I Sold My Internet Business In July of 2009

11 April 2010

You're not wasting your time! I'm not building you up with some fictitious ramblings only to spring some product offering on you at the end. I'm not selling a single thing.

I just wanted to give you the details of how my wife Priscilla and I started an internet business in our garage 9 years ago, how we generated more than 6 million dollars doing it, why we sold it in July of 2009, and what we are up to today. That's it.

In 2001, my wife Priscilla and I started selling items around the house on a new site a friend of mine told me about called eBay. I'm guessing you've probably heard of it. :) Our primary goal was to generate enough income that Priscilla could quit her job and be a stay at home mom for our baby girl Jillian.

After we had literally sold everything in our house that wasn't nailed down, it became obvious that we needed to find suppliers of wholesale products we could purchase over and over again. My research quickly lead me to what was the best selling items on eBay at that time. It was cds and dvds. Three of the top power sellers on eBay were selling either cds, dvds, or both. For me, it was a no-brainer. I just needed to find a good supplier.

I spent literally months trying to find a wholesale dvd distributor. I went through all of the dvd wholesale lists, Google searches, and wholesale magazines. There were tons of dvd suppliers, but most of them were selling junk 99 cent titles that I couldn't even give away.

Then one day, I stumbled on an auction for an eBay business. The seller was offering his eBay user id and the contact information for his supplier. When I looked at his past auctions, he had sold thousands of dvds with very good titles. It became very clear to me that this guy had the information I had spent many hours searching for.

When I contacted him, the auction for his business was more than $8,000. At that time it was well out of my price range. After some negotiation, I convinced him to sell me the contact name of his supplier for $500. For my family, that turned out to be a life changing decision.

Selling dvds on eBay was how we cut our "internet teeth". The eight years that followed was a journey that generated more than 6 million dollars in total. When we sold the business in 2009, we were on track to hit 1.8 million dollars in sales that year. That is more than we generated the entire first 5 years we were in business! That's not bad for what analyst were calling the worst economy since the great depression.

Our internet business eventually extended well beyond just cds, dvds and eBay. We sold a wide variety of products on venues that made eBay not even worth the time. When we started in 2001, 100% of our income came from eBay and dvds. Eight years later, neither of us would have noticed if either of those two were non-existent.

That's about all I'm going to write on a beautiful Sunday afternoon. :) The kids are in the backyard and I'm about to join them! But keep watching your email box. I want to share some more details with you on what type of products we specialized in, where the best places to sell those products are, why we decided to sell our business, some of the good times and bad times we experienced along the way, and what we are working on now.

If you have any questions, you can send me an email if you want, but the best way to talk to me or ask me a question is by leaving a comment in the form below. That's really the method I prefer.

I look forward to hearing from you and keep an eye out on your email box and I'll fill you in on the missing details.

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Voice Your Thoughts

  1. andy:

    That a brilliant story .. i would like to know how i could get into making money on ebay, i have always been interested in in trying to make money on ebay its just finding the right suppliers
    Its hard , just need pointing in the direction , do you have any good advice ? it would be appreciated , is importing from china the way you do it ? because all the wholesalers i come across are not cheap enough to make a profit …

    thanks Andy

  2. Kim:

    I appreciated your update. I am also looking forward to learning more. You have given me hope there is a way to do this for myself and my son, he is special needs. Thank you and I’ll watch for more.

  3. Bob Guignon:

    Hi Brett,
    I’ve been trying to reach some financial goals for the last 8 years and so far what’s happened is, after much research, I bought the wrong business and have lost $40K that I still owe my best friend. I’d appreciate any tips on how to make money on the web. Bob

  4. Dear Brent, Thanks for all of your emails. I really enjoy reading about the insight you have to offer and your real experiences. I actually think I ran across one of your businesses – I wondered when I saw it if you were you the owner of Jillian Distributors (leather goods).
    Have a great day.
    Chandra
    PS Our website is currently in the build phase. Soon to be published. :-) Ch
    PPS Congrats on the DVD business sale!

  5. Tim:

    Hi Brent,
    You have me very curious. I am very excited to see your next email/update. I already sell on ebay. Some months are good and some are break evens at best. I’m looking forward to more info.
    See ya,
    Tim

  6. Brent:

    @Andy – I started buying directly from China 2 – 3 years in. By that time, I was already making plenty of money using wholesalers right here in the U.S. At this point, buying directly from China should be the last thing on your mind. It takes money and resources to buy a container of merchandise from China.

    You need to figure out a way to make money on eBay that is within your means using suppliers right here. I’m going to be writing some additional details in the next few days. I hope you’ll come back to check it out. I think you’ll gain a better idea of how I made this work for me.

  7. Brent:

    @Kim – Hi Kim. Thanks for taking the time to leave a comment. I’ll be writing some more very soon. Let me know if I can help. Good luck to you and your son.

  8. Brent:

    @Bob – I’m sorry to hear that. It sounds like you have an interesting story too Bob. I hope you’ll share some details. It might be a learning experience for all of us here.

    I think you’ll get some ideas from my future posts, so check back in a few days and I’ll give another update.

  9. Brent:

    @Chandra – You got it! Jillian Distributors was the name of our holding company and also the domain of one of our two primary web properties that we sold back in July 2009. Good luck with your business launch!

  10. Brent:

    @Tim – I owe a lot to eBay. Without eBay, my life would be much different right now.

    I said that to say this, I’m not bashing eBay, but they are not the same company they were when I started 8 years ago. I spent the last few years not even caring if eBay fell off the face of the Earth. There have been lots of changes and most of them have not benefited the sellers.

    But no worries. I’m going to write about the venues that worked the best for me.

  11. Brent : Congrats on your success

    @ Bob Guignon i have Two Internet Ventures being worked on now ,{ a online Tournament Site and a Paid Download Game Application for the New Apple i-Pad ,if you wish too know more reach me through http://www.KingsBattlefield.com { register and leave me a message } i want NO Money from you just want too help you repay your friend . KarL Erikson – Game Inventor

  12. Rod:

    Brent,

    What other “venues” besides Ebay have you found to be the most profitable. Also, besides DVD’s and CD’s what are some other products and services that would be good to sell online, and their wholesale Suppliers. I have been focusing on selling DVD boxsets on Ebay. My Supplier is from China because the U.S. Suppliers are too high and many of the Ebay Sellers of the same products are obviously using the inexpensive Suppliers from China as well. Any input that you can provide would be appreciated. Thank you. Rod

  13. Rod:

    P.S. Also, if you don’t mind telling, how much did you sell your business for?

  14. trevor:

    Hiya Brent
    A compelling story and i look forward to the next installment. I hope the ideas or advice you share will also apply to businesses here in the UK

  15. Brent:

    @Rod – I’ll be writing in the next day or so and I’ll include the venues that we found the best. I promise not to keep you waiting long.

    As far as those box sets from China, I’d recommend stopping that right now. I was sued by a major picture company for $150,000 for selling those China dvds. Turned out, they were complete fakes. Once I proved my ignorance of that fact, I was able settle the lawsuit, but not after it cost me over $20,000 in legal fees.

    On another point, usually when someone gives you a pile of money there are some stipulations with it. One of many I agreed to was a non-disclosure of the price, so I can’t share that with you. What I can share is it made all the work worth the effort.

  16. Brent:

    @Trevor – I’m sure some of the things I’ll write about will apply to the U.K. Most of the projects I am working on right now and will share can be done from anywhere in the world.

  17. Rod:

    Brent,

    Thanks for the reply. I use a supplier who provides authentic products. I am looking forward to your next newsletter about other venues besides Ebay. I would like to expand my selling market. I enjoy Ebay because it has such an large audience or buyers and sellers.

    Regarding the sale of your business, is it safe to say that it sold for more than $6 Million?

    Congratulations on the successful sale of your business! And thank you for all of the help that you provide to others in reaching our goals.

    What other business ventures are you pursuing now? Or are you going to retire now :) ?

    Thanks again,
    Rod

  18. Krista:

    Hi Brent,

    I have purchased from you in the past on ebay and your leather goods site. I would love to find distributors in the US/Canada at a low or free cost. I am in Canada on a very fixed income…debt up to my ears. I have worked with a distributor in China but it seems ebay is filled with people who are doing the same. I agree e-bay is not the company it used to be. It’s hard to make a profit when ebay takes a big portion of it.

  19. […] 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 […]

  20. Terry:

    Hi Brent.

    Congratulations on your success. Thanks for your insight on selling CDs and DVDs. You’ve been very helpful.

  21. Brent:

    @Rod – Bootleg movies are a big deal. I’m going to give some more details of my issue in a future post, but I’ll say this for now.

    If your supplier is in China, I’ll bet the farm the movies are not legit. They may look legit, and they may even be produced in a factory that is licensed to produce real copies, but you shouldn’t rest easy on this issue.

    Movies have region coding. Here in the U.S. we are region 1. China is region 5. If you sell a legitimate region 1 movie in China, you’ve just violated copyright law. It’s no different than you sitting down at your computer and burning a copy to sell. On the same note, if you take a legitimate region 5 movie from China and sell it in the U.S., you are guilty of a copyright violation.

    I don’t want to burst your bubble, but I don’t want to see you make the same mistake I’ve already spent $20,000 to fix. To be sure, contact the MPAA and ask them to confirm the legitimacy of your supplier, but don’t let them know you have been purchasing or selling items from this supplier. That could be a mistake.

    As far as the sales price of the business, it isn’t safe for me to say much. I can say, if I received 6 million dollars, I’d surely have someone else typing this for me right now. :)

    I’m in my early thirties. Retirement isn’t on my plate for many years. I could not earn a dime for the next 10 – 15 years and still have a pretty good life. Then what? I’d be in my mid forties with nothing.

    The sales price was enough that I can do something, but it wasn’t so much that I can do nothing.

    I promise I’m going to get to what I’m doing now really soon! I’m working on the second post as we speak.

  22. Brent:

    @Terry – Thank you Terry. I appreciate you taking the time to leave a comment.

  23. Dear Brent, I am interested in selling DVD’s Please let me know the best way to get started. I do not have a lot of money to start.

    Have a great day

    Karen

  24. Brent:

    Karen,

    You’ll have to give me some more details on where you are so I can help you a little better. Do you already have my supplier list? Knowing the suppliers would definitely be a good place to start if you were wanting to start a DVD business. Depending on your situation, that may not be the best thing for you.

    I always tell people to never invest more money in this business than you are willing to lose. Every business has risk. One of the most important tasks you’ll do in this business is title selection. If you pick a bunch of bad titles, your business WILL go bust. Since you have limited funds, you may not want to take that chance right now.

    I’d recommend cleaning out the attic and closets to find items to sell from around the house to build your cash. Once you have $500 that you are willing to risk, then take a second look at this business.

  25. Dear Brent,

    Thank you for your advise. I will do some more research and see where I stand. Thanks again.

    Karen

  26. Krista:

    I would be interested in a list of legitimate suppliers if you could help. I have tried so many ‘businesses’ over the years and still have come up with nothing. I would appreciate any advise you can give. Thanks

  27. Krista:

    Hi Brent,

    I have purchased from you in the past on ebay and your leather goods site. I would love to find distributors in the US/Canada at a low or free cost. I am in Canada on a very fixed income…debt up to my ears. I have worked with a distributor in China but it seems ebay is filled with people who are doing the same. I agree e-bay is not the company it used to be. It’s hard to make a profit when ebay takes a big portion of it.

  28. @Krista – Hi Krista, Please read my comments to Rod about the China suppliers. “Buyer Beware” is the phrase of the day.

    As far as finding DVDs at a free cost, I’m not sure how you would do that unless you went into Wal-mart, filled up a buggy, then ran out the front door. 😉 I wouldn’t recommend it. It’s not a sustainable business model. You’d probably be safer with the China suppliers.

    I do offer a list of suppliers at http://www.jillianentertainment.com/ I can tell you the list is very large, but there are really 2 – 3 major suppliers here in the U.S. that are worth using. The bad news is they will not ship to Canada. So for you, I do have a handful of Canadian suppliers on my list. My list also includes the largest supplier for Canada. http://www.jillianentertainment.com/CanadianDVDSupplier.html

    Do you mind sharing what kind of businesses you have tried in the past. I’m curious how that compares to my own list.

  29. Krista:

    First my apologies for the double post. I didn’t notice my original post went through last night.

    I also should clarify when I mentioned ‘free’, I ws referring to additional costs for ordering through a company. For example, the China supplier I used did not have a fee or dropshipping fee. You ordered, you paid and the item was shipped. I now understand how the China suppliers work. I will have to plead ignorance as I honestly believed it was ok and the products were authentic. They sure do look appear to be.

    As mentioned, I am on a fixed income so am unable to get a ‘real’ job at this time. My life certainly isn’t where I thought it would be at this time. I am 39….

    I appreciate the links Brent and will take a look. I appreciate the Canadian one. It is hard to find good and honest suppliers. I did find a few in the US before but as you mentioned, would not ship here. I will look and hope I can ask further questions. My goal is to be independent and able to pay the bills and maybe enjoy a few extras. Would be nice.

    I have tried so many things in the past: MLM and most recently SMC (Specialty Marketing Coorporation – http://www.smcorp.com) after watching a late night informercial. I didn’t make a cent. I have lost money I never had.

    To say I’m frustrated is the understatement. I was happy after I found the China supplier but then again, I didn’t realize what that was about. I thought I had ‘found something’ but now am back to square one.

    Any advice is certainly appreciated. Thanks for your time.

    Krista

  30. Rod:

    Brent,

    Thanks for your replies. I’m am a relatively new online seller. I just started regularly selling on Ebay about 6 months or so ago (some months I did not list or sell anything) . My volume of business is very low. And my Ebay feedback is still less than 100.

    At first, I just sold stuff around the house as you had suggested. Besides Ebay, I have also used Craigslist with some success. I wanted to make this a full-time business because I am currently unemployed. I have been constantly job-hunting. But, in this economy, it is tough to find a good job that one would want to stay with. Since my initial online selling experience was rather pleasant, I had hoped to try to make this a long term business. Needless to say, I am still trying to “find my way” when it comes to online selling. I have had mixed success. Of course, one of the major obstables is finding good Suppliers. The Supplier I used from China is Paypal’s largest client in the Asia Pacific region. Of course, Paypal is owned by Ebay. I know that this Supplier also supplies many Ebay Powersellers with these same products. I do not know how this Supplier can hold the lofty position of being “Paypal’s largest client in the Asia Pacific Region” if its operations are not above board. It would be nice if Ebay / Paypal abides by the same rules that it imposes on its members. Regardless, I had discontinued using them as a regular supplier a few months ago.

    I am glad that I bought your list of DVD / CD Suppliers. It has alot of good info on U.S. Suppliers. However, while conducting market research on DVD boxsets on Ebay, I can’t help but notice that there are alot of Ebayers who are still obviously obtaining their products from overseas Suppliers. For example, there are some particular DVD boxsets that I have become familiar with which sell for about $350 by Ebayers who receive their products from U.S. Suppliers. But then there are hundreds of Ebay listings from Ebayers who are obviously using overseas suppliers and are selling the seemingly exact same product for $80-$150. These Ebayers are selling these products left and right. But the Ebayers selling the U.S. Supplied products hardly sell any. In fact, since I have been doing market research, I have not seen any of these sell for the listed price of $350… or even $200 for that matter And how can they sell any, when hundreds of other Ebayers are using overseas suppliers who sell their products at 1/4 or 1/5 the price. It seems that the DVD market on Ebay has become saturated with products from overseas… putting the Ebayers who sell U.S. Supplied DVD’s at a deep disadvantage, if not out of business.

    I still agree that DVD / CD’s are the niche market to concentrate on. I do not currently have any active Ebay listings. I have spent several weeks looking for Suppliers who can provide products at a competitive price to those of the overseas Suppliers… but, to no avail. Do you have any suggestions on where to go from here? I would like to stay with the DVD/CD boxset niche. Any thoughts from you or anyone else in the forum?

    Regarding the sale of your business, I just took a guess at $6 Million. I hope that you were able to get at least $1-2 Million for it, espcially considering that your business was going to do $1.8 Million in business in 2009 alone. You have quite an online success story. Maybe you could write an ebook about it.

    Rod

    P.S. Thanks for your help. I must have bought dozens of these ebooks / information products in the past from many different selers. But you are one of only a very few who actually regularly communicates in “real time” with your customers… I commend you for that.

  31. Brent:

    @Krista @Rod – You guys are in similar situations. Both of you are selling dvds from Chinese suppliers. You guys should consider sharing contact information with each other and work together to determine if these DVDs are bootlegs or the real thing. My experience leads me to believe they are not.

    The fact that eBay and / or Paypal is getting a piece of the action means nothing. They’ve been sued multiple times from manufactures for allowing knock offs on the site.

    You guys could start with the MPAA. They should be able to help you determine if these movies are the real deal. Here is a quote from an article about China’s piracy issues.

    A study commissioned by the Motion Picture Association of America last year estimated that 90 per cent of the movie market share in China was lost to piracy, and the cost to the big Hollywood studios of piracy worldwide last year was more than $US7 billion ($7 billion).

    http://www.smh.com.au/news/world/hollywood-takes-on-chinese-fake-dvds/2007/01/26/1169788693472.html

  32. Ray:

    Great info, Brent. I find your messages to be great references. Could you identify the DVD (and also CD) distributors that you bought from while you were selling CDs and DVDs? Also, is my potential for higher profits better if I sell CDs/DVDs on eBay or if I sell them on Amazon? Thanks again. Ray

  33. Gary:

    Happy for your success. I followed your plan and signed up with the two biggest dvd suppliers. I inflated my projected purchase quantities to get their lowest prices. Still my cost was more than I saw selling on ebay? Why do you think I got such high prices?

  34. Michael:

    Hello Brent,
    I do not recall how I first came across your email, but I like what I have read from you. I have sold a variety of things on Ebay over the years. Primarily stuff around the house and collectible toys from the “Good Old Days”.
    I am an individual with a wife and 3 kids under 10 that used to be in a really good place financially. Building homes and moving various types of real estate, then the market crashed and so did we !!! Were broke and barely hanging in there.

    If you have some real advise and real ideas; man could we use them. I’m running out of energy. I was cleaned by a real estate con-man and then a good friend. We almost lost everything. They have made me beyond skeptical.

    Thanks for any constructive advice.

    Mike K.

  35. Brent:

    @Mike – I don’t have a magic bullet by any means. For me, I just found something I enjoyed doing, worked very hard at it, and things worked out very well for me.

    The best advice I can give you is do what you know and love. If that is real estate, then start moving in that direction again. Maybe you aren’t in a position to build houses right now, but it doesn’t cost that much to get a real estate license and start selling it. I have a good friend that just got started a year ago. He’s been going after all the FSBO properties out there and has carved out a niche working with short sales. He’s doing very well for himself.





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