I’m not proud of it, but a long time ago I owned an online smoke shop. It sold all manner of marijuana paraphernalia from bongs to grinders. Here’s the thing, it was a good business in many respects. It did well, I enjoyed it, and the people it attracted and most importantly, I profited.
Now, I’ve done my fair share of weird things in my time so far. And that’s ok, I’m a weird guy. A smoke shop seems a strange move for a guy who is focused on conservative family values, and building long-term, intergenerational wealth. You’d be right, this isn’t the sort of thing I’d do now as a ‘proper adult’. But, I was a different guy then. I didn’t even intend for this business to pan out this way. In fact, I was trying to build a general-goods importing business, that sold on my local eBay-type site. And it turned into something completely different.
I started writing this as more of an “I did this once” story-esque post. But there’s so much more to it. The key takeaway is, any business you start will evolve. In fact, if you aren’t different from your outset in the first 3 months, you’re probably doing it wrong.
I actually started off selling…crap. Yep. Following the success of selling worms(and their ‘crap’), I wanted something that was a bit faster paced, and that I could scale on a less land-intensive level. That is to say, more specifically, without turning my parent’s yard(I was living with them at the time) into a worm haven and becoming the lord of a veritable rat-fiefdom. So with my worm selling operation netting probably $40-60 per week, I started looking up how to import.
I actually came across the article so many of us read by the Startup Bros. It got me pumped AF(these guys make money from selling courses, not products..more on that later). Then I immediately got to work looking for products. There were surplus profits I had from my worm farm(after recycling them to scale that operation) and rolled them into buying products from good old AliExpress. As for the products, I purchased drink cup clips(wtf?), lumbar supporters(too big), mini cameras, hair brushes, flashlights(actually useful) and a few other bits and pieces. Like I said, crap, really.
The Cameras I got in. Wound up just giving these away.
I had no idea if any of these would work, and it was no wonder that most products I got didn’t. At the time, I didn’t really have any system of gauging demand. Unlike in almost any other 1st world country, we don’t have eBay and we certainly don’t have any real scale of economy. This means we don’t have tools to gauge our local market using a large data pull with 3rd party software. Short of some macro data from government websites, or pounding the pavement, it can be hard to stay ahead of the curve. I have a system now..but I don’t kiss and tell(if I did, it wouldn’t work).
Quick side note – If somebody is selling you a system on how to make easy money, stop and think. Why in the name of all that is money would they disseminate that? If it’s so great, why don’t they just do it themselves? M-O-N-E-Y. The system is ceasing to produce enough of it, so they monetize the thing that used to work in the lowest form of a product. Selling systems on how to make money. Rest assured the only way to make money is through hard work, absorbing actual knowledge(not systems), and learning how to fail properly. So next time you see a dropshipping course ad or The StartUp Bros selling some cheatsheet or some stupid crap like that, just carry on. Nothing against them or their business, but to build generational financial capital takes creativity and unique culture. Not 3 easy payments of $333 for a ‘unique system’. That $999 is better to put towards figuring out your own system. Read some basic concepts and then get creative and never divulge your deep secrets.
Anyway, in my country, there is a problem. And that problem is most people make their purchasing decisions on price and price alone. In fact, the only thing people like to spend a lot of money on besides their car and food is…their…phone.
That Feel When…
Eureka, Phones! Wait, no. Memory Cards! Yes, the extension that everybody needs for that little tool in their pants. The storage capacity of phones(at the time) was barely enough for half a rap album, not even including those weird skits that rappers do(that still a thing?). They needed memory extension, and micro SD cards were the shiznit(that still a thing?). I brought in 8, 16 and 32GB. Heck, this company I found on Alibaba were selling storage cheap as chips, so I got some USB Flash Drives too. Why not? I was stoked. 3 weeks later, they arrived and I was in business.
I actually had the mentality at the time that diversification was the way to make a lot of money. It isn’t. Diversification helps you keep a lot of money, specialization helps you make a lot of money. At any rate, I incorrectly applied some ‘product portfolio diversification’. While I was waiting for my ‘digital storage solutions’ items to arrive, I got in some “Herb Grinders” “Cigarette Style Lighters” and some “Water Filter Pipes”.
At long last, the flash drives and SD Cards came. I had written some sales copy, had some images from the supplier and listed them on the auction site. By the end of the first week, I had nearly sold out. Identifying as a ‘gamer’ a the time, I actually set a sound on my phone to play a Mario coin noise every time I got an email. So I was a veritable embodiment of the red suspender wearing plumber, going about my business and collecting coins. I naturally ordered more, a lot more. And things went well…for a time.
Totally me. It felt that easy(relative to my apprentice wages).
I was up. Way up. I was up in that secret cloud level in world 4-2, ready to jump to the last level. I had sold out of my second load and the third had arrived was sitting in my storage cupboard. 500 of the things with about $11 profit per. Then I got a warning email that there were complaints about my products. I thought it was a one-off, and replaced it promptly. But the complaints kept flowing. Something was up. To cut this segment short, it turns out these storage devices were “fake”.
It’s not that they didn’t store data. They totally did. Just not as much as they claimed to be capable of storing. You see, there’s a sort of invisible file on flash drives and SD cards. An indicator that tells the devices it interfaces with how large it is. These were 4GB cards that told devices they were 16gb or 32gb.
So I had to pull them. I couldn’t live with selling crap to customers(unless it’s worm crap). I refunded what I could, especially where I felt most guilty(selling to a photography class in a high school for eg). Then Round two.
The ‘High’ Road
I’d taken the liberty(would you even call it that?) of pulling the bad products. I had actually been neglecting the aforementioned smoke products I had listed at this point due to the success of the SD cards. I’d actually been selling a fair few of these water pipes with massive margins, along with the grinders. The lighter was a dud and wasn’t selling well. I had also found a butane powered vaporizer as well during all of this, another massive margin product. Then the auction site hit me up again. They send me an email that explained the products didn’t align with their values, and removed all my listings then shortly after, banned my account.
Very good. Very, very good. So I had around $500 of these products that were actually good, people actually wanted them and I actually wanted to sell them. It was time to get serious. I bought a poorly researched non-SEO friendly domain and got to work building my very first website. And did everything wrong, I paid for an expensive and crappy website builder(I would use WordPress now) and I paid for bad, overpriced hosting(I use Hostgator now). Also, I didn’t know of Google or Clicky Analytics at the time. So had no real idea of the performance.
So dumb. But there was a little trick, I made a bunch of stickers, which I cut by hand that had the website logo and URL on it. I emailed everybody who had bought in past, showing them the site, offering a discount and a referral reward of a grinder with their next purchase if they referred somebody else. Now sending emails soliciting people without their permission is actually not allowed by international law. Don’t do this, I plead ignorance, but that’s no excuse really. It did give me a start, and we all have to be a little gray sometimes to make our lives and those of others better. Again, not advocating illegal activity. I also started an AdWords campaign, and this also drove traffic to the site. Bingo-Bango, we were in business.
The sticker on the pipe with the logo(URL on the bottom)
I kept getting the snowflakes from the business and re-rolling them. I spent every night on design, emailing customers and finding products, re-rolling profits in the business. And it grew. Turns out those little stickers…stuck. People were using these cools devices when smoking with their friends. People were seeing the stickers and looking the site up. Enticed by the affordable and unique devices, they quickly converted to customers. I was making bank, and proud of it. About 2-500/week depending on what sold.
My fondest memory during this time was having a custom bong built from stainless steel for a man with cerebral palsy. He couldn’t actually use his hands well enough to hold smoking tools without dropping them, and wanted something rigid to smoke out of. I got a stainless welder to weld up some stainless pipe into a bong form and used a stem and cone from another product to create a drop stem. It was pretty legit(is that still a thing?).
Then problems arose again. I was in PayPal’s world
The stainless bong I had made. Incomplete, but it’s the only photo I could find.
For anybody starting a business. There are a few key tenets you must apply: “Need, Entry, Control, Scale and Time” – more in another post at a later time, but they’re from The Millionaire Fastlane by MJ DeMarco. Arguably the most important is CONTROL. If you let others control your business, you run the risk of your business being impacted by their decisions. I had given control of the transactions to PayPal, and they didn’t want to be associated with little ol’ smoke shop operating me. So they suspended my account with about $900 in it. And that was that. Shortly after, the local commerce commision told me I can’t be selling some of the products that I do. Then finally, the website builders decided they too would jump on board and erase my site. Very good. Very, very good.
So What Happened?
Well, the boring answer is…nothing much. I sold what I could to a customer who bought a lot off of me along with a few others. I gave away some products and only just recently let go of what was left. It hurt, right in the wallet. But I learned important lessons in business and investing and got up to try again. The next time, I actually purchased the e-commerce store though, it sold adult onesies to adult children. But that’s another story for another time.
I hope this little anecdote has had a few nuggets of info for you to take away. All this happened over the course of about 4 months so things can move pretty quickly, but I failed fast and learned from my mistakes. The next e-commerce I had was a store I actually bought, but that had its own set of issues. That’s a story for another time.
Any takeaways? Do you want to or currently run e-commerce? Want any advice on how to fail? Let me know in the comments.
Thanks for reading. Yours,