The Power of a Space

What a weekend.

I’m in the process of migrating servers, I’m moving from one hosting company to another.  I have a number of different sites, one is still on the old cloud-based server, while this one, among others are hosted on our new server.  I’m still doing a lot of tweaking, testing and securing before fully migrating everything over…and on the to-do-list is whole process for backing up, with a number of fail-safe’s in case anything goes wrong once all is migrated.  The problem?  It was still on the to-do-list.

So on Friday afternoon, I’m working on the server…I’m usually very cautious about working on it because I’m no system admin.  I have separate access for different domains, that way if anything is compromised or anything goes wrong, worst case scenario is that it should only affect that one domain.  During some of the work, I had to access multiple files from different domains, so I decided to login using root access, which can pretty much access anything and do everything.

To make a long story short, I was trying to delete the contents of a folder, and I used the following command:

rm -rf folder /*

I meant to do:

rm -rf folder/*

The difference of that one space?  Rather than deleting everything within the folder, it deleted the folder AND everything in /…which for Windows folks, is like saying delete C:\.  Seconds later and if you went to any of my sites you would get a quick error back saying permission denied.  On top of that, I hadn’t implemented my backup system yet, so I had no backups.  Talk about a nightmare!

The entire weekend was spent figuring out a variety of solutions to get everything restored to as close to the date as possible.  I got lucky with a couple things, like having a backup of some databases that I had downloaded while migrating servers (couple weeks old), and a recent backup in my recycle bin.  At the end of the day, after much wasted time, I was able to get everything fairly close to restored as possible (I did lose some stuff).  The first to-do after that?  Back everything up!  Had I not had certain files downloaded, or my host hadn’t had a disaster recovery file from a month prior, the situation could have been much worse.

This is a reminder to all site owners.  You never know what can happen.  Setup a backup plan, and implement it yesterday.

One Person Can Change Everything, Don’t Forget

I’m sitting at my desk working and watching a special on CNBC called “The Oprah Effect.”  One of the stories is about a business named We Take the Cake based out of Florida.

The company has been doing about $160,000 in sales per year when it was bought out by Lori Karmel for around $80,000.  She re-branded the company and made some other adjustments, but business was not great.  They were barely breaking even, when one year they finally hit a profit…of $16.  Then one day they come to find out that one of their customs works for the Oprah show, who enjoyed the cake so much, she gave one to Oprah…who loved it.  Some time later they get a call saying that Oprah was considering making the cake one of her favorite things on the show.  Oprah ended up doing it!  After the Oprah featured it, the phone rang non-stop for weeks, giving her tons of sales.  This literally took the business to the next level.

A sales increase wasn’t the only thing that was benefited, We Take the Cake then got tons of press, which generated in more sales.  Catalog companies such as Harry & David, Nieman Marcus, and even Whole Foods carried their products.  They now do over $1 million a year in sales.

All this because one customer literally changed everything for the company.  This is a prime example of why you should never neglect anybody, you never know who you are talking to or selling to.

In my business, I can think of a few key people that have literally changed my life and moved my business to the next level.  When I started Carbon Fiber Gear, I had written about a carbon fiber wallet that I thought was pretty cool.  It turned out that manufacturer of that wallet had it on display at a trade show and somebody had come up to them saying that had seen it on my site.  They ended up buying 500 wallets.  This made the manufacturer seek me out, and gave me the opportunity to directly sell the product on my site.  That was the start of my store, which is now my full-time business and supports my lifestyle.

Can you think of any one person that has literally moved your business to the next level?  I would love to hear your story in the comments below.

Virginia Property Tax Ridiculousness, What Similar Issues Do You Have?

My company is registered here in Virginia, which happens to be a “Personal Property Tax State”.  What that means to me is that where normally people are used to paying property tax on their homes every year (as they live in that property), I also have to pay property tax on vehicles as well as my business assets…every year.  This is the one thing I absolutely hate about being in Virginia, though I’m sure each state has their pros and cons, which I’d love for you tell me about in the comments.  Let me explain each tax so you have a clear understanding of what I deal with and pay.

Vehicle Property Tax

Don’t get this confused with sales tax…because you have to pay that too.  With sales tax, you buy a car, you pay sales tax one time, and that’s that.  Virginia also charges a yearly property tax of 4.2% (May be different based on your county) (billed twice a year) which is based on the NADA value of your car as of January 1st (so you are paying the full assessed value, even in December a year later).  It’s like paying sales tax on your car every year!  There is a little bit of relief though, especially for those with cars valued under $20,000.  For my county they offer 58% relief up to the first $20,000 of value.  So if you own a $10,000 car, your property tax due is $420 minus 58% = $176.40.  Anything over $20,000 owes the full tax amount after the initial relief up to $20,000.  So if you have a BMW for example worth $40,000…here’s the breakdown:

BMW Value: $40,000
Tax On Initial $20,000: $840
Tax After 58% Relief: $352.80
Tax On $20,000 leftover: $840

This means you will be paying $1,192.80 on top of the sales tax you already paid just to have that car.  Tack on the cost of gas and insurance, it gets quite expensive to drive a nice car.  That’s no chump change, and definitely keeps me from wanting to buy any new cars.  Keep in mind, you have to pay this EVERY YEAR…so the value may go down to $36,000 in the second year, and you’ll pay a bit less than the original $1,192.80.

Also note that any vehicle that is used for over 50% business, is not eligible for the relief and must pay the full 4.2% every year.

Business Tangible Personal Property Tax

I just found out about this one a week ago, which is really frustrating, not only because of the money, but because of the effort required to do file this.   You are required to have an asset list that you provide to the state every year of the following:

  • Property owned by the business
  • Property owned personally and used in the business on a full or part-time basis
  • Property received as a gift
  • Property that is leased or rented
  • Property that is fully depreciated or expensed for federal tax purposes

This means you need to have an asset list (and pay property taxes every year) on everything from the computers to the printers to the furniture, etc, etc.  You have to pay 4.2% of the assessed value EVERY YEAR.  There is a breakdown depending on age to figure out the assessed value:

  • 1 year old = 50% of the original cost
  • 2 years old = 40% of the original cost
  • 3 years old = 30% of the original cost
  • 4 years old = 20% of the original cost
  • 5 years and older = 10% of the original cost

To give you an example, say you own a video editing company and you have to buy a $5,000 computer.  On top of the sales tax you may have already paid, you will also pay $105 the first year in property tax (4.2% of half the original cost).  You will pay $84 the second year, $63 the third year, $42 the fourth year, and $21 every year after that, even 10 years later when it’s probably worth nothing.  This is just one computer.  Now add up all your equipment, furniture, etc, etc and see how quickly that can add up.  It’s like they don’t want you to make money.  Not to mention the hassle of having to create, maintain, and submit this asset list.  How do you know what the cutoff is?  Do I include all my pencils?

In Conclusion

There may be other property taxes that are charged, but these are the two that I am aware of.  What do you think about these taxes and how does it compare to your state?

Things You Can Do To Prevent Credit Card Fraud

Recently I’ve run into a couple issues with stolen credit cards being used on my site.  There are a lot of things you can do to prevent it in the first place, for example only allowing the billing/shipping address to match.  Unfortunately this is an unreasonable thing to do as many people order things and have them shipped to friends/family as gifts, work, etc.  It most likely wouldn’t be worth the money lost in having this policy.

While there is unfortunately no fool proof method, there’s quite a bit of research you can do, especially for US orders.  Here’s some of the stuff I’ve done, please feel free to comment with further ideas or anything else that you may do.

  • Make sure the AVS code is a match.  You can see what all the codes mean here.  I can’t think of any instance other than human error why the AVS code should not match.  For those that don’t know generally having the AVS code helps prove that the customer has the actual card in-hand.
  • If a billing/shipping address are a match I feel that you are pretty safe to ship an order without worrying about fraud.
  • Call the customer if you have any concerns.  While somebody using a stolen credit card may lie on the phone, you may be able to catch something.  Sometimes they even use the billing phone #, so you’ll end up calling the actual person that owns the stolen credit card and you’ll find out right away when they have no idea that something was ordered from you.
  • Google the e-mail address with quotes around it.  Something may turn up that shows you it’s the person that actually ordered.
  • Google the billing and shipping address and see what comes up.  Street view on Google Maps is a great feature.  While it may seem somewhat shallow, when you have a billing address which shows some sort of nice huge house, and a shipping address that shows a crappy looking house…that should raise a flag.
  • Google the name with quotes around it.  You may have to add the state or city name into the query if it’s a common name.
  • Search the name and e-mail address on sites like Facebook, LinkedIn, MySpace, etc.
  • If the e-mail is something that looks like a screenname, Google that portion.  For example if an order is placed under something like mrpowerman2738@yahoo.com, search “mrpowerman2738″.  They may use this name on things like forums or anything else that may help link the order validity.
  • Use a site like IP-Lookup to get information on the IP.  This can help make sure that the billing or shipping location is the same as the IP.  Have an order going to Nebraska, but the IP is from Croatia?  That’s a red flag to do some research before sending out an order.
  • Use WhitePages.com to check up on the address and phone number to see if customer data matches.  You can use WhitePages.ca for Canadian customers.  White Pages allows you to do reverse phone and address searches for free, which can be very helpful.
  • Sometimes you end up calling a mail forwarding company that international customers use to forward shipments to their country.  This is fairly common from what we’ve seen, but also has a potential for fraud. You can speak with the company and have them either look up the suite # or the name and verify that the information is correct.  Sometimes you can even make sure the last 4 digits of the credit card match when they opened up the freight forwarding account.  Companies like Bongo do a security check before accepting customers to open an account with them, so they can verify the validity of an order.

Of course none of the above can guarantee you won’t have issues, but if something seems fishy you’ll at least have some steps you can take to help verify an order.  Generally if something seems too fishy, I’ll contact the customer and tell them we’ll need another form of payment like a wire transfer.  You take the risk of losing a sale by doing this, but you also stop the potential for sending out an order and not getting it back while losing the money on a chargeback.  Just explain to the customer that you’ve had problems with credit card fraud and because of certain reasons their order raised a flag.  Alternatively I’ve even had customers scan in their drivers license with the billing address.

I’m sure there may be some better methods out there, so I’d love to hear your feedback.  How does a company like Amazon help defeat fraudulent orders when they do so many transactions per day?

My next post will be about what happens if the product has already been shipped and you find out it was ordered with a stolen credit card.  What can you do about it?  Stay tuned!

Reassessing The Priorities of a Successful Business

Note: Forgive me for rambling a bit, I typically like to jot down what I’m thinking :)

I have always striven to create some sort of multi-million dollar brand through one of the businesses I have started.  Now that I’m working for myself full-time, I’ve had the opportunity to sort of re-asses what my actual goals really are.

I find myself laying in bed at 2am in the morning with my mind racing about the day, ideas for the future, how I’m going to do what’s on the task list, etc.  Part of these big dreams I think has to do with the fact that a lot of content and stories of entrepreneurs that I tend to read about are big picture companies.  What I mean by that are companies that make products or offer services which meet a huge audience.  Intel makes chips for all PC’s and Mac’s, Google makes products that everybody uses, Foot Locker sells shoes that everybody wears, etc.  These are big picture companies that have the real potential to bring in millions, or even billion of dollars.

Then I look at my core business, a very niche luxury store that deals specifically with carbon fiber products…a material which the majority of the people never heard of or have no idea what it is.  When I’m dreaming of making my business successful, I think about being able to live the lavish lifestyle…but in reality, is that a true way to define success?

I find myself constantly comparing my life to how it was when I was working full-time for another company.  To be blunt, I’m making roughly the same amount of money right now, but I’m working wayyyy more.  Not only that, I have the constant stress of this never-ending to do list…forms to fill out, reconciling monthly, tax estimates quarterly, business license yearly, blah, blah, blah.  There are a million things to do, and I find myself always thinking and worrying about getting them done.  In comparison, at a full-time job, my day ends at 5pm, and typically doesn’t get thought about until I arrive the next morning.  The time in-between is “free-time”.  Now I feel like I lose a lot of that free-time because I’ve always got business on my mind…I’ve got to be able to make sure to afford the next month’s mortgage payment.

On the upside though, my schedule is much more flexible.  If I want to wake up a little later (although I find myself waking up earlier), I can.  If I want to take a week vacation, I can (although I’ll have ridiculous amounts of work to do when I get back, and that will of course be on my mind during vacation).  I work at home, which is great, but eventually (hopefully) I’ll grow out of my home office (which has grown to about a 2.5 room home office) and need to have a commercial space.

So I find myself always asking myself if this is all worth it?  The great thing about owning a business is the fact that the sky is the limit.  I have a much greater chance of making a lot more money with my business than I would working for another company, but that comes at a cost…and is that cost worth it?  To be honest, I haven’t fully decided yet.  The big thing for me is I generally like the work I’m doing on my own much better, but being the sole employee is a bit overwhelming.  I have to play many many roles, and you can’t just know everything or do everything better than anybody else.  Getting that first employee and being able to pass off responsibility will probably be one of the single most life changing parts of my career as an entrepreneur.

I will say that it’s extremely tough to get to the point where I feel like it’s worth it.  If I was able to do the same amount of work and double the amount of money, I would feel a lot more comfortable saying it is.  Apples to apples comparison, the freedom of knowing a paycheck is coming every two weeks, knowing that my health is taken care of, and having some sanity back/burden off my shoulders…it’s tough to say the business route is the way to go.  I honestly don’t think most people would be able to do it and stick to it.

This post was just more of a way for me to get some thoughts off of my chest.  I’m calling out to other business owners and entrepreneurs out there to post your experiences in the comments.  Do you find it worth it?  Have you gotten to the point monetarily that you’ve surpassed your goals?  If so, do you have any advice?  Did it happen over time with slow growth, or was there one moment that changed everything?

What Is MAP and Why Manufacturers Need To Enforce It

What Is MAP?

MAP stands for minimum advertised price.  Essentially it’s something that manufacturers can use to enforce their sellers to not advertise their product for a price lower than X amount of dollars.  For example if I am a manufacturer that makes a cell phone, and I have three different stores that sell it.  I can set MAP pricing to $199.99, meaning none of those stores can publicly advertise the phone for less than $199.99.   The Supreme Court has said that utilizing a MAP is legal and does not represent a violation of U.S. antitrust statutes.

How Does MAP Benefit Both Parties?

As long as MAP is strictly enforced, it can be extremely beneficial in my opinion for both the manufacturer and seller.  Lets look at some of the reasons:

  • By maintaining a higher price point, the product retains its value, which in turn is better for the brand image behind it.
  • Enforcing a MAP can allow some of the small business players to compete with the big guys.  For example, if I have a widget that is being sold under a MAP at Mom & Pop Shop as well as Wal Mart…we both know that Wal Mart has the upper hand in terms of purchasing quantity.  Generally increasing quantity purchase means they can also get a lower price, and then use that buying power to lower the retail price, therefore not giving Mom & Pop Shop a chance to even touch the pricing.  If MAP is enforced, both Mom & Pop Shop as well as Wal Mart would sell for the same price, even if Wal Mart may be paying less per widget.  This gives everybody a chance to compete, but as a benefit to Wal Mart for buying more, they make more profit per sale.
  • Price wars will not occur between your sellers, which drives pricing down.  We’ve seen this first-hand, especially in marketplaces like eBay.  10 different sellers on eBay trying to sell a product can turn a profit that was once a healthy margin into literally pennies on the sale.  Sure, this is great for the consumer in terms of price, but imagine the customer service and company behind a sale where they make practically nothing and are hoping for sheer volume just to make a few bucks.  More than likely you are going to get treated like shit, or there will be other negative things like aggressive upsells, selling your information, etc.  Remember, everything comes at a cost.
  • By making all sellers follow the same retail pricing, sellers will need to come up with more creative ways of promoting and selling a product aside from simply marking the price down.  With the higher margins that everybody can make on the product, it will allow for budgets to do such things like offer better customer service.  This again can become a significant method of positive brand image reinforcement for the manufacturer that just wouldn’t happen any other way.
  • By maintaining a MAP, and ensuring their distributors are holding their resellers to a MAP policy, it allows room for wholesale pricing to work.  I can’t tell you how many times I’ve seen a wholesale price, while I could literally find a seller selling for less than that.  The whole business structure behind reselling and wholesale just doesn’t work if pricing isn’t properly enforced.

As I mentioned above, all of the benefits can only be had if the manufacturer (and wholesale distributors) were to ensure that the MAP policy was strictly enforced.  It takes just one seller adjusting their price by 5 cents with no reprecautions from the manufacturer to mess things up.  It’s vital for the manufacturer to not play “favorites” with their bigger sellers.  Manufacturers as a penalty should threaten to freeze sales for a seller if it is found violating MAP, or even go as far as taking legal action against the seller.

Other Concerns and Problems and Notes

There are certain workarounds and situations that should be of concern.

  • It’s much easier for a distributor or wholesaler to not adhere to MAP policy for their resellers.  For example if I am the manufacturer, I sell to a wholesaler, who in turn sells to a store.  As a manufacturer you would need to be adamant about ensuring your distributors are adhering to policy for the stores they are reselling to.  If you find a store selling below MAP, find out who the distributor is if it’s not direct, and threaten the distributor.
  • There are workarounds for getting around an advertised price.  For example I’m sure you’ve seen sites like Amazon who do things like “Click here to see the price in your shopping cart”.  This is a way for sellers to somewhat get around pricing.
  • If you look at it from the manufacturer standpoint, they make the same amount of money regardless of whether or not the seller is making high margins, or pennies on the dollar…they are still buying the product for the same price from you.  So it’s easy for them to not care as long as somebody is buying the product.  They should consider the different factors up-front and if they want to set a MAP policy, be sure to adhere to it going forward.

Your Thoughts & Opinions

I’d like to openly ask both store owners as well as manufacturers to respond in the comments (feel free to do so anonymously) about what your thoughts and experiences are.  Am I out of line here?  I can see that this may be less concern in a brick-n-mortar outlet, but online I believe it’s extremely crucial.  Are there other advantages and disadvantages I haven’t thought of?

No Longer Working For The Man…Or Am I?

Working For The Man

As of January 1st, 2010 I have left the company I worked for to do my business ventures full-time. I’ve generally tried to be pretty DL about my regular job, but now that I’m gone, it’s full disclosure.  I had been working for Aol as a project manager since I graduated college (I left the company with about 4.5 years of experience under my belt).  When I started there, their headquarters were located here in Northern VA.  Being that I had experience in online advertising, I was a perfect fit for a position out of school within the technical online advertising part of the company.  I won’t get into my job there, but I will say that I loved working for them.  I really enjoyed the people and the atmosphere there.  Sure, there was a lot of mis-management on a higher level, and sure there were bad acquisitions (*cough* Bebo *cough*), but it was a great place to work.  Now with Tim Armstrong (formerly of Google) holding the reigns as CEO, I think they have a better chance than ever to do something worthy.  I took every opportunity I could to see and listen to Tim in person, and I believe he’s doing a great job.  I really appreciate the way that he finds it important to communicate with everybody in the company, tries to get a full understanding of all the legs, and keeps everybody in the loop.

There are two main things I want to point out before I get off this subject.  The first is that Aol, while as uncool as many of you initially believe, actually does a lot of cool things and owns a lot of cool sites that you may have never even realized.  For example some of my absolute favorite websites on the internet are owned by Aol, and have been for years…like Autoblog and Engadget.  There’s tons of others like Moviefone, TUAW, Asylum, Wallet Pop, Mapquest, AIM, TMZ (up until the split in December 2009) etc.  You can see the full list here.

The second, is that Aol is a different business than it was in the 90′s.  Their core business is no longer dialup as everybody tends to believe, but instead they are in the business of advertising and content generation…competing with companies like Yahoo! and MSN.  The thing to note though is that the majority of the revenue coming in right now, and what’s keeping the company alive, is from the ever-dwindling dial-up subscribers.  Believe it or not, there were 6 million when I left last month.  Do the math on how much cash a high-margin business brings in on 6 million people paying a monthly fee.  The downside to this is that the company valuation is based on this number, which has been and will continue to slide as dial-up subscribers cancel their service and move to free accounts.  The money will eventually dry up.  The web  part of the business right now is a loser.  That’s why Aol has this time now to replace that money with the new money.  It may not be comparable (and will come at the cost of much more downsizing), but it can be a profitable business.  Though, my suggestion is to wait it out if considering to purchase stock in the company.  The ISP and advertising revenue needs to level with each other first I believe.

Still Working For The Man

Now that I’ve left Aol, I’m still working for the man…me that is!  I wrote a post on this site back on December 10th of 2007 talking about launching a site named Carbon Fiber Gear.  It’s interesting looking back at this post, where I analyzed three possible revenue models for the site, and built it up originally as an experiment in affiliate marketing.  Looking at the site now, I’ve actually implemented all three revenue streams, but have a larger focus on blogging and eCommerce, and less so on affiliate marketing as I have a higher interest in maintaining my readers and customers.

So fast forward two years later, the business has come far enough along to be able to support me full-time (at least I hope so!).  It’s not just Carbon Fiber Gear, there are a few other projects, and they are all done under the dpitMedia umbrella.  It has especially been a crazy year, basically working full-time at Aol, then coming home and working until 4 in the morning sometimes on my personal projects.  Through a lot of dedication and work, I was able to see a real potential in the business, and started to think about doing it full-time.  It’s a scary decision.  I had a great a job, with great benefits, I just bought a house…that’s a lot to ponder.  If you think about it though, we’ll all almost never be in the perfect place to run a company full-time, there will always be something.

Anyway, I started to think about potentially leaving in early 2010, but wasn’t 100% sure.  Then with Aol spinning off of Time Warner, it came with an announcement that the company would have to layoff 2,500 employees, or about 30% of the workforce.  They did an interesting method though, they offered voluntary layoffs for those that wanted to leave before 2010 started, and then will do another round of involuntary layoffs in Q1 to get the numbers they need.  The interesting thing about it though was that they offered larger severance packages to those who took the voluntary layoff.  It was sort of a sign for me.  I had really though about leaving, and now I was going to be paid to leave.  I had to take it and see what I could do.

Over the past year, I haven’t paid myself anything through my business, so I had built up a fairly nice safety net of funds…then I had some personal savings, and now I have a few extra months of salary coming in from AOL for a severance package.  Plus, it’s not like I’m going from my salary to $0…my business already brings in money.

With the helpful advice of family and friends, I decided to take the package and do dpitMedia full-time.  Now I sit here in bed with my laptop typing this after my first full-day at work for myself.  The first day of the rest of my life.  If I can replace my company-life with the lifestyle of the work I do for my company, even just making the same amount of money, I will consider myself successful.  Not to say that I don’t work as much (in fact I would say I work much more), but I really don’t consider it work…I truly have a passion for what I’m doing, and I love it.  And that makes a world of a difference.  Not to mention I have a much higher chance of being very successful through my business than by working for a company.

As it was interesting looking back two years at a blog post I made on here about a little affiliate experiment I was doing, I hope it to be just as interesting looking back two years at this post about a little company I had started.

I’d like to thank my mom and aunt for the support they provided.  My mom especially always supports my decisions, regardless of how weary she is about it.  I’d also like to thank my amazing girlfriend Allison for putting up with my late nights, for all my crazy thoughts and ideas, for all the advice she gives, and for all of the help she provides.  Lastly, I’d like to thank my Dad for giving me somebody to prove that I will turn this company into something big.  One last thanks goes out to Adam McFarland, who’s blog about entrepreneurs, and his business have truly been inspirational and have lead to things that have really helped me out.  Little things like learning how his business setup their warehouse, or opening the doors to Stanford’s Entrepreneurial Thought Leaders podcasts have made bigger differences than I’m sure he realizes.

Server Was Potentially Comprimised – Steps To Take

Yesterday I got an e-mail from somebody saying that they had gone to my site and their anti-virus software popped up a message saying their was a trojan. I didn’t see anything on the site, so I asked them to send me a screenshot of the error. Once I saw the screenshot, I saw a call being made to a data.js file, which is not something that I would make a call for or uploaded in that location. I checked the site in IE, and sure enough there was the call. Somebody had been able to get it on the server and create that file. I had been compromised.

The first thing I did was rename the file and check through the rest of the site to ensure nothing had gone into affect or been messed with. I seemed to have gotten lucky here. I called my host to see what steps can be taken. They told me to delete the file and follow all steps here which was extremely helpful.

You can go through the above document if you run into the same issue, but I’ll give a high-level overview of the two most important things to do.

Change ALL Passwords

I went through and changed all of my passwords. Think of everything you have passwords for, and change them. Make sure to use strong passwords (mix of upper and lowercase, numbers, and symbols). I changed everything from my host dashboard password, to database passwords, to username passwords (ex: WordPress), etc. You have to assume that if your server was compromised, they have your passwords. Changing them will lock them out.

Back Everything Up

I created an archive of my entire web folder and databases. Make sure you always have backups. This is a given, but the event was an eye opener of a reminder.

I got lucky that nothing worse occurred and that somebody brought this to my attention in time. To help prevent this, change your passwords and backup your data often.

My Amazon Seller Central Rant

When I was first setting up an actual store for Carbon Fiber Gear, I went to Amazon to see what I could do about selling some of the unique products I was carrying on their catalog.  I found that they have a Seller Central program, where you pay $40/month and a tremendous 15% transaction fee (albeit – it does include the ~3% credit card transaction fees) to be able to sell your products on their store.

I thought it would be a great opportunity not only for me to get my products out there, but also for Amazon, since there was a decent number of products that weren’t on their store…and I have the mindset that Amazon wants to sell everything possible.

So I signed up to see how it would go.  While I wasn’t selling a ton of things through Amazon (in fact there were probably months I lost money), it was still ok enough for me to keep going.  My problem comes down to the fact that I ended up getting a few bad feedback, that were all promptly resolved…yet Amazon still decided to close my account down due to it.  Lets run through the what happened, and the 4 pieces of bad feedback I got out of the close to 100 transactions we made:

  1. Customer orders a wallet late on 12/13.  It ships on 12/16 via USPS Priority Mail.  Without contacting us, she leaves a 1 (1 is the worst and 5 is the best) feedback rating because the product didn’t arrive.  Two days after she leaves her feedback, the product arrives.  She does not change her feedback, and we provide a seller response stating what happened.
  2. Customer orders a iPhone case, it was damaged in shipping.  Customer leaves us a 1 rating feedback, and then contacts us for a resolution.  We of course offer to accept the product back for a replacement, unfortunately things sometimes get damaged in shipping, and it’s outside of our control.  The only thing we can do is offer the best customer service.  We never hear from customer, customer never changes feedback.
  3. Customer orders a license plate frame.  It also ended up being damaged in shipping, and without contacting us, leaves us bad feedback.  We found out that we accidentally sent a prototype version of the frame that was prone to the backing falling off…the production version completely resolved this issue.  Without ever contacting the customer, or them contacting us, we sent him two of the new frames, along with a carbon fiber keychain, and a personal note explaining the situation.  The customer gets in touch with us, thanks us for everything we did, was happy with the new product, and goes back to Amazon to modify his rating and feedback.  That update I’ve yet to see in Amazon’s system.
  4. Customer orders a carbon fiber money clip that ended up having a few minor imperfections in it from the manufacturer.  He leaves bad feedback, but does not contact us.  We get in touch with him, send him a replacement that we made sure was perfect, he is happy with the new product, and he updates his feedback and rating on Amazon.  We have not seen this get updated in Amazon’s system either.

Then there are 3 feedbacks that are perfect 5′s.  So out of close to 100 orders, we get 3 perfect ratings, 4 bad ratings – 2 of which were changed to perfects and 2 of which there was nothing else we could have done to try and fix the situation.  From my perspective we’ve offered the best possible customer service we could, we’ve sent feedback to the manufacturers we work with to ensure their products are perfect and they take the feedback we send them to heart.

Yet, even explaining each situation Amazon still closed our account…permanently…and forever, and we were told via e-mail…we were not given an opportunity to speak to anybody in person.  The response we got was:

Thank you for writing. We have considered your request for reinstatement and decided that your account will remain blocked.

A seller’s negative feedback, refunds and claims reflect a seller’s overall performance. High rates of these criteria generally indicate that buyers are experiencing unsatisfactory transactions.

Even though in reality everything we did was ok, and we didn’t happen to have the other 93 or so customers leave good feedback…so it looked like percentages of bad feedback was extremely high compared to good (4 to 3)…and it wasn’t even put into consideration that two of those had changed their feedback, even though I don’t see an update on Amazon’s side.

It just really sucks from our perspective, I was hoping to develop a great relationship with Amazon as we continued to grow…not only in sales, but also in the uniqueness of our products on their store.  I was extremely displeased with the sort of canned responses we were getting.  I mean we’re paying $40/month and we were giving them 15% of our sales, the least we could ask for is the opportunity to speak with a human.  I hope this isn’t an indication of where Amazon is moving as a company.

Anyways, that’s that, and so we close that chapter.  It’s also a reminder to not put all of your eggs in one basket, because you never know what can happen.  Running a business is a constant rollercoaster of ups and downs, unfortunately this was a big down!

True Internet Story: SmashMyViper.com

Wow, I sit here today on March 10th, 2009, realizing I’ve been holding myself back from writing this post since I started my blog a couple years ago.  I always wanted to write the full story of how the idea came about, what we actually did on our end to get things going, and what the outcome was.  So here’s my story.

How Did SmashMyViper Start?

It was 2005, and like most people, I came across a site named The Million Dollar Homepage.  A kid from England by the name of Alex Tew had started the site where he created a million pixel grid that was split up into 10,000 100×100 pixel boxes.  In each box he would sell an image advertisement for $100 (essentially $1 per pixel since there were 100 pixels in each square).  Sounds a bit stupid, but Alex got lucky and it caught on.  His site had a snowball effect, it started getting linked around, people/companies started buying advertising, then some press would cover it, and more people/companies would buy advertising.  This kept happening, and he actually sold all of the pixels on the page, yes a million dollars worth:

Million Dollar Homepage screenshot

One of my best friends (and roommate at the time) Jason and I had seen the site back when it had barely sold any of the million pixels…but right at the time where it was starting to catch on.  We’d go to it a couple times a day to see if made any more money, but it was really the only reason we were going back to the site.

So we sat and we thought, how can take a concept of this site, but make it better.  How can we make it so that people will actually want to come back to the site?  Million Dollar Homepage was cool, but it had barely any retention level.  We went through a ton of ideas, most of which were pretty stupid – but then one came out that started to make some sense.

Not too long before we were sitting there thinking, Jason had purchased a 93 RT/10 Dodge Viper.  While it was absolutely pristine, and had low miles (20,000), the car was actually a lot cheaper than most people would guess.  People that didn’t know cars thought it was basically a new car, he could say he paid $150,000 for it, and people didn’t hesitate to believe him.  What they didn’t know was that he paid around $30,000 for it.  Still a lot of money for a car from 1993, but in all relativeness, it’s one of the best bang for buck supercars you can buy.

So back to us thinking about what we can do…one of us threw out the idea of destroying the Viper.  I mean, people would see that, right?  We both knew we would.  The car is super rare, it’s a dream car to many, if somebody was willing to destroy one people would come see, and we thought it was crazy enough that the press would be dying to write about it.  That’s where the concept for SmashMyViper started, but I’d like to talk about the more detailed aspects of getting started and how the official plan came about.

The Official Plan

How It Would Work

We knew we had to destroy the Viper, but there were also 10,000 opportunities on the pixel grid…so we knew we couldn’t do it all at one time.  We started to think of some ideas of how we would could elongate the process of damaging the car, but still make it interesting to people.  We came up with a tiered system that worked like this:

  • $100 – 1 square of advertising – key the car
  • $400 – 4 squares of advertising – drill the car
  • $1,000 – 10 squares of advertising – throw an item of your choice under 5lbs, plus the advertiser gets a small decal on the car
  • $2,500 – 25 squares of advertising – hit the car with a Louisville Slugger baseball bat, plus the advertiser gets a bigger decal on the car
  • $5,000 – 50 squares of advertising – you name it (with our approval), plus the advertisers gets a bigger decal on the car

While MillionDollarHomepage strictly had the advertisements on the grid, I wanted to do something to benefit the advertisers a little more.  I made it so that when you hover over any of the ads (even if it was a small one), a bigger ad would show up.  This would allow even the guys spending $100 to potentially get some more clicks to their sites.

Hover over ad

On top of all these tiers, any advertiser could get one of our “SmashMyViper Girls” to do the damage for an extra $100.  We also planned to do a variety of picture galleries and videos to entice people to come back and check it out.  We ended up with the ultimate site for guys, we had hot chicks, hot cars, and destruction…what more could you want.

The Car

$30,000 was a high investment, especially for two guys straight out of college, renting a townhouse.  Yeah, we had some cool toys, but we’re not loaded.  So we started to think of ways we could do this while lower our risk.  We pitched the idea to a potential investors, which happened to be my ex-step father.  He liked the concept, so we also pitched it to his accountant, who also liked it.  So what were we asking for?

We wanted them to purchase a Viper of the same style, as well as pay for some miscellaneous expenses that we knew we would need to incur.  They agreed to this, and we went out on the search for the perfect car…and came up with a great solution.  We found a 94 RT/10 red Dodge Viper in Utah that had something like 130,000 miles on it.  While 130,000 miles isn’t uncommon for a vehicle from 1994, it’s extremely uncommon on a car like a Viper (in fact, I’ve still yet to see one with higher miles).  We picked the car up for about $22,000, and had it shipped to the house.  While it had high mileage, it looked pristine.  We had a local friend with an 02 GTS Viper who just replaced his aftermarket BBS wheels with another set, so we also picked the BBS wheels up from him for about $1,500.  Why do that you ask?  The OEM three-spoke wheels on a 1st generation Viper like we had just looked too outdated.  The rest of the car looks great, and we wanted most people to believe it was a lot more expensive than it was.

The Viper

Other Stuff Needed

We picked up a few other things that we needed, 2 DV video cameras, a nice tripod, microphone, some lighting, and a Louisville Slugger baseball bat.  We tried to do everything on a shoestring budget.  I built the website myself, so that definitely saved some money.  We also used ImageShack to host all of our pictures, we didn’t want to be stuck paying extravagant hosting fees if the site had blown up.  Another one of my best friends, Ryan, who goes by the name of “SplitVizionz” produced an official theme song for us that we would use in all of our videos.  We wanted to create a brand, something that people would remember.

We also scoured MySpace for local, attractive girls that would be willing to be in some of the videos for free in return for the recognition.  We got a few, and we were fortunate enough to have attractive girlfriends and a couple attractive friends that we could use.  All the sudden we had the lineup for the SmashMyViper girls.  I contacted a company out in Oregon that I had make shirts for us, as well as tank tops for the ladies.

I knew a few people in the custom car show circuit since I had a Nissan 350Z that was highly modified and in occasional car shows at the time, so I utilized the services of one of those contacts to create and install decals on both Vipers (the SmashMyViper Viper and Jason’s Viper).  Let’s face it, the Viper is an attention whore type of car, you drive it around and everybody looks…we planned to drive BOTH Viper’s around, and with decals on the car to promote this project…plus it’s just good branding for the videos and picture galleries we would have.  The cost for doing this was about $400:

SMV decal

Putting Everything Together

Making The Intro Video

Now that we had everything ready to go, we wanted to create a cool intro video to entice people to check out the site and come back for more.  Now keep in mind, while 2006 doesn’t seem like that long ago, it was right about the time before internet video was about to become huge.  I remember spending a lot of time trying to figure out where we were going to host these videos.  YouTube was extremely unreliable and slow at the time, so we ended up starting with a site named StreetFire.  For those that don’t know, StreetFire is a site that is dedicated to video’s about cars.

I had some experience in video editing previously, so luckily we were able to do everything in-house using Adobe Premeire.  We didn’t have too much of a plan going in, we just wanted some cool car shots and girls.  Few things that were discussed around the net or questions that we got all the time from the intro video…We didn’t actually get pulled over in the one scene with the cop behind us.  We had three state police guys that were our neighbors, they were all young and cool.  As long as we didn’t have any sort of identifying marks showing on the car, they let us use one of the cars for that scene.  The other question was about that third GTS Viper with white stripes that’s in the video.  We were actually filming on that stretch of road, and it randomly drove by, so of course he stopped by and we added it to the video.  What’s better than two Vipers?  Three!

I would have definitely made the video much different today than I did back then, but there’s a lot of stuff I would do differently today.  I’ll discuss more about that towards the end of this post.

The Site’s Done, Let’s Get This Going

We finished the site, intro video, and a few picture galleries and put everything together.  We didn’t want to start off with zero advertisers, so we actually went around to some friends and family to get them to purchase a few ads.  I remember on the forums there was a lot of discussion about Red Cross and Toys for Tots advertising on the site.  Those were actually some family that had nothing to advertise, so I chose for them.  Yes, they did actually pay the full price of $100 for each square, and we probably sold about four of those internally.

We didn’t want our story to just be, hey two guys destroying a Viper to get a million bucks.  We knew people would be like “he has a Viper, why should I give him money”.  So we fudged things a little bit.  Jason and I always had this one great idea for a bar, so we used that for our story (To our credit, had we brought in the full million, at the time we would have considered actually opening the bar).  We never told people that the actual Viper being destroyed was not Jason’s real car until this article.  Although we could have made the story better, we went with the concept of two entrepreneurs with an idea to start a bar, trying to raise the money by destroying Jason’s prized possession that he basically spent all of his money on.

We hired a company to write a press release for us (which you can read here), and then we used PRWeb to send out the release to the media.  I was personally hoping this would yield huge results, but we didn’t really see as much as I wanted.  The biggest thing was an article that the Washington Times did on us:

Me in the Washington Times

We posted about the site on a bunch of automotive forums, which helped get the word going, and it sort of snowballed from there.  I would say a big portion of the traffic we were getting was from chatter on forums, as well as the tons of people that were watching it on StreetFire.  Let me tell you, the automotive world absolutely hated the idea!  I really didn’t see that coming, but so many people talked so much trash about us, especially in the Viper community, because we were destroying such a rare car.  The fact is though, if we had been doing it something like a Honda Civic, nobody would care!  I guess it’s that double edged sword…but at the same time they say bad press is actually good press.

We also created a MySpace account and purchased some bot software that essentially went out and friend requested random people to whatever the limit per day was.  We used a hot picture of one of our SmashMyViper girls as the avatar, and that really helped attract a lot of people.  As Jeremy Schoemaker would tell you, use a hot girl in your avatar, and people will click to your site.  There was so many guys that would just respond to the friend requests trying to hit on the girl in the picture.  We’d play the part and do things like say ok if you go to SmashMyViper.com and tell me what you think.  It was pretty ridiculous.  Speaking of using girls to generate more views, at the time we were doing this, the video sites would use the exact halfway point of the video as a thumbnail.  We would insert one frame in the video with some hot model pic (one of our models) that had cleavage, so that would become our thumbnail…it worked well!

We also manually pitched the site to a bunch of bigger blogs and sites trying to get some coverage.  A lot of sites did bite, we were written about Autoblog, News.com, AdRants, and many more places.  What we really needed though was CNN type coverage, and that just didn’t happen.

Another thing I did was call up some popular talk radio stations that were considered “fun” and just tried to tell them about it.  For example I was on Elliot In The Morning, I just called up on my way to work, got on the air told the hosts “hey, guess what?  I’m destroying a Dodge Viper”.  That got them intrigued and I get a few minutes of free air time talking about the site.  I did that with a few radio shows, some went well, others didn’t.  We had a great connection that got us an in-studio interview on the Kirk, Mark, and Spiegel show on 98 Rock in Baltimore.  That was an interesting experience doing the show live, we took video of the interview that you can check out here.  We had a couple radio shows that we got on from the site just becoming viral, one of the bigger ones was Motor Trend Radio on Sirius, which you can listen to here.  If you listen to all of the interviews I did, I definitely started out pretty bad, and got much better speaking over time…it was a great learning experience.  For example this was one of the later ones on the Jay Wulff show, where the hosts even mentioned that we were good interviewers :)

Things Are Launched, Time To Do Some Damage

As traffic was pouring into the site we starting to get some advertisers in.  Here it was we thought, getting the first advertisers was the hardest part, and everything would just snowball from there.  After compiling a few advertisers together that all purchased the $100 key mark package, we went out and filmed the first damage video.  We wanted to make it somewhat Jackass like, so we did things like dress up in a Santa costume (it was around Christmas) to make it funnier.  We went out to a local shopping center parking lot and had real people do the damage to the car.  We did this because we wanted to film the great reactions from people, and we wanted to cause a scene.  People would drive by and see two Vipers in the back of the lot (that say SmashMyViper.com on them) with cameras, and a bunch of people – it was a great way to promote locally.  Using real people (like a kid) allowed viewers to really believe we weren’t just putting on a scam.  We really were keying the car up, all the damage shown was real!

We got some great feedback from the first damage video (like the fact that it was way too long), and I think each subsequent one got better and better.    The damage started to get more interesting too, for example some advertisers had us make the 6″ keymark in the shape of something.  The Burto and Dubs radio show had us key “BD” in the front bumper.  Finally by the fourth damage video, we had our first advertiser purchase a drilling of the car, along with one of our girls doing it.

The Viper’s hood is made of fiberglass, drilling through it was an interesting experience:

Drill hole in Viper hood

Then things got really interesting.  Shaun Carter, a young entrepreneur came to us with an idea to promote his site InstantCredit.CC.  He didn’t want to do any real damage to the car, but he wanted to do something wild, so we came up with the idea of having our models cover the car in peanut butter and jelly, then feathers.  Shaun ended up paying about $2,500 for the package, but it was the most unique thing as of yet, and we hoped it would spark the ideas of other advertisers.  We found a big bag of feathers online, and got tons of PB&J at the local BJ’s, it turned out to be a great video:

Real peanut butter, thickly covered on the Viper:

Peanut butter on Viper

Here’s a couple of the girls right before we added feathers to the car…I couldn’t photoshop these pictures if I wanted to:

Here we’re adding feathers to the car, notice us in the background with cameras.  People driving by would stop and watch to see what the hell we were doing:

Adding feathers to the Viper

Here I am cleaning up the huge mess we made, good thing feathers are all-natural:

Cleaning up feathers

Shaun will tell you, we drove a ton of traffic to his site, and I don’t want to put words in his mouth but I’m sure he’d say it was worth the investment.  We loved it because it didn’t really do any real damage to the car (although we had to buy a power sprayer and took about 5 straight hours to get most of the car cleaned up)!

The End Of The Road

Unfortunately things started to die down a bit around that time, and after a few months we realized that our chances were over.  We had brought in about $8,000-$9,000 total, nowhere near the $1m goal.  We took some of that money and hired a PR firm to see if they could try and get things kick started again.  That turned out to be a huge waste of money.  We took the rest of the money and had the Viper fixed, since all of the damage was done to mainly three panels of the car and the glove box, we were able to bring it back to new for under $2,000.  We then sold all of the assets to the business that were invested, including the car.  The car was actually sold for more money than we had paid for it!  We also sold the website (for cheap, just $300), paid our investors back 100% of their investment, plus we all made a little extra money after all was said and done.

While we never brought in the million dollars, I would do everything all over again if I could.  I was able to drive a Viper for free for about six months, have photoshoots with some hot girls, had an amazing experience dealing with press and just increasing my knowledge on marketing, etc.  We met a lot of new people and made a lot of new friends.  We’d go out to bars with our SmashMyViper shirts on, and people would come up to us because they recognized us from the site.  I still meet people to this day that remember the site, and it’s always a great story to discuss.  We never spent a penny of our own money, and we fortunately didn’t lose any money for our investors.  My personal opinion is that it was a huge success.

In Retrospect

When I look back at everything, there are a lot of things I would have differently.  I think part of the timing was off when we did everything, it was Winter, we’d drive around freezing, we originally wanted to have girls in bikinis, online video wasn’t that big yet…I could go on and on.

Since then I’ve learned many new things, had much more business experience, and have a lot more connections.  I think if I could re-do the whole thing today, I could make it successful.  There’s a sweet 456 GTA Ferrari for about $40,000 for sale on eBay, any investors want to partner up and try again? :) SmashMyFerrari.com?