It’s 3:30 AM and a familiar morning chill brushes Neil’s cheeks as he drives down a vacant highway. If he can just drive slowly and predictably, he will be able to pass by the cops lurking in the darkness. The last thing he wants to do is call attention to himself because he really needs to reach his destination. Neil’s been making this Monday morning trek down route 51 for the last 6 months. He knows that if he can get to his favorite Big Box dumpster at least 4 times a month, he’ll be able to pay rent… and a whole lot more. There are other dumpsters that Neil likes to hit, like the one behind his neighborhood Verizon store. Cell phones can bring in a nice reward. They can also be found in a local Radio Shack dumpster which is a low rider and easy to reach into. But lately other people have caught on to this stealthy form of entrepreneurship. Adding to this problem, Radio Shack is about to close its doors forever. Lately this scenario has left Neil Kirk, an otherwise typical twenty something, with the necessity for checking out other sources of income.
Looking at the REAL economy outside of the record stock market highs, one can only admire Neil for his fortitude and resourcefulness. Other people his age in his middle class suburb of Charlotte, North Carolina are still living with their families because there are just no jobs to be found. As an Amazon FBA entrepreneur, Neil is able to ship what he finds to his nearest Amazon fulfillment center and make a nice profit. After all, he pays nothing for the products he sells and people are more than willing to buy discounted merchandise despite the occasional scuff mark on the packaging. During his weekly excursions, he finds coffee machines, blenders, watches, software, game consoles and the list goes on. No one knows where his merchandise comes from and what they don’t know won’t hurt them. I consider this a great passive income model because all you have to do is get your merchandise to a fulfillment center and Amazon takes care of the rest. Whether you are asleep or awake, products are bought and shipped with no effort on your part.
I first met Neil in a local Walmart because I was drawn to ask him about his hand held scanner. It seemed strange how this kid with punked out hair was scanning a row of toys, as a non-employee. When I approached him about it he confirmed my suspicions. He was just comparing Walmart prices with what the products were selling for on Amazon. With a scanner attached to his cell phone, Neil is able to know which products will provide the biggest profit margins. Sadly, Neil confessed that it’s not a sustainable business model for the long term. Just like dumpster diving, it’s getting more difficult to find enough merchandise to make his efforts worth while.
On top of dumpster diving and retail arbitrage, Neil has also had a go at sourcing from thrift shops. Typically, these products are better suited for eBay because they are undeniably pre-owned. But if you ask any professional eBay seller, their sales volume on that platform is taking a nosedive. This is due to the increasing popularity of Amazon and the ability to get things new or almost new for cheap. And Amazon Prime members can get free delivery within two days, a feature that eBay can’t compete with.
However, there is a ray of hope for those who only have the resources to sell on eBay. If you live by a Goodwill outlet store, you will never be short of products to sell while paying almost nothing for them. I’m not talking about regular Goodwill stores mind you. Designated outlet stores have all of the goods that the regular Goodwill stores can’t sell. And when these goods are brought out to the floor, you can see people fighting for them. Beautiful leather shoes, tank tops, jackets, sports coats – everything is brought out. When each cart of fresh merchandise comes it is off limits until an employee gives the countdown, “Ready, set… go!” That’s when the customers pounce and for good reason. All of the clothing is $1.98 a pound. At such a low clearing cost, smart shoppers can make a good living on eBay despite its decreasing popularity. A lot of people have been part of this cultural phenomenon for years but as for others, they get the gut feeling of “Nah, it’s just not my thing.” After having seen this wild buying environment myself I can fully understand.
No matter how you look at the competitive climate of selling online, one thing stands out that is never mentioned. The veterans are starting to make videos of their sourcing adventures. Whether they’re dumpster diving behind Big Box, scanning items at a Family Dollar or fighting off people at the local Goodwill outlet store, they are really keen on documenting it and uploading to Youtube. My first reaction to this was a big WHY. Why would anyone want to film their sourcing activities, thus creating more competition? Folks, the reason became clear after I started speaking with Neil and learning about his experiences. All the veteran online merchandisers know that they won’t be able to profitably do business forever so they make videos which will bring in advertising revenue. When each video is watched, an ad is displayed which people tend to click on. The grand scheme is to make so many videos that the veterans can transition out of a business model which they know is declining. They will be making money day or night, offering false hope to the viewers who desperately need to rise out of poverty. It’s a classic example of the adage, “Knowledge is power”.
So here’s the takeaway for any newbie who needs to bring in big bucks quickly. When our economy tanks due to over the top government spending, you will be doing whatever it takes to make ends meet. If you find yourself in a desperate situation, start dumpster diving and be shameless about it. Go anywhere and everywhere to fill up your car. Make long journeys outside of town, wherever there’s an electronics retail store. Stay away from retail arbitrage but get down to the thrift outlet stores as much as possible. Know that whatever you find, you will easily be able to sell in your yard if you have one. Biweekly yard sales can be a saving grace for those who are weary of the competition online.
However, don’t count on this method of acquiring merchandise as a lifelong source of income. You will need to transition into selling your own specific brand name products because that’s where the money will be. The veteran merchandisers who are making reality show videos of their traditional merchandising activities are now having products made in China and Indonesia. They are then shipped in bulk directly to Amazon in the US where Americans live up to their name as chief consumers of the world.
The second major takeaway from this article is this; the best merchandisers in the world are Amish. All they need to do is make simple products that everyone loves. Their products sell at yard sales or online and since they are made from homegrown material, their profit is almost equal to the sale price. If you can picture your product line through the eyes of an Amish person you can do even better than the veteran merchandisers who are having their products made in Asia. A product can be quickly made in your garage or living room and shipped the same day it’s finished. Whether you want to explore wood, leather or fabric, simplicity will ensure your success.
Let’s all be encouraged by the story of 12 year old Moziah Bridges who now has a fashion business worth $150,000. When he was 9, his grandmother showed him how to sew neck bows because he loved to wear them. Thanks to the online venue Etsy, Moziah started to sell like gangbusters. He now has four employees and is ready to expand his fashion line. Now let’s talk about Alicia Shaffer who is Etsy’s most successful merchandiser selling over $65,000 a month. As a mother of three, she planned to make some hair pieces to pay for her daughter’s dance lessons. But orders became strong and she ventured into leg warmers, scarves and headbands. The secret of Alicia’s success is that she loves what she’s doing and has a real fashion sense to make appealing products.
Notice how simple products can make people incredibly wealthy. With the help of family members, you too can gain traction quickly as you build your back yard or online store. But what if you don’t want to deal with the production aspect at all? Maybe it’s time to consider edging into the best kept secret on the internet, which is the business of drop shipping. What you do is create a very attractive website that sells nichy and rather large products like horse saddles, chairs or wind vanes. Find the best WordPress template to create your website and then work with companies that will source your online store. There’s no need to buy costly shopping cart software. All you need is a special plugin called Gumroad. You simply slip a line of code under each product that you list and a “BUY” button appears. When clicked, a Gumroad box pops up offering the ability to pay by credit card or Paypal. Once an order is placed, you send the shipping details to your sourcing company and your responsibility is over. This is an amazing business model because if you’re selling a niche item, your website will have top rankings in search engines. The more unusual your item is the less competition you will have. And you won’t need to spend a year creating a large site in order to make Google take you seriously.