When Trevor Chapman was a college student without money (about 13 years ago), he took whatever job he could find, ending up selling pest control as a door-to-door salesman. His primary goal was to make more money to support himself through college, but he eventually chose to launch a sales operation on his own. His company worked to install solar panels on homes and businesses and expanded fast through three different states. However, after about two years, he realized that something was missing.
He knew instantly that it wasn’t how much time he spent at the office that was the trouble. He finally came to terms with the fact that he was in his 30s and didn’t want to wait for his kids to move out before enjoying his life and recognizing his true potential.
The answer he found was to use $200 to launch an online store called LDSman.com, which offers many different items from China, such as charcoal toothpaste, fidget spinners, Kevlar pants, and inflatable lounge chairs, among others.
In just three months, Chapmen stopped putting in 12-hour shifts at the solar company and spent about one and a half hours on his site each week. In that short space of time, he hit over $1 million in sales. In 2018, Chapman chose to sell LDSman and other e-commerce companies to another holding company, which was worth over $10 million. His experience led him to believe that e-commerce was the best opportunity for people who want to make more money and have more time to enjoy it.
How it Started
Because Chapman was unhappy with his solar panel business and couldn’t see any way to change himself from there, he was feeling frustrated. He came across a particular quote from Warren Buffett that said the goal is to find ways to sleep while earning money, so you don’t work yourself to death.
He determined that the best way for him to make more passive income was by utilizing e-commerce. In 2015, global online sales for retail grew to $2.3 trillion from $1.9 trillion, according to one Ecommerce Foundation report from 2016.
Before Chapman truly considered leaving his job selling solar panels, he wanted to make sure he could sell items online and make a profit. He claims that it does require work like other jobs and you can do it along with your full-time job until you’re comfortable quitting.
Chapman only spent a few hours each night working on his project, and his start-up fees were only around $200. He purchased a domain name that only cost $2.99 a year, set up his Shopify account using a trial run for $14, and spent most of his money (roughly $100 each day) using advertising on Facebook. His website, LDSman.com, went live in November of 2016.
On his first day, he lost money because he realized quickly he was selling the wrong products. He wanted to sell Mormon artwork, which only lasted about 10 hours. Chapman realized he wasn’t driving enough traffic because his product of choice wasn’t in high demand.
He knew he had to refocus, so Chapman considered a lesson he learned selling solar panels: When you’re selling door-to-door, your product has to be interesting enough for people to open the door and let you inside. The same thing applied to online sales – you have to be intriguing so that people are pulled away from their friends to check out your product.
He decided to do away with Mormon art and focus on inflatable lounge chairs, which are selling virally (or were at the time). He chose to source from Chinese manufacturers from Aliexpress and Alibaba, purchasing products for about $5 and reselling them for about $60. He didn’t want to risk having a ton of inventory he couldn’t push, so he set up an arrangement with various suppliers using WeChat, a popular messaging service for Chinese. Therefore, his orders could ship from their warehouse to the customer (called drop shipping).
Drop shipping included other benefits, as well. Chapman also worked with ePacket, a program that arranges for the USPS and foreign postal workers to work together, he found it cheaper to ship his products from China. While there was some lag time involved, it didn’t seem to bother customers.
Made Money While Sleeping
Orders continued streaming in while he slept, which is when Chapman realized he was onto something great. He made some money on his second day, and it never stopped. After just two weeks, he had made $10,000 in one day for the first time.
Chapman took that revenue and outsourced his time-consuming customer service to freelances from the Philippines. He paid each person $700 a month (which is low by the US standards, but higher than what families in the Philippines earn). He also raised his advertising budget on Facebook, putting more money into ads that attracted more business.
After about two months, the difficulties of drop shipping caught up with Chapman. He paid $80,000 to a vendor in Chine to ship and supply his inflatable chairs, but that vendor swapped out his product for a cheaper one. Customers started complaining, which required LDSman to replace almost 1,500 products. Even though it was a drawback, Chapman bounced back and still managed to get a 48 percent profit margin that month.
Like any entrepreneur, Chapman turned his setback into an excellent opportunity by buying a warehouse in Salt Lake City and hiring a five-person staff for fulfillment. That move allowed LDSman to soar to the next level, which isn’t for everyone since it takes a lot of commitment and money for investing. Once the warehouse was in place, he quit the solar panel company for good, spending about an hour each week updating Facebook ads and working on his website.
Just after 92 days, the website brought in its first $1 million. Shortly thereafter, Clarke Capital, a Utah-based VC company, called on him, interested in buying Chapman’s e-commerce business. Chapman initially turned down their offer in 2017. In 2018, however, he agreed to sell his logistics company and LDSman to outside investors. The deal was worth over $10 million and included his Academy of Arbitrage, an educational site he founded to help others start e-commerce businesses.
Even Chapman’s mother built a site after following his lessons, even though she didn’t know much about e-commerce. With hard work and perseverance, you can be as powerful (or more) as Target and do it all online.