How I Created My First 6-Figure Business For $119.40

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I’d already been working for myself for a couple years doing Web design (back then a chap didn’t need to have sick skills like Charlie, Norcross, and Reese have), selling on eBay, and just straight up hustling before I started my first extremely profitable business in 2002 for just $119.40 (back then it cost a little more, this is what it would cost today).

If you’re a member of the Freedom Frighters you know a tiny bit of this story, but I’m going to go in-depth now. Strap yourself in and hold on tight! (Err, if you actually do that, please first pull your car to the side of the road before continuing on reading this. Safety first!)

The Beginnings: Hustle

How it all began: In the year 2000 I met a girl who sold stuff on eBay. I’d already been dilly dallying on eBay, but she taught me about a fun little niche. She taught me how to find free stuff to sell on eBay. This wasn’t a hugely profitable business (I’m getting to that part!), but for college students working very part time it was awesome and very consistent.

There were 2 main aspects of this “free auction profits” niche. First was getting lots of free after rebate stuff from stores like CompUSA, Staples, and OfficeMax. Sometimes this stuff was beyond free. We’d actually sometimes get paid after the rebates were sent! The second aspect of the free stuff was going to record stores and getting free stickers/cassettes (yes!)/CDs/posters/paraphernalia that street teams would leave in stores promoting bands. We would never take ALL of the stuff, just a few of everything. There was (and probably still is) a huge market for band stuff on eBay.

All in all, this business could pull in $500-$1000 profit in a good month. Again, not hugely profitable, and it really depended on if the rebates were rocking hard or not, but it was not especially time consuming. (Side note: I was also beginning to dabble in affiliate marketing at this time. Like I said, hustling!)

But I’m getting a little ahead of myself.

More Hustle. Hustle Times Two. Hustle Hustle Even!

All throughout my eBay selling (even before the free stuff) I was a member of a small eBay sellers forum/message board. I spent a lot of time answering questions and also getting help. I had no Web site, and nothing to sell. I was just there because I loved learning about auctions and what others were doing. And I also thrived on teaching new auction sellers the ins and outs.

One day I e-mailed the guy who ran the forum. We’d had many previous contacts, but this time it was something new. I’d read about people selling these things called information products, specifically eBooks. So I e-mailed him, told him about the free stuff I sold on eBay, and asked him if he thought it would make a good eBook. He already had an information product to sell, so I figured I should get advice from someone with experience. (<– So important I did this.)

His response?

“Yes! Write it! I’ll promote it!”

Wowza! Sweet. :)

So what did I do?

I got my ass in gear, wrote the guide, wrote the sales page, designed the Web site/eBook cover, and released that eBook, Free Auction Profits, within 10 days!

Then I e-mailed Jim, the guy who ran that auction forum, with a copy and an affiliate link.

What did he do? He promoted it without the affiliate link! He said it was thanks for all the awesome help I provided on a regular basis in the forum. :)

First Sale (!!!) and Goal Setting

From idea to first sale was just 10 days. This was October of 2002. (In 2006, after I stopped selling that product and quit that business I put up a copy of the eBook for free at FreeAuctionProfits.com. It’s strictly for posterity so please don’t take anything written there as gospel nowadays. It probably isn’t valid. Also, please excuse the formatting and AdSense. I don’t really know how to edit that site now.)

My goal with that information business was to make just $400/week. On top of what I was already making with other stuff, it would mean I’d never have to get a job after University. I hit that $400/week goal within a month. So I doubled the goal to $800/week. I reached that a few months into 2003.

Stepping It Up To 6 Figures

Next goal: $100k/year. It took a little bit longer to reach that goal. If you remember reading Sweet Shit Saturday #004, I talked about a guy named John Reese. With the stuff I learned from him I turned this tiny little information product business into a 6 figure earner in 2004, when I was 23 years old.

The gist of how I did that: I stepped up my eBay game by learning about wholesaling and drop shipping and then released a $97 physical (as in, real mail!) product that taught how to find wholesalers. With the higher price point I could offer affiliates a nice commission on a great product and still make ~$30 per sale after all fees. I sold low 5 figures worth on launch day. A few thousand went to affiliates, but along with all of my other income streams, it was my first $10k profit day. We’ll talk about that (and at least one other 5 figure profit day, as an affiliate not merchant) next Monday.

Breaking Down The Costs Of My First 6 Figure Business

Let’s break down the costs of what that first tiny info product business that changed my life would cost today …

1) Domain Name: $9.69/year (or free)

My domain name advice is simple. I like .com the most although I do own a bunch of .net and .org domains. Choose a name that sounds good (RidiculouslyExtraordinary.com) or a choose a name that has a bit of a benefit already built in (HowToLiveAnywhere.com). Length of name doesn’t matter much since you’ll be doing your promoting online.

I’ve been using NameCheap.com to register domains lately. Good prices and free domain privacy. I used to use GoDaddy, but switched for my last 9 domains (including HowToLiveAnywhere.com).

You can honestly use any domain registration service you want. The Web host I use will actually give you one free domain

2) Web hosting: $95.40/year

For $95.40 per year (including domain name) you can use the same host I use: BlueHost. Many people don’t recommend them. Many people do. They’re not perfect. No Web host that costs less than $10/month will be perfect. Hell, I used to have $500/month managed servers and things weren’t perfect with those either. Don’t get too caught up in choosing a Web host. Every time BlueHost has been down they’ve been good about providing quick status updates. And while my wish is that they’d never be down, I know things happen with computers.

Note: BlueHost is on WordPress.org’s recommended hosts list because they make installing WordPress really easy.

3) Credit Card Processor/eBook Delivery Service: $5/month or $49.95 one-time

When it comes to your first info product I can only recommend these two: e-junkie.com (use coupon EJVIDEOS for a 67 day free trial) and clickbank.com. E-Junkie is $5/month and Clickbank is a $49.95 one-time fee. Each have their benefits and downfalls. For what it’s worth, Free Auction Profits (the infoproduct I talked about above) was launched on Clickbank. I’m using E-Junkie for How To Live Anywhere. E-Junkie has much lower fees (i.e no fees beyond the $5/month) than Clickbank ($1 + 7.5% per sale). But Clickbank take care of paying your affiliates. With E-Junkie you have to login once/month, download a file that you upload to Paypal, and pay your affiliates yourself. It takes less than 10 minutes. :)

4) E-mail list management/Autoresponder: $19/month

Double opt-in e-mail lists have been responsible for generating hundreds of thousands of dollars in revenue for me. Double opt-in simply means that somebody signs up for your e-mail list (for example, my Freedom Fighters ecourse), gets an e-mail asking them to confirm subscription, and clicks a link inside that e-mail before you can actually send them any messages. This is the anti-spam approach to e-mail marketing. It’s permission based marketing and completely on the up-and-up.

More than anything, building an e-mail list is the key to starting a successful long-term online business. I interviewed 2 experts on list building for How To Live Anywhere, that’s how much I believe in it.

I use AWeber.com. It starts at $19/month. As your list grows in size your costs will increase a bit. But that’s a good thing. If your costs are increasing your profits will too (especially if you do what the 2 dudes I interviewed in How To Live Anywhere tell you to do).

And that’s it. Free domain + $95.40/year Web hosting + $5/month e-junkie account + $19/month Aweber account = $119.40

For $119.40 you can get started with your own info product empire. Technology is awesome. :)

Note: Results are not typical. There are too many variables for me to say you will have the same success as me. Forgive me for being honest, but there is no magic pill. Take focused action and hustle! ;)

Photo Credit

{ 51 comments }

Henk

Great post once again Karol.

Many so called 6 numbers talkers always talk vaguely around it, But you just get to the points straight away and provide awesome facts without any bullshit.

keep up the good work!

Henk.

Karol

Thank you Henk. :) You know me, I don’t like fluff. Gotta get to the good stuff as soon as I can.

ami

Karol: This post does a great job of breaking down the steps to establishing a business – and making it seem reasonable, accessible, and straightforward.

The only problem is – you makes the process seem so straightforward that my excuses for not doing what you suggest seem lame. Could you try to think of my dignity next time? ;)

thanks for the information, I’ll be mulling over your points for a while.

Karol

Hi Ami!

I don’t just make it seem reasonable, accessible, and straightforward…it is! I’m not saying it’s easy, but when you break it down to its essence there aren’t very many steps involved in taking action on something like this.

I hope you rock it!

Cheers,
Karol

Susan Spensley

Thank You, Thank You! This is what I’ve been waiting for! I can’t wait for the release of your HTLA! I’m so glad I got in early! You rock!

Karol

:) Thank you Susan!

Kenny

Awesome! Love this no fluff writing!

Karol

Thanks dude! :)

Mike

Loved the plug for e-junkie and using them for affiliates, which I need to start doing.

Maybe you can give us a quick primer on that process ;-)

Karol

Yo Mike! I’m not sure what you’re asking. A primer on setting up e-junkie? They have pretty extensive info on their site. It’s actually pretty easy. But if you have questions let me know.

Marcin

Very inspirational article!

I have a question.

How much does it cost to set up a business in the United States? I don’t know what is the law in the US but here in Poland you need to set up a business if you want to sell something (for example ebooks). And that’s not so cheap. Did you need to set up a business to start selling your ebook?

Karol

Hey Marcin!

Since I already had a business registered from years prior that wasn’t an issue. But to get a very simple business (sole proprietorship) only cost like $10 back when I did it. To form an LLC (what I have now) costs more. That said, with Paypal you can start selling as an individual instead of as a business entity.

Cheers,
Karol

Nicky Hajal

In the States, it’s legal to sell without a business entity setup and considered a ‘sole proprietorship’. In this case, taxes are filed under your Social Security Number.

You can file a DBA (Doing Business As) which allows an individual to do business under a fictitious name, and I believe you receive a Tax ID. This option is the cheapest filing possible. Probably around $25.

The downside of a DBA is that your personal assets are considered assets of the business. If your business is sued, you are sued.

This is where LLCs (Limited Liability Companies) and Incorporations come in. They are totally separate entities from their owners. The business can be in financial trouble, but the owners personal assets remain untouched.

The typical debate is filing an LLC vs an S-Corp. They both would generally run about $300-700 to file on a site like BizFilings.com.

A tad more than you asked but hopefully useful!

-Nicky

Karol

Thanks so much Nicky! I appreciate you going into so much detail. :)

Chris

Great post Karol,

Now I just need to get my finger out and find something that I enjoy and might translate into $$$ (oh and to stop jumping from one idea to the next!)

Thanks.

Karol

Thanks Chris! Focused action buddy! Make it happen. :)

Isa

Hi Karol,
Thanks for sharing.

I am ready to take my company to the next level and would love to receive any guidance or advice that you feel would be helpful.

Take a look at the web site for the next 30 days to get a sense of what the purejoojoo experience is all about and if you feel compelled to reply back, that would be wonderful!

Thanks in advance and hope you are having a wonderful day!
Isa.

Karol

Hi Isa,

You’re welcome. :)

I’m really not sure what you’re looking for as far as help. I actually can’t figure out what your site is about. Although the quote is good and the design does look nice it’s a confusing user experience.

Cheers,
Karol

rebekah

Hi Isa,

You were asking Karol for help so I thought I would take a look at your website also to see if I could help you too. When I clicked on your screenname on this blog it sent me to purejoojoo. I saw a pretty rainbow swirl graphic and a positive quote about creating positive change in your life by changing your thoughts. So far so good. You were able to bring my attention to the possibility of changing my thoughts for the better. When I read this I was thinking that if I clicked on the link it would take me to your homepage where you would show me techniques to get my mind to focus on the right thoughts and that you would also give me some objective to funnel my positive thoughts and energies into. For instance: showing me places I could volunteer, me writing positive quotes on post-it notes and placing them around my office so I could cheer myself up during the day, eating foods that boosted chemicals in my body that would encourage positive thinking…something. Instead, you told me that I could change my life by changing my thoughts and left it at that. So, if I can help you in any way, it would be to encourage you to elaborate on what you mean by changing your thoughts. Explain how a person can go about changing their thoughts. And then give them some activities that they can direct their changed thoughts and energies into. Show them concrete examples of the good they can do. Tell true stories of people that you know that have turned their life around 180 degrees. Videotape yourself interviewing people who have done what you are recommending and post the videos on your website. Put a blog on your website and write blog posts where you give tips and tricks to keep this way of life going. You know, stuff like that. So produce more content, create a product, and set up your website to monetize your product.

Of course, I do realize that it’s only been 2 weeks since you posted this, so it is possible that you are just waiting 2 more weeks to publish your completed website when the month is up. Whichever way it is, I hope this helped and I wish you the best in your business.

Karol

Thanks for helping Isa out Rebekah. :)

Tim

Hey Karol,

That was some good info. It look’s like you’ll cover list building in HTLA, but how did you initially build your list?

Thanks!

Karol

Hey Tim,

Yes, the specific list building stuff will be covered in the HTLA interviews. :) It’s rockin!

I initially built my list the same way I’m building my blogging readership. Networking, guest posting, and just generally talking to people.

Cheers,
Karol

fred

Great Article!
Just one suggestion. You sounded confused while differentiating b/w clickbank and e-junkie. i am using e-junkie for more than 5 years and no doubt e-junkie is better than any other service. there was no need to compare e-junkie and clickbank. i don’t know what world says about clickbank but e-junkie stands way ahead than clickbank.

anyways, great article and keep up the good work
:)

Thanks!

Karol

Thanks Fred!

I don’t think Clickbank is necessarily way better. It’s definitely easier to set up and accepts more forms of payment out of the box than e-junkie. That said, e-junkie rules which is why I’m using it for How To Live Anywhere. :)

Cheers,
Karol

paurullan

Thanks for the post :D

It is funny since right now I have deliberately chosen to focus on college plus personal life and put appart any bussines. But anytime will be good to start!

Karol

Hey Pau, thanks man!

Today is the best time to start. ;)

Jonny | thelifething.com

I am impressed man, good on you. Always inspiring to hear people that are making money and how they got to that point.

Karol

Thanks Jonny!

Pat

Very informative—lots to think about. It’s an interesting read. Thanks for sharing,

Pat

Karol

I’m glad you like it Pat!

Jonathan Butterworth

Karol I just came across you blog because of a comment you left on smartpassiveincome about your iPhone app. I am very glad I did. I really enjoy your stories and tips. I am going to be hanging around.

Karol

Awesome Jonathan! Thanks for finding me through a comment on Pat’s blog! :)

alwaysLovely

Karol,

Thanks for sharing. Interesting to read your story.
I’m using the tools you mention too! Aweber, namecheap, ejunkie

Karol

Wooohooo! Very cool. All great tools. :)

Krishna

Sweet, no filling, just the facts. Thanks for this post!

Cheers,
Krishna

Karol

You’re welcome Krishna. :)

Kris

Karol, I absolutely love your writing! You are a complete source of inspiration and one of the coolest writers I’ve come accross. I win Procrastinator of the Planet award hands-down and even I’M trying to get started with an online business now thanks to a post I read of yours on ZenHabits… THANK YOU!

Karol

Whoa, thank you Kris! :) I appreciate your words. My wish is that you’re inspired enough to do instead of try. ;)

Cheers,
Karol

Morgan

I only recently found your website and it didn’t take me long to get on your mailing list. Your writing and journey speaks directly to my entrepreneurial heart! You’re straight forward and informative and I thank you for that. You’ve given me the exact resources I need to get shakin’! Thank you!

Karol

:) Thank you Morgan! Glad I could help. :)

Katie

Hi Karol,
I’ve just discovered your website, about two days ago – and have spent those last two days glued to my computer reading it! Thanks so much for this article, it’s really informative, easy to understand, and inspiring! Good luck with everything, I am definitely of the same mindset as you!
Cheers, Katie.

Karol

Thanks Katie! Good to know you’re into what I’m doing here. :)

Gaelle Linard

Hey Karol!

Thanks for this article :) I’ve been meeting so many entrepreneurs here in Malaysia that it’s been tickling some parts of myself. Started brain-storming ideas for a niche but was left at that… “What do I do next?? Where do I start?” Your blog and your FF newsletter are just answering that! Keep it up :)

Karol

Awesome! I’m glad I could help Gaelle! Keep kicking ass.

William

Hey Karol,

I am very pleased to meet someone (digitally :D) like you with such great disposition and authenticity.

Now I am not bashing your authenticity by asking this, but I genuinely want to know, what are all the actual business costs, not just the numbers, but all the extra required things to set up before actually doing this business online? For example, forming an LLC in a tax friendly state, getting an EIN, etc. I am wanting to start up my business and btw I am only 17 years old and sooooo grateful I have been opened up to these new ideals, but I do not want to blindly jump into making profit online without the actual legal matters of business and business structure in order.

Of course I know you are not a lawyer( at least I think so :P) and if all you can do is tell what these required things you had to have first are, I still appreciate it, and I ask can you refer me to the sources of people/books who got you straight in the legal/biz structure side of things?

Karol

Thanks William. Don’t concern yourself with the paperwork before you actually have a business. You can register a DBA (Doing Business As) for ~$20 and you’re in business. When you start making money you can hire whoever you need to figure out what corporate structure is best for you. That’s my very unprofessional advice, but it’s exactly what I did.

Gabi

Hi Karol,

This is an amazing post! Like other readers have said here; most people who have found success with internet marketing in it’s various forms are alswys vague about their information.

You are a good writer and I really enjoy learning what you teach. I’m looking forward to learning more as the course progresses.

Here’s to the 1% :)

Karol

Thank you Gabi. Enjoy the rest of the course. :)

Monica

Everyone is on here mentioning how they first “met” you. I don’t even remember how I met you now. But, I have to say that the articles you publish are not only informative, but they keep my furnace stoked! My life is changed! I liked the color-by-numbers simplicity of this article and I’ll be conscientious about giving the same type of value to my readers!

Karol

Hey Monica, thank you. It’s great to know my articles have positively affected your life. :)

Robyn Woods

Thank you for the detailed info Karol. I love your course and am slowly but surely implementing everything. Wish I could faster! Thanks, I like your style!

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