Over the past month to 6 weeks, I became aware of a VERY good business opportunity. It was an on-line B2B business. All orders were faxed directly to the manufacturers represented, and a commission was paid within a few weeks. I had put some money down on this business, and I met with the present owner. At the end of our meeting, there were some “details” to clean up. One of those details was making an additional installment. When my “hand” couldn’t write the check, we soon parted.

Why I became interested in this business?

1. Guaranteed revenue stream. Although margins seemed to be suffering, it still seemed to generate a low 6 figure income.
2. It was a nice niche area. There are distributors and retailers that provide this product, but this site enabled a customer to get the freshest product directly from the manufacturer.
3. Home based. Since everything was drop-shipped, the business could be operated from anywhere.

This is why I couldn’t go forward:

1. My original agreement had a payment schedule. The existing owner (let’s call him Fred), wanted to revise the schedule. Even eventually agreed not to revise, but this went down into the column where I was developing Fred’s profile.
2. Another part of the agreement was Fred was going to stay on for a period of time and he was targeting some customer and manufacturer goals. Once these goals were reached, he would receive an additional bonus on top of the sales price. The payment schedule for this was also spelled out in the agreement. He wanted to modify the agreement on these points. And, there is nothing wrong with doing this, but the original agreement would no longer be valid.
3. Our agreement was a piece of paper that no business lawyers had looked at. It had holes and “outs” for either side. Both of us knew this. At our first meeting, Fred mentioned that an attorney jokingly told him, he could just keep my down payment, and have no legal obligation to return it. And, I countered with, if this doesn’t feel right, I am content to call this down payment my “mid-life crisis”. Translation: Neither of us gave much credence to the contract.
4. The website needed rewritten. I have many changes from my existing website (www.signsseen.com) that I wanted to bring to this website. And, although Fred didn’t say not to, I believe in his capacity he would have been a barrier to getting some of these changes completed. And, the Fred “negative” column was beginning to get a few bad marks.
5. Fred didn’t have much of a plan to get things moving forward. As Fred and I talked, I saw Fred taking my money for buying the business and then being able to play with my money as he tried out his ideas. We can get telemarketers; we can get distributors and not manufacturers; we can cut the commission rate; and we can do some other costly thing to the website. As I continued to listen, I heard no budget and no guarantees. I heard a spaghetti on the wall approach with my money that was already being stretched with the purchase of this business.
6. The business brokers were involved. As I was driving down to our meeting point, Fred called me and told me a business broker had a buyer who was willing to spend more than I had offered. After receiving this info in a “crackled” form, I dipped into a valley and lost the signal. And, when we talked again, I had enough time to become concerned as to where this whole thing was going.
7. All about the money. The arrangement was to pay for the business on a schedule. And, once Fred had completed additional sales efforts, the pay schedule would kick in for his sales efforts. Knowing the broker was out there and knowing how quickly Fred wanted to completed his sales [it would be a year before he received full payment], I could not help but classify his motives as “anxious to leave the business”.

And, in light of all of these things, I was concerned his involvement for even the next 6 months would be difficult to manage. I didn’t not want to place my existing business in danger, and the financial strain of the purchase plus managing a rather ambiguous Fred, made leaving the best option.

Fred has called the brokers and hopes to have the business sold very soon. I look forward to receiving my down payment check back. [Fred said keeping it would be bad karma.] And, I anticipate incorporating many of the processes used by Fred into some of my websites.

Am I dissapointed? Yes. Is Fred disappointed? I am sure. But, if Fred wanted the money and I wanted to inject some freshness into my site, we are both winning–I think…..

First, to dismiss any concerns that I am an idiot…..dropshipping is good. It is a money saver, and my cash doesn’t get tied up. I understand its merits to my business. I am not going to stop doing this-no room for negotiation.

Second, there are certain issues that are a natural part of stocking items:

• Do you have warehousing space or garage space or some other space you can scrape together?
• Can you guess best what your customers will want?
• Do you have enough cash allow your money to sit in your warehouse?

And, obviously in my mind, stocking big items is not even an issue. I am willing to take less margin and make whatever margin I can off of the larger items. The issue here is are there some items that are worth stocking while dropshipping the greater portion of your product?

And, the answer to this question is my present quandry. Here are what I view as an acceptable option to stocking items:

1. I “bought” into a distributorship last year. I had a product line I really wanted to have. And, the only way to get “in” was to have a certain size initial order. And, I bit and bought in. I now have some clearance items I need to get rid of. Fortunately, I have had to reorder the items I really wanted. “Stocking” was necessary here, but a Clearance sale is coming soon for the other items.
2. Buying in volume to get better pricing on items sold on existing websites. Frankly, this is the reason I am writing this entry. Should I buy items at 80% off the price the individual item is available on a import website OR should I discontinue the item entirely? Based on sales, I am leaning toward discontinuing the items. [Translate: see the Clearance portion of my site]

In quick summary, I am certain a mix is the best option. I believe a business/website needs to weigh its overall goals. If a product is a “must”, then you negotiate and stock a few things. But, if the profit is minimal and the product is not one of your core items, I recommend strongly emphasizing the dropship products made available to you by your manufacturer…..I think I will. 😉

I have bought 3 or 4 businesses on eBay. And, with the exception of my sign business, they have all had very limited potential. They have been much more hands on than what I am willing to manage with my hands already full with other businesses responsibilities. Unfortunately, my most recent business falls into this category, but it did lead to a fit….

My most recent eBay purchase involved a business with both equipment and product. Although not very complex, the equipment allowed the product to be converted into something that was much more valuable than the raw materials. And, it was this possibility that lured me into spending some of my hard earned money on its potential. Once the many boxes showed up from the eBay seller, I went through them. And, they everything he promised. The most exciting part to me was having a distributorship of a specialized printer. I thought, “I can make my money back reselling the printer.” And, to do this, I needed to ensure the printer was maintained on the sites it was already being promoted. And, it is here our story begins……

I received a casual email from the eBay seller about a site where the printer was being promoted, and the owner of the “promotion” site was being CCed. I looked at the promotion site, and emailed the owner as to what the site did. He explained it was a B2B site, with over 5,000 products. He explained how the orders came in and how they were all processed–it was a VERY automated process. And, by the way, he was interested in selling the site. And, after some discussion, terms being bounced around, and a willingness to throw in the towel more than once, I put down a deposit check. I felt good about it and went off on our post-Christmas trip.

As, a slight aside, I also started a sister site to my sign site. And, I had been wondering when the first sale would come. Well [here is the omen part], my first sale from my new site came from someone who is in the industry of my new business. And, if it is not an omen, it sure is a convenient occurrence to keep me positive on the whole idea….

And, unless I miss my guess, additional entries will follow about this whole process…..

The haunting was fully evidenced Sunday morning. It wasn’t screams of an unknown origin, objects moving without visible physical assistance, or smells of events from the past, it was the disappearance of my website on the search engine. I do a link:www.website.com and site:www.website.com and there were no results. I knew that this was no accident-the haunting had begun. And, the 7050 results that I received the night before, were now completely gone. So, I accepted my sentence and hoped it would not extend to far beyond the 30 days I was serving.

I continued to get used to the idea–I did my mourning all day Sunday. And, when the day was over, I was very used to the idea of having more free time over Christmas and New Years. And, I slept much better this night than the previous two nights.

Monday morning I did another check to make sure the site was still gone. Then, I was talking to a supplier and telling him my story. He went to the search engine and typed in my website, and it appeared. Then, I did the same thing. My first reaction, “It is a caching issue. I have 29 days left in my sentence.” Then I closed my browser, and afer opening it, I tried again–my site was still there. Then, I received a couple of phone calls, and I had them check my site–it came up in their search results, too. Then, I checked my Shopping Cart Tools — it showed I was getting hits from this search engine. Gradually, it started to sink in–I was being paroled! I may have a virtual ankle bracelet on, but I have no reason to summon the authorities as I breach my parole.

Bottom Line: First, don’t do anything to violate the search engine guidelines. Second, if you page is in violation and you receive an email from the search engine, clean up the problem and as to be reconsidered as quickly as possible. Third and finally, expect the search engine to honor their 30 day threat (or whatever the time frame), but be grateful if you are given a reprieve…and don’t be ignorant of the guidelines again!

When I bought my sign site on eBay last year, I knew it had very good placement on a few key words. I didn’t think about it much. I just knew I did not want to change the site. I change a product here or there, but I didn’t do anything to all of the other baggage on the website.

Well, today my ignorance is haunting me. I received an email from the search engine telling me that my site has been bad, and all/some pages will be removed. I will need to make changes and reapply for consideration on this search engine.

I did make all of the changes (the text mentioned in the email was hidden at the bottom of the page), and I reapplied for consideration on the website. My pages are still on the site, so I don’t know if they will all disappear or if some will disappear or what will happen due to my infraction. I get about half the traffic from another popular search engine as I get from this one. So, if I am removed entirely, my business will not dry up. However, it certainly does fill me with dread…

Why did this happen? I reviewed the pages at this search engine. I can only guess someone who covets my spot in the rankings turned the site in. I used to be #1 on a few key terms on this search engine, and I have since dropped to #3. And, once this all plays out, I don’t know where I will drop in the result rankings. And, if the sales slow down, I will just put up more things on the site to sell. And, I will continue to count my blessings for the opportunities the site has provided…