On Par To Make $500,000 This Year And Why I Consider It A Failure

[Addicted]

I recently stumbled on this forum and was rather surprised at the amount of great advice and level of discussion. I figured I would start of my journey here by adding value and sharing with you my experience over the years with running an online business.

A little background first. I just recently turned 30 and have been at this online-money-making thing since I was 20 years old. It wasn't till I was 27 when I was able to make my first breakthrough and quit my 9-5 slowlane job. I had many attempts and failures before that time and somewhere in the middle I went through a burn-out phase where I completely shut out anything work related. My brain couldn't even process a single industry buzz word (I would seriously feel sick).

I was out for 9 months before I could get myself to work again. I was so broke I was considering buying a van to sleep in. It never came to that and I was, slowly but surely, able to get back on my feet. I say this because I don't want anyone thinking making money at this be-your-own-boss thing is easy and if you find yourself failing over and over then know that you're one more try away from hitting a home run so don't give up and keep at it. Fail quickly and most importantly learn from your failures, adjust your strategies accordingly and try again. I can't stress enough how important it is to identify WHY you "failed" before moving on to the next thing. Don't get discouraged and know that the master has failed more times than the beginner has even tried.

Anyways, back to the point of this thread. This year I'm on par to make 500k and I consider it a major failure. Obviously failure is relative. So why is it a failure? Seems like a good chunk of change. Well, it would be if I didn't make 1.2 million in profit the year before (2015). That's more than a 50% drop in income within 1 year. If I was a CEO of a company and posted numbers like that I would likely get fired.

So what happened? What on earth would cause such a drastic drop in income? I could blame it on how my primary sales channel introduced new policies that made it more difficult to advertise and sell my products but the truth of the matter is that I got complacent and failed to properly diversify my sources of traffic. Fortunately I had a list I was building and a website that sustained the major loss of a sales channel so I didn't go straight to zero.

In hindsight I could have done much more and I put in a weak effort because things were going good. I got lazy. I had 3 years of consecutive growth and that made me over confident. Thinking back, I lost my drive and hunger. I spent too much time buying stuff and not enough time securing future growth. I knew the potential for loss was there but I ignored it and for that I had a year where I lost more than 50% of my income.

Don't get me wrong. I'm still very happy making what I make but that's not the point. The point is this could have been avoided. I could have mitigated my losses but the hunger that got me there had subsided and I wasn't hustling anymore. I was coasting.

The lesson I want to share here is don't get complacent, don't lose the hunger regardless of your income and, most importantly, live well below your means. Reward yourself but don't go overboard. I bought a Porsche for $130,000 and that was stupid (in hindsight). No, it didn't bankrupt me because it was still within my means but it was mostly a dumb buy. Making a million dollars isn't a lot after taxes. it's easy to spend it all very quickly if you think your business is bullet proof when it really isn't. So don't make the mistakes I made, regardless of where you are on the totem pole of income.

I'm happy to have found this forum. It has been a while since I've seen a hungry and motivated crowd that is striving for more than just the average life. I hope to learn from the folks on here and I hope my post adds a little bit of value to some of you out there.

Cheers.

 

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[Jon L]

I recently stumbled on this forum and was rather surprised at the amount of great advice and level of discussion. I figured I would start of my journey here by adding value and sharing with you my experience over the years with running an online business.

A little background first. I just recently turned 30 and have been at this online-money-making thing since I was 20 years old. It wasn't till I was 27 when I was able to make my first breakthrough and quit my 9-5 slowlane job. I had many attempts and failures before that time and somewhere in the middle I went through a burn-out phase where I completely shut out anything work related. My brain couldn't even process a single industry buzz word (I would seriously feel sick).

I was out for 9 months before I could get myself to work again. I was so broke I was considering buying a van to sleep in. It never came to that and I was, slowly but surely, able to get back on my feet. I say this because I don't want anyone thinking making money at this be-your-own-boss thing is easy and if you find yourself failing over and over then know that you're one more try away from hitting a home run so don't give up and keep at it. Fail quickly and most importantly learn from your failures, adjust your strategies accordingly and try again. I can't stress enough how important it is to identify WHY you "failed" before moving on to the next thing. Don't get discouraged and know that the master has failed more times than the beginner has even tried.

Anyways, back to the point of this thread. This year I'm on par to make 500k and I consider it a major failure. Obviously failure is relative. So why is it a failure? Seems like a good chunk of change. Well, it would be if I didn't make 1.2 million in profit the year before (2015). That's more than a 50% drop in income within 1 year. If I was a CEO of a company and posted numbers like that I would likely get fired.

So what happened? What on earth would cause such a drastic drop in income? I could blame it on how my primary sales channel introduced new policies that made it more difficult to advertise and sell my products but the truth of the matter is that I got complacent and failed to properly diversify my sources of traffic. Fortunately I had a list I was building and a website that sustained the major loss of a sales channel so I didn't go straight to zero.

In hindsight I could have done much more and I put in a weak effort because things were going good. I got lazy. I had 3 years of consecutive growth and that made me over confident. Thinking back, I lost my drive and hunger. I spent too much time buying stuff and not enough time securing future growth. I knew the potential for loss was there but I ignored it and for that I had a year where I lost more than 50% of my income.

Don't get me wrong. I'm still very happy making what I make but that's not the point. The point is this could have been avoided. I could have mitigated my losses but the hunger that got me there had subsided and I wasn't hustling anymore. I was coasting.

The lesson I want to share here is don't get complacent, don't lose the hunger regardless of your income and, most importantly, live well below your means. Reward yourself but don't go overboard. I bought a Porsche for $130,000 and that was stupid (in hindsight). No, it didn't bankrupt me because it was still within my means but it was mostly a dumb buy. Making a million dollars isn't a lot after taxes. it's easy to spend it all very quickly if you think your business is bullet proof when it really isn't. So don't make the mistakes I made, regardless of where you are on the totem pole of income.

I'm happy to have found this forum. It has been a while since I've seen a hungry and motivated crowd that is striving for more than just the average life. I hope to learn from the folks on here and I hope my post adds a little bit of value to some of you out there.

Cheers.

Welcome! Its posts like yours that make this forum great. I know that your story will come to mind when I'm in a similar situation with my company.

 

[TheGrind]

Living below my means is one of the biggest challenges I face.

 

[Addicted]

Living below my means is one of the biggest challenges I face.

It certainly can be especially if one has recently exponentially increased their income. Just remember that money = freedom. The more you hold onto the more access to freedom you have. Freedom from bosses, freedom from schedules, freedom from everything and peace of mind that if shit hits the fan you can survive and not have to liquidate. I never had to liquidate anything but I can only imagine that it would feel like death. The more you spend the more liability you add. We all want nice things (most of us) but no car/house/item is worth losing security, freedom and peace of mind.

 

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[jaypi]

Definitely a bookmark-worthy post to look at when hitting the fast-lane and allow the power of currency drive in the wrong direction! Thanks for sharing

 

[BlakeIC]

Just remember that money = freedom. The more you hold onto the more access to freedom you have. Freedom from bosses, freedom from schedules, freedom from everything and peace of mind that if shit hits the fan you can survive and not have to liquidate. I never had to liquidate anything but I can only imagine that it would feel like death. T

See this is my true goal.

Ya know I like lambos and all but being free is what I truly want.

When I am on my death bed I want to die a free man not someone who was chained down their entire life even if they still had all the flashy cars and homes

 

[Tony I]

So what happened? What on earth would cause such a drastic drop in income? I could blame it on how my primary sales channel introduced new policies that made it more difficult to advertise and sell my products but the truth of the matter is that I got complacent and failed to properly diversify my sources of traffic. Fortunately I had a list I was building and a website that sustained the major loss of a sales channel so I didn't go straight to zero.
(adsbygoogle = window.adsbygoogle || []).push({});
In hindsight I could have done much more and I put in a weak effort because things were going good. I got lazy. I had 3 years of consecutive growth and that made me over confident. Thinking back, I lost my drive and hunger. I spent too much time buying stuff and not enough time securing future growth. I knew the potential for loss was there but I ignored it and for that I had a year where I lost more than 50% of my income.

Looking back, how would you keep yourself motivated? By not buying stuff?

been feeling very complacent recently- i feel like sometimes we have to go through the pain of losing income, opportunity in order to stay motivated.

otherwise, our brain rationalizes that we are fine just coasting, and since there's no real consequence we never have to change.

 

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[Addicted]

Looking back, how would you keep yourself motivated? By not buying stuff?

been feeling very complacent recently- i feel like sometimes we have to go through the pain of losing income, opportunity in order to stay motivated.

otherwise, our brain rationalizes that we are fine just coasting, and since there's no real consequence we never have to change.

I would have kept motivated by consistently reminding myself that I'm not out of the woods just yet. Instead my attitude was that of someone with 50 million in the bank. I wasn't reckless to the highest degree but I was foolish by not fully realizing the weaknesses in my business and moreover not taking enough action to compensate for worst case scenarios. My mindset was not right. When you're winning it's important to continue to have the mindset of the underdog as that will always put things in perspective. I could have easily set challenges for myself that centered around growth and I should have spent more time surrounding myself with others who have this mindset which is part of the reason why I joined this forum. At the end of the day I can't cry over spilled milk and I view this as another lesson that will make me stronger in the long run. Sometimes the best way to learn is to experience setbacks and I don't plan to make the same mistakes twice.

 

[MTF]

[HASHTAG]#notable[/HASHTAG]?

Thank you, @Addicted for this thread. It's a very powerful reminder for me at my current stage of business. I'm taking it to heart.

 

[devine]

Not to disrespect @Addicted, more about how people perceive information they read.
A) 30+ people liked this OP, because Addicted said he's making hundreds of thousands in profit annually, not because there is any valuable information.
B) People will come to this thread to ask questions, because *read above*.

 

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[JokerCrazyBeatz]

This is really good , thank you for your post

 

[iizu]

Not to disrespect @Addicted, more about how people perceive information they read.
A) 30+ people liked this OP, because Addicted said he's making hundreds of thousands in profit annually, not because there is any valuable information.
B) People will come to this thread to ask questions, because *read above*.

I have to disagree with your point that there is no valuable information. Posts like these on the forum actually carry a lot of value.
For example this post is a great reminder ,for me atleast, that even the guys making decent amounts of money are making the same mistakes that I am doing. In this case, overspending.

For me this post was a great reminder that you can start to pave your path for future success right now by developing great habits.
In this case: start to live below your means. Doesn't even matter if you have started a business yet or not.

So thanks @Addicted for sharing.

 

[devine]

For example this post is a great reminder ,for me atleast, that even the guys making decent amounts of money are making the same mistakes that I am doing. In this case, overspending.
For me this post was a great reminder that you can start to pave your path for future success right now by developing great habits.
In this case: start to live below your means. Doesn't even matter if you have started a business yet or not.

Guys who make such mistakes on such scale are not the right ones to learn from. So it's more like an illusion of a right to have exuses, i.e. "If these guys make the same mistakes, it's normal", while it's not.
The story about how people spend hundreds of thousands on living above their fold is common, but I've seen too few people who spend hundreds of thousands on learning. I, personally, find a part about 2x less profits more interesting than anything else.
Anyways, that's not the point.

 

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[Addicted]

Guys who make such mistakes on such scale are not the right ones to learn from. So it's more like an illusion of a right to have exuses, i.e. "If these guys make the same mistakes, it's normal", while it's not.
The story about how people spend hundreds of thousands on living above their fold is common, but I've seen too few people who spend hundreds of thousands on learning. I, personally, find a part about 2x less profits more interesting than anything else.
Anyways, that's not the point.

You missed the point if you don't see the value but that's ok, not everyone will. I also didn't post this for likes as that does nothing for me. As far as the numbers, they are mostly irrelevant as the lesson can be applied at any point in your business, that said, the major reason I revealed numbers is because this is a "mindset, motivation, choices" forum and reading what is possible can be motivating for some.

 

[The-J]

So what happened? What on earth would cause such a drastic drop in income? I could blame it on how my primary sales channel introduced new policies that made it more difficult to advertise and sell my products but the truth of the matter is that I got complacent and failed to properly diversify my sources of traffic. Fortunately I had a list I was building and a website that sustained the major loss of a sales channel so I didn't go straight to zero.

I'm interested in hearing more of this story.

Back in 2012 or so, Google updates crashed a lot of businesses. Is that similar to what happened with you?

Guys who make such mistakes on such scale are not the right ones to learn from.

You're wrong for the same reasons you think you're smart. You think you wouldn't ever make the kinds of mistakes OP made. You think that it won't happen to you. But guess what? It can happen to anybody. If not this mistake, then some other mistake. That's some arrogance, man.

Serious question: have you ever made $1m in a year? (I'll answer for myself: I have not made $1m in a year.) If you have, then why do you think that you could ever avoid a situation that will cause you to lose half your income? Why do you think that you couldn't possibly learn from the mistakes of others? And if you haven't, what makes you think that OP can't be learned from?

It's like saying that you can't learn anything from a RE investor who lost everything after the crash, or from a tech entrepreneur who lost everything after 2000. You can learn a lot from that RE investor and that tech entrepreneur.

 

[Addicted]

I'm interested in hearing more of this story.

Back in 2012 or so, Google updates crashed a lot of businesses. Is that similar to what happened with you?

Something like that but my business didn't crash because I had just enough diversification and return customers that losing a source of traffic didn't require me to start from zero.

The safest source of traffic is the type of traffic that will type your domain name into the URL bar and hit enter, not the type that will type it into google. Google, Amazon, Ebay, Facebook, these are just sales channels. If right now your business hinges primarily on any of these sources then your business is not safe. Any of these sales channels can change their policies, algorithms, or simply kick you off at any moment for any reason. Use them to build your business but don't put the fate of your business in their hands.

#1) Build a list, can't stress this enough. This will be your base and if done right will always make you money no matter what happens with google, amazon, ebay, facebook, etc..
#2) Build a brand. You're not going to get wealthy selling someone elses brand.
#3) Scale your traffic and sales BUT don't rely on one source. Diversify, diversify, diversify.

 

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[devine]

You're wrong for the same reasons you think you're smart. You think you wouldn't ever make the kinds of mistakes OP made. You think that it won't happen to you. But guess what? It can happen to anybody. If not this mistake, then some other mistake. That's some arrogance, man.

Serious question: have you ever made $1m in a year? (I'll answer for myself: I have not made $1m in a year.) If you have, then why do you think that you could ever avoid a situation that will cause you to lose half your income? Why do you think that you couldn't possibly learn from the mistakes of others? And if you haven't, what makes you think that OP can't be learned from?

It's like saying that you can't learn anything from a RE investor who lost everything after the crash, or from a tech entrepreneur who lost everything after 2000. You can learn a lot from that RE investor and that tech entrepreneur.

Not actually, if I would make his mistakes, I wouldn't make even $100k in a year (I don't make 1 milli in a year). OP himself said that he would end up fired if he would be a CEO for somebody else's company, which is true. With a business that makes 1 milli in a year there are mistakes you cannot afford to make. But this is not what I think is important, I agree that there are all kinds of experiences to learn from and there are all kinds of combinations of mistakes even successful businesses make.

My point is that people put numbers on pedestal and follow those who showcase big numbers, no matter what those numbers actually mean. People will always be impressed by big numbers thinking that it's a sign of success, but working with businesses that make much more than 1 milli/year, I take everything with a grain of salt, because their success most of the times is unrepeatable and based on luck+circumstances+persistence, than on actually smart choices.
And in this OP there is more of an emotional side than of actual substance to learn from.

 

[Addicted]

because their success most of the times is unrepeatable and based on luck+circumstances+persistence, than on actually smart choices.

It's unfortunate that this is the mindset you have adopted. You set your own limitations. You don't think you can even make 100k in a year when people in 9 to 5 jobs can break through that barrier let alone business owners.

I'm not here to berate you or tell you that you're wrong but do yourself a favor and remove your self imposed limitations. If the only thing you consider valuable or of substance is a step-by-step guide then I can tell you that the information is already out there and freely available. Are you willing to put in the work?

 

[devine]

It's unfortunate that this is the mindset you have adopted. You set your own limitations. You don't think you can even make 100k in a year when people in 9 to 5 jobs can break through that barrier let alone business owners.

I'm not here to berate you or tell you that you're wrong but do yourself a favor and remove your self imposed limitations. If the only thing you consider valuable or of substance is a step-by-step guide then I can tell you that the information is already out there and freely available. Are you willing to put in the work?

Apparently, I expressed myself not clear enough.
I make more than $100k/year. In my place people rarely net-profit 2-3k$/month as entrepreneurs, 9-5 job is about 300-500$/month, btw.

Sorry for hijacking your thread, not my actual intention.

 

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[G_Alexander]

#1) Build a list, can't stress this enough. This will be your base and if done right will always make you money no matter what happens with google, amazon, ebay, facebook, etc..
#2) Build a brand. You're not going to get wealthy selling someone elses brand.
#3) Scale your traffic and sales BUT don't rely on one source. Diversify, diversify, diversify.

THIS is great. Saved it in my notes.

Also, thank you for this thread. It definitely has value.

Since my ecom business now generates substantial profit each month (on auto-pilot), and so do my rental properties... I find myself focusing a good bit more of my time on my Brick-and-Mortar business (I have been doing this most of 2016, since March) all while getting a bit complacent with my online ventures. If I didn't have the B&M to grow... would I be spending more time going to China? Would I spend more time visiting with my suppliers here in the U.S.? Would I spend more time working on building out my own brand (rather than just drop-shipping)?... What about using Google Shopping (something I've been neglecting)?...

Building my own brand is in my mid-term plans, but it's taking longer than it should (since I have gotten comfortable with $XX,XXX per month net). I haven't NEEDED to build my own brand, I haven't NEEDED to focus on downside protection... (but I should be). This being said, it doesn't mean our business hasn't grown in 2016. I hired a GM in February. We are on pace for 4x+ last year's sales. We added an Amazon sales channel (which has grown a lot... but still is just another 'channel' like you mentioned)...

There is a lot of value in your thread. You hit the nail on the head about not creating your own brand. Any one of your channels could evaporate and that could literally be IT. Got my gears turning. Time to mock-up some of our first designs (like I promised I would in Q3 this year). I owe you a cold one .

PS. Would love to get a small brain-trust group (or another thread) going for online store downside-risk mitigation. I'm sure we can take a deeper dive on this topic. Would be even cooler if we put a minimum proven online sales req. to join brain-trust... we can come share our findings with the INSIDERS on this forum.

 

[ZCP]

PS. Would love to get a small brain-trust group (or another thread) going for online store downside-risk mitigation. I'm sure we can take a deeper dive on this topic. Would be even cooler if we put a minimum proven online sales req. to join brain-trust... we can come share our findings with the INSIDERS on this forum.

Start an INSIDERS thread! A lot of us have things we are doing and could use other ideas as well.

 

[ZeroTo100]

Not to disrespect @Addicted, more about how people perceive information they read.
A) 30+ people liked this OP, because Addicted said he's making hundreds of thousands in profit annually, not because there is any valuable information.
B) People will come to this thread to ask questions, because *read above*.

I agree. I'm more interested in learning about his system and what worked/didn't work. I could care less about the numbers.

I was really hoping for the detail but the post went on and on and I knew someone would come along and say exactly what I was thinking.

If you're here, you should alreay know not to give up. Entrepreneurs don't give up - it's not in our blood!

With all due respect, a little more about your process would be helpful. We don't really have to know what you do, but content that helps people always holds a lot more weight around here - not numbers.

 

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[G_Alexander]

With all due respect, a little more about your process would be helpful. We don't really have to know what you do, but content that helps people always holds a lot more weight around here - not numbers.

His content does help people. You're looking for spoon feeding. What niche/sales channel/where his suppliers are based/ad funnels he uses is all irrelevant information and is specific to his journey (which is unimportant to your journey...because all your stuff will be different, everyone's story is). Instead of waiting for someone to lay out their entire "process" for your benefit... take a look at a few successes and get out there and try something. You will be on your way up much sooner that way.

I know that's not what you want to hear, and you probably think I'm attacking you. But sometimes, the truth isn't what you want to hear. Re-read my post in a "nice" tone, and then go take action.

 

[ZeroTo100]

I appreciate your reply but I just have to make my point clear - I'm not looking for spoon feeding. I've had some success of my own. I've had many $5k, $10k, $20k weeks in my life. Maybe my game is off a bit as I've recently had a baby, gotten married, bought a second house (I'm 32). I've lightened up on business a bit which is fair but I still do very well. I follow and read your posts and I do get a lot of value out of them but keep in mind this is a public forum and people can disagree. I'm here to pick up bits and pieces as anyone else is and I do my share of helping on here. I have not posted in a bit as I'm working on a new project and focusing much of my time on that. I'm even working on doing a major update to my progress thread. Just don't confuse me with others on here that want it handed to them. I have a boatload of millionaire friends that can spoon feed me if I ask but I'm not that type. I've hustled my whole life and earned it on my own! If you want my story feel free to pm me. I was basically relating his story to TMF Interstates - simple stuff. Never asked for any of the above that you mentioned.

Again appreciate all your threads. I know you have a solid reputation around here - all good.

His content does help people. You're looking for spoon feeding. What niche/sales channel/where his suppliers are based/ad funnels he uses is all irrelevant information and is specific to his journey (which is unimportant to your journey...because all your stuff will be different, everyone's story is). Instead of waiting for someone to lay out their entire "process" for your benefit... take a look at a few successes and get out there and try something. You will be on your way up much sooner that way.

I know that's not what you want to hear, and you probably think I'm attacking you. But sometimes, the truth isn't what you want to hear. Re-read my post in a "nice" tone, and then go take action.

 

[Addicted]

I agree. I'm more interested in learning about his system and what worked/didn't work. I could care less about the numbers.

I was really hoping for the detail but the post went on and on and I knew someone would come along and say exactly what I was thinking.

If you're here, you should alreay know not to give up. Entrepreneurs don't give up - it's not in our blood!

With all due respect, a little more about your process would be helpful. We don't really have to know what you do, but content that helps people always holds a lot more weight around here - not numbers.

This thread isn't about the process but I'll tell you a that I didn't reinvent the wheel. There is no substitute for experience, get out there and try a few things. Look for where others have success and ask yourself, can I pull this off? What is stopping me? Can I do it better or offer a unique spin on the existing products/services? Then try to fill in the cracks and see how far you get. That doesn't mean you won't fail but it will give you experience to eventually hit gold. Again, this is a motivational/mindset thread, not a process thread. Good luck to you sir.

 

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