GOLD! SUCCESS STORY: Biophase

[lightning]

By the way Biophase, after reading your story, it makes me TRULY appreciate your profile picture. (just like MJ's Murcie Roadster avatar, its all about the life the pic represents).

 

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[CactusWren]

Thanks for the update. Speed +

 

[rugreedy]

I really enjoyed your story. In Real Esate, remember "When everyone is crying, you should be buying, and when everyone is yelling, you should be selling.

Excellent read.

 

[biophase]

I just reread this tonight and realized that I wrote pretty much all of this before I even began doing ecommerce. I opened up my first store in Oct 2007. It's been 6 years! I'll write an update to this. It feels weird to me that I wrote a "success story" post even before I had really done anything. At least it feels that way to me!

 

[biophase]

Honestly, I didn't know what I was doing. I downloaded free software for my store, messed around with it, stuck some Paypal buttons on it, called a few manufacturers. I was just winging it. I launched with an imperfect store. But that's ok. If you wait until everything is 100% perfect you'll never open.

As weeks passed, I added Authorize.net, SSL, a toll-free number, a UPS account, a fax line, etc... Now my store is a full fledged legitimate online store with all the bells and whistles.

So I wrote the above back in 2008, about 6 months after my first ecommerce store opened. It's been a long journey and time to update this thread.

Back in 2007 I was on flippa looking to buy a dropshipping ecommerce store. I knew nothing about ecommerce so I figured I'd buy a store and then I'd get to see the back end and the inner workings of how a store worked. I found a store that I wanted to buy and made the guy an offer. Long story short, the guy was wishy washy and he ended up saying that his "partner" changed his mind about selling. By that time I had done enough due diligence to gain enough confidence to start my own store.

This was before the days of Interspire, Bigcommerce, Shopify and even Volusion. I downloaded OScommerce which was an open source shopping cart and began to fiddle with it. It took about one month to get my store up and running and within a week I had my first sale.

My store was 100% dropship and I had one supplier. I expanded to 3 suppliers within a few months and was still 100% dropship. With the success of my first store, I opened up several other stores in different niches. Many of them failed and I can't even remember most of them now. But I do remember in Oct 2008 I opened up my second store that I still have today. It was an instant hit, but I was PPCing $50/day and breaking even. I did this to get my store on the map. My dropshippers were very surprised that I sold so much on a new store.

Dec 2008 was the first year that I ran into supply issues. My dropshippers, who supplied many other online stores also, ran out of stock around Dec 5th. Obviously, this was very disappointing to me and I vowed not to have it happen again.

Dec 2009 I called my dropshippers and bought all the inventory that they had and shipped it to my house. This caused all the other stores to run out of stock. But of course my stores had plenty of stock.

About this time I realized the limitations of dropshipping. You have no control of inventory and customer service. When I customer called about a product, I had no idea if it was in stock AND if it could get shipped out today. I had to hang up and call my dropshipper and then call the customer back. Although dropshipping gave you freedom, it limited your potential. At some point you have to choose on freedom to work from anywhere vs. more money and control.

So I began to stock 75% of my store's items in my home. I started with 2-3 of each product. But being in business for 3 years now, I knew what my hot sellers were so I'd stock 10 or so of those. My margins were slightly better and I was able to provide much better customer service this way. But the big difference is that now I had to be home to ship out product. It wasn't bad work, I would wake up and have most things done by 12pm. But I also was lucky, because if I was out of town, I could still have my original suppliers dropship for me.

Then in mid 2010, I decided to try to import my own products. This would increase margins by at least 2x and I would be able to brand my own line. I started with an order of 100 products which sold out very fast. This was truly a huge but great step. You see, every year I would get the new 20xx price list in which the wholesale price for a product would go up by a few bucks. However, I could not raise retail prices, so my margins were getting eroded. I had no control over wholesale pricing. By going to China, I was now getting manufacturing pricing.

Business was growing and Sep 2010 was the month where it really started to take off. By Dec 2010, I was working all day packing boxes and dropping them off at Postnet.

In 2011 I made up my mind to hire people and also move the business to a commercial location. So I got a warehouse/office and hired a person. I also began to import more products from China. I was also now "dropshipping" my brand for my original suppliers and some others. I was now the person who would raise my wholesale price yearly!

Not much has changed from 2011 to the present. The ecommerce landscape changed alot due to Google updates and Amazon, but the business is still basically the same. So this is where I'm at right now with this business. I go into the office maybe once a week now. I can take a one month vacation and feel comfortable leaving my business for even longer.

I see many people on here trying to start and business and have freedom at the same time. But you have to sacrifice to get that freedom. Let's say you are making $40k a year, working from anywhere with 100% dropshipping. That's decent money, but you can't be sitting at a beach for long on $40k. You need to expand that business to $100k, but to do so, you may have to give up that freedom for a year. When you get to $100k a year, then you hire someone at $40k and take your $60k and sit on the beach. Better yet, wait until you are at $200k a year, then sit on the beach with $160k.

 

[wfliu]

great story .

 

[Twista]

Bringing this back up again. This is great! I'm so glad I found this. I've been reading a lot of your threads, biophase. I want to be like you in the near future, which is to have freedom.

 

[biophase]

Thanks for commenting on this post! It made me re-read what I posted many many years ago!

Found this part from 2008 interesting...

I realized that what I really wanted now was to be geographically free. This came from wanting travel to Chicago in the summers and live in Scottsdale in the winters. I also wanted to spend summers in Crested Butte, CO. In order for me to live there or live anywhere I wanted I realized that I needed an income stream that was location independent.

6 years later, I finally did it.

https://www.thefastlaneforum.com/community/threads/stuck-change-your-environment.52975/

 

[Andy Black]

Great story bio. I too stumbled across RDPD and bought a few properties back before the crash. Only when the numbers stacked up too, so I didn't get burnt when the house of cards came down. I like your attitude to money... when your passive income matches expenses, you're free to do whatever you want. Great story, and that was back in 2007. I will read through it all later. Just wanted to say thanks for that writeup back then, and the bumps.

 

[Rudy]

Hi Biophase, could you share us an update?

 

[andviv]

Rudy, maybe if you ask a less vague question you can get something vuable, don't you think?

 

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[Red]

I never knew this was your back story @biophase... very cool.

 

[Stubbers]

It's great when someone brings up an old post that's a solid as this one ... Thanks @biophase for sharing this

 

[Bila]

Yes great thread. Thanks for the bump

 

[Antw]

Man this post brings back memories. @biophase 's old blog and posts are the reason I got into ecommerce a couple of years ago. Thanks for sharing.

 

[YoungGun]

Stories like these dissipate the doubt. Back to it

 

[Rudy]

Hi Biophase, I saw someone was inspired by you and got financially free due to that, so I looked up all your post and found this one. I enjoyed reading this topic and was wondering how you proceeded. Could you share us an update about what changed in the last 2 years (since your post from October 7, 2013) business wise: What happened and what pointers can you give us due to your experience?

Thanks,

Rudy

 

[juggler619]

this is incredible bio, thanks for the share @biophase

 

[AntonyS]

What an inspiring story. Thanks for sharing @biophase

 

[Joshua Navarro]

Thank you @biophase. Your story makes me want to learn more about real estate and e commerce haha

 

[biophase]

Hi Biophase, I saw someone was inspired by you and got financially free due to that, so I looked up all your post and found this one. I enjoyed reading this topic and was wondering how you proceeded. Could you share us an update about what changed in the last 2 years (since your post from October 7, 2013) business wise: What happened and what pointers can you give us due to your experience?

Thanks,

Rudy

Hi Rudy, it's only been 20 months since my last update and really nothing drastic has changed. Business is still going well. But really, I've just been through 2 Xmas cycles since the last post.

Amazon has taken over much of the Ecommerce landscape. They are just dominating in sales. Free shipping is pretty much the norm on any significant order size. You should sell on Amazon first and then move to your own store. I think it's more important than ever to build a brand and import from overseas. All I'm doing now is expanding my brand, trying to take it from 4 products to 30 products.

I think dropshipping is dead or at best a very hard way to make a living. It's just not sustainable and I think your dropshippers will ultimately compete against you. I probably dropship less than 5% of my orders now.

I took a trip to China recently and visited my factories and a few new ones. I recommend doing this probably within a year of getting your business going. I waited 5 years to visit them which was way too long. It's like going to the B&P/Fastlane summit. Once you meet someone in person, your relationship changes a little. They become a person with a face and voice, not just a person in another country that you email. Also, you can see what their factory capabilities are. They may make product X for you, but you see that they can make 100x more products just but looking at their raw materials and equipment.

Aside from ecommerce, I just got back into real estate and purchased a condo earlier this year. I've been paying down loans even though they are at 3% interest rates. I'm not interested in leveraging or getting optimal returns on my money. I am trying to increase my REI cashflow to the point where if my ecommerce stores and brand disappeared that I'd still be doing ok.

As I write this I am in Chicago, in the neighborhood that I grew up in. When I drive down the streets I remember what stores used to be around when I was growing up. The corner drugstore, became a restaurant, became a furniture store and is now for rent. The small hotdog place became a realty office, became a CPA office and is now a dry cleaners. I always wonder why they changed? Is it because they moved, sold, retired, or failed? Businesses don't last forever. My businesses won't last forever, so you need to put away that money and invest for the long term, even if your returns are only 3,5 or 10%.

 

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[TheNextTrump]

My story is not as intricate or exciting as the other ones on here

I beg to differ, sir. This story was INCREDIBLE, glad I found this gem! Seeing the progress wrote out from 2007 to 2015 is very inspiring.

Thanks for sharing this man !

It's the stories like these that keep me focused during this up hill climb . Patience and consistent action, and a guy can truly do anything.

 

[Supa]

didn't see that thread until now, great insights thanks!

 

[Justincredible]

Awesome read, the progression and time frames are so authentic.

Great work biophase.

Blessings

 

[Ita_schooliosis]

Biophase, thank you for your story. It's not everyday you get to see such an honest, detailed account of success right from the beginning. Your story resonated with me having experienced a similar background (engineering for a high paying job-->coming to the realization that time>money) and because your story isn't so intricate or "exciting" as you put it. Your story shows a natural progression of choices/action one might take and because of that, it's inspiring

 

[21elnegocio]

@biophase This is phenomenal story brother, loved your story very motivating. I am glad you came to the Phoenix market, I live here as well and do real estate as well thats one of the reasons I like your story. I a happy rentals owner, after starting several business's and fail I think I have found y niche.

 

[jesset17]

Wow, talk about a progress thread filled with success. At the very least this should be tagged as NOTABLE if not GOLD. Thank you @biophase for keeping this updated over the last 8 years. There is so much gold information in your posts that still holds true. There are two points that really hit home for me.

Honestly, I didn't know what I was doing. I downloaded free software for my store, messed around with it, stuck some Paypal buttons on it, called a few manufacturers. I was just winging it. I launched with an imperfect store. But that's ok. If you wait until everything is 100% perfect you'll never open.

• I need to quit trying to have everything in perfect and in place. No sales will be made if the store is not open, consumers won’t see your product if you are constantly tweaking them, get your product out to the market and make improvements after.

In 2001, my friends and I took a mountain biking trip to Crested Butte, CO. We camped for one week at Lake Irwin. No electric, cell phones, running water, etc... The town had a speed limit of 15mph. I remember cruising into town and slamming the brakes like WTF? However, at the end of 7 days, 15mph actually felt fast in town.
There was a point during the trip that I looked at my watch and calculated that it was 5:30pm in Chicago. At the time I was sitting on a rock on top of mountain at about 11,000ft having a PBJ:banana: sandwich with my buddies just chilling and looking at the clouds. If I were at work this week, I would be running down the street trying to catch my train at this time. What a contrast in speeds. It was at this moment that I knew something was wrong with my direction.

• This gave me goose bumps when reading because it is exactly how I felt about my life only a few chapters into TFM. Will my current career allow me to enjoy my life how I want or will it only allow me 1-2 weeks of vacation a year. I refuse to waste the remaining years of my life living this lifestyle and am dedicated to changing the 5 for 2 trade off. My destination of choice would be McCall Idaho. Very similar town to Crested Butte, mountain/lake town with all the outdoor fun anyone can handle. Congratulations on being able to live (and work) in your dream city!

You really are a great role model for all newcomers to the forum or any entrepreneurs, I am kicking myself every day for not participating in your mentorship program. Probably won’t overcome that regret.

 

[biophase]

From my original post in 2007

I also had to sell my Acura NSX. I loved this car so much, but I knew that selling was for a better future. I bought a pre-construction condo in Chicago that I calculated to have positive cashflow. It wouldn't be completed for 2 years. I sold my NSX and put the money down on that condo.

I drove the areas, looked at the rents and bought 2 townhomes at $140k. I found a property manager and hired them and my first PM'd rental was born. My calculations didn't quite work out. My proforma rents were too high and I had accept lower rent. Turned out that both townhomes had break even cashflow. Well, one was -$7/mo. These townhomes have appreciated to $195k each, adding another $100k to my networth.

Somebody asked for an update, so I was re-reading this thread again. I think you guys will find this interesting.

That Chicago condo I bought in 2005 with my NSX sale money is now completely paid off and cashflowing $1100/month.
The 2 townhomes in SLC that I also bought in 2005 cashflow about $1000/month total. I still owe about $80k on each of them.

I thought this was interesting because it's been 10 years since buying these and they will provide me $25,000 a year+ for the rest of my life.

So all you younger folks who want things quickly, make good decisions now and you will have it alot easier when you get older!

Update to come later!

 

[devine]

From my original post in 2007



Somebody asked for an update, so I was re-reading this thread again. I think you guys will find this interesting.

That Chicago condo I bought in 2005 with my NSX sale money is now completely paid off and cashflowing $1100/month.
The 2 townhomes in SLC that I also bought in 2005 cashflow about $1000/month total. I still owe about $80k on each of them.

I thought this was interesting because it's been 10 years since buying these and they will provide me $25,000 a year+ for the rest of my life.

So all you younger folks who want things quickly, make good decisions now and you will have it alot easier when you get older!

Update to come later!

Kenric, what kind of investments you do now?
Can you share some details on your approach nowadays to creating passive income streams and maybe some vital lessons that you learned?

 

[MJ DeMarco]

I thought this was interesting because it's been 10 years since buying these and they will provide me $25,000 a year+ for the rest of my life.

I'd like to point out for some who might be thinking, $25k/year isn't a lot of bread. $25,000 is a ton of cash if you have no mortage, no car payment, and no other debt other than living expenses (insurance, gas, food) -- not to mention Kenric's main eCommerce business which makes bank.

This $25K in effect, is "f*ck you" money -- R8, trips around the world, whatever else.

Thanks for the update Kenric.