How to Annoy Friends and Lose Money!
I’d always been an aspiring entrepreneur. I remember as a kid taking the fresh green grass clippings, soaking them in water, putting the green fluid in cups, and trying to sell it to passers-by on our dead-end street. You laugh, but how much do people pay at the gym for a shot of wheatgrass juice? We’d dig the clayiest soil from tan streaks in the bank of the creek and form it into pots and jars, left to bake at the top of the driveway in the summer sun, and then try to sell those through the lemonade stand model as well.
After college, I went to Mexico and bought a bunch of pottery (from a store, at retail price) and had it shipped back. We took pictures and put them up on the web. But this was before Google, before shopping carts, and before PayPal. Yet again I’d built a store no one would drive by. I clearly needed to learn a thing or two about sales.
When I was approached about a career teaching and training entrepreneurs, it sounded great. I was a bit alarmed when I found out it was in the cosmetics industry. I’m not a super girly girl. But who cares what the product was! I was going to have freedom and flexibility to work my own hours. And the promotion scheme was transparent. Meet the criteria, get promoted. It was perfect.
I quickly rose to the top 2% of the company. I earned the use of two different cars: first a Red Pontiac Grand Am, then a silver Pontiac Grand Prix.
And I was broke. Oh, Lordy, was I broke. The leaders of our group kept urging us to fake it until I made it. Instead of contributing to the household as I had been, we were now fully dependent upon my husband’s income. Any time my team was about to miss its target, I’d whip out the credit card and buy more inventory. It would sell some day and I’d get my money back, right?
Here’s the problem with buying inventory on a credit card. Let’s say a lipstick cost $12. That’s $6 to pay for the wholesale cost to the credit card, and then the other $6 should be set aside to replace it so you have a full inventory. You’d have to turn over your entire inventory to get a fully paid for inventory that you could then take profits from.
I say, beware of all enterprises that require new clothes, and not rather a new wearer of clothes. – Henry David Thoreau
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