From a completely available domain name, to $350 a day in Amazon.com affiliate revenue, to negative $20 a day, this is the true story of FriendlyHippo.com.

It all started in 2005 when I tried to get serious about starting an e-commerce store using a drop shipper. I was an frequent visitor to woot.com and was very impressed with their success. In order to start my own store I would need a company to handle all the shipping and returns. I had done some half-hearted searches before for drop shippers but never with serious intentions. Turns out, finding a real drop shipper is very difficult.

Try searching for "dropshipper" on google or Yahoo! There are a lot of companies claiming to be drop shippers that are in fact total scams. I was all set to start using one in particular, called NetDropShipper.com, when I read some very bad reviews. People were claiming orders never arrived, or arrived damaged, or arrived damaged with the wrong item inside the package, etc. I have no idea if these claims are true, I didn't end up using that company. This website now appears to be just a parked domain.

It occurred to me that Amazon's affiliate program is almost the ultimate drop shipper. They certainly have a wide selection of products and a great reputation for shipping items well and all around great customer service. The only real difference is instead of charging customer credit cards directly, you let Amazon do it and your margin is determined by them. (They pay around 6 to 10 percent of the item's price.) First thing I needed: a name for my store.

Picking a domain name is a funny process. I'm of the opinion that it's silly to spend any money to buy a domain from another party. Whatever your business is, there's a creative domain name that's just perfect available to register. Domain names are handled by the Internet Corporation For Assigned Names and Numbers (ICANN). They publish a list of companies that let you get your own domain. I knew I wanted an animal name to make it sound warm and fuzzy.

I had a great picture of a Hippopotamus in the clip art package I bought. I settled on FriendlyHippo.com and registered the domain with no problems. I had some basic HTML skills so I didn't see the need to hire anyone to build the site. I also knew some PHP which made using Amazon's Web Services rather straight forward.

After a couple practice sites, I put together FriendlyHippo.com and like most new sites, I had zero traffic. Zero. It's a depressing lesson everyone learns after launching their first site. You put all this time and energy into making every page just right and then hear nothing but the sound of crickets as you wait for a visitor.

I always thought of this venture as a real e-commerce store. My job as the store manager was to:

• Provide a functioning website with products
• Drive traffic to the site (advertise)
• "Make the sale" - get the customer to open his/her wallet
• Send that customer over to the order fulfillment department

When I chose Amazon as my drop shipper I didn't realize this would cast my store with a big scarlet letter A (for Affiliate) to many other companies. The fact that I wasn't charging credit cards myself and then sending a percentage of that money to a drop shipper turned out to be a big, big deal.

Since I saw no difference between my store and say CompUSA.com or BestBuy.com, I started to advertise the way a store like that would advertise. I didn't explain in detail my association with Amazon. Many visitors would have no idea we didn't ship our products ourselves. We weren't deceitful about it. It was disclosed in the about us section, and the minute you try to buy something it becomes obvious. I did something next which I thought was rather ordinary at the time: I registered the store with Froogle.

And a rather amazing thing happened next. We got traffic. Lots and lots of traffic. Turns out stores that don't do their own order fulfillment are not allowed on Froogle. But I didn't know this at the time. After our first real day with Froogle traffic I logged into my Amazon account and saw this:

$46.75! Wow! Could it be that our Hippo was so warm and fuzzy he makes people want to buy 19-inch Flat Panel LCD Monitors? And Tend Skin Solution 8oz? I didn't even sell this product. (Amazon gives you credit for anything the customer buys after clicking over from your site.) But over $45 in one day? This had to be a fluke.

But it was no fluke as Day 2 proved with $50.61. And it just kept going up. On August 15th we did $164.03. August 16th $184.06. We were selling TVs, digital cameras, PCs, printers, you name it. I really thought I was on to something! Not wanting to limit myself to just consumer electronics I quickly made a sister store called HomeDucky.com.

With both stores listed on Froogle, the money was literally pouring in! We got to around $350 a day which is about $125,000 a year! (If you continue to make $350 a day for the whole year. We didn't.) My two favorite purchases during this time were an Apple Cinema 30" HD Flat-Panel Display for $2,849.99 of which we got $242.25 and our best ever, a Swisher ZT2460 Zero-Turn-Radius 60-Inch Riding Mower for $3,799.99 of which we got $361.00.

My brother suggested I create several more of these animal named stores. His name ideas where JewleryWorm, MedicalSupplyMoose, DietPillDragon, and ExerciseEquipmentEagle. I told him compared to FriendlyHippo and HomeDucky those names were just silly. But should I keep creating more stores? Had I found a money making machine? Froogle does not charge to list your store's products. There was zero cost to running the stores except for the domain and a small hosting fee. I held off on making new stores and worked on expanding the inventory of the two I had.

Then, on day 40, we got this letter from Froogle:

From: Froogle Merchant Support
To: Andrew
Date: Sep 15, 2005 4:58 PM
Subject: Your Froogle Store - www.friendlyhippo.com

Hello Andrew,

Thank you for your interest in having your items included in Froogle's
product search results. After further review, however, we're unable to
include your site, www.friendlyhippo.com, in Froogle as we're not
including affiliate products.

Froogle points users to sites where they can buy actual products from
the merchants that sell them. Therefore, to be eligible to submit
products, you must sell these products directly and ship them to the
buyer. If you sell products on commission, your site content may be
crawled by and included in Google's web search, but it will not be
included in Froogle.

For future evaluation and the possible creation of new products, we do
keep track of merchants that we don't accept. We'll be sure to contact
you if your site fits a future need within Google.

Sincerely,

The Google Team

A few days later we got the same letter for HomeDucky.

I knew what the letter meant the second I read the first five words. "Thank you for your interest..." Nobody thanks you for your interest unless the next part is something bad. I was a little hurt by the line "Froogle points users to sites where they can buy actual products from the merchants that sell them." Um, you could actually buy products from FriendlyHippo! We actually sell them! We just happen to use a third party for order fulfillment. Well, is gray area. But Froogle wins.

While the money was pouring in I tried to invest some of it back into the company. First, I tried to register the store with other services like Froogle. Froogle is the only one that gives you traffic for free. The rest charge you on a per click basis. I tried Smarter.com and Become.com. Smarter was happy to take my $100 retainer and send me a bunch of traffic at around $0.50 a click. I ending up spending $100 to make about $40. (Then a week later that $40 was returned!) Become.com refused to even take my money:

Before I set this up for you, I have to clear something up about your
Amazon affiliation.  We can only list products that YOU are actually
selling, that have product landing pages and a shopping cart on your
site (as opposed to a link to Amazon).  If you have products like this,
these are the ones that you could provide us in your feed.

I also purchased a radio ad on RadioIndy.com for $30. It's very difficult to measure the success of a radio ad, but near as I can tell, it had absolutely no affect whatsoever. Except, some of my friends did laugh at me.

And right before the traffic from Froogle dried up, I purchased $600 worth of pixels on the Million Dollar Homepage. I do get some traffic from this investment. Maybe two or three people a day. But they almost always look just at the homepage and leave. As far as I can tell, no visitor from MDHP ever bought anything.

I used to log into my Amazon account thrilled to see $350 worth of new orders. After the traffic stopped the returns became very noticeable. For a while, each day we lost $20! Well, more like we just never earned that $20 in the first place but with nothing coming in it seems like you are losing money. Typical day during the high traffic:

41 units shipped, $4,555.26 gross, $331.04 net.

Computer & Video Games
   1 $14.95 Memory Card 1019
Electronics
   1 $169.95 Canon EOS Rebel 2000 35mm SLR Camera Kit with 28-80mm Lens
   2 $27.70 HP Model C6578DN No. 78 Tricolor Inkjet Cartridge
   1 $93.15 Mobility Electronics UN0749-12 Easidock 1000ev Uni
   2 $799.80 Sharp LC-10A3US 10" LCD Flat-Panel TV
   1 $44.99 Sennheiser PX 100 Headphones
   1 $84.99 Kensington Expert Optical Trackball USB Mouse for
   1 $49.88 Rio Cali 256 MB Sport MP3 Player
   1 $217.82 Harman Kardon DVD 31 Progressive-Scan DVD Player
   1 $117.50 Teac SR-L50 CD Player/Radio with Remote
   1 $121.99 Hewlett Packard 49G+ Graphing Calculator
   1 $75.99 Sony DPP-EX50 Digital Photo Printer
   1 $29.99 NETGEAR WG111 Wireless USB 2.0 Adapter (54 Mbps)
   1 $11.49 Microsoft Optical Mouse by S+arck - Blue
   1 $34.99 Southwestern Bell FT372W 2-Line Speakerphone with
   1 $349.99 iRiver PMP-140 Portable Media Player (40 GB)
   1 $76.99 PalmOne P10952U 802.11 Wi-Fi SDIO Card for Tungste
   1 $63.99 Sony 512 MB Memory Stick Pro Duo (MSXM-512S)
   1 $89.00 Oregon Scientific MP120/BL512C 512 MB Waterproof M
   1 $16.99 Delphi SA10112 FM Direct Adapter for SKYFi2 Receiver
   1 $45.99 1GB PC3200 DDR 400MHZ 184PIN
   -1 $-45.99 1GB PC3200 DDR 400MHZ 184PIN
   1 $299.49 Samsung HT-WP38 DVD Home Theater System with USB P
   1 $184.99 Thermaltake VA9000BWS Black Kandalf Super Tower Case
   1 $345.99 Panasonic DVD-LS90 9 Inch Portable DVD Player
   1 $269.99 Sony NW-HD5 Network Walkman 20 GB Digital Music Pl
   -1 $-300.00 Canon Powershot S2 IS 5MP Digital Camera with 12x
   1 $69.98 Virgin VS2100 Boomtube EX Portable 40 Watt Speakers
Home & Garden
   1 $22.49 Weber 3604 Hose and Regulator Kit
   1 $12.99 Weber 3640 Catch Pan and Holder
   1 $49.99 Strathwood Basic Elements Boxwood Chaise Cushion w
   1 $12.99 LaCrosse Technology WT-3102B 10-Inch Atomic Analog Clock
Kitchen & Housewares
   2 $13.48 BLACK DIAMOND Owl Optical Wallet Light
   2 $9.98 Famous Maker Supima Hand Towel 2-Pack, Sage
   1 $4.99 Famous Maker Supima Hand Towel 2-Pack, Berry
   -1 $-32.99 GE/Kenmore SmartWater Refrigerator Filter (GWF)
   1 $97.47 GE/Kenmore SmartWater Refrigerator Filter (GWF-3) 3 pack
   1 $22.95 Frigidaire/Kenmore PureSource Ice and Water Filter
   1 $529.00 Broan Rangemaster RM524204 Wall Mounted Chimney St
   1 $45.99 Black & Decker CHV1500 15-3/5-Volt HEPA Cyclonic DustBuster
Other
   1 $19.88 Braun 7000FC Syncro Replacement Combo, Black
   2 $45.98 Racor PBH-1R ProStor Bicycle Hoist Monster
   1 $29.88 Zadro LED Lighted Fogless Mirror
Software
   1 $339.99 QuickBooks Premier Contractor Edition 2005
Tools & Hardware
   1 $9.99 Fiskars 99216981  Softouch Micro-Tip Pruning Snip
   -4 $-82.32 Coast Cutlery - Tek Torches (CCC7736D) V2 Dual Col
   1 $39.95 Invisible Clock-II 

-3 units shipped, $-147.83 gross, $-10.35 net

Electronics
   -1 $-89.00 Oregon Scientific MP120/BL512C 512 MB Waterproof M
   -1 $-38.89 VTech VT2461 2.4 GHz DSS Cordless Phone with Digit 
   -1 $-19.94 Canon PSC-75 Deluxe Soft Case for S2 IS, S1 IS & G 
   

After these sites ended I went on to teavee.com and moosak.com.