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Jas0n United States. Jan 03 2012 21:44. Posts 1866 | | |
2011 was a pretty good year for our company and we're really excited about what will happen in 2012. Despite eBay fee increases and new restrictive selling policies, we still came pretty close to our sales goal. This was our first year as an official S-Corp and we got a pretty strong start. We branched out onto Amazon in October which gave us a nice 100k in sales for the holiday season. Overall, for 2011, we did $948k in sales which is just under our $1 million goal.
There were a lot of roadblocks on the way. Mainly rising eBay fees and new policies that really restrict the way we operate. PayPal decided to hold $20k of our money hostage for no real reason. Amazon is increasing their fees in the first quarter of 2012 as well. Along with a hundred other issues that came up over the last year that whittled down our profits. Early in the year we predicted that we were easily going to do over $2 million in sales at a ~50% higher profit margin than our current profit margin. But by May, with all of the changes on eBay, we knew that wasn't going to happen.
However, $948k is still pretty good by our books and our current profit margin, although a lot less than it was at the beginning of the year, is still more than enough to keep us motivated. We got a trade show in Vegas coming up in March and by the end of August, we'll have moved into a permanent location either in the Midwest or in California. Once we get things going, we're going to start importing directly from China. There are a lot of things we're excited for in 2012 and although there's definitely going to be a lot of unpredictable setbacks, we're hoping for at least $2 million in sales by the end of 2012.
Looking back at 2011 I realize that although there is still a ton I don't know about the business world and e-commerce, it's unbelievable how much I learned over the last year. edzwoo keeps saying we should write down what we know so it would be easier to train new employees in the future and who knows, maybe in 30 years write a book about our experience 
I remember buying our first storage shelf about a year and a half ago to help organize our products. We were getting to the point where we just had too many boxes lying around and needed a better way to store our products. This was when we had less than $3000 in merchandise so one shelf was enough at the time. After assembling the shelf and putting some stuff on it, I took a few steps back to get a better perspective of what I just did and man, I felt SO legit. That was when I started to feel like what we were doing wasn't just a part time thing (I was still in college at the time) but rather something I could do as a career.
A few months later we had a CPA on our payroll and a lawyer setting up the S-Corp for us. I thought having to buy storage shelves for business purposes was pretty sweet but getting incorporated was really amazing. We were now a legal entity and we even had shares of stock. It was pretty awesome.
A few months after that edzwoo and I flew out to a trade show in New York. Felt pretty legit handing out business cards and wearing a badge with our company name on it. After a day or two though, we realized that we were one of the bigger companies there. We were actually bigger than a good number of distributors there too. I don't think anyone there took us seriously though because of our age. Most of the buyers there would inquire about products in quantities of 10 or 20. Because the way we operate requires that we move products really fast, we usually purchase items in the hundreds and thousands. And usually when you purchase in those quantities, wholesalers will give you a price break or a discount of some sort. But very few of the sales reps at the show knew if they could give us any price breaks so we couldn't tell if certain items were worth purchasing. Either way, it was in New York and we had a blast.
I know how everyone on LP love charts and graphs, so here you go
eBay - the red bar isn't accurate and for 2010, we didn't really focus on the business so it's not a very good comparison
Amazon
tl;dr
it was a good year
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soberstone United States. Jan 03 2012 22:15. Posts 2662 | | |
Quick synopsis of what your product is? |
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Jas0n United States. Jan 03 2012 22:19. Posts 1866 | | | |
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TheHuHu3 United States. Jan 03 2012 22:32. Posts 5544 | | |
How much of that goes into your pockets? |
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Silver_nz New Zealand. Jan 03 2012 22:54. Posts 5647 | | |
Great post!
Buying direct from china sounds exciting. Hard part seems to be building up a network of trust? Finding the right people to buy from.
I still have no idea how you guys got a porfit margin to start with, but good show.
A+ would read again
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Spicy United States. Jan 03 2012 22:58. Posts 1027 | | |
That's some pretty sick growth for 1 year %wise, and you did it while staying profitable
For 2012, do you plan on trying to keep growing as fast as you can or improve margins?
seems like importing directly from China is a solid play to make up for higher fees |
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DooMeR United States. Jan 03 2012 23:00. Posts 8559 | | |
solid shit man Seriously good work guys |
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| I just saved a bunch of money on my car insurance, by running away from the scene of an accident. | |
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edzwoo United States. Jan 03 2012 23:16. Posts 5911 | | |
| | On January 03 2012 21:54 Silver_nz wrote:
Great post!
Buying direct from china sounds exciting. Hard part seems to be building up a network of trust? Finding the right people to buy from.
I still have no idea how you guys got a porfit margin to start with, but good show.
A+ would read again |
A lot of the bigger wholesalers that are more trustworthy tend to have higher prices because of their good service. One of our wholesalers has sick prices to start, but is pretty scummy and tends to send us empty boxes when we expect hundreds of pieces. Then it takes like 5 phone calls to make them refund us. At this point though, we buy large enough that we get good deals from the bigger wholesalers. They also send us awesome gift baskets for the holidays because they want us around lol. |
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Endo United States. Jan 03 2012 23:30. Posts 953 | | |
Yea have jason work that china connection |
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Bigbobm United States. Jan 03 2012 23:32. Posts 5512 | | |
have to say im pretty jealous.
sick story, hope it continues for you guys |
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| Its time to stop thinking like a bitch and think smart like a poker player - ket | |
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edzwoo United States. Jan 03 2012 23:42. Posts 5911 | | |
| | On January 03 2012 21:58 Spicy wrote:
That's some pretty sick growth for 1 year %wise, and you did it while staying profitable
For 2012, do you plan on trying to keep growing as fast as you can or improve margins?
seems like importing directly from China is a solid play to make up for higher fees |
Well, improving margins and growing fast go hand in hand since we mostly reinvest our profits into the business. Jason and I live pretty frugal lives, and Jason actually doesn't need to pull money like me because he's made quite a bit from his coupon ventures in the past. |
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Jas0n United States. Jan 03 2012 23:51. Posts 1866 | | |
We basically take out what we need when we need it, otherwise we just let the money sit in our business bank account. We pay for a lot of personal stuff with our business money anyway because we can write a lot of it off when we pay our taxes. |
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Spicy United States. Jan 04 2012 00:35. Posts 1027 | | |
Sounds good, penny-pinching early on to let the business grow
Some entrepreneurs pay themselves too much when they're still small and cap their growth/get lazy |
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K40Cheddar United States. Jan 04 2012 01:01. Posts 2202 | | |
Well now I know what you mean when you said your "customers were shipping it to us" LOL.
But seriously sick job guys |
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very cool post. I've looked into your venture, however, and it seems your guys' business plan is to provide extremely cheap merchandise at a high mark-up - with little-to-no customer retention.
i'm curious if you guys are intending on eventually providing a bit higher quality of product (and thus, encourage mouth to mouth marketing/awareness) or continue with the current 1-shot sale/move on strategy?
regardless, what you guys are doing is fucking awesome. it's really cool to see people envision a profitable business plan and follow through. little under a million in sales after having a stock of ~3k not long ago? incredible.
wish you guys all the best.
i have so many questions i'd love to ask haha, but feel it's too personal for a public forum.
champs. seriously. cheers |
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Chewits United Kingdom. Jan 04 2012 07:50. Posts 2539 | | |
Link to your website? Curious! |
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| I am a degen. Do not believe in any of my advice. | |
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bigredhoss Cook Islands. Jan 04 2012 08:37. Posts 8649 | | |
so sick
nice work guys :o |
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hneaz United States. Jan 05 2012 04:36. Posts 79 | | |
YOU GUYS NEED A BIGGER HOUSE FOR YOUR PRODUCTS! |
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