When a $15k Mistake Turns Into a $1M Mistake (A Cautionary Tale)
Let me tell you a little story. I recently talked to a guy in the UK who has a pet supplies brand on Amazon. He does about $62,000 per month in gross revenue on Amazon. And he does that without advertising.
He wants to grow the business to $200k/month so he can spend a little less time working and get into a better balance with his family.
When I asked him why he’s not doing any advertising, he said it was because two years ago he hired an agency to run some Google Ads for him and it was a disaster that cost him about $15,000. He had such a bad taste in his mouth, he stopped advertising altogether.
Sooooo, here’s where things get a little crazy. I can say for certain that his brand should be doing at least $100k/month. But he’s not—he’s doing $62k. So every month, he’s leaving ~$40k on the table. Why? Because some bozo that runs Google Ads wasted his money.
Now look, I don’t like losing money any more than the next guy/gal. But get in a room full of business owners and ask for a show of hands on who has been burned by a bad agency or bad employee. Guaranteed the room will look like this:
It’s just part of doing business.
This guy basically had two choices:
Option A: Lick his wounds, feel sorry about losing $15k, let it be a lesson that makes him a little wiser & smarter next go-round, and move on.
-or-
Option B: Feel so burned by the $15k loss that he decides not to advertise, even on other channels. Because of that, he leaves $40k per month on the table for two years. Now let’s do the math on how much this mistake actually cost him.
$15,000 + ($40,000*24)= $975,000
He took Option B, and that $15k mistake is now a $975k mistake (given it another month and it’ll be a cool $1M.)
Most of us logical folks would choose Option A. Or at least we think we would. You see, it’s very easy when you have the perspective and detachment of it not actually being your $15k that was lost. I’m currently reading the business book “The Obstacle is the Way” and it’s full of examples, historic and contemporary, of business idols who were hit with major adversity and used it as fuel to build their empire.
Don’t let the mistakes of the past prevent you from making clear-headed decisions in the present. Go forth and prosper. Build your empire. Hire the agency. Try the ads again. The E-com game is a marathon and those with the stomach to persevere will triumph.