Expanding Business Beyond CDs and DVDs

13 April 2010

If you haven't read part one of this story, you can read it at this link. I Sold My Internet Business In July of 2009

There are a lot of great things about selling CDs and DVDs. The demand is huge, you can start a business for a couple hundred dollars, and you can fit all your inventory and supplies in a spare closet. It's really a fantastic way to learn to operate an internet business without risking much.

A year or two into this business, I began to recognize that selling CDs and DVDs had it's own set of disadvantages as well. The fact that the demand was huge was a blessing as well as a curse. Huge demand equals a huge market. A huge market equals lots of competitors trying to beat each others price. At the end of the day, I was lucky to profit an average of $2 for every DVD that I sold.

Another problem that existed back then that isn't as bad today is the vast amount of bootleg movies on the market. It's nearly impossible to compete with a guy that's paying $3 a piece for new release titles. What's worse is the pirated DVD market is so sophisticated that the average consumer can't tell the difference between a legitimate movie and a bootleg movie. In some cases, it requires a sophisticated analyzer to determine a legitimate copy from a fake copy. I learned the hard way that ignorance is not an excuse when it comes to violating copyright law. I'll save that story for another time.

I soon realized, it takes the same amount of leg work to market and sell an item that you make $2 from as it does to market and sell an item you make $20 from. While many people have built huge businesses selling just CDs and DVDs, I decided it would be best for me to find a wider variety of products that had better margins. I just had no idea of what those products would be.

I spent a lot of time on a free wholesale site called Wholesale Central. I contacted all sorts of companies and I tried everything! I sold candles, baby formula, exercise equipment, tents, knives, electronics, small appliances, luggage, closeouts, and many more items than I can name.

One item that I was particularly fond of was leather wallets. I was able to purchase good quality leather wallets for less than $2 each. This is a product that easily retails for more than $15 and nearly every man in America has one. In my mind, I had found a huge market with high margins.

Leather wallets lead to leather everything. Within time, my focus became leather wallets, hats, caps, jackets, coats, purses, luggage, organizers, portfolios, briefcases, and many other items. I was purchasing these items from wholesalers I had found on Wholesale Central and reselling them on eBay. It turned out to be a great line of products.

The problem was it took up so much room. Within time, I had filled up my entire garage, and I had built another two-story 24' x 30' garage that was completely full. I rented 3 - 12' x 24' storage building that were completely full.

The business was quickly growing beyond an operation that we could operate at home. I hired several neighborhood teenagers to help with shipping. They were constantly coming and going. My neighbors were having to deal with weekly deliveries from tractor trailers and daily pickups from UPS. We spent hours every night going between the storage buildings and our home to get all the product we needed to ship. I'm sure we were becoming a major nuisance to our neighbors.

My wife Priscilla began pushing me to rent a warehouse. I knew that we needed to, but I'm the guy that has a glass that is half empty not half full. I was worried about taking on that kind of obligation. We had built this business using the cash and profits it generated. We didn't have any debt nor any obligations.

Signing a lease on a building was a big step as far as I was concerned. It was a big commitment. It isn't something you can just walk away from. What if I signed a lease and things didn't work out? What then?

This became a battle in our house for months. Neither of us was willing to budge. I knew we needed the space, but I just needed a sense of security to know that if this didn't work out, we would be able to meet our obligation and pay the lease off.

It was about this time that I discovered a man named Corey Rudl. Corey was the first real internet marketer. He was a trail blazer and a true internet marketing pioneer. Corey had a heart for teaching and did a very good job of it. I never met Corey personally, but one of the products I purchased from him was instrumental in my success. At the time, the product was called the Insiders Secrets to Marketing Your Business on the Internet.

Corey passed away in a car accident in 2005, but his company is still in existence today. Corey's company updates the information in that course every year and markets it under the name of Step By Step Guide To Selling Online. (that is an affiliate link)

The course has a lot of good info in it and led me to setting up the site JillianEntertainment.com to market my wholesale CD and DVD directory. Within days of setting that site up it was making money. Call me lucky, but within a few weeks one of the news networks ran a special on eBay and focused on a seller that specialized in DVDs. The demand for my wholesale guide went through the roof and that simple site started making over $3,000 a week.

It doesn't do anything close to that today, but in the early days that site was a real money maker for me. That extra income gave me the security I needed to start seriously looking for a warehouse.

I'm having a lot of fun writing this! It brings back lot of memories. If you have someone that you think will benefit from it, please have them sign up for my newsletter on the home page of the site. I'd love to share this info with as many people possible.

In my next post, I'm going to talk about moving outside of the house, the eBay suspension that nearly ruined it all, my quest for a Chinese supplier, finding venues outside of eBay, and what type of effort it took to get this bird off the ground. Talk to you soon!

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Voice Your Thoughts

  1. Rod:


    Nice article. I am familiar with Corey Rudl. I purchased one of his Set of DVD training videos in 2004-2005 time period, just before his passing. From what I understand, he was driving a Nascar on an auto race track when he passed. At least his legacy of teaching people how to make money online still lives on through his company.


    P.S. How do I contact Krista?

  2. Krista:

    Rod: You can email me sweetydarling@ns.sympatico.ca

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