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Wow how have I never read this amazing thread? Absolutely amazing to follow the progress made!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.
I don’t know of any e-commerce courses right now that I would recommend. In all honesty, I don’t read or even look at any of them in any detail.
Hello I'm a new member of this community, honored to be here! My goal here is to motivate You how to become a successful person with a lots of experience, happiness and strong mind through quotes, pictures and videos that I learned over the few years. I hope It will help you to overcome anything and become best version of yourself.
1. quote:
Words Of Wisdom, read this It could change your whole life: Life Is a Journey not a destination. " If we thought of life by analogy with a journey, which had a serious purpose at that end, and the thing was to get to that thing at that end. Success, or whatever it is, or maybe heaven after you’re dead.
But we missed the point the whole way along.
It was a musical thing, and you were supposed to sing or to dance while the music was being played. "
I think that it is a lot of consistency and calculating numbers correctly. When you are young, you want everything right away.
On a mission to read all of the free to play gold threads and what I quoted are some of my favorite sentences that I've read so far. I'm 5-months into a full-time job and am already feeling like 5/7 of my days aren't spent the way I want to live.
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.
My story is not as intricate or exciting as the other ones on here and I'm nowhere near the $1M range yet. But, after reading the other ones I felt compelled to write mine. It's actually pretty boring and normal and it's not the fastlane or slowlane. I'd call it driving in regular traffic and luckily catching all the green lights.
I had a normal education at the University of Illinois which ultimately ended with a Master's in Engineering. I knew that I was in college to get the degree only because it meant getting a higher paying job. I got my first job out of college with a hefty $35k salary. After two years of measly raises, I jumped jobs and got paid about $42k. I was in the wireless industry building cell sites. I was there for one year when they were bought out by Alltel. The company was shutting down the Chicago office and moving everyone to Little Rock, AR.
This was my first realization that you can't control your destiny in the corporate world. Luckily I got 6 months severance and landed a job the next day. I took my 6 months severance money and bought my first home in 1999. I started remodelling my home from day 1 and found out that I was really good at it. I knew nothing about real estate investing at this time.
During this dot com era, I changed jobs every year. Every company I went to went under, usually due to crazy overspending on lavish things, but I wasn't going to complain about free health club memberships that cost $100/mo. Although I was changing jobs constantly and I knew that they were through no fault of mine I was having fun living the crazy dot com life, parties, cruises, beer trolleys...
I finally landed a job that felt like a lifer. It's one of those jobs where you retire. I worked with a lady who had been there 35 years!
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 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.
Coming back to work the next week I had lost all motivation. I had a great week in Crested Butte and we were all talking about going back the next year. I remember thinking, just another 51 weeks? I work 50 weeks a year to enjoy 2 weeks. Thinking deeper I also realized that I only enjoy Friday and Saturday out of the 7 days of the week. Doing the math, something wasn't right. Why do we enjoy only 2/7 of our lives?
With this realization, my next thought was how do I enjoy life more. First answer, move to Crested Butte, CO. But homes there cost twice what mine does and salaries are 1/3.
I did a quick calculation on my finances at the time. Jeez, I had a huge house, 2 cars and all the materialistic things I could have ever wanted. I remember seeing on Oprah that families survive on $50k a year. Here I was single, making almost twice as much as that and I couldn't save a penny. Somehow, one day I picked up Rich Dad Poor Dad. Reading that changed my life. I realized that I was tied to my job. I also realized that it was completely my fault.
I started looking into shifting my income from active to passive. This meant real estate, CDs, money market accounts and high dividend stocks. Anything that put $1 into my account at the end of the month without me doing anything, I was reading about.
I had goals in 2002 to lower my expenses and to buy a rental property. I was following the Rich Dad passive income = expenses means you are out of the rat race. Living in Chicago, I quickly realized that there weren't that many positive cashflow properties out there. In addition, my mortgage on my huge house hindered my capabilities to get a loan on a rental property. I could not qualify for a investment loan so I failed my goals in 2002.
I knew I had to sell my primary residence to free up my cash. I completely remodeled the house in the fall of 2002. 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 sold my car and home and all my furniture in 2003 and moved back in with my parents. I came home with a hefty check for over $100,000. Added my to savings, I had a significant wad of money.
I had read almost every single Kiyosaki book and every real estate rental book out there the past two years. It was 2004 and now that my expenses were nil, I was really getting sick of my job. I obviously didn't want to stay at my parents house forever so I looked for a change.
I remember seeing on Loopnet that there were 4-plexes in Phoenix asking $150,000! I didn't know anything about Phoenix. I thought it was all brown and desert. I had a friend living in LA. He said that I could live with him. So I quit my job and moved to LA. On the way to LA, I stopped by Phoenix and bought 2 condos in Scottsdale and a preconstruction house. Talk about impulse shopping! I had 4 properties and no job!
These buys were all based on cashflow. I was a cashflow guy. If COCR was above 10%, I was buying. The condos had Section 8 tenants and would cashflow $183/mo at the price I paid with 20% down. One day from moving out of Chicago and I was cashflowing $366/mo! This was easy. LOL
I didn't really like living in LA. I was 30 minutes from the beach and real estate was crazy expensive. 4-flats were $1,000,000 and massively negative cashflow. I couldn't stay with my friend forever and the LA RE market was booming. Then one of my Section 8 tenants got kicked off of Section 8. It was reported that she was a prostitute and on drugs. I got her evicted and went to view the condo, which was of course, trashed. I had to fix it back up to get it re-rented. In the process, it occurred to me that I should just move into it. That's how I ended up in Phoenix.
The market in Phoenix went crazy during 2005. I literally hit the lottery. Homes were appreciating $10k per month. I made another preconstruction purchase based on the comps I felt I had $100k in equity at the purchase. My Chicago condo also closed with about $60k in equity.
In 2005 I had literally turned my networth into around $600k. However, I totally understood that this was pretaxed, pre-realtor commissioned money. Getting $600k cash in the bank was another story.
One day I was surfing craigslist when I came across an ad about preconstruction, cashflowing, mountain view townhomes in Salt Lake City. I made a call to the realtor, did some research online and decided that he wasn't bullshiting. I booked a flight the new morning to SLC, rented a car and met the realtor. 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.
I also picked up a couple 1 acre lots in St. George, Utah. This was my first foray into land. In hindsight, I broke my cardinal positive cashflow rule. Buying land you are 99% assured negative cashflow.
2006 saw the downturn of the real estate market. This is where having positive cashflow or at least breakeven cashflow helps alot. I sold my lots in St. George at a loss of around $35k. I sold my condos in Scottsdale at the peak of the market. I sold one preconstruction house at about $65k below peak prices. My SLC and Chicago properties have held in value. My Phoenix properties have dropped huge. I've learned alot about value of geographic diversification.
My story doesn't have and ups and downs like the other ones. However, some months are bad and some are very good. During the bad months you wonder if you should have stayed in the comfortable cubicle and lived the easy predefined life. The biggest thing I've learned is that you should take risks in life.
I do sometimes wonder what my life and networth would be if I stayed at my job in 2004. I think about what I've experienced in the past 3 years since quitting. I'm not talking about the money. I'm talking about living in LA, PHX, traveling to SLC, St. George and dozens of other cities that I ended up not buying anything in. My ex-co-workers used to call me and the first thing they said was, "Hey, what city are you in today?" Before that I had spent 33 years in Chicago.
When I moved into my condo in Scottsdale, I experienced something for the first time in my life. I had lost the ambition for money. What I mean is the pursuit of making lots of money just to make money. I had a monthly payment of $600/mo which included all utilities. For all intensive purposes, I did not have to work for 10 years at my current burn rate. The need for money to pay bills was gone.
So now you wake up and what do you do? The answer is... anything you want! This is what many retirees face after 55 years. I faced it at 33. I had a new outlook on life. My main priority now was living life, I figure I have at least 50 years. Where does all the time go? LOL Money is important, but money is a means to live life. You shouldn't live your life to get the money. If I want to travel the world, I find out what it costs and then go make that money. I look at money with a purpose. It's purpose isn't to sit in a bank. It's purpose is for you to spend it on things that you enjoy.
I might have to look into joining that Lambo crowd on here... you guys are making them very appealing to me!
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