#31 : 6-Figure E-Commerce Business

 
Episode31.jpg

LISTEN AND SUBSCRIBE

Apple Podcasts | Google Play | Stitcher | Spotify

Want to grab the transcript of this interview? Click here!

I’ve found in my interviews for The Richer Geek that once someone has the entrepreneurial bug - whether they are born with it, or they get bit by it later in life - it tends to take them into all sorts of interesting businesses. That’s the case for today’s guest, who started her entrepreneurial pursuits in real estate and short-term rentals and has since transitioned into building a really successful e-Commerce business.

Melissa Nesbitt works full time leading a Customer Engagement team at SAP and at 29 years old is within reach of financial independence. Over the last two years, she has purchased 4 rental properties, sold 3 as fully operational Airbnbs yielding incredible financial gains, and has built a 6-figure, multi-channel e-Commerce business which is on track to soon replace her W2 income - all while continuing to be identified as a top performer at her full-time job.

In today’s episode, Melissa and I are talking mostly about her 6-figure e-Commerce business and how she’s built it up from scratch. She walks us through the early days of keeping product at her house and labeling everything herself to today’s business with a product team, prep facility, and social media presence that keeps loyal customers engaged. We also talk a bit about how and why she sold her rental properties as Airbnbs, and some of her top tips for other entrepreneurs.

In this episode, we’re discussing…

  • How and why Melissa has built a 6-figure e-Commerce business in her extra time away from her W2 job in tech.

  • Where she learned about e-Commerce businesses and found what she needed to get started.

  • How Melissa deals with competition in the market and sets herself apart from her competitors.

  • What the process for building her business has been and how she scaled the business to where it is today.

  • The challenges of selling on a platform like Amazon.

  • Why she decided to sell her short-term rentals and how she was managing them before moving into the e-Commerce space.

Melissa’s Top Tips:

  • Keep learning and growing – Melissa wouldn’t have known about the world of e-Commerce businesses without podcasts and other resources. Keep your mind open to possibilities for increasing your income!

  • It can be hard to play by other people’s rules – for example, selling on Amazon comes with its own unique requirements that all sellers have to abide by. It’s worth keeping this in mind when deciding whether to drive people to your Amazon account or your own website and store.

  • Just get started – build a business that keeps you interested and engaged and it will be easier to stay on track, keep learning, and scale it up into something that can help you achieve financial freedom.

Resources:

 

+ Read the transcript

What if you could be doing something smarter with your money that creates income right now? If you're an IT professional who is wanting to get ahead financially and enjoy greater freedom of choice. And if you wonder who else in tech is creating ways to make their money work for them? You want actionable ideas with honest pros and cons and no fluff. Welcome to The Richer Geek Podcast for helping IT professionals find creative ways to build wealth and financial freedom. I'm your host, Nicole Stohler and in this podcast, you'll hear from others who are already doing these things and learn how you can too.

Hey everyone, welcome back to The Richer Geek Podcast. Today's guest Melissa Nesbitt works full time leading a customer engagement team at a major software company. And like many other folks in tech, she's invested in real estate, her niche of choice with short term rentals and she recently sold them she sold them as fully operating Airbnb ease. And we'll talk about that a little bit. But what we're going to talk about in a lot more detail is the fact that she's built a six figure multi channel ecommerce business in the last two years. We're going to get into those details. And I'm really excited to have Melissa joining us today. Melissa, welcome.

Thanks so much for having me, Nichole. I know we've been trying to get something scheduled for the last couple weeks, and I'm glad we finally made the time to do it.

Well, you are a busy person. And I understand you're getting married this week. So this is a little bit of downtime, I guess so that we can use to share this information free time.

Exactly.

Still working. I can relate. I already provided an intro and a little bit of background, but go ahead and tell us a little bit more about yourself and what you do in technology.

Yeah, sure. So I live in Scottsdale, Arizona just like you do. I'm 29 years old. I am an industrial engineer by training. I knew nothing about technology 10 years ago. ended up getting staffed on a senior design project at Georgia Tech, working at Coca Cola who happened to use this little piece of software called SAP and blindly applied for a role in what was then called the pre sales graduate Academy and sap got hired upon through a couple of different roles there. So I'm now in my seventh year at sa p, I've moved on to a couple different departments, but always staying within supply chain, and just you know, loving the the lifestyle that it brings me.

Great background, and I think a lot of our audience will be able to relate to that. And I would love to have you share. So we have a many different topics that we're going to cover today because you're multi entrepreneurial, which I love, and I generally find that for the guests that we have on you know, someone starts with one house and then they do something else or they have, you know, different business interests. So we have a lot of interesting things to explore. Let's start with your e commerce business. Can you tell us a little bit about first of all what prompted you to Start an e commerce business.

I think it was just podcast. So you and I also have in common that we were both married to airline pilots, or I guess I will be this weekend. So I'm engaged to an airline pilot who spends a lot of time away from home. And I've got a lot of downtime and just kind of, you know, time to listen to podcasts and read blogs and things like that on the internet. So I stumbled on an Amazon podcast. So how to sell on Amazon, how to get products into customers hands. I grew up Never knowing about entrepreneurship. And all of these things were just so fascinating. So I'm a mover and a learner. And then just started importing honestly fairly random products and launching them on amazon.com seeing how they went and finally I found one that scaled and started to build a brand around it.

While it's a little bit like listening to real estate investing podcasts, and there's obviously a full gamut of different ideas out there. So it's pretty cool that you took action and kind of played around with the different products, I guess I would say to find what was most effective? What was that process? Like? What did you do? Did you go find a manufacturer or supplier? How did you set up your shop? Can you tell us a little bit of that overall process?

Yeah, honestly a little bit of everything. I leverage finding manufacturers pretty heavily. But I also was doing something called retail or online arbitrage where I would buy things that like Bed Bath and Beyond or Walmart or list them on amazon.com as well. So I had some success with some of those products, but eventually ended up finding out that some of the ones that I had found the manufacturer for, we're going to be a lot more successful at private label those branded them as my own. And the good thing about that was is that it doesn't have to be that expensive. So I think my initial investment for what is now a six figure business was a little over $1,000. So definitely a lot lower cost of entry than real estate. It feels like a lot of money. It was definitely a gamble, but I think I had learned some of the skills in order to make sure That I could accelerate that.

But what's the $1,000? investment in? Is it product?

Yep. And yeah, so to live on Amazon, it doesn't really cost anything. I mean, there's a professional subscription you can pay for or you don't have to. But yeah, it was it was just product creating the listing and seeing who came.

And you kept it at your house, like the physical product, or was it? How does that actually work?

Yeah, so a lot of times when you buy something on Amazon, and you see the prime checkmark, it's fulfilled by Amazon. So they have a full network of warehouses or fulfillment centers where you can ship in your product, and they will fulfill it for you. So if I placed an order on Amazon, it's very likely coming from the Phoenix warehouse. So what I would do was import the product, I would have it at my house, label it and then send it into the fulfillment centers on Amazon, wherever they told me they needed it so that they could fulfill the order for their customers.

Okay. Tell us what have been some of the positive outcome. So you've talked about the businesses grow, actually, how long has it been?

It's been a little over two years. So the business looks a lot different than it did then I'm no longer storing products at my house and labeling it here. I've got a prep center and a prep company who does all that I've got a little bit of a team, and some staff who take care of a lot of different things and a couple of different channels. But yeah, a little over two years.

I have a few questions just off the bat, which seems to me like could be potentially challenges. One would be returns. Are you in a space where there aren't as many returns or do you have to deal with that?

Yeah, unfortunately, I am in a space that does deal with return. So with the Amazon channel, they accept the returns, they'll check them over check them back into my inventory if they're sellable. If not, I can either grant them the permission to dispose of them or to send them back to my house. So typically, I will do that just because I want to make sure that I'm looking everything over I can typically repackage what I'm selling and gain the money back from Some of the other channels though the returns do come back to my house. So I have a p o box. I'd go check it once a week. And I just, you know, repackage those, and I have a full inventory warehouse under my guest bed actually.

Perfect. Now, the other challenge I would think about is just competition and the rapid change in pricing. Are you in a space where you don't have any competition? Or how does that affect your business?

No, there's absolutely competition. But I think the advantage that I've made for myself is that I've built this whole brand around it. So it's not just an Amazon business where people are going in and comparing the prices and buying the cheapest one. I've got a social media presence, I've got a website, I've got a couple other channels that I sell on. So people are actually starting to gain the brand similarity and start to actually seek me out for for the product based on the brand name.

So let's play this back. You Heard about what does it call it an Amazon FBA? Is that right? Yeah, you heard about that on a podcast two years ago, you bought about $1,000 worth of product. You tested that. You saw what could be interesting, you realize that you needed to private label to create a brand and higher margins around it. You used to handle the fulfillment, you know, shipping, obviously, Amazon was handling a lot of it, but you had inventory your house. Now you have a prep center where they're actually labeling and preparing for the Amazon shipping out. And you have people that are answering emails and handling, probably the customer communication, I would imagine around returns.

Yep, exactly. And I've got a couple people doing social media, but yeah, it's a lot of customer service and social media. But yeah, that's the summary of the story.

Okay, wow. Okay, so a couple more questions on that. So you know, not being in this space. How How would you know where to find a prep center? Google?

I know that's, that's that's the simple answer. But yeah, I just I looked around one day and realized that we were spending every single Sunday in front of football games, just putting labels on and repackaging products. And it wasn't really a sustainable way of growth. And especially as a sales grew, I knew that I wasn't going to be able to just keep this going. Because not only was the house starting to get really cluttered, it was starting to take on a lot of free time that I wanted to have for fun. So I turned to Google, I interviewed a couple different companies and people and ended up finding one that worked out really well for me, and he's been such an incredible asset to my business, and I don't think I would be here without him.

Wow, that is so it's just fascinating, all the different aspects of this particular business. So how do you find a way to do the private labeling is that also you're just googling and you're finding manufacturers and your negotiating contracts and terms with them, or how does that work?

Yeah. So right now I'm leveraging a lot of suppliers that I found on Alibaba. So I'm importing a lot of goods from China. But even if it's not a supplier based in China, Alibaba, if you want to find manufacturers or import goods is a great way to start just to find these different suppliers. So yeah, it's it's come with a lot of negotiating terms and handing over a lot of the designs that I've done, or I've paid to have done, but it's actually worked out really well. And now as I've gotten these relationships with suppliers, they're able to give me better deals or prioritize my manufacturing run or other things that that come from building great partnerships.

All right. So tell us what have been some of the challenges of this particular business?

I think this one in particular has been time. So especially with working and selling on a platform like Amazon, you have to play within their rules. So if if a customer responds or if a customer has a question For you, you have to answer within 24 hours or I went through a scenario a couple weeks ago where they were starting to do audits of products very randomly for the holidays that are upcoming. So mine was removed from Amazon just because they needed some extra certifications and things like that and paperwork that I had to provide. So playing within the rules. And you know, if, if you don't have the time to do that, it does make things a little bit more difficult. So I was traveling for work last week and had an issue with some of my listings on Amazon, they all just kind of split apart for some weird reason. And I wasn't able to take care of that immediately. And that impacted sales.

So interesting, a little bit where you know, Amazon's the 800 pound gorilla that is the place where people go, yeah, and then you're a little beholden to them. And I like how you said play by their rules. And you talked about social media and branding, ultimately, are you trying to move that traffic then to your website, so you can can control more of that, or how do you see that going in the future?

I think a little bit of both. So I definitely want to leave the products on Amazon. I do sell some wholesale. I have my own website, and I'm on about two other channels right now. So diversifying the different channels and the places that sales are coming from are great. But yeah, I mean for the website, once people find the brand on Amazon or on social media, I do have the ability to offer better discounts or sales or incentives for people to buy from the website. And I use Shopify for that website. So Amazon does offer the great customer service and the free returns but I try to offer those two on my website and then I since I don't have to pay the extra fees, I can give them a little bit of just a discount when I do that as well.

I love that. It's interesting. It reminds me of something in the hotel industry space, which is that we all hotel brand names would prefer that people book directly with that particular Brand right then and then right there, obviously you can you can choose your location. But that is huge push, because all of the, you know, the hotels com and Travelocity and all of those, there's fees, right? And so you end up and you don't ultimately have that relationship with the customer. So that's a great to see, you know, as you move down that path. Wow. So how, okay, I think you shared a little bit about this, but maybe if you have any other tips, how did you and how do you balance this business while working full time?

I think it's the team. So I was actually just looking at things before you and I got on the phone. I have a team of nine people right now. And that wasn't the original team and I have had to make some staffing changes a little bit. But I'm with an incredible group of people who are just very organized and willing to to help to put in their time and it's also to be honest with you technology. So I use a software called Trello, which is my project management. software and basically the the lifeblood of everything in the business. I also use a multi channel fulfillment software that's kind of like my source system where I keep all my master data and all my inventory in different places. Since I have three different places where I keep inventory, Amazon is only one of them. So it's it's technology, and it's the people.

It's such a great point. And it seems like a lot of people, but they're all doing like you said, the prep center, social media all have different components that they're doing that works together in a very efficient system. It sounds like,

Yeah, exactly. And it's documenting the whole process so that it can continue to scale.

I do have a question for if someone's listening, and they say, Wow, I'd really like to get into that. I'd like to hear the podcast or if you remember that you were listening to that share this information, and then also any resources that you'd recommend people research or go investigate.

And it's a funny question. I'm happy to share the podcast. It's a very popular one. It's called the amazing seller. And the reason I laugh is because he's working on one not only diversifying his channels where he's selling products, but he also recently got into real estate and short term rentals. So he's starting to talk a little bit more about real estate on his podcast, too. It started out as a big Amazon podcast, and I highly recommend those earlier episodes and even some of the more current one, but he is also getting a little bit more into Airbnb.

Okay, so let's transition to real estate then. And you know, from the time that we originally spoke to when we're recording this now you have sold off a couple of your short term rentals that you had. So tell us how you manage those short term rentals. And again, when you got into that,

Yeah, so I moved actually to Scottsdale a little over two years ago, I was living in Atlanta before that. And we moved in pursuit of a real estate deal. So we bought a I found the financial independence community. I had started paying a little bit more with Amazon and then wanted some cheaper housing too so we could save some money. So we bought a townhouse here in Scottsdale that the two of us could very easily afford on the salaries that we had, and started fixing that up. And since we had a little bit of extra money leftover since we didn't have a high rent payment, we were able to afford a one bedroom condo. So my first I closed on a Wednesday and I think I expected my first short term rental guests the following Friday. So just two days later, it had been running as a short term rental before before I purchased it. So I was able to just very easily have that transitioned over from the previous owners that went really really well. And same kind of concept. I had some great technology was able to automate a lot of things. And I ended up buying another condo in the same complex about six months later. So I've been managing the two of them together. And then we ended up selling that one buying it's another one that we had intended to hold but just ended up slipping so Over the last two years, I have owned three short term rentals and actually sold them all within the last couple months.

And that is the piece that I want to dig into a little bit because I think this is interesting. I actually had a realtor who focuses specifically in short term rentals in Scottsdale. And one of the things that she was talking about is that when someone has built up a business, and they have successfully rented out that short term rental, when they go to sell, the property is valued based on a business. And so she was talking about how that brings up the selling price and the comps in the neighborhood. I would love to have you kind of talk about that, you know, selling it as a as a turnkey business that someone can come in and take over.

Yeah, and it's I think a lot of the reason these were successful were because of the systems and the processes and the automation that I had put into place. So to your point, absolutely. That's part of why sold the property values had risen, they were worth a lot more than they were when I purchased them. They were fully furnished. And they already some of them actually already had bookings that I was able to transfer over to people. So the one that I just sold and closed down about two weeks ago, I worked with the new owners on transferring over $12,000 in bookings to them. So not only were they paying for the property, they were paying for those, those future bookings as well. And, you know, I think a lot of us as we work in technology, we do have that advantage because I'm sure a lot of us have these analytical minds where we can set something up, see what works, certain documents that probably automated as well. And even just passing that on to someone looking for an investment like that is is a huge value.

What did you transfer over in addition to the bookings and the fully turnkey? Did you teach them how to use those systems or how did that all work?

Some of them I did so full disclosure as well. I'm a real estate agent. So have also been trying to specialize in short term rentals as well, I am buying and selling a few properties and ended up sitting and getting my license earlier this year. So some of the people who either had not been working with another real estate agent who were unrepresented, I did work with them very closely. So I showed them how to use the software I sent over the copy for the messages that I've been sending. I sent over the timelines, the guests books and things like that. So some of them I had some of them I had not, but it seems like people also want to put their own spin on things as well, when they purchase something like that.

On either of these two businesses, what key piece of advice would you give listeners?

I think, just try it, see what works and then grow it from there. So I think most people could make anything work. It's just a matter of having a passion for something, finding what you like finding what works well for you and your schedule, and then being able to systemize that and grow it. So if you have passion for something, you're obviously going to be able to be more successful than if you do

Great advice. Tell us how can listeners get in touch with you or learn more?

Sure. So I ended up just sharing my website, it stays s ta y s by Melissa and e L is a, the goal is eventually to make that into kind of like a short term rental blog. It's also the site I use for real estate clients. But I have my email address on that website and then also a contact form. So happy to talk about either e commerce or real estate in Scottsdale through that website.

Fantastic. Thank you so much for joining us today.

Yeah, thanks so much for having me, Nichole.

Thanks for tuning in to The Richer Geek Podcast. For today's show notes including links and resources, visit us at therichergeek.com. Don't forget to head over to iTunes, Google Play stitcher or wherever you get your podcasts and hit the subscribe button. help us spread the word by sharing with others who could benefit from listening and leave a rating and review - that'll help us get the podcast in front of more people. I appreciate you. Thanks so much for listening.

The information, statements, comments, views, and opinions (collectively, “Information”) provided in this podcast are not intended to be and should not be construed as financial, economic, legal, accounting, tax or other advice.  For our full disclosure, click here.

 
187A9788.jpg

ABOUT MELISSA NESBITT

Melissa Nesbitt works full time leading a Customer Engagement team at SAP and at 29 years old is within reach of financial independence. Over the last two years, she has purchased 4 rental properties, sold 3 as fully operational Airbnbs yielding incredible financial gains, and has built a 6-figure multi-channel e-commerce business which is on track to soon replace her W2 income all while continuing to be identified as a top performer at her full-time job.

Melissa lives in Scottsdale, Arizona and is also a licensed real estate agent, specializing in short term rentals. Her design skills, industry relationships, and engineering-provoked processes ensure her clients are able to purchase and furnish a lean, top-performing vacation rental.

In her free time, Melissa enjoys exercising, boating, strapping her Maltese mix in a bike basket for a quick ride, and convincing her soon-to-be husband to complete one more home improvement project.

Melissa loves to make meaningful connections and can be reached via her website or Instagram for anything from e-commerce advice to taking your next step in purchasing a vacation rental.

 
 
 
Small Business, Online BusinessNichole Stohlerpodcast, season 1