I had the plan, the money, the experience, and a manager with extensive retail experience…
I had the perfect location with thousands of cars driving by daily…
I had great products to sell with enormous margins. I negotiated a very special deal with a major big-box retailer, allowing me first-hand access to their overstocks at very low prices; between 25% and 10% of the retail price.
Just do the math…
For a $100 retail price product — I paid only $10!
Even if I sold that item at 50% off the retail price, I would be making 5X my money!
I was super excited; the initial investment was low and my most pessimistic projections showed solid returns.
I opened my retail business in 2014 and got a fantastic acceptance by the local community. We were received with positive local newspaper coverage and word spread quickly with a solid marketing campaign.
Our prices were unbeatable and our customer service was impeccable.
Everything was perfect… except for our sales.
Sales were very low during the weekdays and got slightly better over the weekends.
What was wrong?
“Marketing,” I thought.
I invested in a bigger road sign, purchased banner flags and doubled my marketing efforts.
What’s going on?
I used my 20+ years of entrepreneurial experience and executed flawlessly. I worked harder than ever before in my life, plus had expert retailers helping me.
I couldn’t sleep.
I thought about this problem day and night.
I worked harder, opened more hours; I was worn out.
One day, I found myself on the “throne” shopping on Amazon through my iPhone…
“Oh shit!” I thought.
I finally understood what was happening!
Our shopping habits had changed!
Even while being a loyal addicted Amazon Prime customer, I couldn’t see this before I opened the store!
I quickly recognized my mistake and expanded my sales online.
Using cloud technologies I changed my business model maximizing our inventory exposure. The same item I had available on my retail store I had it exposed for sale on Amazon marketplace, eBay and my website synchronized in real-time using my POS.
Sales increased, but even with higher sales, it wasn’t enough to cover my huge overhead.
I closed my retail store and focused on selling online.
I still wasn’t able to compete.
I finally sold my business, took my losses and moved on.
This is my life-changing advice:
Hard work is not good enough anymore!
We must be very strategic on how we focus our time, money and efforts.
My failure was not because of my lack of money, execution or expertise… I failed because I had a broken business model.
We live in a world of amazing changes. This is a new economy based on data and knowledge. Everything is changing and if we don’t understand these changes we don’t stand a chance to compete… no matter how hard we work!