How the Millionaire Fastlane literally changed my life.

[Flyleaf]

This letter was originally written to MJ directly on Facebook as a private message. I've never been one to really brag about my accomplishments and that isn't my goal here. MJ asked me if I would share this with the Fastlane community as he felt it would encourage other members. I will preface the letter by simply saying this - the book "The Millionaire Fastlane " changed my life. Every part of it. I have given away numerous copies of the book to friends and family because of the profound impact its had on me. I don't consider myself anyone special. I'm not the most brilliant person and I was able to cram 4 years of college into 5. If I can do this, then truly anyone can do this. Have faith, believe in yourself and trust the process. I also have to mention that before I read "The Millionaire Fastlane " I was at a very low point in my life. I was desperate and really did pray to God for an answer to what was wrong with my business. 30 days later I found MJ's book on my Amazon Kindle. I believe God answers prayer and for me this was the answer. Be blessed on your journey....



Hey MJ,

So I didn't necessarily want to post this on the forum, or as a AMA, but wanted to drop you a line to say thanks. I'm currently listening to the audible version of Millionaire Fastlane and have now read it twice. I've given away multiple copies and its always what I recommend as the best business book I've ever read.

2 years ago I read your book for the first time. At the time I ran an online business on eBay that was struggling badly. Things had gone okay for about 4 years and was able to live off of the profits, but things changed and my source of inventory started drying up. I had to go to work for my father and hated every minute of it. I had about $50,000 in credit and car debt and was miserable in the work I was doing. After reading your book though a light bulb went off in my head and I changed the way I was doing my online business. 1 year after implementing changes that you talked about in your book my business started making more money then my job. It's been about a year and a half now since I quit working for my dad and I'm now at home with my kids everyday. I have 6 employees, a programming team, as well as part time workers in India.

This year for 2014 things are heading in the direction of me making $1,200,000 (net profit)- on eBay alone. lol Honestly, I never thought this was possible. To give you an idea, my business taxes owed for 2012 was $6,000. My taxes owed for 2013 that I'm paying now was $110,000. Our little company is still growing but its still hard to believe. I remember years ago that I thought if I could sell 300 products a day that my life would change forever. Well I now average about 1,000 sales a day, with my biggest day coming this last December when on Cyber Monday I sold 2,441 items in a single day.

This past year I paid off the $50,000 in debt that I owed. I was able to take my wife and 2 kids to Disney World twice, Hawaii twice and also to Las Vegas. I personally also traveled to Qatar, London and India. I've sat courtside twice and watched my favorite basketball team (Go Thunder!) and I'm now building my dreamhouse that I plan on paying cash for. Much of the travel was with free airline miles that I get every month because of the volume of orders from my business.

I'm not a millionaire yet, but I am close. What I thought was an impossible goal at one time I am now about to achieve. MJ, in all sincerity, thank you. Thank you from the bottom of my heart. Your book changed my life and the life of my family. When I do hit the million dollar mark it would be my greatest honor to come to Arizona, meet you and buy you a beer to celebrate.

I hope this message finds you well and is a reminder to you of just how much of an impact you have made in the lives of some of your readers.

God bless you my man.

- Ben

 

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[Flyleaf]

Hey Yury,

haha yeah people still use eBay. Their fees are somewhat absurd, but you are basically paying for traffic to your items.

For me one of the things in TMF that hit me the hardest was when MJ talks about hitting the ceiling or limits of what you are selling. He gave a couple of examples like owning a hot dog stand outside a hardware store, and realistically how many hot dogs you could sell in a day. For me one of the biggest bottlenecks was the limit of inventory my supplier was capable of providing me. I started asking myself questions like, "What if I wanted to sell 3,000 items in a day?" and realized it wouldn't be possible with my current model. I had to spend time making new connections and new relationships. But where I used to have about 1,000 items listed on eBay I now have about 25,000 items listed.

The other big one was when MJ talks about the Commandment of Control. I realized that I had all of my eggs in one basket. If eBay went down, so did my business. I was a hitchhiker in someone elses car. I had to expand to other channels and branch out into other areas. Now if eBay closed shop tomorrow, it would still suck, but it wouldn't be the end of the world.

The last big one was automation. I used to do everything by hand because I thought I was saving money and who better to do it then myself. Let me tell you, once you invest in programming that can do a lot of tasks for you every day and night you will never go back! I actually found my programming team on freelancer.com. They work out of Columbia but speak great english and are about half the price of what you would pay in the U.S. I can check in with them everyday on Skype on my laptop or phone. It's been a fantastic setup and the amount of time and money it saves you is unreal. Now I think of everything in terms of "could this be automated?" lol

 

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[Flyleaf]

If someone asks him who his suppliers are, or the name of his products, Ill rip your head off.

LOL!

You just have to ask companies. The worst they can say is no. If you make your case right though you'd be surprised how many will say yes. For example, the first company I ever worked with like this was a company called - evertek.com (its ok I don't use them anymore but it can give you an idea of how this works). We ended up doing so much business with them that they actually began working on a dropshipping model themselves for their company. I just told them I could do a lot more business with them if they would let me buy one piece at a time instead of bulk, and just charge me a bit more then the bulk price. I became one of their biggest clients.

Even if companies don't want to participate in shipping straight to your customers, ask them if they will offer local pickup. Almost everyone will do that. Then just hire a local stay at home mom to drive over pick up your stuff, pack it and have UPS come pick it up. When I first started, this was how I did it. I live in Chicago and Evertek is near San Diego, but I did this for years with 2 different stay at home moms (I got references and background checks for both). It worked beautifully. The amount I saved in shipping the product to myself for storage I turned around and paid them to pickup and pack the packages. Customers got their items faster, I didn't have to hold items, and 2 women got jobs while still staying at home with their kids. I know its a little outside of the norm, but when you're first starting you have to get creative sometimes.

 

[MJ DeMarco]

Reading stuff like this literally makes me relive my own experience and gives me chills. Thank you for posting it!

Also, I'd like to mention that YOU changed your life... my book just pointed in a direction and gave some guide markers. Give yourself credit and congratulations. Certainly beats waiting around for the stock market to go up or down.

 

[Flyleaf]

Hey everyone,

Let me make a couple of things clear that I think may not have been in some of my previous posts...

I've been doing e-commerce now for about 9 years. During those 9 years I made a ton of mistakes that I learned from. I was full time selling online for about 5 years until things went south and I went to work for my father for 3 years. During those 3 years I spent all my time off work refining and building up my business. It was during the last year of my job that I read "TMF " and applied its principles to my business. I have now been dong this model for almost 2 years now and the results have been phenomenal because of the principles outlined in the book.

Something else I want to make clear from my first post is this too. I do like to travel and I do like nice things, but there are many things I am holding off on because of still having to ask myself the question - "Can I afford it?" All the flights I take are paid for as I mentioned with airline miles from running inventory through on my business. I got to fly business class to India and back to Chicago with airline miles and it was incredible, but at this point in my life I would never have paid for it outright. Another example would be that my wife and I have just one car between the 2 of us with 115,000 miles on it. Why? Because it works, its paid off and its all we need right now. I personally want to own a Tesla, and even though at this point in my life I could go pay cash for one there are other things that are more important right now. This kind of attitude probably stems from mistakes I made in years earlier. When I was in about $25,000 of credit card debt do you know what I did when I moved back to work for my dad? I financed a $30,000 Infiniti G35. Boy did I feel cool.....for about 3 months. I actually sold it once my business started taking off just because I was so sick of the debt!

My story is that I started off years ago doing just eBay. I originally ordered items straight from manufacturers to my house and then shipped them myself. I continued doing this and reinvesting profits at a rate of growth that seemed too slow for me. Being young and stupid I used credit cards to purchase a bunch of inventory all at once and moved into a small warehouse. This led to a mounting debt and a business that wasn't keeping pace. The main problem being that I was trying to live off the profits when they just weren't enough to sustain me.

In 2007 I hit a wall of credit card debt that I had to deal with. My wife and I went for a long walk and had the idea of "pre-selling" the items from our vendor on eBay. By pre-selling, the plan was we would sell the items on eBay without actually having the inventory. Once the item sold we would turn around to our vendor and order the items we sold that day from them, ship them to our house, and the day we received them we would pack them up that day and ship them to our actual customers. There was about a 2 day lag to get the items to our home but otherwise things moved fast. The amazing part about this was it worked and really opened my eyes to the possibilities with dropshipping. For the next 3 years we did this model of business and averaged making about $50,000 a year. The only thing that changed was during the last year was that we hired stay at home moms in California to pack the items for us instead of shipping them to ourselves. The whole time I wanted to grow more and always tried thinking of new ideas but I had 2 big problems that didn't become apparent until after reading "TMF ". Problem #1 was I was relying on only one vendor for all of my inventory. Problem #2 was I was only selling on eBay with no other websites or channels that I received traffic from. In essence I was hitchhiking and eBay was driving.

Fast forward to April 1st 2010 and eBay announced many changes that had a drastic impact on my business. Faster shipping times for better search placement, lower search placement for longer handling times, etc. Overnight my sales were cut to 1/3 of what they were before. I tried scrambling to come up with a fix but it was too late. All I had was eBay. It wasn't until 3 months later with credit card debt mounting that I admitted defeat. I called my dad and asked if he had any spot in his company I could work in. My wife and I packed up and moved back to Chicago, leaving our friends and my wifes family behind in Tulsa, OK. As much as MJ talks about how much he hates Chicago in his book, I think I hate it more, lol. The next 6 months the vendor we had been using decided to open a retail division to compete with us directly. Our own vendor ran us out of the marketplace because they saw us as a middleman that could be cut. This was a dark point in my life. The next 3 years I worked a job I hated while still trying to think of anything to make work online.

Finally in December of 2011 I read "TMF" while on Christmas vacation. Parts of the book hit me like a sack of bricks and I immediately realized some major gapping holes in what I had been doing. I thought of the idea of using several major retailers to use as our dropshippers, but I knew I would need some automation to make this work profitably since the margins would be low selling retail from one site on another retail site. We spent 10 months working on developing the programming with only test sales so we invested the almost the entire years profits from selling online into programming. We hit a lot of walls with this method, every month it seemed we hit a major issue that seemed like we could not get past, whether it was eBay or our product sources. But I was determined this time and saw the potential, so we all put our brains together and figured out work arounds for the walls we hit.

At the point I'm at now most everything is run with programming except for things like emails and returns. The thing I focus on most now is just growth into new channels and finding new sites for inventory.

Something I should make clear here is that I never go out looking for "dropshipping companies". If a company advertises that they are a dropshipping company then I stay away. Many of them are scammy where they want a big fee up front, or even if they are legitimate then everyone else and their brother is already using them. Where I have found a lot of success has actually been using companies as drop shippers that sometimes don't even realize it. For example, I know of online sellers who use walmart.com as a dropshipper. Crazy? Maybe but I've seen sellers on eBay making $100 a pop on patio furniture doing this very thing. "Won't buyers be pissed though?" I can hear people asking. The sellers feedback doesn't reflect it. Most people are just happy to receive their item. Now most things people only make a couple of bucks on, but it depends on what you are selling. If you are interesting in doing a drop ship model here is where I would recommend that you start - retail arbitrage. Retail arbitrage is simply taking something for sale off of one website and promoting it on another. In my opinion, in this day and age there is really almost no reason to have to stock your own products if you don't want to. Go on any major search engine or shopping comparison site and look up a product. Now go look that product up on eBay. Chances are that had you looked around you could have found the product cheaper somewhere else. If you can exploit this difference in prices from one site to another then that is where money is to be made. You just have to think outside the box.

 

[Flyleaf]

All of it is now dropshipped. It didn't used to be, which was part of my problem. Prices would fluctuate while I still had 50 pieces of XYZ product still sitting on my shelves and now I would be losing a dollar on each one. I know this model works for some, but for me it didn't. My thought was that if someone else already has a warehouse that the product is sitting at, then what does it matter if its sitting at my place. I made arrangement with some companies to pay extra for the product if they box it and ship it for me. Since they ship all day long anyway most were fine with this. I would print off PDF's of all labels going out that day and load it into a shared Dropbox folder with the company. They print off the PDF, slap it on the box and out it goes to the customer.

For me the beauty of it is that there's virtually no overhead. I don't have to reinvest the profits into more inventory to hold while hoping some overzealous moron on eBay doesn't slash prices so everyone is making 10 cents.

I used to have packing employees, scheduled pickups with UPS, FedEx and USPS, allotted time to drop off international packages at the Post Office (loads of fun), pay for packing supplies, storage for inventory, etc. All of that is gone now. It's a much more efficient system, but it takes some time and patience to set it up right.

 

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[Flyleaf]

Pay attention folks. Notice how he is solving problems and challenges.

So ... did you start with thousands of dollars? Or was this entirely bootstrapped?

I started small and then focused on growth. My main source of funding was Mastercard with my first order ever being for about $150 of product and it grew from there.

I remember my first month ever finally making some money on eBay (eBay was where I first started). I thought I'd made $500. Then my wife and I started counting up the fees we had to pay and realized that we had just broken even. It was extremely disheartening but we figured we could make it work.

The times I got in trouble was when I tried to do too much too quickly. Usually this was in the form of trying to expand too fast in the form of financing everything on a credit card.

Be real with yourself. If you are only selling 10 products a day to start then work on getting to 20 first before shooting for 100. My biggest problem sometimes was actually optimism. Optimism is great in focusing on the long term but too much of it can lead to stupid decisions. I remember one time importing some digital cameras from China that were 5 Megapixels (great image quality at the time) and paying about $5,000 for about 100 pieces. Even though they were 5 Megapixels the quality ended up being garbage and we had to liquidate them for a loss. It's always better to test a little first. Be patient, make sure its working then invest more. When you find a model that works the growth will happen naturally and quickly, you won't have to force it.

 

[MJ DeMarco]

If someone asks him who his suppliers are, or the name of his products, Ill rip your head off.

 

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[MJ DeMarco]

Something I should make clear here is that I never go out looking for "dropshipping companies". If a company advertises that they are a dropshipping company then I stay away. Many of them are scammy where they want a big fee up front, or even if they are legitimate then everyone else and their brother is already using them.

I hope people caught this little tidbit of information.

When he first mentioned "drop-shipping" I thought, "utt oh, entry violation." Why? Because everyone is looking for dropshippers who will make their life easy. How he fixes the entry issue is he doesn't use company's that specifically mention dropshipping because that is where the crowd, or the herd is looking.

Instead, he uses his personal capital and tries to establish relationships with manufacturers that are off-the-grid, and not advertising dropshipping. Heck, some of them might not even know what it is.

Easy - Oh look at this list! This website lists 100 dropshippers. I'm gonna call em!
(Problem is, every tom-dick-and-harry is using them, crowding the space.)

Hard - Call 2 dozen manufacturers that don't necessarily "drop ship" and establish a personal relationship with them.
Result: Unique products without fly-by-night money chasers crowding the space.

 

[Flyleaf]

I guess this is kind of turning into a AMA, haha. It's okay though, if you guys have any questions, I'm happy to answer them. This is kind of my way of giving back.

 

[Flyleaf]

I'll be happy to come on again later and answer any questions asked. I only hope it helps some of you. Today is my wifes birthday so I have to run out for dinner. Again, the biggest things that helped me in my business were all inside of TMF book.

 

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[MJ DeMarco]

Must be the week of anonymous donors...

I'm happy to announce that another anonymous donor has come forward and paid for a 3mo INSIDERS Subscription for @Flyleaf -- congrats! I'm sure I can speak for all of us INSIDERS, I hope we can hear from you more in there.

 

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[Flyleaf]

I hope people caught this little tidbit of information.

When he first mentioned "drop-shipping" I thought, "utt oh, entry violation." Why? Because everyone is looking for dropshippers who will make their life easy. How he fixes the entry issue is he doesn't use company's that specifically mention dropshipping because that is where the crowd, or the herd is looking.

Instead, he uses his personal capital and tries to establish relationships with manufacturers that are off-the-grid, and not advertising dropshipping. Heck, some of them might not even know what it is.

Easy - Oh look at this list! This website lists 100 dropshippers. I'm gonna call em!
(Problem is, every tom-dick-and-harry is using them, crowding the space.)

Hard - Call 2 dozen manufacturers that don't necessarily "drop ship" and establish a personal relationship with them.
Result: Unique products without fly-by-night money chasers crowding the space.

This is exactly it! Some of the products I sell on channels I'm the only one even selling the item. But its because I spent the time to make the relationship. This in turn leads to higher margins on those items, but its all a result of reaching out to companies.

I'll admit that for me cold calling a company is not exactly a favorite past time, although its led to some of my best relationships. But even if you don't want to do that, see if on their website you can ship the product to a different address then the billing address. How many 10's of thousands of websites are out there that will let you do that? Now you have to be careful and not just trust anyone but what I'm trying to point to is that there is virtually limitless inventory already online. Developing a system to use what's already there and sell it on different channels for a few bucks more is where I see lots of opportunity.

 

[MJ DeMarco]

Thanks for that info. Btw not sure if you are willing to share but do you stock these items in a warehouse and arrange for shipment or is it all dropshipped directly to your customers.

If someone is taking time out of their busy day to answer your questions, you should "Like/Thanks" their contribution. Or better, send them rep $. Thank you.

 

[Flyleaf]

Awesome! If you don't mind, regarding outsourcing your programming:

Are you saying that you are outsourcing adding tangible product descriptions, weights, packaging requirements to marketplaces?
The reason why I ask is that you mentioned you had approximately 25,000 items you are selling online. This has been one of my biggest dilemmas on adding more dropshippable products do to the fact of having to provide the data for others to add to various marketplaces, websites.

If you are doing that, can you share a generic process of making that happen?
If not, I understand, but you are making me think that this might be possible without having to oversee every dotted I and crossed t.

Or, are you referring to outsourcing your programming of developing an online store only?

Again, thanks for your time!

Randall

Hey Randall,

Well for me I outsource all of my programming. I know enough web design and HTML to get by but nothing major. A good developer will be able to go to a site and develop a system that automatically pulls product descriptions, weights, SKU's etc. put that into a program that can then input that information into an ad or listing for whatever marketplace you are targeting. From my understanding It can be done in a number of different ways. Again, I found mine at freelancer.com but I've also heard that elance.com is good as well. Just read feedback and discuss your expectations with any programmer before hiring them. In the beginning some of these things can maybe be handled with an excel spreadsheet or even by hand. But once you start getting into even hundreds of items it starts to become more necessary to integrate programming. Don't let programming intimidate you though. I can't program my way out of a paper bag. lol But a good programmer will walk you through everything that needs to be done. They are out there you just have to look.

 

[MJ DeMarco]

Pay attention folks. Notice how he is solving problems and challenges.

So ... did you start with thousands of dollars? Or was this entirely bootstrapped?

 

[Kak]

Yeah I have seen people doing the model you guys are describing and it is not sustainable for the long term. This is really more of an issue on eBay.com then other sites like Amazon where there is one product page and image with multiple sellers. I think when you are starting off then it is an okay way for people to get their feet wet but as you said you would begin dealing with Copyright and Trademark issues of companies who either don't want their products listed or their images used. Of course you have to respect this and if you don't then you'll get your business shuttered. In my experience about 95% of the companies out there have no problem with you using their images as long as you are buying the product directly from them. But you can't just assume that. I always try and get permission if I am unable to take my own pictures, but even then some companies will open a violation against you on various channels. Usually this is just a case of a company where the left hand doesn't know what the right hand is doing. Establishing relationships is always the best way to go but using other retails sites for arbitrage is a model that works well. Anytime I have ever had anyone accuse me of anything like copyright, trademark or even counterfeiting I always contact that company immediately and explain the situation. 9 times out of 10 the problem is fixed over the phone. If you are doing things right then you have nothing to worry about, but no you can't just copy and paste everything you find on the internet. Apologies if I gave that impression.

I apologize if indeed you are building relationships with all of these suppliers, but it doesn't sound like you are. Let it be known my disdain with copyright infringement.

Folks the way to be successful in business is to always make sure every angle of the venture is in the right. People like the ones being discussed will be looking over their shoulders for years to come. If you always adhere to strict moral standards from the beginning you will never have to worry about being shut down, sued and even criminally punished.

A well respected friend of mine says to always "walk in the light" and it makes sense on so many levels. Don't be a bottom feeding dickhead.

 

[MJ DeMarco]

Some of your company's money is made illegally.

C'mon bro, quit taking out your frustrations on someone who doesn't appear to be guilty of what you're saying. Reminds me of the emotional response we heard from people using ad blockers.

 

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[Flyleaf]

Awesome stuff I read everything. Still a little unclear on how to do this and i'm wondering because I have a small e-commerce operation i'm trying to expand and i'm open to anything.

So if I were to use target.com or walmart and find a good price - Would I basically list that on ebay, then when sold, buy it from target and use the buyers info?

Sure, that would probably be easiest. If you want to even test it locally to see how it works you could always throw an ad on Craigslist, then just go pick it up locally or have it delivered to your local store. Again the amount of profit won't be astronomical, but if done in volume it can become more. The idea is to test and see what works.

 

[Eskil]

Wow... awesome success story! +$rep transferred...

Yeah drop-shipping and selling on eBay both have some negative connotations these days so it's refreshing to see someone doing so extremely well at to this day, even having started it so recently!

This really goes to show that old sayings like "that method has been done to death" or "you can't do that anymore...too much competition these days" don't hold water when an individual dares to think different and finds a new way to go where others can't or won't.

 

[Flyleaf]

He admitted to doing exactly what I am talking about. He said he doesnt always get permission. Ill drop it.

...But the fact that some companies didn't want me to use their images was what led me to seek permission with all the companies I now use...

 

[Flyleaf]

Pat Flynn just had a podcast on this:

SPI 099 : Buying Stuff and Selling it on Amazon (For 6-Figures a Year!)

As a side note, I wanted to say thanks for posting this. I listened to it and decided to open another FBA Amazon account solely for trying out this model. My wife and I spent about 12 hours last week shopping clearance racks in our local area and spent about $4,500 on deals that we found that we'd make a profit on. Honestly, I was floored at some of the things I found at local stores. Some items I spent $10 on and will make $30 when it sells. If it all goes as planned then we should double our money. The idea is that if it works we'll hire a shopper and packer for about 4 hours each day and try to automate this. Loved the idea though and so far its working. Sales are already coming in off of what little we have sent to Amazon.

 

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[Flyleaf]

Another home run! You are such an inspiration - you took the idea and ran with it. Thank you for encouraging.

Would you mind sharing-:

- what type of items and stores do you (your staff) go to?
- Do you follow the same model described in the podcast (such as Target, Walgreens, etc.) or you changed the strategy?
- With the staff and Amazon fees, what kind of profit margin do you expect?
- do you use any software such profit bandit to evaluate the purchase?

Sorry for so many questions, but thought this will help larger audience too. Thanks in advance.

No problem. We use pretty much everything described in the podcast. We use Profit Bandit on our iPhones - this is the main piece. I honestly don't see how any of it would be possible without it. Most of our stuff we are finding at just the same places most people shop - Target, Walgreens, Menards, Home Depot, Sam's Club, Costco, Toys R Us, Babies R Us, K-Mart, etc. We scan almost anything that we see on clearance that is pretty heavily marked down. You would be surprised at some of the stuff you will find. Also not everything is always on the clearance rack. We've found products heavily marked down by themselves in the middle of other full priced retail.

Average profit currently stands at $9.07. This is after all fees except for pay roll. So after paying employees the real profit is probably more like 30 - 35% of that. Employees are definitely the biggest chunk but also the most necessary (obviously) for automation.

I probably don't need to say this but the biggest difference between this and any kind of dropshipping model is that you have to pay for the inventory up front by doing this. That is more of a risk and we do get a fair amount of returns as Amazon is very lenient with their return policy. The profits stated are still after returns are taken into account but it is something to be aware of.

Software we are currently using is:
AppEagle.com for automatically adjusting pricing and keeping items competitive.
InventoryLab.com for all bookkeeping and monitor numbers.
Profit Bandit app on iPhone for scanning items.
Not all of this is necessary to start but it just makes things easier. All you really need to start is just a selling account on Amazon and the Profit Bandit app.

I don't think I would qualify this type of business as "Fastlane" really at all but it's at least a way to get your feet wet if you're just starting. For me I look at it as:
N - Doesn't really solve a need. There are already lots of sellers on Amazon.
E - Barriers to entry are very low so there is more competition.
C - You don't have control, Amazon does.
S - Scalability is really only possible by expansion into other areas and hiring people.
T - Time can only be detached by hiring other people to run it for you.

I'm glad that we've tried it and it seems to be working okay, but in all honesty it hasn't been my main focus as much as some of my other projects. If I can keep doing what we are doing now with little to no effort then I will do it for as long as it will last, but I certainly would not want this to be my main or only business based on the criteria MJ laid out in his book.

 

[IceCreamKid]

Hey man, huge respect to you for this. I once believed that dropshipping was on its way out, but you have clearly found a way to make it work. Rock on!

 

[JasonR]

That is AWESOME. Killer action with killer results.

I would send you more than $100 if I could.

 

[Flyleaf]

Wow! Kudos on taking action, and that's what sets you apart. How is going since then (Apr '14)? A quick update will be helpful. Thanks for sharing again.

So far it's going pretty descent, it hasn't been as fast as I had hoped but right now we're pulling in about $1,500 - $2,000 a month from it with little to no effort so I certainly can't complain about that. We were able to automate it with 4 employees - 3 shoppers and 1 regional manager. We're paying an hourly wage plus 10% of potential profits found. The regional manager gets hourly plus 5% of all potential profits that come in. Her job is to pack everything up and get it to Amazon.

Our first month in April it was just my wife and I testing it by going to local stores and purchasing items we found. That was by far our best month with it. We made about $6,200 with it but we were very aggressive with it. Honestly it was pretty fun though, kind of like a treasure hunt or something. Right now our one region is in the suburbs of Chicago but if we can make it more efficient then we'll try and open more regions in other areas.

Here's a snapshot from inventorylab.com showing progress thus far....

 

[Y.B.]

Thanks for that info. Btw not sure if you are willing to share but do you stock these items in a warehouse and arrange for shipment or is it all dropshipped directly to your customers.

 

[Flyleaf]

I apologize if indeed you are building relationships with all of these suppliers, but it doesn't sound like you are. Let it be known my disdain with copyright infringement.

Building relationships is the primary way I do business, but after rereading some of what I wrote I can see how it could appear otherwise. My intent with talking about retail arbitrage was to get people thinking of the opportunities around them for doing a dropshipping model. The fact of the matter is that most people don't mind you using their images if you are purchasing the product from them. Some may not like me saying that but its the truth. Again as I said before, you should always ask, which is what I do now. When I was first experimenting with changing my business however I did try this with several online stores. The result? Many contacted me asking me to setup an account with them instead of purchasing straight from their website so I could get better pricing. Most online stores are extactic that you are moving inventory for them, not throwing a fit because you use their stock image. lol I did during that time though have 2 companies contact me and ask me to not use their images. Of course I complied with it immediately and it was no problem. But the fact that some companies didn't want me to use their images was what led me to seek permission with all the companies I now use. I went to a conference around the time I was changing over my business and met a woman who ran an online business out of Iowa. She had contracted with Victoria's Secret to be their sole buyer of out of season clothes and excess product. She told me that it wasn't easy securing the contract but her business exploded as a result of it. After talking with her this was the model that I chose to pursue as I felt it obviously made more sense.

Now if someone that is starting off asks me what I would recommend to get going then I do tell them to build relationships with companies, but to actually get sales in the door I have recommended retail arbitrage (maybe I shouldn't). I've seen it done and in the past I did try this with success. In all fairness though, the only angle I have ever thought about this in, is in terms of being an online reseller. I don't manufacture any of my own products so I'd never really considered the other side of those who do. I'd always assumed it was more business for them. I do think there are 2 sides to this though instead of assuming that every thing is illegal when it comes to using stock images.

Can I ask an honest opinion to some of you who manufacture your own products? What do you think about this - http://www.tabberone.com/Trademarks/CopyrightLaw/ImageTextTheft/ImageTextTheft.shtml I feel it shows another point of view on the law from an eBay sellers standpoint. I'm not saying I agree with either side but am genuinely curious how this plays out. Like I said, I now have permission for everything sold, but for a time did not always do it this way. I do think its better to er on the side of caution but am curious to hear your thoughts.

 

[Flyleaf]

I know a person that engaged in "Retail Arbitrage" at Costco (before there were Costco's all over the Country) she was selling comforters on Ebay that she bought from Costco marking them up about a $100ea. Lot's of customers where happy but there where also plenty that were pissed when they found out what they purchased. When that business (more like a hustle) dried up she ventured into sporting goods buying from traditional channels(wholesalers) and selling on ebay and brick and mortar. Since she never really learned good process she ended up going BK after a couple of years.

The biggest problem I see with Retail Arbitrage is that you have NO CONTROL. It could be a nice hustle while it lasts but probably not the best way to build a Fastlane business.

I agree its not a way to build a Fastlane business, you have to make the switch to actually establishing relationships with the companies and manufacturers themselves to have make it work for the long term. I do however tell people that Retail Arbitrage is great way to get started in selling online. If you try to approach a company by telling them that you have no online experience, but want to sell their products its not going to look good. On the other hand if you can show that you've already been selling their products with success and want to buy directly from them for better pricing then you'll find a lot more people willing to listen. Arbitrage is a starting point, and a good one for most people, but its not the end all be all.

 

[Flyleaf]

Must be the week of anonymous donors...

I'm happy to announce that another anonymous donor has come forward and paid for a 3mo INSIDERS Subscription for @Flyleaf -- congrats! I'm sure I can speak for all of us INSIDERS, I hope we can hear from you more in there.

haha you guys are incredible. I've snooped these forums for a couple years now but always just read and never posted. thank you, whoever did that.

 

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