How a $29 investment brought me to 1.8 mil /year

Why I'm writing this:

For the past five or six years I've read countless articles on warriorforum, many that have helped motivate me along my short e-commerce career. When I first started I enjoyed reading the success stories on here that proved to me it was possible to make real money. I've just sold five of my top earning websites so I thought it would be a good time to share mine. I hope I can provide some insight to readers about how I did it and how (at least in my case) it didn't take money to make money. What I did is very risky and may not be for everyone, but it worked for me.

Why I choose e-commerce:

Five years ago I graduated from college and was lost. I had a big life plan about how I would be my own boss, travel and be successful but I had NO CLUE how I was going to get there. I was working and making a decent salary but I spent every free moment looking for a way out, a way to make it on my own. I've always enjoyed reading business books and I had gotten myself a copy of The Four Hour Work Week by Tim Ferris and this book really opened my eyes to what is possible in the world of e-commerce. I would recommend it to everyone and anyone, which is exactly what I did. I told one of my former college roommates (who had also gotten a job) that he had to read it. Once he did he was hooked as well. We decided we were going to start an e-commerce business together, and make it succeed.

How we started:

Myself and by business partner would meet at the local library every night after work with our laptops and plenty of paper to take notes. We began to try to find the perfect product to sell online. To meet our 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 ebays tools for tracking the hottest categories and we broke them down even further by checking "closed auctions". We found all 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 we're one step closer to opening our business.

Next we had to prove we could compete in terms of pricing. We were new to e-commerce and not aware of drop shipping so we went right to the source, China. Let me clarify... we went to alibaba dot com. We found many suppliers in China offering the exact products we wanted. We contacted them all, received price sheets and delivery estimates and learned that we could make a HUGE markup!

This is where it gotd tricky. A 20' container of our product cost about $20k (including customs clearance to the US an 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 proven sales, we had also researched websites that would be in competition and saw their popularity.

We didn't 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 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, letting customers know if they purchased there would be a 12 week lead time. We put up a yahoo store for $29 and directed many customer their to view the full product line. We also posted free ads on craigslist in big cities directing people 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. Well, the sales just kept coming. The next day we had a sale for $2.4k... with many more to follow. Within 2 weeks we had raised enough money to pay for the goods. We sent a bank wire to China then waited for the merchandise. Everything arrived about 8 weeks later and our customer were thrilled. We now had a REAL business.

This was five years ago, since then a lot has changed. We learned about drop shipping, started selling for over 50 suppliers, built our 5 niche category websites and recently (about six months ago) sold them all off at a nice multiple.

Obviously what we did was and is EXTREMELY risky and could have resulted in complete failure but in our case IT WORKED! I wrote this article to show people that it really doesn't take money to make money... sometime it just involves taking the risk of a lifetime.

Here is where it got me:
2008 Sales: 680k
2009 Sales: 1.2m
2010 Sales: 1.8m
2011 Sales: Business was SOLD


We spent $29 the first month for our Yahoo store which was out of pocket. After that it was just reinvesting business profits. Hope this helps at least someone out there who is on the fence or discouraged about starting an online business. There is REAL money to be made and there are millions of buyers just waiting for you site to come along. You just have to do it.