Huge Risks Led To Huge Rewards
The Story Of My First Online Business
The Story Behind My First Online Business
My business partner and I would meet at the local library every night after work with our laptops and plenty of paper to take notes. We began trying to find the perfect product to sell online. To meet out criteria that product had to be priced over $200, it could not be readily available to purchase locally for the average consumer, and it had to be an item that already did huge numbers (sales and traffic) online. That’s right, we WANTED competition.
We used eBay tools for tracking the “hottest” categories and we broke them down even further by checking “completed auctions”. We found all of the auctions that had ended and found that there were the same 10 or 12 products in one niche that ALWAYS sold. Usually at HIGH “Buy it Now” prices. We were one step closer to opening our business.
Our next step was to prove that we could compete in terms of pricing. We were both completely new to eCommerce and and neither of us knew anything about about drop shipping so we went right to the source, China. Let me clarify… we went to alibaba.com (a global sourcing website). We found many suppliers in China offering the exact products we wanted. We contacted them all, received price sheets and shipping estimates, and we learned that we can make a HUGE markup!
This is where things started getting tricky. A 20’ container filled with our product cost about $20k (including customers clearance to the US and ocean freight charges)… we did not have $20k. What we did have was a strong belief that this could work. We had checked many competitors on eBay and tracked their ACTUAL sales and we had also researched websites that would be our future competition and checked their popularity. We did not have a doubt whether or not we would be successful.
We did not have money but we had an idea. We knew we could offer the SAME exact niche products that were being sold on eBay at a better price and we were confident that if we listed them the sales would follow. Since our average product price was $1k it wouldn’t take many sales to raise the $20k for the container from China. We went for it.
We created some very nice auction pages on eBay showcasing our products and let our potential customers know that if they purchased from us there would be a 12 week lead time. We put up a Yahoo Store for $29 (their monthly fee) and directed many customers there to view our full product line. We also posted free ads on Craigslist in big cities directing more buyers to our website.
The result? We got our first sale the first night! For $529, of which about half was profit… too bad we couldn’t see any REAL profit until we had the $20k to send to our supplier in China. From there the sales just kept coming. The next day we had a sale for $2.4k with many more to follow. Within two weeks we had raised enough money to pay for the goods. We sent a bank wire to China then waited for our merchandise. Everything arrived about 8 weeks later and our customers were thrilled with the quality of our product. Now we had a REAL business.
That was almost seven years ago and since then a lot has changed. We learned about drop shipping and formed relationships with over 50 suppliers, we built niche websites for subcategories of our main website, we stopped directly importing and became retailers for different manufactures which resulted in much less work and much more money, we developed a system for success, we duplicated it over and over and we SOLD our main network of websites.
Here is what we were able to do with a $29 investment:
First Year Sales: 680k
Second Year Sales: 1.2m
Third Year Sales: 1.8m
Fourth Year: Business was SOLD
We spent $29 the first month for our Yahoo store hosting which was out of pocket. After that all money spent was reinvested from profits. In my seven years in the business I have accumulated a priceless skill set of tips, tricks and processes that can be replicated over and over. If you follow this system you will see results. There is REAL money to be made and there are millions of buyers just waiting for your site to come along. You just have to TAKE ACTION.
Are you ready to start a REAL business and earn a REAL income? Good!
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