So about a year ago I decided I was going to start an eBay business and dominate the whole world. As it turns out I ended up getting wrecked and learned a valuable lesson.

The Plan

A friend and myself had done a bit of research and decided it would be a smart move to sell electronic devices like iPods and XBOX's on eBay. We had been checking some stuff out and found that we could buy these types of items wholesale for roughly 10-20% below what they were selling for on eBay. It looked pretty good to me, all we had to do was order a few, make some profit, order more, make some more profit and build. Remember those words: BUILD.

Our Mistake

We started out just testing a wholesaler who was able to sell us just 1 item at a wholesale price. We tested this and it worked fine. We got the iPod and sold it on eBay and made like $50 or something. Not bad, we had started!

Because of this success we somehow thought that everybody we would do business with was as efficient and easy to work with as this wholesaler. We got greedy and for our 2nd purchase we each contributed $6,000 for a $12,000 order of electronics from a DIFFERENT wholesaler (I think you see where this is going).

At the time it was close to Christmas, which was a bit of the reason for our eagerness. We decided we should have the items within a few weeks and started to actually take pre-orders for some of the items on eBay. We had a few orders go through and everything seemed to be going well.

Reality kicks in

We waited 2 weeks. Nothing. We waited 2 more weeks. Nothing. We started to get a bit worried at this point. We called a person named "Judy"'s cell phone and she assured us that our merchandise was on the way. We were starting to get a bit concerned.

We decided to cancel all our eBay orders, which was a total pain. People are not too happy about paying for something and then not getting it - I kinda know the feeling!

After 6 weeks we decided it was time to get formal with this. We started filing complaints and letters with the local state attorney general and business associations that could hopefully do some action. After countless attempts to get a refund or some type of compensation we decided we probably weren't gonna get our money back. For some reason when I tried calling "Judy" all I got was voice mail... What happened to these friendly people?

As the weeks went on we finally received an email from these wholesales explaining the problem. They basically said that they had ordered the items they were going to ship us through some other wholesaler with our money. Since they didn't have this money either (or so they say) we were unable to receive a refund because they didn't actually have the cash. Well couldn't we file something? No, but they could: BANKRUPTCY!

After probably like 3 months we actually received a formal letter saying that this company had filed bankruptcy and was out of business. From what little I know about bankruptcy from this case, if a company files bankruptcy they are excused from all their debt. It's basically your get out of jail free card and I believe you can file once every 7 years or something. Whatever the case, I was out $6,000 and somewhat pissed but you know what, I DESERVED IT! Seriously, why did I get so greedy and make that move? This just should have never happened.

My Advice

Put first things first. Start small and build. There is nothing wrong with taking small steps as long as you are constantly moving forward. I think Warren Buffett had the right idea when he said, "I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over."

Conclusion

Sometimes you gotta learn the hard way - I know I ate it on this one.

 Filed under: Business, Business

About The Author

Quinton Figueroa

Quinton Figueroa

Facebook @slayerment YouTube

El Paso, Texas

I am an entrepreneur at heart. Throughout my whole life I have enjoyed building real businesses by solving real problems. Business is life itself. My goal with businesses is to help move the human ...

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