Sunday, October 12, 2008

Time Flies When You Are Having Fun!

I've been in a rather reflective mood this weekend; looking back at where I was three years ago this month. October 2005 was the month I made my decision to fish-or-cut-bait with Glacier Bay.

My choices were simple: 
  • To continue with the business, my changes would have to generate a meaningful profit during the busiest quarter of the year. I was just looking for a positive trend, a sign if you will, no earth shattering numbers.
  • If I didn't reach that goal, I would shut the business down, come the first of the year and deal with the results of a shutdown and an unknown future.
Well, since I am now a full-time blogger and part-time merchant, you know the rest of that story. 

As I look back though, I am amazed at the many opportunities that are now available for online sellers that weren't a real option for me back then. In fact I am now the beneficiary of those options. Today, three years later, I am back in the business of selling media (DVD's, CD's and Video Games) online.

What a difference three years makes: 
  • Today, I buy product directly from the consumer -- with lots of margin -- through my website http://www.buybackdirect.com. Three years ago that was not an option.
  • Today, I don't need a warehouse or a large staff, because I store my product in Amazon's warehouse, using their FBA program. They ship the product for me and handle all of the customer service. Three years ago, I was in the 2nd year of a 3 year lease for $4500 a month and had 6 full-time and 4 part-time employees.
  • Today, I can launch a website for $60 a month plus a commission on sales and it took me 1-week to launch, without hiring any outside help. Three years ago, I spent $80K to design and launch my website, plus $150 a month for a web server..
  • Today, I am a multi-channel seller, though to be honest I just launched the website, so that is a little bit of a stretch. Today, there are multiple marketplaces available for me to sell on and that is my plan for 2009, as soon as Fillz can mange my FBA inventory. Three years ago, I only sold on eBay and Amazon was just starting to become an option.
  • Today, I'm not afraid of advertising on Google. Three years ago, I was very afraid.
  • Today, I have a lifestyle business, that allows me to make an income and grow at my pace. Three years ago, my business was my life and I had to grow or die.
I'm sure you are wondering why I just took you down memory lane? It's because, many of you are going through something similar or have already been where I was and you're probably scared to death about it. Let me assure you, this is just a setback before your next opportunity. You will survive these troubling times and come out of them in better shape, than you can imagine.

If you are at the same crossroads I was at three years ago, it will be painful, but if you persevere and don't lose hope, you too may be spending a weekend reflecting on your past and smile, just as I am now.

I am living proof that new opportunities will become available, where one door closes another one opens.

Just my 15%

17 comments:

TheBrewsNews said...

Outsanding post. Very inspiring to the online sellers facing lots of uncertainty right now.

David said...

Randy interesting that you said that Amazon was just starting to be in option in 2005.

Before I started selling on eBay I used to buy textbooks on eBay that were auctioned and sell them on amazon and I had great results.

If I put a DVD on eBay it would sell immediately. This was back in 2002.

My guess is that there was a lot less people that were aware of amazon marketplace and now it would be much harder to move stuff.

Randy Smythe said...

Thanks Brews! Hopefully it will encourage others going through the same thing.

David,

Yeah, Amazon was great for that type of product. I was buying my product from distributors and there wasn't enough margin to make that profitable for me on Amazon.

Henry said...

Good job getting back on your feet Randy. These days, any larger e-commerce outfir really needs to be on both eBay and Amazon. eBay for the volume and Amazon for the growth.

You are a great blogger Randy. Keep up the eBay-bashing and long-live Amazon.

ms.pat said...

Randy - can you possibly see Ebay doing for anyone what Amazon is doing for you? Warehousing and shipping your items and doing the customer service too? Yep...they're doomed :-)

Randy Smythe said...

Henry,

I think eBay would be a great liquidation channel for me, to recover cash from stale inventory. I may one day go back there to liquidate inventory, I have at FBA that has been there for more than 3 months.

But not until they figure out what they want to be.

Pat,
eBay, should be used for what works there and if nothing works sellers should go elsewhere.

ms.pat said...

"eBay, should be used for what works there and if nothing works sellers should go elsewhere."

I believe that's just what they're doing LOL :-)

Moonlight said...

That's a nice site you have there, Randy. Too bad you don't take VHS. I have a roomful of 'em.

Sweetrevenge said...

Randy, how can we help you bring eBay down once and for all? I know they are on self-destruct mode already but I want to help you crush them for what they did to you!!

Randy Smythe said...

SweetRevenge,

I think there may be some mis-communication here. I don't want eBay to die. I want them to be a healthy marketplace for sellers again.

eBay didn't put me out of business. my model was broken and no longer worked and I didn't have the desire to change again.

Randy Smythe said...

Moonlight,

I would buy them if there was a market for selling them. Unfortunately there really isn't except for Disney titles.

Sweetrevenge said...

Yes Randy, they DID put you out of business, like they have hundreds of sellers with their high fees and constantly changing rules! Just like you would not go back there in a million years, we need to help the few remaining eBay sellers still under the eBay brainwash drop the habit and get healthy again.

Anonymous said...

Randy that was such a hearfelt, and really moving blog post. I felt like you were speaking directly to me.

Thank you for your hope and inspiration.

Randy Smythe said...

Anonymous,

You are welcome and I wish you the best in the future.

Anonymous said...

Hindsight is 20/20...I wish I had spent the last 3 years developing new career/business options instead of staying on the ebay cash-flow treadmill. Ebay is so much worse now than it was, even 3 years ago....

I honestly don't see any long-term future for ebay/amazon media sellers who were once inspired by your business model back in the early days....the overhead rises, the profit margins shrink...and sellers continue to live only on cash-flow, no true profit.

In 2004, a new, large ebay media seller told a friend of mine, "we're happy just making 50 cents on a sale".

I wonder if this time next year, he will still be able to say 50 cents profit is even possible to realise per unit...

I guess there may be one or two very large volume media sellers still out there who disagree with me, but I wonder if they actually enjoy their jobs anymore?

Ya know, one thing, volume ebay sellers who admire the Southwest Airlines business model never got is: that Southwest Airlines never compromised a standard of true customer service-AND offered low prices.

Quality control and fair customer service on ebay went out the window in 2004, at the expense of the whole marketplace, even the good guys like jayandmarie and moviemagicusa and hundreds of other smaller sellers are left with this mess we now have today....

Keep up the great work, Randy. Your reflective post seemed to make me reflective, too. Steady on!

Stephen

Christine said...

Good post, I am in a "I'm scared to expand" position right now, and a "how big can I grow working out of my basement?" I will have to ponder these questions over the next few months.

I wasn't aware you could have an Amazon webstore that sold books and DVDs. Is this something new or were you able to negotiate this?

Randy Smythe said...

Christine,

There are decisions to make every step of the way. Media sellers can now have Webstores, but they do need to be approved.