It was the summer before starting college that I incorporated the LLC for Hometown Industries.

Starting out I wasn’t sure what kind of business I wanted to start. I had a long list of bad ideas, which much to my dismay I have since lost.

The summer before school started I worked for a digital marketing firm, and from this experience the seeds for my first venture were planted.

It was one of my first real hands on jobs that took me outside the world of minimum wage retail, and I am eternally grateful to the owner of the company for hiring me.

One of the most valuable things about this job experience was the very humbling realization that I knew nothing at all and had no practical or technical skills.

I didn’t know how to code and even the most basic online marketing concepts were foreign to me.

With this first job I was exposed at a high level to a lot of the digital marketing industry.

I got to see the organizational structure of the dev team and how they collaborated on projects, and was exposed to how new clients were brought in the pipeline.

I was drawn to ecommerce at the time, because it was something that I felt I could understand.

At this point, my metric for success was something that pulled in a few hundred dollars a month to go towards loan payments and food.

Any delusions beyond that had yet to fully take their form.

My interest in ecommerce led me to discover selling on Amazon.

Perhaps you already know this, but I find there’s often a lot of confusion for people around the way Amazon actually works in terms of who you’re buying from as a consumer.

It is true that Amazon does own some of the inventory they sell, but the majority of merchandise available for sale is owned by independent sellers and businesses.

So you are actually buying from them through Amazon.

The reason Amazon is able to offer millions of products in their catalogue is that they allow third party sellers like myself to own and sell inventory through their platform.

They make money off of me through a commission fee, and if I want my products to be eligible for 2 day prime shipping I need to use their network of fulfillment centers, which incurs another fee.

The Amazon ecosystem of physical products is so vast that with enough research and resolve you can find products that are selling with relatively high demand but with low competition. You then can source these products back to a manufacturer and start selling them yourself.

Amazon at this time, was an ideal platform for me to start on. Not because it was particularly intuitive or easy to use, but the platform itself receives such a high amount of traffic that a business just starting out doesn’t have to do a lot of marketing off of the platform to get sales.

The first product my partner and I sourced was a 4x6 plastic picture frame.

We became quite skilled at the process of selling through Amazon’s platform.

Operating in niche categories, we figured out how to consistently outrank our competitors for valuable keywords, and create listings that were appealing to potential buyers.

Getting sales was never a problem. I can still remember how surprised we were when we launched our first product and actually started to get sales.

Where we failed to achieve success was in the reliable sourcing and quality of our goods.

After 75 days of waiting, close to 10% of our inventory arrived from the manufacturer like this.

Anyone can go on Alibaba and place a bid for millions of cheap Chinese goods, but arranging affordable, reliable, and fast transport for those goods is another matter all together.

At the core of business are the relationships that make commerce possible, and for all that we try to replace with technology, it can’t replace the in person encounters required to build trust and lasting partnerships.

Partnering with a good factory in China is all about relationships, and we would have needed a great deal more resources than two high school graduates with the savings of minimum wage jobs to make that happen.

Amazon has strict requirements for the quality of goods. A product defect rate of less than 1%, is required to sell on their platform. A few bad product reviews and enough product returns is the beginning of the end for an Amazon seller.

My partner and I had a few close calls with products showing up to customers slightly damaged before we decided to suspend the account and take stock of our options.

We regrouped, and in the true spirit of capitalism decided to double down on the things we were good at (selling on Amazon’s platform), and let other businesses invest in product sourcing and development.

50% of all goods purchased online are bought through Amazon.

With the way Amazon was cannibalizing all of ecommerce we figured that any business selling consumer goods would need to figure out a way to get on Amazon’s platform, and we could be there to fill that gap.

With a clear value proposition in mind we started pitching our services to a few small businesses.

Smaller companies are approached by digital agencies all the time, and they have good reason to be wary of them.

They make grandiose promises, charge a lot of money upfront, and usually fail to deliver on most if not all of what they said they could do.

That’s why we chose to structure our approach differently.

Instead of trying to make a quick buck we pitch clients on long term profit sharing agreements of around 12 months.

We charge no money upfront, so if we fail to deliver on what we say we can do the client loses only the time they spent talking and working with us, and we lose our time as well.

The profit sharing has resonated a lot with some of the small businesses we’ve worked with.

The biggest ROI these small businesses care about is sales.

Abstract metrics about how some expensive ad campaign drove x number of visitors to their website, of which 0 converted to sales, is not a success for a small business owner.

A lot of digital strategies take time and repeated effort to have their full affect. The profit sharing creates partnerships where the long term investment required for such strategies to work is actually possible.

So what are the long term goals for long term goals for Hometown Industries?

The goal is to get to $10,000 in Monthly Recurring Revenue by the time my partner and I graduate college in the next two years.

That $10,000 comes having to split it two ways with my partner, leaving us each with $60,000 a year pretax, and realistically closer to $45,000 after taxes.

Maybe not as much or as secure as a junior dev salary, but enough for me to justify getting out of the nine to five to focus on creating and building the things I want to full-time.

If you made it this far I really appreciate you taking the time to read my story.

If you want updates about our progress towards this goal be sure to subscribe to my newsletter.

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