1 Incident That Nearly Wiped Out My Business
Updated: Oct 17, 2019
We probably went through most of the possible mistakes while building up our business – be it running a Shopify dropshipping store or Affiliate Marketing. From blindly trusting anonymous suppliers to not keeping track of our accounting to not properly keeping track of ad campaign data.
This post is slightly different in the sense that it isn't directly about Shopify marketing strategies and tips, but it is more directed towards business decisions. And making good business decisions is part of a business, and that includes running a Shopify dropshipping store.
I didn't made any of these mistakes as stated above, as I am someone who is very careful when it comes to money. But I made a fatal mistake in some point of my digital marketing business journey that nearly wiped out my entire business.
One of my biggest drawbacks is being extremely frugal by nature. Frugal means that you often hold on a little too tight to your money. While this is great practice in situations where you often re-invest majority of the money earned back into your business, I've learned that it is quite dangerous when it comes to business expenses.
This is an article that I had the most trouble writing out, and it's also one of the hardest post that I have ever written. It will uncover my digital marketing journey woes and my actual mistakes that usually nobody in my line of work would ever speak of. But I had to do muster the courage to write this so that you do not ever walk down on the same path as I do.
I had my first success when I started my journey as a Affiliate Marketer in year 2010.
It was perfect – back then you could just invest a few bucks in PPV (Pay Per View) and with a relatively good looking landing page and an ad-writing with an element of urgency, you could easily secure a conversion or two.
As a business owner, we are mindful of how we handle our profits. It wasn't wrong to re-invest majority of our hard earned money back into our business – so I basically re-invest 90% of my entire profits back into my business, and 10% as my allowance.
Here’s a past accounts of my take home salary(self-declare) in year 2010-2011.
October 2010: ($2663.64)
November 2010: ($3175.41)
December 2010: ($3839.27)
January 2011: ($2247.31)
February 2011: ($1284.96)
March 2011: ($1832.77)
April 2011: ($2091.82)
May 2011: ($2395.13)
June 2011: ($2932.42)
July 2011: ($2914.82)
August 2011: ($1973.25)
September 2011: ($2819.58)
Yeah, these numbers aren't impressive. But for a college student at that time, juggling in-between studies while maintaining my dropshipping store at the same time – those figures to me really meant a whole lot!
For those who didn't know – in the world of Affiliate Marketing, it is a very volatile industry that you could be earning 5-figures today and nothing tomorrow.
We are aware that at the end of the day, no matter what type of business that we are into – not everyday is a bed of roses where we can rack in decent amount of profits.
So this mindset became deeply rooted into my mind.
I started cutting costs, ensuring that my expenses are lean – so as to maximize my profits.
And this proved to be a very big mistake that nearly cost my entire business to sunk.
I Fucked Up.....
I refused to upgrade my hosting, and instead of upgrading to VPS I stick to shared hosting. The difference between $3.95 per month for shared hosting as compared to using $79 per month VPS hosting is just too great of a difference.
Then I came up with an even better(stupid) idea. I got even stingy, I completely stopped using hosting to host my landing pages altogether and instead I used a landing page tools (such as leadpages etc) for my convenience sake by skipping the process of getting my designer to design my landing page. And in a bid to save up my cost even further, I create a new email address every 14 days just to fully utilize the 14 day trial plan.
Ahhh my ultimate grand scheme of plan, or so I thought.
My conversions started taking a toll, I started seeing no conversions a lot more frequently in my campaigns. Initially I thought that maybe or perhaps my landing page isn't as good as before or my ad-writing sucks, or maybe my scarcity isn't that convincing enough to make people take action.
But I completely overlooked about one thing – landing page tools aren't designed for affiliate marketing campaigns. Because one big major factor is speed.
A lot of these landing page tools is this – they add too much extra code and bloat that’ll slow down your pages.
What happens if someone clicks a link and it takes over 5 seconds to load? They’re going to hit the “back button".
All of the profits that I've used to earn during the past couple of months are completely wiped out as I launched as many campaigns to further test around my angles but yet didn't take into account of the terrible speed.
It was then that I signed up for stackthatmoney and mastermind with some of the top Affiliate Marketers in there and realised my huge mistake.
The mistake of saving that $79 for VPS hosting and ended up losing tens of thousands of dollars.
And that’s where I messed up. I didn’t respect the money I worked so hard for.
I saw my portfolio slowly plummet that year.
Trust me, you can go into an emotional roller coaster ride when you saw your money being depleted down. It took me close to half a year to recover back from that incident alone. I went back to working a part-time job while juggling my studies so as to earn back some of the money to restart back into Affiliate Marketing again.
But somehow, it turned out to be a blessing in disguise as during my time working as a part timer, an acquaintance that I got to know introduced me into the world of e-commerce as she was selling ladies apparels online.
And the rest is history.
Likewise, I’ve seen other people end up in some pretty bad situations in e-commerce because of their stinginess to money.
1. Sourcing for cheap suppliers in exchange for jeopardizing quality shipping time.
No, it isn't wrong to source for cheaper suppliers. But it would be a complete no-go if that particular supplier did not offer better shipping methods such as e-packet as compared to another supplier who offer e-packet shipping with an extra $1-2 initial cost.
2. Saving money for sourcing quality designers for POD (Print-on-Demand) products.
Look, designs are everything in POD. If your product designs are like shit, nobody will even buy your products. There are many cases where one would rather hire a designer for $10 instead of a designer that charges $50 but able to deliver quality designs. However, that does not goes to say that expensive is good. Again, do your due diligence in researching for the right designers. Looking through their past customer reviews are a good way to start.
Lessons for the Present and the Future
I didn't come from a rich family where I could inherit my entire family's fortune and be a millionaire tomorrow. I came from a average income family where I was being taught to save for the rainy days and spent what is necessary.
Because of this, I would become extra careful in the way I spend my money, as well as in my investment strategies. However, going through this unfortunate incident and losing so much money has calibrated me more as an investor and more willingly to spending money. Perhaps the saying is true, the rich get richer while the poor get poorer.
If you want to be rich, you have to start thinking like the rich, act like the rich, and spend(invest) like the rich.