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$20.000/month ecommerce - Should I just sell it?

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Hold or Sell

  • Hold, stick it out and scale

    Votes: 5 50.0%
  • Sell it, use time a better place

    Votes: 5 50.0%

  • Total voters
    10

KJG

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Dec 19, 2019
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So... This is the most stupid post of the century.
(Alert: English is not my native language)


--> I got this eCommerce business that is selling Bestseller brands (read: high competition, with the same products) and doing $20.000/month after 8 months.
October is the first month that we're generating a profit (10%), but we're having big cash flow issues due to past months' inventory investment and management of it (overstocked and having trouble getting the overstocked SKU's sold)

We want to compete with the small-medium size ecommerce stores (500.000-1.000.000 in profits/year). We have better service, faster delivery, more personal marketing and just invested in better inventory management than them.
--> But at the same time, we're selling the same products as the giants (Nelly.com, Zalando etc.), so the only differentiates I see compared to the giants, is the personal marketing/service.
We have much smaller product selection than them (we have about 300 and they have 10.000+ products).

We have an investor that is willing to invest $50.000 for 25%, as long as we're willing to be personally liable and they can convert that $50.000 to shares later on.

TLDR:
Downside: High competition, same products, lot of competitors, Giants have the same products, Cash-flow issues
Upside: Personal marketing (some people will always buy from personal stores), better service, faster delivery, better inventory management than our direct small-medium competitors.
 
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Mister

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No one can make a decision for you. ( I think you know that already)

MJ wrote a good part about decision making in TMF, the chapter begins in 166.

I would suggest that you read the part. It often helped me to make a logic based decision on my own factors. Trough that i now afterwords why I decided to make that decision and have no dough it was the right choice.
 

Kokaka

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Aug 9, 2019
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I am in the same position. Short running time but very sucessfull.
If you see your sales increase. Try to sell after 24 month. Reinvest into another business and do it again.

Ask yourself. Do you need the 50k now or can you take 200k next year?
 

Toyotomi

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We have better service, faster delivery, more personal marketing and just invested in better inventory management than them.
You already have multiple skews and finally seen your first month of real profit.

In software people always want to throw what they deem "trash" code out and re-write it, in the end is never really worth it unless is exceptionally bad, rather you want to improve what is there.

You not only have a profitable business but done so under a year.

How much more can those profits increase? Can your margins increase?

Moving those things forward will increase your exit far more than selling now after you have built the machine (the hard part of getting through your first sale is done), thus would be better to carry on unless there is something you can't solve and cash flow issue does not seem like the absolute worst issue you can have.

You can start now optimising and deal with pain points that will make you more valuable in the market place.

Also personally liable to a loan... so either get sued personally for that loss if shit goes sideways or take 25% of shares? Sounds like a win-win for them, try to remove the personal liability from it, no point in having a company if they can burn you with it.

I voted hold a stick it out, but with the condition that you solve your cash issue and that you don't repeat the inventory management issue you can't ask for loans to save your a$$ every time, but you also need to resolve this issue, get it fixed and continue is my recommendation. But, ultimately do what you think is best with sound reasoning.

I hope that helps a bit.
 
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Last edited:

biophase

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So you are making $2k a month and reinvesting that into inventory?

At best your company is worth $75k-$100k.

$50k for 25% sounds good but why are you liable for it, it’s not a loan.

Use the $50k to add some unique private label products in your store.
 

KJG

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Thanks for all the replies.

It has been chaos since I posted.

A lot of excuses, but also important to take care of (Family and serious health issues)

All in all, it all went to shit.

3 buyers was ready to buy, but did not get accepted by Bestseller (the company that makes the clothes) and with me neglecting to take care of my business and just shutting it down I'm now iiiiin, wait for it, debt.

Around $30.000.

Maybe I should start a progress thread on that shit :rofl:
 
Last edited:

fridge

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Thanks for all the replies.

It has been chaos since I posted.

A lot of excuses, but also important to take care of (Family and serious health issues)

All in all, it all went to shit.

3 buyers was ready to buy, but did not get accepted by Bestseller (the company that makes the clothes) and with me neglecting to take care of my business and just shutting it down I'm now iiiiin, wait for it, debt.

Around $30.000.

Maybe I should start a progress thread on that shit :rofl:
So the contingency to sell was that one of the manufacturers or suppliers had to accept the deal as well? If so you were screwed from the beginning there.. At least you learned a lot of good business lessons.
 
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