Success Story – Geniusmods 2017-07-31T15:44:54+00:00

Hitting “Reset” on an Amazon Business

How a Lifelong Online Seller Saved His Once Volatile Business

Background

As a kid, Tim Ervin had a business savvy sense of mind that many adult entrepreneurs would envy. While his classmates and friends were making small profits on lemonade stands and paper routes, Tim was flipping Pokemon cards online for upwards of $2,000 a year. It’s worth mentioning he was just nine years old at the time.

It was 1999 and Tim would use his allowance to buy Pokemon cards in “booster box” sets of 10-50 cards, re-sell them individually on Yahoo’s now defunct auction website, and reinvest his profits in buying (then selling) more cards. In 2004, he pivoted to flipping Pokemon video games that he had learned to recode so everything was unlocked for his buyers — a feature that generated nearly $90,000 a year in sales. In 2008, he pivoted once more when he noticed that his fellow gamers wanted something better than the basic black controllers that came with their video game consoles.

Profitability From Selling Pokemon Cards to Video Game Controllers

Tim launched Geniusmods in 2008, which specializes in customized video game controllers. He was selling his controllers on eBay and through his own website, but he wasn’t gaining the exposure he needed. So he turned to Amazon — and business took off. But cash flow gaps made it difficult to sustain growth and invest in more inventory.

Like many businesses, Geniusmods gets the bulk of its revenue (50%, in fact) during the holidays, and to prepare for that seasonal demand they need to start producing their inventory over the summer. But even though he was generating over $2 million in revenue, his cash flow was tight — and because such a significant portion of his sales were coming in during only two months out of the year, he couldn’t get traditional funding.

“I enrolled in a matter of a day or two, and saw benefits almost immediately.”
—Tim Ervin, Owner, Geniusmods

The Challenge

So he turned to credit cards and a short-term high-interest loan, but his credit cards only let him spend so much and the loan payments were eating at his profits. On top of that, he had added labor costs after mistakes in production and they were taking on too many orders than they could handle — this in turn led to a lot of upset customers, refunds and lost profits. “It was a mess,” he recalls. So much so that he put everything on hold in early 2014 to reevaluate his strategy and figure out how to make his business more viable.

He took a nearly three year hiatus and in late 2016 relaunched Geniusmods with a fresh perspective: “It wasn’t really the revenue that counted, it was more about profitability, reducing costs and increasing selling price. We’re purposefully doing lower volumes now to make sure we get things right. It’s less stressful and reduces some of the logistics issues that previously got us into trouble, like inventory management and labor.”

Starting small with the Geniusmods reboot has made it easier for Tim to manage his business and really see where his priorities are, including (but not limited to) having reliable cash flow. After all, limited cash flow is a large part of what led to his hiatus in the first place. As Tim says, “Cash flow is the biggest challenge and I don’t think any business has it figured out.”

His ultimate goal was to find the cash to get through each day so he could make more sales and use his profits to invest in areas like automation to, for example, mass produce his controllers instead of making each by hand.

Limited Cash Flow – Using Credit Cards and a Loan for Inventory

“Payability is definitely the way to go. It beats any other type of conventional lending that’s out there. You’re getting access to your funds and it’s really not cutting into your bottom line.”

The Result

As luck would have it, Tim saw an ad for Payability in Amazon Seller Central and, despite thinking the offer was too good to be true, in the beginning of 2017 he decided to explore further. “I enrolled in a matter of a day or two, and saw benefits almost immediately.”

Payability to the Rescue

He’s now able to purchase inventory more frequently, buying 2-3 times a week instead of the usual once every week or two. Sales have also increased and he’s been able to meet the new demand. Not only that, he’s far less stressed overall. “I no longer have to worry about spending my time evaluating cash flow and deciding how to spend what little there was. I can focus on the business now instead of just the cash flow problems that go with it.”

Working with Payability has allowed Tim to breathe new life into Geniusmods and overall run a smarter, more profitable (and soon, more automated!) business. Safe to say, Tim no longer thinks it’s too good to be true.

“Payability is definitely the way to go. It beats any other type of conventional lending that’s out there. You’re getting access to your funds and it’s really not cutting into your bottom line.”

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