This page may contain links from our sponsors. Here’s how we make money.
While some entrepreneurs have always known they want to run a business, others, like Jon Elder, turn to entrepreneurship after experiencing frustrations in a more traditional career.
Jon started his Amazon-based e-commerce business in 2014 after realizing he wanted to grow his income faster than what was possible with his 9-to-5 job. And as you’ll see from Jon’s story, he accomplished exactly what he set out to do.
From Construction Science to E-Commerce
Jon Elder graduated from the University of Washington in 2010 with a degree in Construction Science. After graduation, he landed a job in his field and began working on large projects and managing teams. Jon assumed this would be a long-term career, but his view changed pretty quickly.
It wasn’t long before Jon realized the income growth in his career might not happen as fast as he’d like. He wasn’t content with the typical 4-5% annual raise. He also felt like he needed more money to support his growing family. “My wife was pregnant,” Jon says, “and I knew a tsunami of expenses was headed my way.”
Jon’s desire for something more led him to research different business opportunities. One option he kept seeing over and over again was selling on Amazon. So in 2014, Jon took the plunge, invested about $5,000, and, along with a business partner, launched his first brand selling golf-related products.
Golf was one of Jon’s hobbies, plus he thought he could innovate and create products better than the leaders in the market at the time.
Unlike many private-label Amazon sellers who launch products quickly without much thought, Jon was meticulous with his product’s design and functionality. He analyzed competing products and focused on details that came up repeatedly in negative customer reviews. Using that info, he sketched the improved product he wanted to make and approached manufacturers about creating it.
Jon’s careful approach helped him create a product that was truly better than the competition, and his attention to detail paid off. His product became a #1 best seller, and Jon repeated the process with other products and variations. Before he knew it, he had a seven-figure business.
Early on, Jon reinvested as much money as he could, which was necessary to grow the business and build the product line. He also launched additional brands and applied the same approach in various product categories.
Eventually, Jon had five successful brands in his Amazon seller account, including an outdoor kid’s brand and a leather goods brand.
Although there were benefits to having five brands, things weren’t always easy. According to Jon, “It was always a constant battle to balance growth levers across my five brands. To be frank, it was a daily struggle to decide where to invest capital for maximum ROI.”
He also expanded to sell on eBay, social media, and his own website.
Jon continued working his full-time job and grew his online business as a side hustle until 2016, when he eventually left his job to focus on the business.
After leaving his job, Jon paid himself the same salary he had been making at the job, and he continued to reinvest the rest to grow the business. As the business grew, he gradually scaled up the money he took out.
Jon used an organic product launch approach rather than the popular launch services that many other Amazon sellers used. His approach involved significant investment in pay-per-click (PPC) ads, so advertising was his biggest expense.
Jon’s Keys to Success
Jon’s story includes a few important keys to success that can serve as inspiration for e-commerce business owners and entrepreneurs.
1. Goal Setting
Jon had a whiteboard in his office from the time he started the business. Written on that whiteboard was his exit goal, the amount of money he wanted to eventually sell the business for.
Speaking about the goal on the whiteboard, Jon said, “It drove literally every business decision. If it did not help me get to the goal, it was ignored. It helped me run things simply and to stay lean. “
2. Focusing on Product Variations
While many brands focus on adding more products, Jon preferred to focus on adding variations of existing products first. He believes there’s a “snowball effect” with Amazon products when you add variations (colors, sizes, etc.) and related accessories.
3. Product Innovation
When Jon evaluated product ideas, he wasn’t looking to create something just like a competitor’s product. He dedicated a great deal of effort to innovating and creating a product that truly deserved to be a bestseller.
He also worked to make his products and brands defensible through patents and design patents, which Jon refers to as “gold on paper.”
Speaking about design patents, Jon said, “They are highly effective tools for protecting your unique designs on Amazon. Amazon takes action, and they take it fast. It’s not uncommon to see your competitors be wiped off the platform overnight.”
4. Careful Selection of Manufacturers
While most private-label sellers go to Alibaba and find the cheapest manufacturer, Jon worked to find the highest-quality manufacturers who could deliver the level of excellence he wanted. He found well-established manufacturers that worked with major brands, and he tested several before choosing one.
Jon would get a sample from three different manufacturers for each product he launched. He tested the samples himself and also asked friends and family to give feedback.
He also tested the manufacturers to see how flexible they were. Those who said “yes” to his requests and were willing to accommodate him ultimately got his business.
Although Jon did all of this himself, he now recommends using a sourcing agent to save time.
5. Third-Party Lending
Managing cash flow is a challenge for growing Amazon sellers. Like many other growing Amazon FBA businesses, Jon borrowed money to support faster expansion, and he believes it was one of the keys to growth.
A Seven-Figure Exit
After running the business for five years and reaching $6.5 million in annual sales, Jon decided it was time to exit. He’d reached his goal and also felt the need to separate from his business partner. As Jon says, “It was God’s timing.”
Website Closers brokered the deal, and after a six-month process, the sale was finalized in late 2019 for a mid-seven-figure sum.
Having the five different brands in the same seller account worked well for finding an interested buyer and easily transitioning. Jon says, “This was super efficient from a tax perspective and providing the financial documents to the buyer’s bank.”
Following the sale of the business, Jon took a year off to relax and spend time with family. Today, Jon runs Black Label Advisor, where he offers consulting to Amazon sellers.
As Jon proved, being a successful online entrepreneur isn’t easy, but the payoff can be life-changing.
Interested in being featured on Flip My Site? We’re always looking for entrepreneurs with great stories. If you’ve bought or sold a website or online business, please contact us about being featured.