If you haven't read part 1 and part 2 of this series, checkout these links first.

I Sold My Internet Business in July of 2009

Expanding Beyond CDs and DVDs

When I started my business, eBay was 100% of my revenue. I was pretty naive back then and didn't really see a problem with it. That's until they decided to suspend my account one day.

If you've been on eBay for some time, then you know eBay changes the rules a lot. They are experts at creating rules that are open to interpretation. Then they take some $8 an hour worker with a Napoleon complex, put them in a cublicle 1,500 miles away, and place them in charge of enforcing the rules. It was that way 9 years ago and it has only gotten worse today.

Some eBay rep decided they didn't like a certain aspect of my wallet auctions and they would end them. I would wait on hold for hours to finally talk to someone in customer support and would be told the auction was ended in error and I could restart it. A few days later, another rep would come along and use another interpretation of the rule to end the auctions again. I'd spend hours on hold to finally talk to someone and would be given the green light only to repeat the process over and over. Finally, someone decided my account should be suspended.

Overnight, 100% of my revenue was gone, I had thousands of dollars in inventory, and there was nothing I could do about it. Lucky for me, I had saved dozens of emails from different account reps that all had different opinions on how the rule should be interpreted. One email would say the auction was in error and another would say it looked fine. I sent all those emails to then CEO of eBay Meg Whitman and within the week, I was talking to Meg's assistant Gabriel and my account was turned back on. Gabriel assured me that I would not have any further problem with my account and I didn't for many years.

This was an eye opener on why it was important to diversify. I immediately opened a web hosting account and did one of the most pitiful jobs you've ever seen at setting up my own site. I used a host that is no longer in business, but for anyone interested in moving in this direction, I'd recommend using Host Gator. (affiliate link) I still have accounts at Host Gator today.

Another venue that I moved to that has grown tremendously over the years is Amazon. This is an e-commerce site that has it together and really appreciates the sellers on the site. They have a great fee structure, great support, and a ton of traffic. Just to give you an idea, in December 2009, I grossed 10K on eBay and over 75K on Amazon. Amazon is a venue that you shouldn't overlook.

By the time we had moved our focus to leather wallets, jackets, and purses, it became clear the next step was to start cutting out all the U.S. distributors and buy directly from the factories in China. The problem was neither Priscilla or I had any idea how to do that.

As fate would have it, about this time a man named Greg called and claimed he represented some leather factories in China. Greg claimed to be living in Florida after moving there from South Africa. He offered to help us source our products directly. After one conversation, Greg was on an airplane on his way to Nashville to meet us that same week.

Greg got off the plane with suitcases full of all types of leather products. Many were the exact same products we were selling. We spent the day talking about prices. It was much cheaper than we were currently paying and I placed a $15K order that afternoon. Greg didn't require any payment up front. We agreed I didn't have to pay until the good shipped from China.

A few months later, Greg sent me the shipping documents showing the goods had shipped. In return, I paid Greg the $15K and picked the merchandise up a few weeks later here in Nashville. The merchandise was perfect. It was exactly what we were wanting.

Greg pushed me to place another $30K order. He seemed very disappointed that I refused to double the order and we finally agreed on another $15K order.

A few months later, Greg faxed me the shipping documents showing the merchandise was on its way. I sent the payment and expected to pick up my goods in Nashville just like before. Unfortunately, I was about to learn a hard lesson about the laws that govern merchandise transit.

I was under the assumption that since the goods were already in transit with my address, there was no way to keep me from receiving them. Wrong! What I learned was shipments come with a Bill of Lading. That Bill of Lading is much like a title is to an automobile. Whoever holds the Bill of Lading owns the goods. The shipping company cannot release the goods until the rightful owner presents the Bill of Lading.

The way the process works is the factory ships the goods but hangs onto the Bill of Lading. This is their insurance policy to make sure they eventually get paid. When the factory does receive payment, they will Fed Ex the Bill of Lading to the purchaser. This is required to release the goods when they reach the final destination.

You see, I paid Greg, but Greg never paid the factory. He fell off the face of the Earth. I never heard from him again. Without payment, the factory held the Bill of Lading and they remained the owner of the merchandise.

At this point, Greg had kept the factory information secret from me. I had no idea who the factory was and had no way to contact them. After several hundred dollars in legal bills and just days before the U.S. Customs Service destroyed the shipment, I was finally able to get the contact information for the factory in China.

This turned out to be a very valuable connection. Greg had actually done me a favor! What I learned was Greg had only paid $8K for the merchandise he had charged me $15K for. I made a great friend with the owner of the factory in China and he released the merchandise to me without getting paid. The only condition was I placed future orders directly with him. Uhm...can you say no brainer?

With my new Chinese connection, there was no way we could stay in the house any longer. Priscilla won that battle and we finally found a building we could afford. (I wished I would have saved some pictures.) This was a huge 60,000 square foot complex that consisted of several large buildings tied together by walkways and bridges. It was used during WWII to make blankets for the soldiers. It was very dark and to say it was spooky was an understatement. I didn't believe in ghosts until I had spent a few months in that place. Other than us and a man that lived in one of the sections, it was all but abandoned. At $750 a month for rent and electricity, it was perfect!

The combination of that move and the Chinese connection took our business to another level. The year before, we did 200K working out of our home. The following year our revenues more than tripled to over 660K that year.

We also hired our first full time employee who had a son the same age as my daughter Jillian. It worked out perfect for everyone. Both kids were there during the day to play with one another and my wife had the opportunity to be with Jillian during the day like we had planned. It was perfect.

I hope to have everything finished in one more post! I still want to cover the purchase of our new building, the reason we sold the business, and what we are up to now. Keep the questions coming!

Jillian Entertainment CD and DVD Wholesale Directory

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!

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.

Because of the ease of acquiring reasonably priced wholesale CDs and DVDs and the fact that online stores have no overhead or hidden expenses, people can almost always get their products cheaper online than they can in brick and mortar stores. Even when you factor in the price of shipping, most people can save a buck or two by ordering from your online store than they can by shopping in person. With today's tightening economy and the skyrocketing price of gas, people are looking to buy what they can online so they don't have to go to the mall. In fact, the steep worldwide increase in gas and petroleum prices means that online retailers are in a better position than ever before when it comes to appealing to a mass audience. As they always say, strike while the iron is hot!

Finally, some people are worried about the fact that not enough people browse websites like eBay or Craigslist to account for enough business to make selling wholesale DVDs and CDs worth while. This is just not true. The popular auction site eBay has millions of registered users and gets tens of millions of hits per month. As computers become available to more and more people, that price is going to plummet even farther so why not get on board now and be discovered by shoppers the world over?

A good salesman can sell anything to anyone, but when you have a reliable and time tested product like wholesale DVDs and CDs, you can count on profits for years to come in your eBay based storefront.

5 DVD HORROR/SCARY LOT!...used    US $14.50

LOT BABY EINSTEIN DVD GALILEO WORDSWORTH VAN GOGH    US $7.95

20 DVD movie lot Animated Children's Pixar Disney More    US $66.99

Lot Borat T-Shirt Mug DVD Sacha Baron Cohen    US $3.00

WHOLESALE LOT 44 NEW SEALED DVD MOVIES CLEARANCE SALE    US $19.95

WHOLESALE LOT 52 MOVIES ON DVD BRAND NEW CLEARANCE SALE    US $19.95

No matter how prepared you are to take on the world of business, you are bound to make a few mistakes along the way. It could be an error in the way you dealt with a costumer complaint or it could be a bad choice you made in picking the distributor. No matter what your mistakes are, keep a log of them so you can be sure that you won't repeat them. A mistake is nothing to be ashamed of as a small business owner. The problem starts when you make the same mistake over and over again without learning from it.

After the first few months of business, you are bound to see some trends that are working and some that aren't Maybe you wrote some product descriptions in a certain way and those products are outselling the rest of your inventory two to one. The first rule of small business success is copying what works and applying it to the rest of your business. Maybe you had a shipping discount sale and your business spiked enough so that you made even more money even though you were paying for more shipping yourself. Keep a diary of sales gimmicks, pitches and things you've tried and don't be afraid to try new things.

Finally, they say that imitation is the sincerest form of flattery, and that couldn't be any more true than it is in the world of business. See what your competitors are doing as far as sales gimmicks and business models and if you run into something that sounds like it could work for you, try it. No one can copyright a sales platform, so as long as you don't copy catchphrases, you'll be within your legal rights. The world of business is cutthroat and only the strong survive, so don't be scared to copy what is working for other people.

DVD MOVIE - Fracture - WIDESCREEN Anthony Hopkins    US $1.99

EUC Movie DVD.THE DAY THE SKY EXPLODED.Action,Adventure    US $.99

Movie DVD.EXECUTIVE DESICION.K.Russell,St.Seagal.Action    US $.99

Jackass: The Movie (DVD, 2003, Full Frame)    US $1.00

Flicka (DVD, 2009, Dual Side; Movie Cash)    US $1.50

20 DVD movie lot Animated Children's Pixar Disney More    US $66.99

The most obvious choice for an eBay storeowner is a salesy user ID. A salesy user ID clearly communicates to your costumer base that you are here with a purpose and a goal and that even though your business is on eBay, you are reputable and trustworthy. The big obstacle you need to watch out for is sounding too cold or maybe even greedy with your user ID. You are here to conduct business but you still need to convey a degree of warmth and welcoming above all else.

Some users choose a user ID that rhymes or is a play on words simply because it would be easy to remember, and nothing is more important to the small business owner than being remembered. Your business will live or die on repeat business, and if you can think of a catchy user ID that will stick in people’s minds, then you probably want to go for that, even if it has nothing to do with what you sell.

Finally, you can’t go wrong with an honest eBay user ID. Using one that accurately reflects what your store does without irresponsible hype is good business and it clearly communicates who you are, what you are doing here and what your customers can expect from doing business with you.

Miffy Triple Pack DVD NEW RELEASE KIDS FAMILY 3 dvds    US $18.68

Kick-Ass (DVD, 2010) BRAND NEW RELEASE SLIPCASE    US $11.99

Nick & Norah's Infinite Playlist (DVD, 2009)NEW RELEASE    US $2.00

Linux Mint 9 Live & Install DVD 32 bit New Release    US $.99

New Release Mandriva 2010 32 bit DVD Edition    US $.99

EVIL BONG 2 : KING BONG new release dvd FULL MOON HOR    US $4.99

If there is one bad habit the Internet has created in many people it is a complete lack of patience. After all, we can type almost anything into a search engine and have it come up in under a second. You can make plenty of money from your online eBay based business, but it isn’t something that is going to happen overnight, so the first tip is to be patient. If you were starting up your own brick and mortar store, you wouldn’t expect to make tens of thousands of dollars on your first week, and that likely won’t happen with your eBay based business, either. With a bit of hard work and the proper dedication, though, that kind of success isn’t out of the question down the road.

The golden rule states that we should treat others as we wish to be treated ourselves, and that couldn’t be more true if you are starting your own online eBay based business. Honesty really is the best policy when it comes to starting your own business. Don’t ever sell a product that isn’t up to par and don’t ever intentionally write a product description that is misleading or just plain false. Buyers understand that sometimes sellers make mistakes and an inferior product might be shipped now and then. The true test of how successful you will be is how you handle those situations and how you ensure things like that from happening in the future.

While many people start an online eBay business as a hobby or as a way to make a few extra bucks, most people realize within a short period of time that if they dedicated more time and effort to it, their online business could be their primary source of income. This is true for any aspect of life: what you get out of your eBay based business is exactly what you put into it. The better your customer service is, the better your overall rating will be, and the better your rating is, the most customers that will flock to your storefront. Having an eBay based business can be a lot of fun and very profitable as long as you stick to your principles and treat each and every potential customer with the respect they deserve.

Thanks to places like Wal-Mart and Target, we now live in the era of the superstore. We walk into an electronics section and expect a huge selection of DVDs to choose from. If we don’t find it, we tend to be slightly offended and we often don’t even consider buying anything there. The same is true for your eBay storefront. The bigger your selection is, the more repeat business you’ll get and the more serious shoppers will take your store. No one expects an Amazon.com type of selection, but if you are only thinking about stocking a dozen or do titles, you might want to rethink your strategy.

A snappy product description and an impressive selection might attract shoppers but good prices are going to be the only thing that keeps them there. Of course, the point of any business is making a tidy profit so the key to offering the best prices is finding the best distributor who is going to offer you the lowest wholesale DVD price. This will likely take some shopping around and some trial and error, so don’t feel bad and don’t give up if you don’t find the best deal right away. You also need to have a good report with your distributor so that you can be privy to discounts and other specials that might become available.

Since most people have heard of the majority of the films you are going to be selling, it is up to you to make each and every wholesale DVD you sell seem irresistible. You do this with well written ads, or at the very least, properly credited descriptions from other websites. Many people are scared to use text written by others on the Internet but in most cases, it is perfectly fine as long as you give credit where credit is due. Try writing your own and see what the response is from your customer base. You may realize that you are better at it than you think!

Expending your eBay based business to include wholesale DVDs isn’t hard, but there are a few golden rules you need to follow to ensure everything goes smoothly.

The first thing you need to realize is that in the eBay universe, your seller rating is worth its weight in gold. It is the ultimate measuring stick that other customers are going to use to measure you. You may lose sales before you even have a chance to impress customers with your inventory, sales pitch, shipping rates and product descriptions. That’s why customer service is the most important part of being an eBay seller. It is your job to make every sale right if there is a problem.

While the overwhelming number of eBay shoppers are regular people looking for the best deals they can find on various merchandise, there are dishonest people who use the site. Just as regular business owners have to look out for shoplifters, there are going to be eBay shoppers who will be dissatisfied with every transaction they make in hopes of getting something for nothing. While eBay does have mechanisms in place for conflict resolution, it is important for every seller to know when to let go and when to write off a customer as being more trouble than they are worth. Running your own wholesale DVD business takes time, and you can’t have all of your energy being put towards jumping through hoops to satisfy one troublesome customer. Even the best eBay stores have one or two negative pieces of feedback, and it is your job to make sure the other 99 percent have a pleasant time shopping at your store.

The key to selling any product on eBay, regardless whether you are selling wholesale DVDs or luxury cars, is the ad that accompanies every item you sell. The more compelling the ad, the more interested people are going to be. Let’s face it - none of us need DVDs to live. Every DVD purchase is an impulse buy, and if your ad can convince someone that they simply can’t live without that DVD, you’ll have a very successful eBay storefront.

Finally, don’t be afraid to try different distributors for your DVDs. There are dozens of wholesale distributors out there willing to give you the best deals on DVDs so if you think your distributor is asking for too much, offer your services to another one.