I’m ready to jump into the present, but since my first real change in thinking occurred last summer, I can’t resist. Last semester left me flat broke. So I decided to focus my summer on replenishing my bank account.
I took the same job I worked the previous summer. It paid slightly more than minimum wage. I wanted higher pay, but the job was incredibly easy and it didn’t require any time spent job searching. So easy in fact, that within the first week I had convinced myself that a second source of income was not only feasible, but necessary to make up for what little I was earning.
I didn’t look too extensively into alternative sources of income before I found a winner. It happened that I had a good deal of experience with Craigslist. Enough to the point that I could sniff out a rotten ad after exchanging just a few texts. The real jewel though, was my ability to find profitable posts. More specifically, I’ve come to assume I have above average ability to detect a good deal.
What made a “good deal” was simple: someone selling a quality item for considerably less than it was worth.
Yes it does sound simple, but it is quite involved. To start, I focused solely on areas in which I possessed knowledge to some point of expertise. In my case, cell phones, computers, and electronics in general. Focusing on just the areas I was knowledgeable in gave me a solid leg up over the seller.
I find it easy to compare a good deal to a “perfect storm.” Every element of the deal must come together just right to produce a potential for profit. In most cases this meant finding an item that was either “like-new,” or only slightly damaged. I preferred the former for several reasons, the foremost being that near perfect items are always easier to sell than their counterpart.
I couldn’t consider whether an item was worth the time, risk, and effort involved until I could confidently assume it’s market value. Market value is difficult to determine if you lack resources outside the internet. Luckily, the internet is all the novice entrepreneur needs. eBay and Amazon came forward as the most efficient avenues for gauging market value. eBay excelled in one area Amazon did not, and that was in the ability to view the final selling price of all ended auctions for a particular item.
Hopefully it was obvious, but I’m not planning on reselling my purchases on Craigslist. eBay was the clear choice. The ability to know exactly how much an item will sell for by checking previously sold items of the same condition was truly priceless.
With market value now in consideration, all that’s left is to approximate the “selling” fees eBay and PayPal charge on each auction. Collectively they take 13% of your profit, 10% and 3% respectively. Subtract 13% from the approximated profit margin to arrive at a highly educated guess of net profit.
Good deals were few and far between. Most people can follow almost the same process to determine how much they should sell an item for. It ultimately came down to needing a dedicated Craigslist app that would notify each time an item was posted to a category of my choosing. It required almost constant attention, not to mention the need to cross-check everything on eBay. I aimed to make at least 50% profit on any item to consider it worth the time and effort. An average investment of $100 – $200 could yield upwards of $100 profit if everything went perfect. My average profit on any sale was around $70, with my most impressive being $230.
Unfortunately, finding items that will earn a high profit is like finding a needle in a haystack. They generally disappear quick and rarely live up to initial expectations. It took a little over a month before I quit completely. The biggest issue being customer service. Creating customer satisfaction is by far the most difficult aspect. Selling items whose histories are generally unknown makes standing behind your work even harder (thus, my emphasis on ‘like-new’).
Overall, I sold roughly 20 items in just over a month. $2,500 worth of merchandise passed through my hands in that time. Cell phones, particularly iPhones, and laptops were by far the easiest to turnover. Of that amount, only $684 wound up in my pocket. eBay will show a total profit in the thousands, when in reality it’s almost entirely your initial investment. Look at it this way, you pay eBay and PayPal 13% of the initial buying price in addition to 13% of additional profit. This made more expensive items a double-edged sword. While there was more profit to be made, there were more fees to pay in return. For this reason alone it’s incredibly important to aim for a percentage of the initial investment rather than a dollar figure.
On a side note, I lost nearly $300 in profit to unfortunate circumstances. Had everything went smoothly I may have pocketed close to $1,000.
eBay, while a short stint, proved a real eye-opener. Sure I knew that there was money to be made selling items on eBay, I hope you do too. What eBay helped me discover was my ability to find a creative way to make a sizable return on my investment of time and money. In this instance, the time investment was relatively minor. I worked 45+ hours a week yet spent only five collectively on the side venture. For someone in my position, the return on time invested was astounding. $700/month for ~20 hours of work.. that’s in the ballpark of $35/hr.
Over 4X my full-time pay rate.
Nevertheless, I still gave it up. It’s not the ideal job, but it opened the door to a whole new way of thinking. I recognized that technology is an incredible tool that allows anyone to create a source of income. Whether you use a pre-existing service, or develop your own source, technology makes earning money both faster and easier.
I could just peek through the door into the land of opportunity and all I needed to do was find a way to get inside.Featured Image: Sparks 2 Photo By [Jonas Maaløe Jespersen https://www.flickr.com/photos/maaloe/212788836/in/photolist-]