What Happened to Just One Dime?
Here’s the lowdown:
Brands like BMW, Forever 21, and Cute Booty Lounge had consulted with Just One Dime asking us to launch and manage their products on Amazon. In early 2020, multiple students of Just One Dime told us that they had the capital to fund their Amazon business but were struggling to find the time to learn and run it.
This is when Just One Dime recognized an opportunity. What if clients invested their funds and Just One Dime invested its time and 50+ years of combined experience, building Amazon stores for them?
Some asked, “Why not just do this for yourselves?” Because we preferred 10% of a watermelon over 100% of a grape. My dream was a network of entrepreneurs around the world who could create freedom for them and those they love, just as I had done when I first set out with a single dime.
Additionally, the two most scarce assets for most Amazon sellers are cash flow and time. By combining the client’s funding for their Amazon business with Just One Dime’s decades of combined experience, we could not only create an unprecedented network of business owners, but we and the clients together could make more money long term on product sales due to the economy of scale.
So in the summer of 2020, Just One Dime launched Done For You.
The program received 7,429 applications and we signed up 978 clients, 13% of the total applicants. On average, each client paid $30,000 in development fees for Just One Dime to build the client’s Amazon business, launch three products, and manage the store. Once the products launched, Just One Dime was to receive 15% of the product sales revenue as long as the products sold for a minimum profit margin of 30%.
Just One Dime paid brand builders 67% of the development fees to build the store and handle all communication with the clients assigned to them. I and the brand builders believed that this 67% would be sufficient funds for the brand builders to pay their teams and run operations as they built the clients’ stores.
The rest of the funds went to Just One Dime staff, operating expenses, and systems. Any leftover funds beyond this we invested into real estate which ended up being 11% of the total development fees. This not only reduced Just One Dime’s tax liability by over $1,000,000 (the IRS calls this method bonus depreciation via cost segregation), but this also resulted in a $388,000 gain for Just One Dime when we started selling the properties. Every dime of rental income and real estate capital gains were contributed to Just One Dime.
But two and a half short years later, Just One Dime filed chapter 7 bankruptcy on November 23, 2022, because the company ran out of cash flow. Had we continued as we were, there would have been zero money left for creditors.
Where did the cash go? To the brand builders and Just One Dime staff. Just One Dime paid me (Seth Kniep) an average annual salary of $165,000 and the company’s co-owner, Josiah, $100,000.
All the funds that the company distributed to myself and Josiah Kniep, went into real estate and then back into Just One Dime. Had we not invested in real estate, Just One Dime would have ended up with less cash in the end.
But why did Just One Dime run out of cash flow? Why wasn’t the 67% paid to brand builders enough to pay for the building of the clients’ stores?
I wish I could have known the answers to these questions before we ever started. But time and failure are great teachers.
The international shipping crisis escalated shipping prices, sometimes up to ten times their previous costs. Production times were delayed. Suppliers Just One Dime was going to work with went out of business which means the team had to start the whole process of finding a new supplier all over again, pushing back the launch of products even further.
The spike in cost of raw materials made finding products that clients could afford a greater challenge, costing more time and delaying launches yet more, all the while Just One Dime was burning capital. Product launch delays resulted in more upset clients which in turn required more time spent communicating to clients, which ultimately resulted in Just One Dime hiring a Director of Client Success who in turn needed to hire dozens of staff.
Up to this point, I had succeeded as an entrepreneur by believing that I could overcome every obstacle. In my mind, this was yet another mountain to overcome, grow stronger as a result, and succeed for our clients. I deeply believed we would make it. But I was wrong. I was overly optimistic. My own ignorance combined with the worldwide shipping crisis and the rise of cost in raw materials and shipping prices resulted in delayed product launches—the very launches that Just One Dime was to depend on for revenue to keep its operations running.
Just One Dime ended up hiring 348 staff to run the Done for You Program. That’s an army to feed. We fired our marketing team and reduced our marketing budget to almost $0. Some nights I and other Just One Dime staff worked all night trying to make this work.
We offered Done For You online arbitrage as an alternative to clients at zero cost because it removed the international shipping challenge (because everything gets sourced locally). It would also reduce the client’s cost of product by a minimum of 33% and create a faster return on investment. We had already tested this out on one client’s store and reached almost $360,000 revenue in eight months at 23% profit margin.
Before Just One Dime received any lawyer demand letters, we began selling properties and transferring the capital gains to Just One Dime. Every property rental payment and capital gain from a property sale went to Just One Dime.
Just One Dime was even approved for an SBA loan at Hillcrest bank for a total of $3 million. But we turned it down because it would have frozen the real estate collateral, restricting us from selling it.
In efforts to keep the company afloat, I sold my personal investment property that I had purchased with my funds two years before Done For You existed and put $492,000 of those funds into Just One Dime. I put my remaining Amazon store reserves of $40,000 and my and my wife’s 401K of $55,000 into Just One Dime.
When some clients started coming after Just One Dime through the legal system, this added an additional expense and time-suck that intensified the challenge we were facing.
I bankrupted my personal finances trying to make Done For You succeed, ending up with no owned house, no car, no stocks, no company, and just a few months of living expenses in my bank account.
Yes, the brand builders were directly responsible for building the stores themselves, but I am a firsthand witness of how tirelessly they worked night and day building the clients' stores. It grew so intense that some of their wives began to complain about never seeing their husbands because this became all that they did from sunup to sun down.
Just One Dime’s Done For You program failed. But not out of carelessness, greed, or insidious motives. The challenges of building an operation of this size combined with the timing of the international shipping crisis at a level the world had never witnessed created the perfect storm.
Ninety-six percent of the clients understood what we were up against. But about four percent of them sued me and my company at local, state, and national levels. A forensic accountant firm did a deep investigation on all the finances and came up with nothing. But angry plaintiffs would not relent and because I could not afford the litigation costs, I filed personal bankruptcy on March 8, 2024.
From a material perspective, losing Just One Dime was the biggest loss of my life. And yet, I gained life lessons that money won’t buy.
If you like videos, you can watch the video documentary of this story here: The Rise and Fall of Just One Dime.
I put all 10 years of my experience selling on Amazon into a single book, broken down step-by-step fashion to show you how to build your own fortune, selling on Amazon. You can grab it here, for free.
Today, I run a company that finds clients for businesses with high-ticket products, GetBetterKlients.com.