How I Built a 6 figure Online Business in 60 days
In 2013 I started an e-commerce business using Shopify on a whim. A friend of mine had recently launched a Vape business here in Phoenix. I had never "vaped" but I went to a local smoke shop, bought a vape pen and tried it out. It seemed interesting (back then anyway) and I decided to stay awake for about 72 hours, start a shopify free trial, join the "build a biz" contest and begin to look for manufacturers.
I basically just listed some of the cool vape pens I knew I could get and at least break even on the site I could dropship or that had good margins I could buy a small amount of inventory for. I built an Instagram page and posted 30-40 images I found around the internet (not recommended). I setup ninjagram to like every #vape post on Instagram and built up a following of 500 or so followers quickly.
I added about 50 products to the site, which in retrospect was way too many. About 2 weeks in I made my first sale and rushed to fulfill the order. I think I ended up losing about $4 on the order but I had my proof of concept and knew I could dramatically lower my cost of inventory moving forward.
In the next two weeks I averaged a sale every two days and even though the store wasn't profitable yet, I could see the demand was there. I made a $300 order from China of the top product we had added to cart which was a very simple Ego Starter kit that we could buy for $5 a piece and sell at the time for $30.
Black Friday was fast approaching. I decided to go black hat and bought 2,000 fake followers on Instagram to give a bit of reputability to the page. I also took the products that had arrived and went to parties all week that my Girlfriend's friends were having. I made sure all the interesting and cool looking people at every party took cool photos using our products.
I used all the vaping hastags and made posts every 3 hours of all the content I'd backlogged that week. We also got a bunch of the "herb vape pens" in and with legalization spreading quickly these became a hugely interesting product to our followers. I built the Instagram account from 2k fake followers to around 10k real followers within 2 weeks. This was before the IG limits on likes and follows were prohibitive.
Black friday came and I discounted the dry herb vape pens to $19.99 after making another $900 order from China. At this point we were into the business maybe $1500, but a whole lot of time.
From Black friday through the following week we grossed over $10,000 in sales. So we went from 0-$10k in sales within 60 days with a $1500 investment and a whole lot of hustle.
The business continued to do well eventually hitting $28,000 in gross revenue in our best month all at over a 60% profit margin, sometimes higher.
The trend started to die down in 2015 as these devices became much more readily available and regulations and taxes squeezed the profit margins. The inability to do what I used to do on Instagram because of the new restrictions also factored into our declining sales.
In July of 2015 with sales at just $4500 a month I sold the business to a friend for less than $30k.
I F'd up in a few different ways with this business. I know people selling businesses that grossed much less in sales for 100k, which would have been a hell of an exit.
- I chose an product that I couldn't use Adwords or Facebook Ads with effectively as it was considered a tobacco product making my only ad methods difficult, expensive and sucking my time dry.
- I never delegated shipping my inventory myself from my basement and creating a job for myself that could have been done by a robot in a fulfillment center.
- I built a business in a niche where regulations were fast changing, taxes were being imposed as the big tobacco companies hired lobbyists to protect their interest and stomp out the little guys.
These 3 factors made my business very unsellable. I failed to adjust correctly to the changing factors in the industry and never pitched the tobacco companies for an aquistion which may have been the most profitable way out.
I learned from this failure to pick a niche that won't likely be blackballed by the industry. I also learned to build a business I could actually sell one day. I also learned that if you create a business and take on every role, you are really just creating a new job.
I learned a whole lot from the experience and it has helped me in my new ventures, forcing me to make my current business 100% location independent and delegate accordingly. Hope this can serve as a warning to those considering a risky niche or who haven't considered the external factors surrounding your business.
I hope it can also inspire those to just get out there, build it, test it try it and then cash checks! It was hard and I had to add products until the sun rose and my eyes were ready to pop out of my head but you can go from 0-10k on a new business in 60 days, it has been done before!