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EXECUTION E-Commerce from Start to Scale to... (Sold?)

1step

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Format:

For the first few posts I plan to recap the past few years starting from 2010. I anticipate each post will be pretty long and I could certainly make them shorter but I think it will be more fun for me to write them longer/more thorough and potentially more helpful for current and future readers. After we get to 2019 we will see how the thread progresses, my company is growing quickly so I anticipate there will be things to talk about. I hope you will find value in the journey that I share.



2009-2010

“You going to make any calls or are you just going to sit there all day?”

I still remember this like it was yesterday.

I was finishing up my final year of college and had just started an internship making sales calls. It was my first day and I had spent what felt like 2 hours “crafting my sales script.”

In reality I was stalling terrified to make that first call…

A week or so prior I saw a flyer posted outside one of my classes, the internship was a sales job with a university selling tickets to sporting events. As a sports management major and marketing minor it was the perfect opportunity or so I thought...

Only problem was I didn’t like sales or even talking…

But this was my chance to start working in sports, a dream of mine and the reason I was getting this degree. In order to get a job in sports you have to start in an internship for free. Prove your worth and move up. This was the perfect place to start. After this short unpaid internship I would soon be living my dream to be working in sports and getting paid for it!

I was a senior at the time and this experience would be valuable for my resume. Not only that but I wasn’t very good at sales or talking on the phone so this was the perfect opportunity for self-improvement. My mom likes to tell a story of me as a kid having my younger brother (2 years younger) make phone calls for me to check on video games or movies at the store or any other reason I had to make a call.

The internship seemed great, I felt like I was ready to tackle it until I sat down in front of the phone. Holy shit fear smacked me right in the face.

I was sitting in the middle of a 400 square foot room surrounded by my boss, fellow interns, and a few hot chicks and somehow I had to get up the courage to make calls all day… It finally hit me, DAMN this internship was going to suuuck.

After “working on my script” for what seemed like 2 hours my boss pipes up:

“You going to make any calls or are you just going to sit there all day?”

Damn!

Time to pick up the damn phone!

So I picked up the phone and dialed the first number on my paper. Ring Ring Ring… no answer shewww… I leave a message and it doesn’t completely suck… Success!

I made a few more calls that day, each time just praying it would go to voicemail!

For the next few months between classes and in the afternoons I would go into the office and make calls. I would typically make calls for 4-5 hours a day.

Eventually someone did answer the phone and each time they did, day after day, call after call I got more comfortable. At some point, I stopped thinking about them answering the phone and thought more about how I could better sell the tickets.

Luckily it wasn’t the toughest sell in the world, we didn’t have to use any shady sales tactics or tricks to get people to buy. That would have made the internship unbearable. I focused on good customer service and creating an experience that they couldn’t get from anyone else.

Each week I got progressively better. Eventually I was one of the best there, not that that meant I was getting paid.

It was still an unpaid internship.

After the first semester I decided to stick around for my final semester of college. They approved, I guess the thousands of dollars I was bringing in was worth the $0 they were paying me.

As graduation neared, I started applying for various jobs in sports and in sales. I ended up with a few interviews but no jobs so I decided to stick around in the internship full time and also picked up a job at a local bar. Full-time and still unpaid, again, I am sure they had to think long and hard about whether to keep me.

Over the summer and into the fall I was able to be more involved in the advertising, marketing and promotions we were running as well as still making calls 8 hours a day. I figured at some point a position would open up at the university and I would be first in line to go for it.

Unfortunately each time I was passed over. (thankfully)

At this point I had pretty solid level of experience especially for an entry-level job.

By the end of my internship I had generated about $1.5 Million in sales from tickets. I was still getting passed up for jobs both within the University and externally. So I figured I needed to go to grad school and get my masters in sports management and an MBA.

Long story short, that never worked out. (thankfully)

It sucked at the time…

Whether it was missing out on a job or missing out on going to your favorite school for grad school, they both equally sucked and were painful.

The reasons for being passed over never really seemed fair but now I feel so lucky that it didn’t work out for me. I don’t want to think what my life would be like at this time if one of those “missed” opportunities had worked out for me.

In Steve Jobs’ famous Stanford commencement speech, he said “you can never connect the dots looking forward you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever. This approach has never let me down and it’s made all the difference in my life.”

Dwelling on a decision made by someone else has never served me well.

All said and done I worked in this internship for nearly two years. What I learned and the self-improvement I gained was more valuable than any of the classes I went to.

I have found that some of my most rewarding periods of life were when I got way out of my comfort zone. Learning a new skill, self-improvement or getting out of your comfort zone are all hard tasks, it’s much easier to not do those things. It’s much easier to do nothing. But it’s not as rewarding. It’s not as fulfilling. At least it hasn’t been for me, what I have found most rewarding and fulfilling is taking something on that’s hard or uncomfortable and seeing yourself crush it.

What finally got me past this internship and propelled me to the next stage in my life was the kick in the a$$ that I got when I read The Millionaire Fastlane.
 

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1step

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In the spring of 2011, I was sick of working 8 hour days at my internship and then after that working at a local bar at night. I was tired of being rejected for grad school and full-time jobs. So, I decided I would change my path and start a lawn care company because… who knows, but it seemed like a good idea at the time.

So, what do you do first when you want to start a business? Business school taught me to write a business plan so that’s what I did.

Luckily the mental masturbation of writing the business plan wasn’t a complete waste of time. As I was googling for some aspect of the business plan I stumbled upon the Fastlane Forum.

It was here that I found MJ was offering a free preview of his book, maybe the first chapter or two of the book. I instantly consumed it and was hooked, so I hopped over to Amazon to order the full book.

Up to this point I had never been that interested in reading but I devoured the book in just a couple of days. The book gave me the kick in the a$$ I needed at that time of my life. It helped me to see what was possible and open my eyes up to a different way of living.

After reading the book I decided the lawn care company wasn’t the way I needed to go and instead came up for an idea for a website which better fit the Fastlane NECST framework.

I also decided to quit the internship and the job at the bar and started working as a project manager for a construction company. I made very little money, but it gave me the opportunity to make money by day then at night I could work on my new website.

I found a developer for the website on odesk (now upwork) and was quoted 3 months and $3,000. He was based in China so after I got off work I could go home and chat with him about the website and be available to guide aspects of design and development.

The website ended up taking 14 months to develop and closer to $6,000.

Towards the end of the 14-months I read the Lean Startup by Eric Ries. The essence of the book is the idea of launching your business with as minimum a product as possible. For example the website I developed could have been launched within 2 months for certain and likely for less than $500.

This was one of the major lessons I learned in this process, I should have scaled back features and not built out the full website with full functionality I should have just launched a minimum viable product to see how it was received by the market.

Knowing what I know now I could launch this business and test the idea with a wordpress website that I could build within 2 days for less than $100. Back then I don’t think I could have personally created the needed website. The $500 estimated above and 2 months is likely high on the money side and slow on the time side for hiring a pro to make the needed MVP.

The website was a 2 sided marketplace. The idea behind my website was unproven, meaning there wasn’t anything like it in existence and I wasn’t sure if I was solving a true problem that needed to be solved. The first question to answer for a business like the one I was creating is whether my website was even needed. I didn’t need to spend the time on creating user profiles or developing extensive feature lists or pricing models.

Instead of building my full website with all the bells and whistles I could have built a smaller site focused on just one small geographic area, for instance my city and built a 2 page website. One page would be do you need this service? Page two would be can you fill this service? Super basic but something like this would have easily worked for me.

If I was able to finish the site in 2 months instead of 14 I could have spent a year trying to slowly prove each theory as they became the next important thing to prove. If the new websites cost was $500 then I would have approximately $5000 more to allocate over the year to slowly solve each problem and prove each theory.

From The Lean Startup I learned an alternate way to launch a business. This would be important for my future projects.
 
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“I Quit”

In early Fall 2012, 14 months after starting my website it was finally complete and ready to launch to the world.

I was so excited about the launch that I quit my job so I could focus on it 100%.

I still remember going in to quit my Project Management job and explaining why I was quitting. I had minimal responsibilities, no kids, no excuse to keep me from moving all my chips to the middle of the table. Even if it did fail I wouldn’t be that much worse off then I was previously.

Luckily at the time I wasn’t paid much (and no other people to look after) so losing my job/pay wasn’t taking away much money from me.

So I quit and went all in.

I still remember the first week working for myself. At my day job it was always a struggle to wake up and get to work by 8. But as soon as I was working for myself I was wide awake and ready to go at 4-5am.

Every day for that first month was a roller coaster. This chart has never been more of an accurate representation of my life then that first 4-6 weeks. Everyday was up and down, I think eventually you more or less just get used to the ups and downs.

chart.jpg


Unfortunately, it only took about 3 months before I realized the website was a dud. The website was a 2-sided marketplace, in order for it to have any value to customers I needed to have people on both sides of the market using the site. So you practically have to build 2 businesses. Getting the people that make up “side one” to the site is completely different than getting the people that make up “side two” to the site. This made it more challenging. Certainly not something I was equipped to handle at the time. Outside of the issues I had growing the user base, another issue was there was no real profit model then or likely in the future.

Somewhat recently a similar idea was pitched on shark tank. They had a lot of the same issues that I had and also had no real profit model. Unsurprisingly the sharks took a pass on the deal primarily because they didn’t see any way to make money on it going into the future.

In late 2012/early 2013 I shut down the website and with less than $1000 in the bank launched my next company a health supplement company.

For this company I applied what I learned from The Lean Startup to launch quickly and cheaply. I chose a private label supplement, people were already selling essentially the exact same thing I was selling so I didn’t need to answer the question of “do people want this?”

Answering the question “do people need what I am selling” is often the initial problem to solve, or theory to prove. Proving/solving that initial problem with an MVP before investing tons of money is ideal. When you private label or manufacture a product that people are already buying you already know people want it you just have to figure out the sales side.

So, the first question I had to answer was “can I get them to buy my supplement over others available?” I wasn’t confident that I could, the easiest place to start was Amazon. They already had the people searching for it I just had to get in front of them and convince them my option was the best.

To get launched as quickly and cheaply as possible, I ordered the smallest possible order from the manufacturer who had the lowest MOQ (minimum order quantity) which was 24 bottles.

I quickly drew up the labels for the bottles on Photoshop and impatiently waited for them to arrive a few weeks later. After a few hundred dollars and a few hours setting up Amazon/making bottle labels I was “launched” and ready to sell.

Getting the first shipment of supplements in was a very cool feeling. I hadn’t put in as much work as I did for the website but holding the bottle in my hands and seeing the label and brand that I created was very cool.

The label looked like shit by the way…

I saved a bottle from each batch for liability reasons and just recently threw them away. Seeing my label 5 years later was quite a different feeling than the one I got on day one!

You don’t have to launch the perfect product, just launch.

Once I had the bottles in hand and everything ready to go on Amazon it was early December 2012. I remember getting everything set up to sell on Amazon then selling a few bottles over the first few weeks of December. Then I went out of town for a long weekend over New Years. I still remember the feelings I had when I got the email that I had sold out of my stock and needed to replenish.

It wasn’t much money but the 10’s of dollars I made in a month were more than my previous idea had generated for me and that was a great feeling heading into 2013.

Note: Amazon in 2012 was completely different than Amazon now. The way I started my company by going into a popular market (most popular) and hoping for sales would never work today. Chances are if you can “launch” your company for a few hundred dollars its going to be insanely competitive. Not a recommended strategy today.
 

amp0193

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Ya'll better hit that "watch" button.

@1step is the real deal.


I used to be scared to call parents when I was a teacher. Would stare at that damn phone forever.

We've come a long ways!
 
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After selling out of my first run of 24 bottles in early January I knew I would have some downtime before I would receive my next shipment and be back in stock. Being relatively new in this business I wasn’t positive how things would go after I got back in stock. Would I be able to keep up sales? How many sales can I make a month? Money was relatively tight so I needed a way to ensure I would be able to pay my bills and survive if the supplements didn’t keep selling.

Fall-Back Plan
Towards the middle of January I decided to start flipping items on craigslist. My goal was to flip enough items so that I would make enough money to pay bills, eat, etc. I did this so that I would know if everything went to shit I could at least make enough money to live off craigslist flipping.

Doing this for a month VERY part time I was able to make more than enough to live. I live in Kentucky and cost of living is relatively cheap. I would buy on craigslist and then take better pictures and list back on craigslist or amazon depending on the product.

This short test gave me the confidence to continue to push the supplement business and be a little more aggressive with inventory purchases. I could put most everything back into the business and know that even if I did mess up I would still be ok.

Sales Growth
During the first few months of 2013 my sales were increasing dramatically. Went from selling the first 24 units at end of December/early January to running through a few smaller reorders and then ordering 1000 bottles by the time March rolled around. As everything was rapidly growing, I would need to be more and more aggressive with re-orders to try to prevent selling out.

My turnaround time on these supplements was 3-4 weeks which seemed like forever at the time. Now I realize this is relatively short and a lot easier to plan inventory and finances then the 70-90 day turnaround times that come with importing product from overseas. If I was selling 100 units a week, I needed to have 400 units in stock to keep in stock for that month plus I would need to order 400 units for the next month so day 1 of the month I would need to have paid for 800 units total. Once you account for any growth your inventory costs grow exponentially.

I am glad that I did the short Craigslist test so that I could feel confident with the level of risk that I was willing to accept. It was a very liberating feeling, knowing that even if everything goes to shit, I will still be able to rely on craigslist to survive.

The first half of 2013 I spent a TON of time on Amazon. I spent a lot of time just searching on Amazon, looking at different products/pages to see what others were doing. I also spent a ton of time doing Amazon related google searches to figure out how to effectively sell my products on Amazon.

Over the hundreds of hours on Amazon I became very knowledgeable on how everything worked and what was needed to sell products. I think this one-track “mastery” was one of the best things I did/learned during 2013. For those starting out, I think having a one-track-mind can exponentially increase your chances at success. Don’t try to be everywhere, master acquiring customers on amazon, instagram, pinterest or wherever your ideal customers are. Once you do that, hire someone else to do that part of the process and move on to the next thing to master.

One of my most prominent memories of this time was a day when I was talking with @Eskil on skype about our supplement businesses. I had just woken up and checked on my Amazon sales and had 50 units in “pending” which typically meant they were sold but not always. At the time I was selling 20 or so a day and I remember telling Eskil there must have been some kind of issue with Amazon because no way had I already sold 50 units so early. Slowly as the day progressed, they all moved to sold and that became a regular occurrence.

That was the start of me realizing how big this could turn out.

One Year Anniversary of Quitting My Job
I wrote this in August 2013 in my progress thread and I think this is a good spot for it as well:

“So, I reached a pretty big milestone within the last week or 2. I have now officially been working for myself for an entire year.

13 Months ago, I was working 40 hours a week as a construction project manager at a small company sweeping floors. I decided it was now or never, I needed to quit the job and give my full attention to my own business. I had $2k or so saved up and have minimal expenses so I knew I had a little time before I would be out of money. At the time I was finishing up a SaaS website that I had worked quite a while on. After working on that project for the first 2 or so months I realized it was going to be a failure, so I killed it.

My next move was to do this supplement business, so I jumped on it, did some research and quickly bought my first order.

I didn’t have time to dilly-dally around, I needed to get started and move fast before I ran out of money. So, I just did it, got started, placed the order and kept moving.

You can see how the rest unfolded throughout the thread.

The main takeaway is to just START, once the pressure mounted and I had to make money I made it happen.

You can spend years doing research, reading forums and worrying about random corporate tax loopholes... You'll never start, there’s always more to learn. You don't need to know everything right now, get started, tackle problems as they come and be nimble.

As an entrepreneur you're just a problem solver, every day there’s a new problem or issue, learn as you go, solve the problems quickly as they come up and move on.

That’s what I've learned in the last year.

I look forward to the next year, I have some big goals for the next 6 months, should be a lot of fun”



20/20 Hindsight:
A lot of my focus in the back half of 2013 was on creating websites, building content, running ads and other stuff to drive customers to my website. This all ended up a waste of time and money as the website was never a real revenue generator for me.

When I first launched this company, my goal was to use the profit from it and invest into another business or idea. I think the success that I experienced in a relatively short period of time clouded my judgement and I thought I could turn this into a huge business by going all in on it. Looking back, I wish I would have stayed the course and just focused on my Amazon sales and either pocketed the profit or put it towards a different business.

Some of the reasons I shouldn’t have focused on building out the websites, content etc:
1. Too Competitive, supplements are crazy competitive, on Amazon at the time it was doable off Amazon was a completely different beast.

2. Me Too Product, the product was private label and essentially the same as every other person. Sure, you can market it and make it seem better but that doesn’t make it true. Something a fellow fastlaner said to me at the time that has stuck with me today is “why does the market need you to exist?”

3. No Passion, I didn’t have much interest in the market or any passion and on top of that I didn’t really like telling people what my business was because of the negative perception of the supplement industry.

In the end I learned a ton through the process of building the content, running ads, etc. but I also wanted to mention how I would do things differently in hopes that it would be of benefit to someone here.
 

Eskil

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Awesome to see you create this thread my friend!

One of my most prominent memories of this time was a day when I was talking with @Eskil on skype about our supplement businesses. I had just woken up and checked on my Amazon sales and had 50 units in “pending” which typically meant they were sold but not always. At the time I was selling 20 or so a day and I remember telling Eskil there must have been some kind of issue with Amazon because no way had I already sold 50 units so early.
And oh yes - I remember our chats back then, and that one in particular :) And meeting you at BnP in 2014.

Really proud of you to see how far you've come. Watching this thread...
 

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