"How my entire eCommerce journey can be explained by a pair of socks"- Beau Crabill
ENTREPRENEUR SINCE BIRTH
My online eccomerce entrepreneurship started in middle school, but well before that I had already emerged into entrepreneurship. In elementary school I would do the typical lemonade stands, sell arts & crafts, and hustle at garage sales. It was not until 8th grade that my first significant entrepreneurial success came about.
In 8th grade Nike came out with some new socks that had some dumb striped pattern on them. They were called "Nike Elite Socks" They originally came out with just black with a white stripe, and white with a black stripe. After immediate success by getting people to pay $12 for a pair of socks.
They then came out with blue with a white stripe and red with a white stripe. These socks cost $12 a pair and that did not stop anyone from buying them.
The more pairs of Elite Socks you had the cooler you were. I saw the huge demand for this trend. I was impressed with Nike, and I wondered how could I dive into this demand that Nike has created...
I then had an amazing idea, there are only 4 different colors people can buy, the more socks you had the cooler you were, but there are only a limited amount of colors you can buy.
No problem I said, I will make new colors. Not make my whole entire new line of socks, but simple dye them different colors. So I did, I bought 3 pairs of black with white stripe socks and 3 of white with black stripes. A big $72.00 investment for me at the time.
Then I went to Jo'Anns bought some dye in various colors for $8.00. Now an investment of $80.00 which I had saved up from picking up dog poop from my neighbors house for $5.00 a day. I then went home, read the instructions for the dye and started dying the socks different colors.
I had black with light blue, red with a black stripe, a few black & yellows, and a couple purples. I went to school the next day, and sold every single pair for $25. I know had $150 and the demand for my socks grew!
All the kids I sold to all were their socks to school and the whole school went crazy, asking where they got the socks from. I then thought that I could probably get these socks for cheaper, to get my cost of product down. I found a few coupons online that gave me some bulk discounts and free shipping to footlocker.com where some of the Nike Elite Socks came from.
My father let me use his credit card to order 15 pairs at $10 each online, I paid him back the $150.00. Week later the socks came in, and I already had all 15 pairs sold to pre-orders, so I turned that $150 to a quick $375.00. I know had a decent amount of cash to work with, I kept scaling over the next month. I got to $1200 before the principal told me I had to stop selling on school grounds.
That was my biggest market, there was a few kids in the neighborhood where I could sell to, but without a phone, and my only communication to the rest of the school was facebook. I had quite a few sales thru cold messaging a bunch of people through facebook. I was pretty upset that I could not sell at school, but this is where is my ecommerce success was born.
I then figured, well if one middle school in one small town will go crazy for these, then there has to be other kids around the country who would want these. This is where I got onto eBay.
IMMEDIATELY, things just shot up. I was amazed about how quickly my sales went. My only problem was the amount of time it took for me to make these socks, as a one man show, the dying process and putting them into the dryer, dipping them in vinegar so they would not fade, took quite a bit of time.
I then decided to test the market by coloring on the black with white stripes in a rainbow pattern, now this was just stupid, the socks started selling for $36 selling about 4-5 pairs a day.
My streak of Nike Elite Socks would end two months later, I did over $10,000 in sales and profited about $6,000. The dad stopped due to Nike's realization and they started making a bunch of new colors and designs. I guess I knew Nike's customers better than they did! But this was not the end of my Nike Socks sales.
I did not know what the word retail arbitrage was, but I was doing it with Nike Socks after my dyeing socks fad ended. I literally bought the special colored socks that Nike would come out with and then resell them on eBay. This was a lot easier, and less labor intensive than dyeing all the socks.
I remember I bought 10 pairs of these special socks that nike came out with, listed them when I got back home, and sold out that nike. Bought for $12/pair sold for $25. Quick ~$100 profit after fees and shipping.
School finally came out in middle school and I had some time on my hands between football and basketball practice. I would get later get into bartering, which if you have not heard me talk about that in the "eBay Hustle Course" you really should.
If you really want to turn $0 into literally a new Iphone, then you want to check that out. But, this summer is where I dived deep into retail arbitrage, my biggest source of income was from Ross Dress For Less. Making about $200-$500 a week, I felt unstoppable, I loved it.
Actually one of my best selling items was the same exact Nike Elite Socks that I originally sold. Ross had them for $6 a pair (really wished I could of got my socks for $6 a pair when I was dyeing them) and I would sell them for $12 on eBay. Whenever I saw a pair at Ross I bought them.
To this day, I have never NOT sold a pair of Nike socks. I have never actually kept count, but I have probably done at least $50,000 in Nike Socks over my lifetime.
LONG TERM THOUGHT SINCE BIRTH
Okay, but we still have not talked about Amazon. You are probably tired about me talking about Nike Elite Socks, however I am not done. Over the next couple of years I would do retail arbitrage, barter on craigslist, and buy products from China in bulk and sell them on eBay & Amazon (I did not know what the word private labeling was, but that is what I was doing.)
A few items that I killed it on, making over $2,000 a month selling Kendamas and phone cases. Importing 500 kendamas a month to my house as a freshman in high school was a pretty fun thing to do. With all the money I made, I never spent a dime, literally I never spent one dime on all the money I made, I kept cash in my safe, put into a savings account, and also invested $10,000 into Solarcity a Elon Musk Owned company which would later merge with Tesla, where I then sold for an awesome profit.
The first and last non-dividend stock I will ever invest in. I think I just got lucky. My idol, Kevin O'Leary, Founder of O'Leary Funds only invests into dividends. I am not an expert, in dividend stocks like the expert level I am with eccomerce, but it just does not make sense to invest into a company that will not pay a dividend.
So far throughout my entrepreneur career, everything I have touched as turned to gold (no pun intended, but I am also a big investor into gold). I have saved/invested every dollar back to myself and have not spent a dime. I have not lost a penny, even through all the bartering I have done, retail arbitrage, private labeling, and complete hustling. Oh and I forgot to mention I got a "job" and became a basketball referee.
That also turned into gold as I worked my way up and refereed basketball games where the players were older than me. I made about $2,000 doing that job.
I would then ramped things up selling online and take it more seriously. This is where I got into selling on Amazon, a friend of my Father who had been selling on Amazon Throughout a private labeled product taught me how to get started with selling on Amazon.
He did not really tell me much, besides that you buy from china, and sell on Amazon. Nothing about the buy box, sales rank, sales rank history, none of that, just the raw basic fact that you can sell on Amazon I dove deep into dropshipping and scaled more into private labeling.
I killed it with this. Dropshipping 3d printers, boxes, yoga mats, video games, special president coins, socks, tape, and anything I could get my hand on. Just from dropshipping I was getting a checks of over $10,000 every two weeks from Amazon.
So now, I had a good amount of cash, everything is great, now how do I scale? At this point I would still call everything I did a hobby, and not a business.
If I stopped doing what I was doing then the money would stop coming in to a certain extent. Some of my drop ship items were pretty passive. But I know there is now way I would be still drop shipping those same items a year from then.
HITTING ROCK BOTTOM
I start to take some risks. One of my suppliers from China, shows me some products that are what he claims are 100% legit, no patent on them, and I will be good to go, to "white label" these products or at least I thought was good to go. White label opportunities are amazing if you do it right.
If you are not sure what white labeling is, then you should go get into my program to see how you can benefit from white label opportunities (it is not private labeling). I profit $35,000 from those headphones within 60 days, while I ramped up my Amazon business.
At this point I am still selling Nike Elite Socks, on Amazon! Nike is a restricted brand, but for some reason I was 'grandfathered" in and I was able to list those products on Amazon. Did I have full rights to resell those? No. I thought I did because I was buying from the Nike Outlet. I was still hustling, doing retail arbitrage, dropshipping all on Amazon. Getting some big 5 figure checks every two weeks from Amazon.
Then it will crashing down. I will never forget this day. I remember I went for an 8 mile run, came back from the run, checked my phone, and realized I made $3,500 during that 55 minute run. All from notifications I saw on my phone from Amazon, eBay, and at this time I was also selling on Bonanza and Ebid.
I remember asking myself, "woah if I just do what happened during my run, every day, then *pulled out calculator* do 1.2 million a year. Then later that night after dinner, got a notification from Amazon saying a "your account has been suspended, you have limited access to sellercentral now"
My stomach dropped, I was like holy crap, I had no idea what I did, or that this could even happen. I had no messages, warning, even any negative feedback on my account. My account was pretty much perfect, besides a few orders that I forgot to fulfill with dropshipping (I guess I sold too many items to keep track).
I rushed to my computer to check out what is going on, and the Case ID was saying I had a copyright infringement claim off the Nike Elite Socks I was selling. Still stressed out, but a small sigh of relief, because I was confident that I would just show them the receipts directly from Nike and I will be fine.
I uploaded the receipts, and got a message back a day later saying those are not validated invoices. Now I am worried. Also, when you are suspended on Amazon, you only get to communicate with their outsourced customer service via email. No calling, and most of the time it is 100% computer automated.
Then it got worse. My eBay account gets shut down. $100,000 in gross sales within 45 days to account shut down. The headphones I were selling were not legit, big lesson learned. I had to refund over $20,000. At this time, I had no luck with Amazon I even got to the point of emailing Jeff@amazon.com once a day.
As soon as my eBay account got shut down, I transferred all but $800 from paypal. I was still able to get sales thru ebid and bonanza...until my paypal account got shut down. Now I literally had nothing. I had no money coming in, only money coming out from returns.
I had thousands of dollars held from Amazon and ebay, that I will not be getting back from 90 and 180 days. This was the first time in my career that something had a significant negative effect.
THE TURNAROUND - DOING THINGS RIGHT
I hated what happened to all my accounts within a short amount of time, but I am EXTREMELY THANKFUL THAT IT HAPPENED. I would have NEVER learned to do what I AM DOING TODAY. I was forced to figure out how to sell the right way. After figuring out to get a new eBay account and Amazon Account, legally.
I then had several phone calls with eBay staff member's (eBay customer service is very helpful) and with Amazon's associates. I basically tried to get them to tell me what their best sellers are doing. I wanted to figure out what people were doing that I was missing out on. I did not get a lot of good answers at all, but I got a few ideas. I started just to think and research "Retail" I started to understand that if you were just the storefront and the place holder for everyone's retail products, just like how Best Buy, Target, Sears, Macy's, Game Stop and all other Big Box retail stores THEN you would make so much money with no work.
ALL BEST BUY IS, is a store getting a cut from BIG BRANDS products. So then I researched how to have the full rights to sell those products. I somehow after a month of non-stop researching and reverse engineering. Found suppliers that supply Gamestop. All the video games you could ever imagine. Then I found out a supplier that supplies Ross Dress For Less.
This amazed me, I was able to make money from Ross, but now I will cut out that extra step and buy from their supplier. I focused really hard on that supplier, and got a solid relationship with one of their account manager. There was sometimes that the account manager I was working with would make some mistakes, but I would eat those mistakes, and do the right thing.
Since I was doing the right thing, my account manager saw that, and rewarded me. He rewarded me, by inviting me to the ASD tradeshow.
I had no idea what the tradeshow was or what the heck he was talking about, but I accepted his invitation and acted like I knew what I was talking about. But, I learned quickly. Luckily, the supplier I was working with, the process how they get their products was working with all the other big brand name suppliers.
They buy in ridiculous volumes from companies who are already buying in ridiculous volumes, so the prices are driven down pretty low, and there is still large margins for them to be profitable and for me to be profitable. Lets just say Ross Dress For Less is NOT losing any money.
What my account manager did, because I was young, he decided to show me all the suppliers they buy from, this was really helpful because I would of been completely lost at the tradeshow and probably literally got lost as there was 3000 ish vendors with a confusing convention center.
He showed me exactly what he does, and what taught me a lot about the retail space. The whole time I was just thinking "holy crap, if I just got a small piece of this pie and leverage it to use this for all online".
AND that is what I did. I immediately started scaling and grow from there to where the point I am at today sharing this information to you, letting you skip out on this crazy journey and have a solid path to success.