods difficult, expensive and sucking my time dry.

I never delegated shipping my inventory myself from my basement and creating a job for myself that could have been done by a robot in a fulfillment center.

I built a business in a niche where regulations were fast changing, taxes were being imposed as the big tobacco companies hired lobbyists to protect their interest and stomp out the little guys.

These 3 factors made my business very unsellable. I failed to adjust correctly to the changing factors in the industry and never pitched the tobacco companies for an aquisition which may have been the most profitable way out.

I learned from this failure to pick a niche that won't likely be blackballed by the industry. I also learned to build a business I could actually sell one day. I also learned that if you create a business and take on every role, you are really just creating a new job.

I learned a whole lot from the experience and it has helped me in my new ventures, forcing me to make my current business 100% location independent and delegate accordingly. Hope this can serve as a warning to those considering a risky niche or who haven't considered the external factors surrounding your business.

I hope it can also inspire those to just get out there, build it, test it try it and then cash checks! It was hard and I had to add products until the sun rose and my eyes were ready to pop out of my head but you can go from 0-10k on a new business in 60 days, it has been done before!

Your post is bringing me back to memory lane when I also had a fully automated e-cig online shop back in 2013-14 but I don't feel so bad for you because you sold your business for 30K! My entire business tanked in just one night due to control issues with new policies and regulations like you mentioned, on the selling platforms I was on. I had to ship my entire inventory from my Michigan to Toronto and street hustle them at reduced rates to sell everything off.

Chalk this up as a learning lesson and move on to bigger and greater things!
 
Last edited:

Dark Water

Gold Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Mar 25, 2014
514
1,245
391
Boston
I love the amount of hustle and process in this thread. You just did it, whatever means necessary. Whether that was just grabbing random (copyrighted) images off the web, black hatting your Instagram account to 10k followers, or pullin' 72 hours straight along with some all nighters, it really shows how you capitalized on an opportunity. Sure, some things could've been done better but hey that's part of learning process.

Even though you look at the bigger picture and realize you may have been able to sell out the company for much more than 30k by going to the tobacco companies, I'm willing to bet the experience is worth way more.
 

Rickchise23

@clickpickRick
I've Read UNSCRIPTED
Speedway Pass
Mar 25, 2017
80
399
187
35
Scottsdale, AZ
I love the amount of hustle and process in this thread. You just did it, whatever means necessary. Whether that was just grabbing random (copyrighted) images off the web, black hatting your Instagram account to 10k followers, or pullin' 72 hours straight along with some all nighters, it really shows how you capitalized on an opportunity. Sure, some things could've been done better but hey that's part of learning process.

Even though you look at the bigger picture and realize you may have been able to sell out the company for much more than 30k by going to the tobacco companies, I'm willing to bet the experience is worth way more.

Thanks for the kind words! It was for sure a lesson for me in just going out and taking action. I think it is more important to just go and start putting something together than to make sure you are doing every single thing right. "Just start braking shit" is kind of how I looked at it. As Damon John's new book says The Power of Broke is real lol. I was broke and needed to build a business so I just did whatever I could that day that would get me from 0 to $1 and then did it again and again. I think in the beginning that is what most first time entrepreneurs need to do.
 

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