How Jenn Makes Over $10,000 A Month With Her Online Store In Less Than 10 Hours Per Week
2:55 AMToday, I have a fun interview to share with you that will show you how to start an online store. I recently had the chance to interview Jenn Leach of E-commerce and Prosper, who explains exactly how to start an online store and make extra income.
She started her online business a little over three years ago and since then she has developed and grown three successful online e-commerce stores earning an average of $19,000 per month.
She only dedicates around 5-10 hours per week on her e-commerce business and is super successful.
If you are looking for a new business or even just a side hustle, learning how to start an online store may be something that you want to look into.
Check out the interview below for more information on how to start an online store.
One last thing before we head to the interview on how to start an online store. Jenn Leach has a course called E-commerce and Prosper that teaches you successfully how to start an online store. She has a rinse and repeat formula that she's revealing to students in the course. This formula earns her an average of $19,000 per month. In her course you will learn:
- How to start an online store
- Winning e-commerce Success Tools
- How to turbocharge your e-commerce success
- How to start making money in THREE days
Plus, if you use the coupon code MICHELLE, then you'll receive $50 off her course.
Related articles on how to start an online store:
- 75+ Ways To Make Extra Money
- 10 Ways To Make Money Online From The Comfort of Your Home
- Ways To Make An Extra $1,000 A Month
- My Online Business Income Reports
- 8 Items To Sell Around Your Home For Extra Money
Here is how to start an online store:
1. Please give us a little background on yourself, how you started an ecommerce business, and how it’s going for you right now.
I’m a Texas-based entrepreneur and blogger over at Drink Coffee & Prosper. I educate readers about working from home, starting a business, blogging, side hustles, and more. I have an MBA from Texas A&M University and a background in business and finance. I was working in banking for 10 years before I decided enough was enough and I wanted to finally pursue my dream of becoming an entrepreneur.
During the final year at my employer I decided to start a business. I tried many things: freelance writing, selling Twitter fan packages, and more. I was very unhappy at my job and was really willing to try anything that would allow me to earn a full time income working from home and being an entrepreneur. After many failed efforts, something finally stuck.
I opened a women’s fashion retail store on the Storenvy platform. I made my first sale shortly after launching and soonafter I was earning enough income to quit my day job, so I did! One year after starting the e-commerce business I quit my day job to pursue entrepreneurship full time.
Fast forward 2.5 years later, I was the owner of 3 e-commerce businesses. I sold my original online store, restructured the other two, and I’ve added teaching courses and blogging to my repertoire!
My remaining e-commerce business has enjoyed it’s second successful holiday season and is expected to experience some big positive changes and growth in 2017.
2. How much do you currently earn through this avenue? How much time do you dedicate towards it?
When all three stores were in rotation, I earned an average of $19,000/month (each store) in revenue.
My remaining e-commerce store earns $11K-$15K/month operating part time and I dedicate about 5-10 hours/week.
3. What exactly is an ecommerce business? Can you explain this more for those who have no idea?
An e-commerce business is a business in which you conduct transactions over the Internet. You are selling a product or service, making sales and collecting payment online. So basically, any purchase made online would be an e-commerce transaction.
4. What do you like about learning how to start an online store?
I love so many things about this type of business. First and foremost, the flexibility of being an e-commerce business owner is incredible.
I’m a mom to a special needs preschooler and wife to a disabled Navy vet. My schedule is crazy most days of the week, like I’m sure most moms experience. It’s great to have flexibility to take my son to school in the morning, run an errand, head to a doctor’s appointment, go to a trade show, travel, and more.
I also love connecting with customers one on one. You get to meet a lot of interesting people and make some awesome connections along the way.
The income potential for an e-commerce business is huge. You control your destiny. I like that the opportunity to increase your earnings is unlimited and it feels great to be my own boss and work for myself.
Networking is an opportunity to connect with like-minded peers in your field, learn from each other, make friends, and more.
5. How much can a ecommerce business owner make?
The income potential for an e-commerce business owner is unlimited.
It’s not uncommon to run into a million-dollar e-commerce owner.
6. What steps are needed to learn how to start an online store?
Creating an e-commerce business is not as difficult as you may think. Here are the steps involved:
- Pick a niche: Decide what you’d like to sell. Examples: apparel, home décor, kids wear, electronics, footwear, etc.
- Sourcing: Research where you will purchase your products from.
- Set up your e-commerce store: Pick a platform (ex. Shopify), buy your domain name, add products, and customize your store
- Promotion: Market your store to get customers and make sales
That’s it. It’s not a difficult process but it can be time-intensive.
Picking a niche – Picking a niche and sourcing tend to be the steps that take the most time. Figuring out what to sell is the most important part of this process. If you don’t pick a winning category, your store can suffer and you might not see success. I recommend for those that are new to e-commerce to really take their time with step 1. It’s not uncommon for it to take a few weeks or even longer to thoroughly research a niche and figure out what kind of product will see successful sales in an e-commerce setting.
Sourcing – Today, with the presence of Internet, sourcing isn’t as difficult as it has been in the past for new e-commerce entrepreneurs. There are a variety of ways to source your product, both online and in person.
Some things to keep in mind:
- Be aware of MOQ (minimum order quantity): Your budget can be eaten up quickly if you don’t keep a careful eye on minimum quantities required for products.
- Some helpful places to find out more about sourcing: forums. Examples: Wholesale Forum and The Wholesale Forums
E-commerce Store Setup – You’ll pick a platform that you’d like to have your store on. Some examples: Shopify, WordPress, Volusion, etc. Set up is usually pretty easy, involving things like adding products, product photos and descriptions, adding your payment method, shipping policy, etc.
Most platforms (like Shopify) will allow you to purchase your domain name through them. If they don’t, you can purchase domain through GoDaddy or Namecheap (examples)
Promotion – In Steps 1-3, you picked your niche, sourced your products, and completed store set up. The last piece is marketing and promotion. This is your effort to get customers to your store. There are many options to promote e-commerce stores paid and unpaid. Some examples include: social media, ads, and word of mouth advertising.
7. What can a person sell? Where do you find products when starting an online store?
There are several products a person can choose to sell.
Here are some examples: apparel, footwear, home décor, kids wear, electronics, etc. You can even sell digital products like printables, workbooks, ebooks, etc.
For physical products, you find products from wholesalers.
How it works: You purchase a product at the wholesale price, sell it for the retail price, and keep the difference as profit. For example, a home décor e-commerce store sells a lamp to a customer. They source that lamp from a wholesaler for $20 and list it at a retail price of $50. The customer purchases the lamp for $50. The e-commerce store keeps $30 as profit ($50 retail price minus $20 wholesale price).
8. How does an ecommerce business owner find customers?
There are many ways to find customers. I’ve had the most success by finding customers through social media. Some other ways to find customers:
- Paid advertising: Ads (examples: Google Adwords), Social media ads (examples: Facebook ads), sponsored posts, paid email blasts, etc.
- Unpaid advertising: Social media, word of mouth advertising, etc.
For hopeful ecommerce business owners, I would recommend focusing on social media. In my first 2 years in business, I relied only on social media and no paid advertising. In fact I did no other advertising at all, just social media and I grew the store to four figures monthly in year 1 and five figures monthly in year 2. Paid ads are also a great option if you have the budget for them.
9. How much does it cost to start this type of business and how much on a monthly basis to maintain it?
Startup costs can vary depending upon the type of business but generally e-commerce businesses enjoy lower start up costs compared to brick and mortar businesses.
STARTUP
Some expenses to plan for if you want to learn how to start an online store:
- Inventory
- Store platform fees
- Storage
- Shipping materials
- Supplies
- Equipment
For my e-commerce store, my start up costs were under $100. This is because I focused on dropshipping in my first year. Dropshipping means that you are the middleman between the wholesaler and the customer. Similar to wholesale buying, with dropshipping, the wholesaler ships the product directly to your customer.
Look at this comparison example:
Inventory held model: Described above (in sourcing), you, the retailer purchase goods from your wholesaler. You buy a wholesale product at a wholesale price and sell at a retail price, keep the difference as profit. When your order is received, you have the product in hand, package it, and ship to the customer.
Dropship model: You, the retailer purchase goods from your wholesaler at a wholesale price and charge a retail price, keeping the difference, your profit. When your order is received, you place the individual order with the wholesaler and they ship the order to your customer.
With dropshipping, expenses are a lot lower because you are not doing the fulfillment, your wholesaler is. So, there are no packing/materials costs and no storage costs. Your labor cost is also less because you don’t have to fulfill orders yourself or pay employees to fulfill orders.
My startup costs were very minimal. I sold in a free marketplace with no membership fees. I dropshipped orders and did no paid advertising. The only costs were the cost of the product (that I would only incur after a sale was made) and PayPal fees.
When I transitioned to an inventory held model, my startup costs included:
- Inventory ($3K-$5K/month)
- Domain/store platform fees ($80/month appx.)
- Fulfillment warehouse ($1K-$2K/month)
- PayPal fees (varied)
These costs might not be typical. I was in year 2 of my business when I transitioned to an inventory held model and private domain. The store was already established and had higher sales. Initial startup costs for an inventory held model might be half of this (shown above) or less.
MAINTENANCE
Maintenance costs are the regular recurring monthly costs to operate the ecommerce store. This can include costs like domain, hosting, PayPal or other payment processor fees, advertising, shipping supplies, and inventory.
10. Are there any other tips that you have for someone who wants to learn how to start an online store?
My #1 tip would be if you have an interest in this field, dive in. It’s affordable to start. You can definitely do a lot of testing by buying small quantities, dropshipping, doing unpaid advertising, etc. I would have never thought I would be where I am today, earning five figures from ecommerce.
I started my ecomm store on a whim, literally.
I just gave it a try.
A year later, I was earning enough to quit my full time day job. Three years later, that store is sold and I have 2 more in it’s place. I would have never gotten to this point if I didn’t dive in and try my hand at ecommerce.
Some additional tips:
- Ask for help before you need it – It can be easy to fall behind and if you wait until you absolutely need help, you can get delayed further by researching the type of help you need, hiring, etc. Virtual assistants are great for handling day to day, simple tasks that can be time consuming like social media efforts, customer service, etc. This will help you free up your time to do bigger business tasks like sourcing, ordering inventory, etc.
- Learn – I'll teach you my secret strategies that landed me three successful online stores earning an average of $19,000 per month! Learn how to start an online store and start earning full time income from your online store in 3 days! Learn how to start an online store from my course that can be found at Ecommerce and Prosper.
- Don’t be afraid to scale up – One of the fastest ways to increase your earnings is scaling up. For example, if you are a footwear online retailer and doing Facebook ads at $10 day selling $50/day in product, try doubling your ad budget to $20/day for potentially $100/day product sales.
- Diversify your income streams – With ecommerce, there are many ways to earn money, other than through your store direct. These additional income streams are covered in the course and are a great way to double or even triple your earnings.
- Network – Networking has gotten me very far. It all started on Instagram for me. I found a friend who happened to be addicted to the platform like me. We found ourselves in the same group Direct Messages late at night browsing around and soonafter developed a close friendship. This opened tons of doors for me, meeting more store owners, joining engagement pods, forming amazing business relationships and more.
The ecommerce industry can be very rewarding. Think about how great it would be to wake up one day and be your own boss. Today, I feel so blessed to be able to have the life that I do, with a flexible schedule and the ability to spend more time with my family, all thanks to ecommerce.
Are you interested in learning how to start an online store?
The post How Jenn Makes Over $10,000 A Month With Her Online Store In Less Than 10 Hours Per Week appeared first on Making Sense Of Cents.
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Birth defects resulting from thalidomide led medical researchers to exclude women of child-bearing age from clinical trials. (Photo: AP/flickr)
Season 6, Episode 26
This week on Freakonomics Radio: We tend to think of medicine as a science, but for most of human history it has been scientific-ish at best. Stephen J. Dubner looks at the grotesque mistakes produced by centuries of trial-and-error, and asks whether the new era of evidence-based medicine is the solution.
Plus: sometimes the only thing worse than being excluded from a drug trial is being included in it.
To find out more, check out the podcasts from which this hour was drawn: “Bad Medicine, Part 1: The Story of 98.6” and “Bad Medicine, Part 2: (Drug) Trials and Tribulations.”
You can subscribe to the Freakonomics Radio podcast at iTunes or elsewhere, or get the RSS feed.
The post Bad Medicine, Part 1: (Drug) Trials and Tribulations appeared first on Freakonomics.
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*Disclaimer: This post was sponsored by TransUnion and contains affiliate links to their products. I am provided with compensation for advertisements on this blog and commissions for purchases made through links in this post. All thoughts and opinions are my own and are not influenced by TransUnion or its affiliates. My experience is my own, and your experience may differ. Thank you for supporting the brands that make this blog possible!
That is such a high number. And, sadly, without the correct precautions, that number may not decrease anytime soon.
Identity theft is becoming such a common occurrence in recent years and it is something far too many people have personal experience with.
No one wants to deal with identity theft. Identity theft could potentially lead to headaches, a drop in your credit score, loss of money, and more. While some situations can be fixed in just a day, some identity theft situations can linger on for years and years. Plus, many times you'll feel like your privacy is lost and you may wonder when the next identity theft will happen.
Related read: Do You Have An Emergency List For Your Family?
Here's why you need identity theft protection:
Identity theft can happen in so many ways.
Sadly, there are many ways that identity theft could happen. As you can read in TrueIdentity's article How does identity theft happen?, identity theft can happen in ways such as:
- Personal documents being lost or stolen. Documents that contain your personal information is usually one of the biggest reasons for why someone's identity may be stolen.
- Unsafe online data. A lot of identity theft cases are found to be because of things that happen on the internet. You need to keep your passwords safe, watch unknown Wi-Fi connections, only click on links that you know of, and more.
- Company data breaches. It seems like data breaches at companies happen more and more often. This is where hackers may gain access to credit card information that shoppers make, such as at stores like Target.
As you can see, in today's digital age, more and more identity theft is starting to happen. Identity theft can happen so easily, and it may not always be due to an error on your end – it may be due to a company data breach which you have absolutely no control over!
You should always be careful with you private information, and one way is to have identity theft protection (as discussed below).
You can never be too careful.
Identity theft is becoming more and more sophisticated. Identity thieves are becoming smarter about how they steal identities.
There are some things that you can do in order to help lower the chances of identity theft such as:
- Don't give out information unless you're sure it's needed. There are many scammers out there just hoping to find someone who will fall for one of their tricks. You should always be sure that you're talking to the right person before you give out any private information.
- Always be careful with what internet connection you use. You never know who else is on the same Wi-Fi as you. For example, they may be stealing your information by logging every key that you type.
- Keep your social security card and number safe. I know way too many people who keep their social security card in their wallet and/or purse. I've even seen numerous people who place their social security cards in the slot where their license goes, so it's in view of everyone whenever they take out their wallet at a store. Instead, you should leave your social security card and number in a safe place instead of on you all the time.
- Shred documents that contain your personal information. Before you throw out papers that contain any personal information, you should shred them. This includes credit card statements, bank statements, bills, and so on.
- Check your credit reports. You should review your credit report at least once a year. You can receive up to three each year for free, though – one from each credit bureau. It's free and I highly recommend doing this!
- Get identity theft protection. This can help protect your identity even further than what you can do.
And, that leads me to the next section…
There is a great option to protect you from identity theft.
Identity theft protection such as through TrueIdentity Theft Protection is 100% free and has many great features such as:
- Lock your credit. You just simply log in with your phone and lock it right then and there. You can simply unlock your credit report with another swipe.
- Free identity theft insurance. TrueIdentity Theft Protection is free!
- Free report alerts. With this service, you can stay updated on any changes to your credit report.
- Free means free – pay nothing. No credit card required, no trial period
You don't pay anything in order to use TrueIdentity Theft Protection, you don't have to enter your credit card information, there is no trial period, or anything else. It is a completely free service that anyone can take advantage of.
Please click here to check out TrueIdentity Theft Protection further.
Do you have identity theft protection? Why or why not?
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I’ve always been a bit of an Amazon junkie. On any given day, you’re likely to see at least one cardboard box with blue Amazon Prime tape gracing my front steps. We use it to order just about everything, from winterizing plastic for the windows to vitamins for the baby.
Since said baby was born, I’ve been using Amazon Prime even more than usual. Shortly after we brought him home, I realized we were running low on a bunch of basics: shampoo, toothpaste, and deodorant. Since we do most of our grocery shopping at Aldi, we have to make a separate shopping trip for the brand-name essentials we prefer.
Related: We All Buy Groceries — Here Are the Cards That Give Cash Back for Them
Not wanting to drag my infant out, I decided to put together our first Amazon Pantry box. It was generally a great experience, and it got me wondering where I could get our essentials for the lowest possible price.
Let’s do some price comparisons to see which wins: Amazon Pantry, Amazon Subscribe-and-Save, or the warehouse stores.
What Amazon Offers
Besides its normal Prime offerings, Amazon offers Prime Pantry and Subscribe-and-Save options. Here’s how these options work:
Amazon Prime Pantry offers a limited number of basic needs items. These include canned goods and nonperishable foods, baby formula and diapers, personal care items, and household cleaning products. Only certain brands are available, but most categories have a fairly wide selection of options.
When you buy from Prime Pantry, you are buying a whole pantry box. This is a huge cardboard package filled up with all your pantry items. Amazon tells you what percentage of your box each item takes up. For instance, a large can of Similac Advance Infant Formula takes up 4% of a Prime Pantry box. A 12-pack of Quilted Northern toilet paper takes up 14.8% of your box.
Prime Pantry boxes ship for a flat rate of $5.99, but you can often get free shipping if you buy certain special items. These items change periodically, but I’ve found that enough of them fit my needs that I can always qualify for free shipping.
What I love: I love that Prime Pantry makes it easy to shop for things I actually need, and would need to go to the grocery store for. Many of the prices are discounted, and are better than typical grocery store prices. It’s nice to get those essentials delivered right to my doorstep, which saves me from making an extra trip to the store.
What I don’t love: Filling your Prime Pantry box is a bit of a game. My goal is to come as close to 100% full as possible, which usually has me adding a few items that we’ll use but don’t necessarily need. Prime Pantry shopping is also a good time for me to stock up on on-sale items that fill in the gaps in my box. This is fine if I’ve got the budget for it. If I don’t have extra money to spend, though, it can be difficult to come in under budget but with a full box.
Amazon Subscribe-and-Save works for similar items as Prime Pantry, but the items are shipped individually. Subscribe-and-Save options are even more limited than Pantry options, but there are still thousands of items that are eligible. Basically, when you purchase a qualified item, you’ll sign up for regularly scheduled deliveries of that item. You can plan for items to be delivered monthly, bimonthly, or even less often, depending on the item.
Subscribe-and-Save items come with discounts, and those discounts stack to add up to extra savings. The more items you add to your monthly Subscribe-and-Save shipping date, the more you’ll save. And you can cancel, change, or skip shipping months at any time through your Amazon account.
What I love: To be honest, I haven’t actually tried Subscribe-and-Save yet. But it’s a great concept for items I always forget to stock up on, or that I know I’ll need on a regular basis. Plus, the stacking discounts could mean some serious savings on certain items.
What I don’t love: Trying to figure out which will save more (Pantry or Subscribe-and-Save) can be a bit hairy. Plus, the monthly shipping date could get dangerous if you forget to account for that automatic charge in your budget!
Comparing Prices with Warehouse Stores
Now that we’ve covered the basics of how Amazon’s services work, let’s look at some actual prices. We’ll take a brand-name item from several different categories to compare pricing from Amazon Pantry, Amazon Subscribe-and-Save, Sam’s Club, and Costco. To keep things on par, we’ll look at per-unit pricing.
Remember, you may get different deals depending on when you shop, since all of these options come with frequent sales. And I’m looking at online pricing for the warehouse stores, so in-store pricing could vary in your local area.
Quilted Northern Ultra Soft & Strong
- Amazon Prime Pantry – $6.47 for 12 double rolls (equivalent to 24 single rolls) = $.27/roll
- Amazon Subscribe-and-Save – $21.05 for 24 supreme rolls (equivalent of 96 single rolls) = $.22/roll (with full 15% discount, $.18/roll)
- Sam’s Club – $21.48 for 36 bonus rolls (equivalent of 125 single rolls) = $.17/roll
- Costco – Exact Product Not Available
Winner – Sam’s Club squeaks in as a slight winner on this one, but it doesn’t beat out Subscribe-and-Save’s 15% discount by much. Costco carries the Ultra Plush option, but it’s not exactly the same, so I didn’t compare it.
Folgers Coffee
- Amazon Prime Pantry – Country Roast: $6.88 for 31.1 ounces = $.22/oz
- Amazon Subscribe-and-Save – Country Roast: $9.84 for 31.1 ounces = $.32/oz (with full 15% discount, $.28/oz)
- Sam’s Club – Classic Roast: $9.98 for 48 oz = $.21/oz
- Costco – Classic Roast; $11.99 for 48 oz = $.25/oz
Winner – If you’re looking for specific roasts, it can be hard to compare these options, as they don’t all carry the exact same products. But if you’re just looking for cheap, brand-name coffee, Amazon Prime Pantry wins for this round.
Dove Conditioner
- Amazon Prime Pantry – Nutrive Solutions Daily Moisture: $3.52 for 12 ounces = $.29/oz
- Amazon Subscribe-and-Save – Nutrive Solutions Daily Moisture: $3.52 for 12 ounces = $.29/oz (with full 15% discount, $.25/oz)
- Sam’s Club – Damage Therapy Daily Moisture: $6.88 for 40 ounces = $.14/oz
- Costco – Product Not Available
Winner – Once again, we run into the issue of stores not offering the exact same items. But, as you might guess, the Sam’s version of this conditioner with the huge pump bottle is much cheaper than the smaller bottles. And on Amazon, it’s a wash unless you put five items in your Subscribe-and-Save card to get the full discount.
Seventh Generation Natural Liquid Laundry Detergent, Free & Clear
- Amazon Prime Pantry – Product Not Available
- Amazon Subscribe-and-Save – $24.87 for 80 ounces = $.31/oz (with full 15% discount, $.26/oz)
- Sam’s Club – $28.78 for 150 ounces = $.19/oz
- Costco – $28.79 for 150 ounces = $.19/oz
Winner – Sam’s Club and Costco come out much cheaper here, even compared with the Subscribe-and-Save discount. Again, it looks like things that come in plastic packaging are just going to be cheaper when you can buy them in extra-large bottles!
Tidy Cats Litter, 24/7 Performance
- Amazon Prime Pantry – $5.52 for 14 pounds = $.39/pound
- Amazon Subscribe-and-Save – (LightWeight version) – $17.30 for 14-lb equivalent = $1.23/pound (with full 5% discount, $1.17/pound)
- Sam’s Club – (LightWeight version) – $19.88 for 42-lb equivalent = $.46/pound
- Costco – Product Not Available
Winner – Sam’s Club wins out once again. I think what we’re seeing is that items in larger, heavier, harder-to-ship packages are going to be cheaper from big box stores. Keep in mind that Costco has its own Kirkland brand for many of these items, including pet supplies, that may be much cheaper than your favorite name brands.
Huggies Diapers (Size 5)
- Amazon Prime Pantry – (Little Snugglers) – $9.90 for 20 diapers = $.50/diaper
- Amazon Subscribe-and-Save – (Little Snugglers) – $45.95 for 124 = $.37/diaper (with 20% discount offered by Amazon Family, $.30/diaper)
- Sam’s Club – (Little Movers) – $39.98 for 140 diapers = $.29/diaper
- Costco – (Little Movers) – $42.99 for 150 diapers = $.29/diaper
Winner – Costco and Sam’s Club win out here, too, but for a penny a diaper, the Subscribe-and-Save option could be worthwhile!
Multi-Grain Cheerios
- Amazon Prime Pantry – $2.91 for 9-ounce box = $.32/ounce
- Amazon Subscribe-and-Save – $56.50 for 144 ounces (8 18-oz boxes) = $.39/oz (with full 15% discount, $.33/ounce)
- Sam’s Club – (gluten-free option) $7.28 for 18.75-ounce box = $.39/oz
- Costco – Item Not Available
Winner – Amazon Prime Pantry is the clear winner here, although the Subscribe-and-Save option is a good deal, too, if you go through tons of cereal in your house!
The Overall Winner
As you can see, there’s not a clear overall winner for these four shopping options. Generally, larger, heavier boxes are going to be cheaper from warehouse stores, while lighter-weight items that are easier to ship may be best bought online.
Keep in mind that with Amazon, you may be partially paying for the convenience of having someone drop everything off at your home. Sam’s Club does offer shipping, but it’s not always free.
Resource: Save Time and Money With These Grocery Delivery Services
Another thing to consider is that the quantities available at warehouse stores may not fit all that well into your home. If you have a smaller space, Amazon sells regular-sized options, usually at a discount from what you’d find in the grocery store.
As a busy working parent, I have to admit that the Subscribe-and-Save option is tempting, since it just shows up at my door without any effort on my part. However, it’s obviously not the best money saver for all of these options.
And finally, you run into the idea of brand name items. Many of these items are probably cheaper as off-brands from Costco or even grocery stores like Aldi.
Whether your goal is convenience or saving money, your best bet is to check out individual items you’re most likely to buy, and then compare them across options like these. When calculating savings, take into account the cost of a warehouse store membership versus an Amazon Prime membership, and don’t forget to account for the convenience factor!
Topics: Budget • Money Management • Personal Finance • Smart Money • Smart SpendingThe post Which Is Cheaper: Amazon or Warehouse Stores? appeared first on The Dough Roller.
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Anybody can start a business, but not everybody can generate enough money from their business to live a comfortable lifestyle. Capitalism, ironically, ensures that everyone will not be successful. Capitalism is what causes an uprising, even though our standard of living has never been higher!
I made the case years ago that real entrepreneurs are successful when I defined success as being able to generate at least the median per capita income for your city after three years of full-time effort. Those entrepreneurs who’ve been trying for far longer, while earning far less were clearly agitated by my stance. But everyone knows the more you spin your wheels in the mud, the more trapped you will be until one day the cannibals hear your cries and start hacking off your limbs until you die.
I don’t want you guys to ruin your lives because of an entrepreneurial pipe dream, so let me share with you a warning story of what may become of you if you don’t recognize reality.
Delusional Entrepreneur In Full Effect
I met a guy, let’s call him Roger, three years ago at a financial innovation conference in San Jose. At the age of 35, he was an enthusiastic fellow who started a video website teaching people how to save money. It wasn’t a novel idea, but you don’t need to reinvent the wheel to create a successful business.
Over the course of the two-day conference I kept seeing him speak to female attendees, which was fine, if the ratio was relatively balanced. But these types of financial innovation conferences are never balanced. Women made up around 20% of the crowd.
During lunch break the next day, he asked if he could join my table. The table consisted of three guys and an attractive woman. I told him sure and he proceeded to gleefully show me all the cards he picked up from the women he was talking to.
“Sam, meeting people, especially women as a founder is awesome. I’m having so much fun!” Roger whispered in my ear, careful not to let the woman to my left hear. Clearly, she was his next target.
Although Roger was a relatively normal looking guy, he was extremely geeky and socially awkward. He’s the type of scatterbrained person who speaks 90% of the time in a conversation and then wonders why the other side hasn’t listened to a word he said. There are many, many people like Roger at these conferences for some reason.
Roger told me he was dedicated full-time to his business and that he planned to stay with his parents in San Francisco while he worked on his startup. That’s pretty honorable given most guys in their mid-30s would do everything possible to stay away from mom and dad.
When I asked him where he plans to meet up with all the women he so proudly met at the conference, he mentioned, “at a bar or a coffee shop, of course!”
Despite knowing about my site, Roger never asked if I could help him spread the word about his business. I was waiting for the ask, but it never came because he was too excited to think about business at a business conference.
Three Years Later
Fast forward three years later, I was walking down Valencia Street in the Mission when I saw Roger at a coffee shop with a female friend I know who was also at the conference three years ago. Ah hah! So Roger was still at it, grinding away at his startup while trying to find love or excitement as a startup founder in San Francisco. Good for him!
I didn’t want to intrude on their conversation, so I let them be. But I did text my friend later that evening and asked her how her date with Roger went.
“Sam, you should have said hi!” she responded. “Roger is looking to sell his company. Know of anybody interested in buying?”
The first thing I always do when evaluating an online property is look up its traffic figures to get an idea of what type of revenue it could be generating. I’ve got a simple formula I use where I take the number of pageviews a month and multiply it by 1 – 10 cents to get the estimated monthly revenue range.
After three years of working on his business, I was expecting Roger’s site to have at least 100,000 pageviews a month, equivalent to roughly $1,000 – $10,000 a month in revenue. Unfortunately, his traffic figure came out to just 1,200 a month, or only $12 – $120 a month in revenue! Holy crap. What has Roger been doing all this time, hitting on women instead of conducting business?
Before responding to my friend’s question, I asked her what else Roger was up to and she said, “He’s still living at home with his parents in San Francisco. He’s looking for a part-time PR person to help spread the word and has a bunch of free interns out of Asia he’s using in.” She then proceeded to ask, “How much do you think Roger could sell his site for?”
I responded, “Maybe about $3,000 – $6,000.” The figure is based off 2X – 4X annual revenue.
“WHAT?” she responded. “Why am I wasting my time with this guy? He’s never going to be able to afford my PR services. He made it sound like his business was doing well and just wanted to move on to something new.”
“Welcome to the world of smoke and mirrors! :P” I responded.
Related: How Much Can You Really Make Online?
Don’t Be Ridiculous
On the one hand, I understand why Roger can’t let go of his business. It’s his baby, and nobody gives away their baby before adulthood. I’m sure Roger spent many hours building content and marketing his business. Further, his position as startup founder enables him to speak to plenty of women he would never have been able to speak to before.
On the other hand, if you are almost 39 years old, still live at home with your parents, and only generate ~$1,200 a YEAR in revenue from a business you spent three years of your life working on, then you’ve got to face reality that things aren’t happening. Roger deciding he wants to sell his company is a step in the right direction. However, his asking price is not.
“Roger told me he’s looking to sell for $3 – $5 million! ” texted back my friend.
Of course he said that, dear friend. He’s trying to impress you.
Roger believed in his failing business so much that his net worth is probably equivalent to that of a typical college student: zero-to-negative. Unless his parents have money, Roger is going to be in financial misery for the rest of his life because he’s actually been working on his business for five years. When I met him three years ago, he had already left his job two years prior to work on some prototype video content.
If you’ve been out of work for five years in your 30s, it is brutally hard to get back in, especially if you have nothing to show for your time away. It took me five years to find an ideal job as a varsity high school tennis coach after a couple hundred rejections from tech companies, despite having a site that’s doing fairly well.
Given everything is rational in my world, I’m perplexed by Roger’s situation. Perhaps his parents are rich since he did attend a private high school. But my friend says his parents didn’t have money when Roger was growing up. Then I found out what Roger could be suffering from based on the passage below.
The Dunning-Kruger Effect
Here’s a passage taken straight from Wikipedia:
“The Dunning–Kruger effect is a cognitive bias in which low-ability individuals suffer from illusory superiority, mistakenly assessing their ability as much higher than it really is. Dunning and Kruger attributed this bias to a metacognitive incapacity, on the part of those with low ability, to recognize their ineptitude and evaluate their competence accurately. Their research also suggests corollaries: high-ability individuals may underestimate their relative competence and may erroneously assume that tasks which are easy for them are also easy for others.
Dunning and Kruger have postulated that the effect is the result of internal illusion in those of low ability, and external misperception in those of high ability: ‘The miscalibration of the incompetent stems from an error about the self, whereas the miscalibration of the highly competent stems from an error about others.’
The phenomenon was first observed in a series of experiments by David Dunning and Justin Kruger of the department of psychology at Cornell University in 1999. The study was inspired by the case of McArthur Wheeler, a man who robbed two banks after covering his face with lemon juice in the mistaken belief that, because lemon juice is usable as invisible ink, it would prevent his face from being recorded on surveillance cameras. The authors noted that earlier studies suggested that ignorance of standards of performance lies behind a great deal of incorrect self-assessment of competence.
This pattern of over-estimating competence was seen in studies of skills as diverse as reading comprehension, practicing medicine, operating a motor vehicle, and playing games such as chess or tennis. Dunning and Kruger proposed that, for a given skill, incompetent people will:
- fail to recognize their own lack of skill
- fail to recognize the extent of their inadequacy
- fail to accurately gauge skill in others
- recognize and acknowledge their own lack of skill only after they are exposed to training for that skill
Dunning has since drawn an analogy – ‘the anosognosia of everyday life’ – with a condition in which a person who experiences a physical disability because of brain injury seems unaware of, or denies the existence of, the disability, even for dramatic impairments such as blindness or paralysis: ‘If you’re incompetent, you can’t know you’re incompetent.… The skills you need to produce a right answer are exactly the skills you need to recognize what a right answer is.‘”
Holy crap! This is exactly it! Roger fails to recognize that no matter how hard he tries, not enough people are coming to his site to provide him a livable income stream. Yet, he refuses to give up after five years and get a job. If the women he keeps tricking to go out with him would simply tell him the truth about his failing business, he might have not ruined his financial situation. But once again, confrontation is hard, even for parents who are housing a 39 year old man child.
My Own Delusions
I know some of you think I’m being too harsh on Roger, but it’s important to realize that because nobody cared enough for Roger, nobody was willing to tell him the truth!
I just don’t want any of you to turn out like Roger, delusional, and wondering why you’ve got nothing in your bank account in the second half of your life due to some fantasy. Given there’s no rewind button, we must speak with absolute truth.
Here are a couple of my Dunning-Krueger issues:
1) I believe all outcomes are correlated with effort, which is a failure in accurately gauging the skills of others. Often, my simply mental response to people who are struggling is, just try harder. I sometimes get frustrated when someone I care about doesn’t understand something or do something efficiently just because I can. This is why I pray for patience all the time. I don’t want to be a tiger dad who causes his kid to rebel.
2) I believe everything I write is logical, and therefore should be followed. How can some people disagree if they haven’t also spent hours and hours researching and writing about a subject for the past eight years? But of course, you’ll plenty of different viewpoints in the comments section that also hold true. I’ve tried understanding other viewpoints with posts such as, Explaining Why The Median 401k Is So Low (to counteract my 401k Savings By Age post), and The Only Reasons To Ever Contribute To A Roth IRA (to counteract my anti-Roth IRA post).
Here’s one of the most common Dunning-Kruger effect: Thinking you’re an attractive person, thereby holding out for the perfect attractive someone, only to end up alone. Let’s face it. Most of us are not attractive! The sooner we realize this, the sooner we can recalibrate our expectations of finding the perfect match. Most of us are not witty or funny either. So if we are unattractive, boring, don’t know how to listen, and have an unsuccessful career or business, it’s time to shoot lower.
The Best Way To Get Rid Of Delusion
I used to think the best way to get rid of delusional thinking is to be an entrepreneur or play sports. Scores don’t lie. If you lose 1-6, 0-6 you suck compared to your opponent. If you are only generating $1,200 a year in revenue after three years as an entrepreneur, your business model isn’t working. There’s nowhere to hide.
That said, I continue to see cases like Roger who aren’t willing to face reality all the time. I also continue to see great stories of triumph against all odds. Therefore, there must be a combination of humble realization and stubborn persistence in order to achieve your dreams. If you see a friend suffering from Dunning-Kruger, try to talk some sense before it’s too late.
For those who long to escape full-time employment, I strongly recommend moonlighting on the side while working a full-time job first. Even if you have to work from 7am – 7pm, Monday – Friday, you’re still left with 4am – 6am, 8pm – 4am, and all weekend to work on your side business.
Only after you’ve gained some traction should you consider taking the leap of faith and going out on your own. If you haven’t made at least a livable income stream after three years of working full-time on your business, it’s time to get a job or pivot to something new. After three years, employers begin to shy away.
For everything else, it’s important to find congruency in how you see yourself and how others see you. It’s vital to ask the people closest you to give an honest assessment of your strengths and weaknesses. When there’s a mismatch, do your best to accept and rectify the situation. Otherwise, you might wake up one day wondering where it all went wrong!
Related:
Career Advice For Joining A Startup: Sleep With One Eye Open
Why Blogging Is The Best Business In The World
Readers, do you know people suffering from Dunning-Kruger? If so, why don’t you be a pal and tell them the truth so they don’t ruin their lives? What are some of the most common delusions people suffer from? Please tell me some Dunning-Kruger effects I’m suffering from so I can get better. Be totally honest! I can handle the truth, I think.
from Financial Samurai
via Finance Xpress