Starting an e-commerce business can be a daunting task. From finding the right niche to selecting the right suppliers and partners, there are many variables that can make or break the success of a business. However, with the right approach and mindset, building a successful e-commerce business is not only possible but can also be highly rewarding. In this edition of ARTicles, we sit down with John Murphy, the founder of eBike Generation, to learn about his journey of building a profitable e-commerce business in a highly competitive niche. John shares his insights on the key strategies that helped him succeed, the challenges he faced, and the lessons he learned along the way.
Chris: Hey John, thanks for joining us today! We're excited to learn more about your journey in building a successful e-commerce business. As our listeners are aspiring entrepreneurs and business owners, your insights and experiences will be incredibly valuable to them. So, let's dive right in and start with the story behind your company. Could you tell us about its history, mission, and the values you uphold?
John: Sure. I got into e-commerce back in 2017 while I was working for General Electric in finance, which was draining my enthusiasm for life. I wanted to find a way to work independently. My wife has a successful career, and every few years, she would receive an incredible opportunity that required relocating. Each time we moved, I had to search for a new job in the new city. I wanted to find something I could do regardless of where we lived. Around that time, I read Tim Ferriss's "The 4 Hour Workweek" and became interested in drop shipping and e-commerce in general. In 2017, I settled on e-bikes as my focus.
Around the same time, many people had the same idea, recognizing e-bikes as an up-and-coming product with fast growth in the US. After about a year, I decided to narrow my focus instead of trying to sell every type of e-bike to every demographic. I chose to cater specifically to hunters. This decision made sense for me, as I was running the business on my own during the evenings while living in Italy and serving US customers. By selling electric hunting bikes to hunters for $5,000, I could make the same profit as selling four or five entry-level e-bikes. However, selling more e-bikes would also mean more work, customers, and customer service.
A few strategic decisions led me to focus on the hunting category, and over time, my website evolved to resemble a hunting site more than an e-bike store. This change allowed me to tailor my messaging, email marketing, and overall communication to address hunters' specific needs, rather than promoting generic e-bikes to a broader audience.
Chris: For our next question, when you decided to start focusing on e-bikes, what steps did you take to turn it into a viable product? Also, what inspired you to launch your company and specifically focus on the hunting niche?
John: I consumed a lot of YouTube videos to learn the ropes. Initially, I tried low-ticket drop shipping, finding products on AliExpress to sell in the US. However, after a few weeks, I realized that I was spending money on advertising and would need to sell a lot of those items, making it an unsustainable business model. That led me to explore high-ticket drop shipping, which was a more legitimate business model. I set up an S-corp in Delaware and began contacting suppliers.
Many resources on YouTube helped me identify a niche and provided specific criteria to consider. Some of these criteria included the availability of multiple domestic suppliers, market saturation, customer service requirements, product complexity, and shipping costs. The more criteria a niche met, the more likely it would be successful. E-bikes met some of these criteria, so I chose it as my focus.
Additionally, e-bikes are popular in Europe, with over 50% of all bicycles sold being electric bikes. I knew this trend would eventually become prevalent in the US as well, making e-bikes a promising niche.
Chris: After deciding to focus on e-bikes for hunters, did you face any challenges executing your plan? How did you find partners like suppliers and other business partners, and how did you select them?
John: Once I identified e-bikes as the industry I wanted to enter, I researched all the e-bike brands in the US. I began reaching out to them, primarily through phone calls. My research helped me understand how many competitors were already dropshipping e-bikes and which brands they were working with. This information allowed me to target brands already open to drop shipping.
I contacted these brands, explaining that I had an e-bike store and wanted to sell their products across the US. I shared my plans and requested to become a dealer. If they agreed, we would sign a contract, and I would list their bikes on my store. The business model was simple: I would sell the bikes, capture payment, and then pay the supplier the wholesale price. The supplier would ship the bikes directly to my customers.
This approach meant I didn't have to buy any inventory upfront, hold stock, or maintain a warehouse. I actually received payment before incurring any expenses, which was an advantage.
Chris: That makes sense. Have there been any people who've been particularly helpful in getting you to where you are today? You've been doing this for six years now, right?
John: Yes, six years. I had a mentor early on, Cory Eckert, who was instrumental in my success. We started with a paid coach-client relationship, eventually became friends, and still keep in touch today. He had already experienced the challenges I was facing, having been involved in high-ticket drop shipping for a long time before he started coaching. I identified him as someone knowledgeable and willing to pay for his time and expertise.
Chris: John, what's your best-selling product right now? Generally speaking, what do you think sets your company apart from the competition?
John: Our best-selling product is a bike called the Mule. It has been the top-selling electric hunting bike for probably three years in a row. I have a strong relationship with the supplier, who is based in Utah. They are hunters themselves, so they understand the needs of their customers. Their tagline is "E-bikes built for hunters by hunters," and they build high-quality bikes.
Chris: What sets your company apart from your competitors?
John: Two things set us apart. First, when I narrowed down my niche to focus on hunters, it polarized my customer base. I was able to speak directly to their needs, and this helped me build a strong and loyal customer base. For example, my abandoned cart sequence used to be very generic, but after I focused on hunters, I was able to speak to their specific needs and provide targeted messaging. This worked much better than a generic approach.
Secondly, in 2019, both Google and Facebook suspended my ads, causing my traffic to plummet. This setback prompted me to learn more about SEO, and I became an expert on generating organic traffic. I even teach an SEO course for e-commerce now. Thanks to my SEO efforts, my revenue increased from $300K to over $3 million in just one year, all from organic traffic.
Chris: So all your traffic came from SEO?
John: Yes, since I couldn't run ads, I focused on writing content that would generate traffic. I engaged in hunting forums to get backlinks and build a reputation as an e-bike expert for hunters. Now, even though the e-commerce business has been tough for everyone, especially in outdoor niches, I don't have to run ads. My competitors do, and it's getting more expensive for them. So I have a strong advantage. Even if I don't make any sales for a month, I'll still be fine.
Chris: And you have better margins, right? Because you don't need to spend a lot of money on ads?
John: Yes, I can hit profitability early in the month with just a few sales. Meanwhile, my competitors spend $10,000 a month on ads because it's their only source of traffic. They have to knock it out of the park every month, or they run into trouble. I have a good advantage. Ebikes typically have notoriously low margins, around 20%. If you spend 10% of that on ads, you have to make those ads work. But I don't, so it's a good advantage for me.
Chris: John, you've mentioned that focusing on a specific niche and excelling in SEO were key strategies that led to the success of your e-commerce business. Are there any other strategies or factors that you believe contributed to your revenue growth from $300K to $3M?
John: Yes, there is another factor that played a significant role in my success. It's related to SEO but reinforces all of the work of getting organic traffic. I realized that even if I occupied the first and second spots on Google's search results, there were still eight spots left, and some of those were going to affiliate marketers. Affiliate marketers have an excellent business model. They make sales by getting to page one, but they don't have to deal with customer service because they refer readers to Amazon and earn commissions that way.
So I decided early on to build an affiliate program and recruit all of the people ranking on page one and two organically like me. I paid them a commission if they made a referral, and over a few years, I've recruited some great affiliates. Now, if you search for "best electric bike for hunters," I usually occupy two spots on page one, and the other spots are filled with affiliate blogs that are in my program. So I indirectly occupy around 50% of the page one on Google, even though I'm only allowed to hold two spots. This strategy pushes all of my competitors off page one, and I kind of monopolize it.
When I launched my eCommerce SEO course, I revealed this strategy, along with all my other techniques, as I'm known as the SEO guy in eCommerce circles.
Chris: Next, could you share with us what you're most proud of accomplishing in your business so far? Additionally, could you tell us about the biggest risk you've taken in the past several years?
John: I'm proud of niching down and focusing on electric hunting bikes. It was a big risk because at the time, there was zero search volume for the term "electric hunting bike" and even now, it only has around 2,000 searches a month. But it paid off, and I'm glad I took the risk. It allowed me to stand out in a crowded market and establish myself as the go-to source for electric hunting bikes.
As for the biggest risk, it was niching down. It was scary to deliberately block out most of my potential customer base, but it was a risk I was willing to take. I was afraid that it would blow up in my face, but it paid off well. I've told other e-commerce stores to niche down, but most are too scared to do it.
Chris: That sounds amazing, John. So what do you love most about running your own business and what keeps you motivated?
John: Well, what I love most about running my own business is the freedom it provides. I used to work in a job that consumed all of my time and left me with no life outside of work. But now I can work on my own terms, and I have the flexibility to take a day off if I want. Plus, I get to live in Italy, completely off the grid, surrounded by olive trees. It's a lifestyle I could never have achieved if I was still working for someone else.
As for motivation, I just love what I do. I get to sell electric bikes, which is something I'm passionate about, and I get to do it my way. And because of the success I've had, I'm able to help others achieve their own success. Whether it's coaching other e-commerce store owners or just talking to people who are interested in what I'm doing, it's a great feeling to be able to share what I've learned and help others along the way. So, overall, I love the freedom and flexibility of running my own business, and the fact that I'm doing something I'm passionate about keeps me motivated.
Chris: Can you share any exciting upcoming projects or initiatives for your company, and what are your goals for the next five years?
John: Currently, I don't have any huge exciting news to share because last year, the business was generating an average of 3 million in revenue annually, and it was running on autopilot, so I wasn't paying much attention to it. However, I started chasing Shiny Object Syndrome and launched a few new businesses that were all related to e-commerce, but none of them were stores. After realizing that sales and profits were not where they used to be, I shut down all those businesses and refocused on the ebike store.
My plan is to get the store's profits up and eventually exit by selling it, maybe two years from now, after having a good trailing twelve months of trending profits. Once I'm financially secure, I'll continue to help others grow their ecommerce businesses through coaching and consulting, but I'll also likely start a new store in a niche that is less seasonal and more evergreen. I have a few ideas in mind, and I'll use everything I've learned from the ebike store to build up the new one.
Chris: Makes a lot of sense. Okay, awesome. Finally, the last question. What advice would you give to someone starting their own e-commerce store or brand?
John: I've seen a lot of people getting into it for the wrong reasons, and then once they realize it's really hard work, they quit because a lot of the dropshipping courses online sell you this get-rich-quick idea. They make it seem very hands-off and easy to make money in just 30 days. I would remind people that it's a steep learning curve in the beginning, but it gets easier over time and can be completely life-changing. You can make tens of thousands of dollars a month in profit, relatively passively, after a few years of hard work.
There's a saying that we overestimate what we can get done in a short time, and we underestimate what we can get done in a long time. That's true for e-commerce. In the beginning, the average person doesn't have all the marketing, internet, and platform skills required. We have to wear a lot of hats and learn a lot of skills. Even if the first store doesn't work, the people that try it always come away with very applicable skills. I know lots of people that didn't stay in e-commerce, but now they have a PPC agency, an SEO agency, or they build Shopify stores for other people because the skills we learn are highly sellable.
My advice would be to get through the initial phase, where it's an actual hard business in the beginning, and not a get-rich-quick scheme. But it is a get-rich scheme if you put in the work.
Chris: John, thank you so much for taking the time to share your insights and experiences with us today. Your story is truly inspiring and a great example of how hard work, dedication, and perseverance can pay off in building a successful e-commerce business. I'm sure our audience will find your advice invaluable as they embark on their own entrepreneurial journeys. It was a pleasure speaking with you, and we wish you continued success in your business endeavors.
Key Takeaways
John's advice to get through the initial phase and persevere in building an e-commerce business is spot on. As with any entrepreneurial endeavor, success takes time, effort, and a willingness to learn and adapt. But with the right mindset and approach, the rewards can be significant.
John's story is a testament to the power of perseverance, focus, and the right mindset when it comes to building a successful e-commerce business. By focusing on a specific niche, building strong relationships with suppliers, and becoming an expert in SEO, John was able to turn his passion for e-bikes into a thriving business generating millions of dollars in annual revenue.
If you're looking to start an e-commerce business, John's story is a great example of how to approach it. Take the time to research your market, identify the right niche, and build strong relationships with your suppliers and partners. By doing so, you can set yourself up for success and build a business that not only generates revenue but also brings you joy and fulfillment. So, go ahead and take that first step towards building your dream e-commerce business today!
