Journal 6 – Taking Twice As Long and Costing Twice As Much

Project 2, flat fee multiple listing services, is finally live.  I’ve worked on Project 1, the flipper house, and its almost ready to be listed.  I also completed some initial research on Project 3 – which I’ll introduce below.  It’s been awhile since I checked in, so this journal entry is a little long.

clock_money-640From the start, to save money and learn the systems and technology, I chose to be a one man-shop for awhile.  My mid-term goals include contracting out development and maintenance of the web sites and routine day-to-day administrative details.  But for now, I’ll have to suffer with the opportunity costs of doing it all myself.  For me, these costs are time and growth.  However, it may be more than these two elements if only I knew what I don’t know.  By now I hoped to be earning a little revenue – which would make seeing that rainbow and pot of gold a little easier.  I know it’s there, but until I see it, I’ll just carry on!

My brother is an entrepreneur and businessman and we’ve had a few ventures together.  I remember him saying that starting a business “Always takes twice as long and costs twice as much.” Well, I can attest to that statement.  But, I knew that coming in… it’s just that I’m really getting tired of the delays and rework.  But, nothing comes to those that quit two-feet from the gold!

Five Days Lost from Technology Problems

I admit that I am a perfectionist and a bit of an “engineer.”  I like to tinker and make things work and that’s what I’ve been doing with the flat-fee MLS company last month.  The site is using Woocommerce as its shopping cart and store.  Woocommerce has some “issues” that I didn’t expect.  The WordPress theme didn’t quite “jive” with the store plugin. The graphics came out large and blurry and the product display doesn’t quite fit my design.  So, I had to create a WordPress child theme to change the CSS (cascading style sheets) and alter the function.php file.

However, the tinkering also caused some problems.  I am running a few websites via a WordPress multi-site configuration.  It makes maintenance easier but magnifies the problems because one problem affects every site in the network.  So, I’ve spent the last three days researching and fixing a “too many redirects” problem.  I eventually had to upload a two-day old backup, which means I not only lose the last three days but also the last two days before that.  I think I have it fixed now; and I’ve scheduled two automatic backups per day!  

Flat-Fee MLS (Project 2)

To get the site to perform like my business plan described, I had to make a few upgrades.  I bought Woocommerce Display Products plugin – developed by Sureshopress.  I got it at the Codecanyon.com market place (Envato Market) for $30 dollars.  By the way, I recommend this website to help spice up Woocommerce and other vendor-plugins.  One can use Woocommerce plugins for many of the same things, but their plugins cost anywhere from $50 to $150 more.

Since the flat-fee MLS company is a real estate services (broker) site, I also had to understand the Multiple Listing Service (MLS) process and include MLS processes in the partner-broker backend.  We developed a process and set a customer service representative dashbard with examples and go-bys.  

The business pan described an uncluttered and easy to maneuver and understand website to encourage purchases.  However, I decided to add three additional pages to support the purchase cycle.  Customers need just the right information to buy – but, since the services does not include one-third of the state, I had to include a “service area” page.  Customers also want to know where their MLS ad will display, so I added an “exposure” page.  Finally, I added a Terms and Conditions page which not only is a good idea but required by the credit card processor.  

The site is now online, but missing the two days of work.  I may get back to it later.  But for now, it’s good enough.  Getting the site up and running took the better part of a month.  Of course, I did work on my flipper house and research a third business during this period too.

The Flipper House (Project 1)

I put up a for sale sign but have not listed the property in the multiple listing services (MLS) yet.  I wanted to see what kind of interest I’d get and perhaps learn something.  I got two calls and one viewing, so far.  Until I can present it well, I won’t list it in the MLS.  Real estate agents say that a sale is “make or break” in the first two weeks – so I’m trying to make the house look its best.

As I’ve mentioned in prior journal entries, I’ve upgraded the two bathrooms with granite counter tops and upgraded the hardware.  The new light fixtures required moving the mirror lights up eleven inches.  The two bathrooms look pretty good, now.  I put a photo of one of the bathrooms in the prior post.  I will have new carpeting installed next week and then put it in the MLS.  Today, I spent a few hours trying to find a toilet tank for the one I cracked.  I will have to buy an entire toilet because the manufacturer discontinued the model.

The market is “warm” and prices are coming up so I’m hopeful about the sales price.  Selling a home is all about the price point to benefits ratio.  I hope I have the right combination.

Online Products (Project 3)

I believe I’ll pursue an online products as my third business.  The granddaddy of online sales is Amazon, with 270 million active customers worldwide, according to Statista (Ref 1), so I started my research there.  I even set up an account with them and Alibaba to look into sourcing products.  Alibaba is the “Amazon” of wholesalers.  Anyway, back to Amazon. 

By interpolation, one can calculate total U.S. Amazon customers by quantity and percentage.  Internet Retailer speculates that 45 percent of Amazon’s U.S. customers are enrolled in Amazon Prime (Ref 2); Recode estimates that Amazon has 50M global prime customers (Ref 3).  So, to calculate how many active U.S. customers Amazon has, one needs only to divide 50M by 45 percent.  Therefore, Amazon has 111M total U.S. customers.  Since the population of the U.S. is 321M (Ref 4), Amazon can boast 35 percent of the U.S. population as its active customers.  That’s stunning!

To continue my research, I checked out Terapeak, too.  It’s a wonderful resource to evaluate products sales and prices.  It draws its data from eBay and, in a roundabout way from Amazon.  From what “experts” are saying, one needs to make a minimum three times the wholesale price to make Amazon worth the effort.  Acquisition sourcing and Amazon takes about one-third of the profit for processing, storage, packing, and shipping.  For larger products, the price almost goes up almost exponentially.  So, to make it work one really does need a good profit margin.  

Amazon Prime and Fulfillment

When selling online, one cannot ignore Amazon; and if you’re part of Amazon, then you can’t ignore Online Product SalesAmazon Prime either.  Prime customers pay $99/year to receive free two-day shipping and a selection of online videos, music, Kindle book lending, and more.  According to Recode, Amazon Prime has 50 million active customers – so that’s 18 percent of Amazon’s total customers and 45 percent of U.S. customer (Ref 2). 

If an Amazon seller wants to get Prime customers, it needs to participate in Amazon Fulfillment.  As a side benefit, this participation increases one’s sales; because, a lot of customers purchase certain products just to get their two-day Prime shipping; and Prime customers and others choose Amazon Fulfillment, over lower priced products, because they trust it and it makes returns easier.

Admittedly, Amazon Fulfillment makes the whole process very easy.  With Amazon or another fulfillment service, one doesn’t have to store, box, and ship orders.  Most fulfillment services (including Amazon) accept and process returns.  Of course, it all comes with a price.  I haven’t worked out the numbers, but fulfillment service likely cost less at startup and a little more as a business matures.  If I do it at the start, I’ll suffer certain opportunity costs as I’ve done already (described above).  Plus, I’d need a certain sales volume to justify the overhead of my own fulfillment operation.  If I had more time, I’d do the fulfillment at first – but I’m quickly running out of time.

My product category is classified, but to get the 3X margin which I need, I will have to sell in one or many of Amazon’s restricted product segments.  But to do this, one needs three invoices from one’s supplier (per product).  So, I am going to make an enroute change and use eBay and Google Shopping first.  

I think I need a “store” to use Google Shopping.  So what I learned from setting up the flat-fee website, I can easily setup a new online store.  I also looked into software that connects Woocommerce to eBay and Google Shopping.

Business Planning Guide

I haven’t worked on the guide much this last month.  Admittedly, I need to write plans for my next two businesses.  So, there is more to do.

U.S. Navy and the Academic Elite

In my last update I berated the bureaucracy of the Navy Reserve Order Writing System (NROWS).  Well, the bureaucracy won out.  Even with a month and one-half the approval chain could not approve my orders.  So, I had to let down the exercise I was planning to support in the Mediterranean and Algeria.  The Active Duty Navy is bureaucratic, as are all government services, but the Navy Reserve can’t get out of its own way.  

It’s got to change, but it won’t until the leadership decides to make a change.  So, I’m not holding my breath because I hear a lot of excuses and they’ve spent a lot of money on it.  Honestly, I love serving in the military but I have such a hard time with the “government” within it.

Communist Adopt the Free Market

It’s no wonder the Soviet Union collapsed and the Chinese Communist abandoned their glorious communist revolution. Only the free market can make things work.  It’s not perfect, but it’s hands-down better than government.  I wish the government-socialist-academic elites and the bureaucrats and military leaders would leave their comfortable government jobs and work in the real world for awhile.  It wouldn’t hurt if the academic elites would spend some time in one or two third-world nations.  I think they’d start to appreciate the system they complain so loudly about.

That’s not going to happen because they’d prefer to theorize instead of doing.  Paradoxically, they benefit from the free market while subverting it!  Forgive them Father, for they know not what they do.

Bottom Line

Starting three businesses was going to be a big job.  I knew it starting out.  But, wow talk about a lot of delays, costs, and rework.  Forget about the technical glitches.  I’m going to have to add some help soon.  Odd, how everything costs twice as much:  both in time and money!

Talley Ho!

Nick

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References

1 – Statista – Number of worldwide active Amazon customer accounts from 1997 to 2014 (in millions).  Web 17 Mar 2015. http://www.statista.com/statistics/237810/number-of-active-amazon-customer-accounts-worldwide/

2 – Internet retailer – 45% of Amazon’s U.S. customers are Prime members, Thad Rueter. Jan. 27, 2015.  https://www.internetretailer.com/2015/01/27/45-amazons-us-customers-are-prime-members

3 – Why This Could Be the Year Amazon Finally Reveals How Many Prime Members It Has, Jason De Rey. Jan. 28, 2015. http://recode.net/2015/01/28/this-could-be-the-year-amazon-finally-reveals-its-most-important-number/

4 – Population, U.S. Census (Web 17 Mara 2015)

Images Source:  Pixabay.com

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