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NOTABLE! $120k in Debt and Gambled With My Life Savings

Discussion in 'Education, Learning, Books' started by TKDTyler, Jan 2, 2017.

  1. TKDTyler
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    TKDTyler Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    What would you do if I told you a way to shift the house odds into your favor?

    What if I told you that you could get a 100% ROI within a month or two?

    How much would you invest if you knew that even when everything goes wrong, you could still walk out of the casino ahead?

    I am $120,000 in debt with student loans and car payments living in one of the most expensive areas in the world, good ol’ Silicon Valley. Earlier this year I took a trip to Vegas that ended up changing my life:


    My friend introduced me to a group of locals who make their living gambling. Risk is inherent in gambling, and as you know, risk is about probability: minimizing and maximizing bets for the best possible outcome. It’s how poker players make their decisions on whether to call or fold. How Blackjack players decide to hit, double, or stay.

    This is exactly what this group of people taught me. How to calculate risk through observation and execution. The key to their method is not in the game, but in how you respond to each win or loss. The adjustment of the process in order to recalculate probability based on what is left in the deck.


    So in February, I took the risk and flew out with the $6000 left in my bank and spend the first 4 months learning everything there was to know about statistics, probability, how certain cards affect the deck, strategies, and the occasional regrettable Vegas decision or two.


    I took that $6000 to the table. Started out a little slow. In fact, I was down to my last $700.

    The emotions were intense. Was I making the right decision? Should I be taking the advice of people I don't know? Is this how I should be spending my money?

    I began to see the wins beginning to roll in. The method is working! Returns were clearing $300-$500 a day and after a month, I was up $7000.


    Epiphany!


    Why can’t I continue doing this? So I upped the stakes by reinvesting my winnings as well as taking out a $5000 loan.


    Why take out a loan you ask?


    Because I did not have enough money to cover my manufacturing costs for my product to cover my projected sales for Q4.


    I thought this thread was about gambling?


    Life is a gamble as is entrepreneurship. Everyday we calculate risk vs reward. Why do so many people take comfort in being employed? Because the risk of not providing to their family vs the reward of stability is skewed in their mind. And that is okay.

    As for me, I took a different route. Vegas, aka The Fastlane Forum and its value giving, risk taking, freedom loving gang of misfits gave me the tools in order to succeed. The tools to skew the odds into my favor. Tools to redefine my thinking.

    Everything necessary to begin is in this giant almanac of entrepreneurship. But it is and always will be on myself to take action. To push through the fear of investing my last penny into something with no assurance of success. The fear of taking out another loan with so much debt looming over my head already (which to be honest, I would have never crossed my mind a year ago). This is real life and these are real problems and emotional obstacles.


    Back to the story.


    As if it is not scary enough emptying my bank account to fund my Q4 shipment. Almost everything that went wrong happened:


    1. There was a material sourcing problem and manufacturing delay that pushed my ship date back by a month. Material costs increased and lost time.

    2. There was a communication error between my freight forwarder and the supplier. Unfortunately, my manufacturer had a holiday that Thursday/Friday and pushed my shipment out until Monday. Lost 5 days.

    3. Shipment got held up at customs for inspection. Lost time.

    4. I get the products to my house and quality check. Turns out 25% of my units are cracked in a corner due to a clamping process during manufacturing. There goes ~250 units that I refuse to sell.

    5. There is another seller who is attempting to copy my product, copy, pictures, and product. I believe they may be sourcing from the same manufacturer. He used paid reviews and is now dead in the water.

    6. Amazon loses 2 pallets somewhere in the Holiday craziness. Eventually finds them.

    7. Product ranking tanked because I haven’t been in stock for 3 and a half months.


    Thanksgiving Day and I am finally up and running. Sales are slow and progressively pick up through the beginning of December.

    Back in July, I would average 4-6 units a day. My expectations were 2x-4x sales for December. To be honest, I was a little down because I missed out on November sales and was only sitting at 14 reviews expecting to sell through MAYBE half of my inventory.

    Then Christmas happened. And it was very merry.

    [​IMG]
    (Is there a way to add an image without having to upload it to an image host?)


    I have never experience that amount of thrill and excitement waking up every day. Being a producer in a sea of consumers during what is usually a month of spending is indescribable.

    December completely shattered all of my expectations. I cleared my goal of $20k revenue in a month. A goal of selling 25 units in a day. A yearly goal of $50k revenue. A goal of 10k Net profit in a month.


    The best part?

    December's net profit was 2x my monthly salary.

    While I was on vacation for 2 weeks with my family enjoying the Holidays.

    After deducting losses from defective products and feeling like the world is ending (yes I'm dramatic).


    Why do I share this story?


    I want people to see that you will never know how the market will respond unless you put yourself out there and take a risk. Taking risks can be terrifying, but growth is about going outside of your comfort zone.

    Because I took a risk in, I have the ability to pay off over half of my loans in less than a year. Instead, this will be put back into expansion and growth of the business to more sales channels and products.


    I think I’m beginning to understand what Fastlane truly means.


    Happy Holidays everybody! Can't wait for what this year has to offer.


    -Tyler


    P.S. I am selling meat grinders and potato peelers.
     
    Storm24, malphax5, jick5555 and 51 others like this.
  2. Unknown
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    Unknown Fastlane-ish Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    You had me going with the Vegas story. I was waiting on the part where you decided to play Teddy KGB, and your 9s full of aces got busted by his aces full. Congrats on your success.

    Edit: the slowlane seems like the wrong place for this @MJ DeMarco
     
  3. dave773
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    dave773 Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    Gambling is not the same as entrepreneurship. Any degenerate can go gamble, anyone can think they have the winning strategy and then lose it all. Gambling has no entry and entrepreneurship does not depend on probability.

    Most importantly, gambling provides value to noone and actually sucks value out of you and society. So it is doing the opposite to entrepreneurship.

    There are not even in the same ballpark as being the same. They both just have different types of risks involved.

    Comparing the two is a very bad example and the title is very click-baity.

    But congratulations on your success. The second half of the post was a good read.
     
    Last edited: Jan 2, 2017
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  4. Mr.Chaos
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    Mr.Chaos Wolves love Ice Cream. Read Millionaire Fastlane Speedway Pass

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    You may have missed the point he wasn't trying to make.

    Nevertheless good stuff @TKDTyler keep pushing forward!!!
     
  5. TKDTyler
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    TKDTyler Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    If only my story could be that good... ;)

    Thanks. Appreciate it.

    You perspective on the value of gambling is 100% correct.

    The point I was trying to convey was that of using research and preparation as a means to limit the risk of failure. I.E. Buying a product and sending it up on Amazon vs thoroughly researching pricing, competitors, manufacturers, etc before ever investing any money.

    I will never beat my competitors in pricing, but because of the work I put upfront, but through taking action after research and overcoming the initial risk of failure, I learned that I could sell my product for 4x the cost of my competitors and still rank top 5 in my niche.

    Most slowlaners in my position would never take out another loan, especially when living close to paycheck to paycheck. But because I knew my numbers inside and out, I was comfortable taking the risk because my perceived risk to reward was much lower than it was in the middle of the year. This is only because of putting the action out there.

    gam·ble
    ˈɡambəl/
    verb
    1. play games of chance for money; bet.
      "she was fond of gambling on cards and horses"
      synonyms: bet, place/lay a bet on something, stake money on something, back the horses, game;
      informalplay the ponies
      "he started to gamble more often"
    2. take risky action in the hope of a desired result.
      "the British could only gamble that something would turn up"

    When I say gambling, I am betting on my strengths instead of probability. I am betting on my research and analytical abilities in order to minimize risk and achieve a desired result.

    Planning on it!
     
    Last edited: Jan 3, 2017
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  6. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    I call this entrepreneurial heroine.

    Yup, and many times the market will surprise you. And the beauty of the market is it can squash individual opinions. "Your product sucks!" (Oh yea, then why has it sold millions?)
     
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  7. TKDTyler
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    TKDTyler Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    Funny thing is that most of my close friends didn't quite say "Your product sucks!" While they were impressed with the quality of my product, it was more of a, "People actually buy these?"

    Only reason I knew about the product was because I was immersed in the niche myself. It is a hobby that I enjoy. There was a demand for the product and a need for improved quality, but it far exceeded what I ever expected.
     
  8. abbymgill
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    abbymgill New Contributor

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    I was wondering if you would mind sharing some of the research materials you used in the beginning? Any recommended books, forums, etc.? I know there is so much knowledge here on the fastlane forum, but I was just curious about your beginning journey.

    Thanks for the great post!
     
  9. TKDTyler
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    TKDTyler Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    TBH, most of the material that I learned was found on this forum through kak, vig, ecom, bio, walter, and all the other ecommerce threads.

    I must have spent over 24 hours reading and digesting all the importing information on this forum before even starting.

    Other than that, TaxJar has really useful tax information pertaining to amazon fba and ecommerce in general.

    I have junglescout, but didn't use it that much. Only really to see how accurate it is on my listings vs my competitors.

    All my numbers I run myself in excel, although I need to figure out how to automate this...

    My main suggestion would be to not be afraid to lose money figuring things out. Rather, make sure you are thorough with your numbers and vetting of suppliers. See how the market responds and go from there.

    Find as much knowledge on the following as you can:

    • Finding and improving products already on the market (Biophase's threads)
    • Supplier vetting (Walter Hay's Thread and book)
    • Working with Asia and ordering samples.
    • Do's and Don'ts of wire transfers to suppliers
    • Product Transportation (Air Freight vs Sea Freight vs Ground Freight.) Familiarize yourself with the terms as well (LCL, FCL, Liftgate, etc)
    • Amazon Seller Dashboard and Seller Policies (Do everything in your power not to get banned. I take the customer's always right approach)
    • FBA process, cost and fees (Q1, Q2, Q3 vs Q4, shipping to one center vs multiple, labeling and packaging requirements, storage fees, etc)
    • How to take product images (Can Outsource if necessary)
    • How to write product copy (Can Outsource if necessary)
    • Sole Prop/LLC/Incorporating your business
    • How sales tax works in your state and how tax nexuses work
    • Obtaining sales tax permits in all your nexus states.
    • Import regulations pertaining your product (different products require different forms to be filled. Work with a freight forwarder. A1WWL is great for new importers)
    • Storage for inventory (Garage, storage unit, warehouse)
    • Selling on Amazon and getting organic reviews
    I'm sure I'm missing a few, but that would be a good start.
     
  10. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    What is your product? :)

    Your product sounds exactly like the products I sell and the ones I recommend my clients now find.

    $50k on Amazon a month is quite impressive.

    I actually had the reverse December of yours this year.

    I have a total of about 90 SKUs on Amazon and my number 2 and 5 selling SKUs got delisted on Amazon on November 23rd, two days before black friday. I did not know this as they don't tell you. But somewhere around Dec 1st, I noticed that I hadn't sold any in a week. My inventory sitting there was about 500 units.

    Amazon basically told me that I wasn't authorized to sell this brand. But it was MY brand and there was a mistake obviously. But navigating the Amazon customer service during the holidays was a lost cause. So basically this winter, I lost alot in sales as 2 hot selling SKUs were totally gone during December.

    They magically became available on January 4th with no explanation. I complained and Amazon refunded me storage fees for that time period of $400. Yes, these units basically cost $.80/unit to store at Amazon.

    These are the fun times we have during this ride. sh*t happens and sometimes you can do everything right and still get screwed. I was hoping for a good final month, but I ended up down 20% from last year.
     
  11. G-Man
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    G-Man Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Same thing somehow happened to us. Wasn't as dramatic as being before black friday, but somehow we can't list our own brand. Been back and forth with Amazon several times. The last time, the lady was so clueless she basically asked me if I knew why we'd been kicked off. I was so frustrated and gave up, and now we just give a really good deal to one of our resellers to list on Amazon.

    Unbelievable. I respect you guys that do e-commerce for a living. As frustrating as B&M is, it takes more than a mouseclick to take you out of the game.
     
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  12. TKDTyler
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    TKDTyler Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    I thought it was going to take me 2-3 years to hit that mark. Who knew.

    I'll show your mine if you show me yours ;)

    I actually wanted to reach out to you about a sales funnel from Amazon I am thinking of for my brand. Maybe this is a good time to ask as I want some non-bias opinion from someone with loads more experience than myself?


    I heard this happened to quite a few sellers since Amazon started cracking down on brand gating/control and UPC codes to remove fake and counterfeit products (same time as the fake reviews crackdown). From what I heard/read they are pushing towards supporting brand owners and pushing out 3rd party sellers as much as possible.

    Amazon Gets Real About Fakes
    http://gizmodo.com/amazon-is-finally-doing-something-about-fake-products-1789423735

    The date is 11/28/16 so the timing seems to be in line with what you experienced.

    Depending on where you got your UPC from, it could also be a conflicting UPC number from a previously listed product. I've heard of this getting product flagged and unlisted as well.

    I've also heard of top competitor to Amazon brands being unlisted around the same timeframe. I doubt Amazon would purposefully do it, but (insert conspiracy theory).
     
  13. TKDTyler
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    TKDTyler Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    Unfortunately, it's not even a mouse click. I can almost guarantee you that there is code in their algorithm that flags listings and takes support to be relisted after thorough investigation.
     
  14. David4431
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    David4431 Contributor FASTLANE INSIDER

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    Great read! I'm currently on my own Amazon / ecomm journey so reading this was very inspirational! Thanks for sharing!
     
  15. maverick
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    maverick Unorthodox Nonconformist Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    @TKDTyler great thread.

    How are you getting on now?
     

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