It’s like the gold rush of the of 1850s. Many sense that there is wealth to be mined in the online wilderness. That sense emerges from both fact and sensational promises. Certainly, there are people making a living working from home running online businesses. Fewer make a decent living at it. Fewer yet become truly rich. Regardless of the odds, the plausibility of limitless income, capped only by one’s ability and resourcefulness, holds an alluring appeal.
This essay will be the first in an ongoing series journaling my personal foray into the labyrinthine online business world. Spoiler alert: I haven’t struck it rich. In fact, when expenses are factored in, I haven’t earned one cent of profit. There’s no happy ending here. Indeed, there’s no ending at all. It’s an ongoing drama. I share my experience to entertain, to warn, and to perhaps attract guidance and spur discussion.
Note that I am not currently an affiliate marketer of any product or service mentioned below. There’s no ulterior motive, and I will not be providing links trying to sell you anything.
Why Start an Online Business?
Perhaps like you, I spend a lot of time online. I would love to say that most of that time is spent in productive endeavors that serve some higher purpose. In truth, much of it is wasted. I have an app on my computer that, among other things, tracks how much time I spend playing computer games. I recently noted that a particular game has eaten enough of my time to equal more than a month of full-time employment. Suffice it to say, I waste a lot of time online.
What if I could take even just a fraction of that time and apply it to a profitable venture? That question has prompted me to explore several possibilities over the years. Clearly, I have the time. All I need to do is figure out how to use it effectively. Simple, right?
Snake Oil by the Gallon
If only it were that simple. Enter “work at home opportunity” or “online business” into your favorite search engine, and you’ll be inundated by various incarnations of snake oil salesmen.
Some are easier to spot than others. Typically, if an ad claims to offer some “secret system” or “elite program” that can have you earning $700 a day by this time next month, it’s a scam. At the very least, it’s going to cost you money well before you make any, if you make any at all.
However, the greater hazards online today are the scams that aren’t so easy to spot. In fact, if you type a particular “program” into a search engine along with the word “scam,” you will likely find affiliates of the product posing as objective critics before you find honest reviews or exposés. As a result, it’s very difficult to locate good information on any given “opportunity” presented on the web.
The Allure of Domination
A few months back, intent upon finding some way to make money selling items on eBay, I tripped upon a “program” that defied conventional categorization. If you’ve done any probing around YouTube for videos about selling on eBay, you’ve likely come across at least one promoting DS Domination.
The DS stands for dropshipping, the practice of selling items warehoused by a supplier, who then ships direct to your customer when they buy from you. It’s brilliant in concept. You never have to touch the merchandise. You don’t have to maintain an inventory. You don’t need to package items, buy postage, or make trips to the post office. You just post items for sell on eBay, then forward the order to your supplier when a customer buys from you.
It may sound too good to be true, but dropshipping is a legitimate wholesale distribution model. That said, the way DS Domination teaches dropshipping (at least in the earliest and cheapest levels of membership) proves unsustainable.
DS Domination teaches people to source products from Amazon and sell them on eBay. You literally find a product for sell at Amazon, copy and paste the description to eBay with a mark up, and have the product shipped to your customer when the listing sells.
You might ask: why would anyone buy something from you at eBay when they can get it cheaper at Amazon? All I can tell you, from personal experience, is that they will. I imagine it’s due to simply not shopping around for the best price and buying on impulse. If benefiting from that doesn’t bother you, then the DS Domination method can make you money.
Here’s the rub though. First, it violates Amazon’s terms of service. Once I found that out, which was pretty soon after I started, I stopped. To my mind, a business model that requires you to violate agreements is not sustainable or desirable.
Second, even if you muscle your way past the ethics of the ToS issue, it’s difficult to control your expenses when sourcing through Amazon. The price they offer today may not be the price they offer tomorrow. And any increase on their end can eliminate your margin real quick, if not cost you money.
Third, it’s very difficult to process returns or otherwise offer customer service after the sale. You’re basically banking on everything going smoothly. If the customer isn’t satisfied, you have to get them to return the item to Amazon, which can get awkward real quick. Either that, or you eat the cost.
Above all, the major drawback of DS Domination is that it’s a multi-level marketing scheme. You pay a monthly fee for access to their training materials and marketing tools. So you’re starting at a loss and the clock is ticking each month toward you losing more. In one sense, this provides motivation to get listings up and make sales. On the other hand, you wonder after awhile what you’re paying for.
I have no doubt that, if I was willing to continue with the unethical practice of violating Amazon’s terms of service, I could have become profitable with the DS Domination method. But I’d rather make money in a way I can be open and honest about.
That led me to SaleHoo, a website that provides a directory of verified wholesale distributors, online training materials, and a community forum for one flat lifetime fee. What I like about SaleHoo is that it’s, to the best of my knowledge thus far, completely legit. There’s no promises of vast riches. There’s no membership fees beyond the initial reasonable investment. You get what you pay for, and you have it forever.
SaleHoo is in league with another service called Terapeak that offers comprehensive market research to members for a monthly or annual fee. I tried their free trial and quickly grew frustrated. The research tool worked great. I had no problem finding fantastic products that were selling well. The problem was: that information does you no good without a wholesale source for those products that can result in your profit.
My frustration with the Terapeak trial combined with other life events led to my shelving the online business endeavor indefinitely. All told, I spent $722.71 on expenses related to my various efforts. My revenue came in at $537.75, adding up to a net loss of $184.96.
It’s worth noting that a large chunk of those expenses came from membership fees and an Amazon Prime subscription. If you take those out of the equation, my expenses were only $449.56 for actual product. That means, had I simply sold the same products without buying into any of the training, I would have come away with a $88.19 profit.
Of course, thought experiments aside, expenses are expenses, and loses are loses. I didn’t lose a ton. But I didn’t make anything either. That said, I feel good about having tried, and am now looking to delve back into the effort with lessons learned and upfront costs paid.
I’ll let you know how it goes.