Welcome to the Wealthy Nickel Side Hustle and Entrepreneur Interview series, where I share inspiring stories of people pursing financial freedom through entrepreneurship.
Today I got the chance to interview my friend and fellow blogger, John from Financial Freedom Countdown. John shares my philosophy that one of the best ways to reach financial independence is by finding additional streams of income, whether that is real estate, side hustles, or passive investing.
While John has several side hustles, the one we’re talking about today is his reselling side hustle – buying products at a discount and selling them for a profit.
In this interview, John breaks down his process and shows it’s possible even today to make a profit by buying items and reselling them on places like eBay, Amazon, and Facebook Marketplace. You’ll learn:
- How he went from $10,000 to $100,000 in gross sales in 3 years
- The exact process he uses to research products to buy and sell
- How his side hustle actually grew during the pandemic
I’ve done another similar interview specifically on eBay Flipping, and a lot of the concepts overlap, but John runs his business a little differently. I always learn something in these interviews, and I hope you do too!
Tell me a little about yourself and your business.
My side hustle is reselling. I buy items that are in demand and try to sell them again in a short period. Sometimes as little as 30 days.
What made you want to start a side business? Why did you decide on your reselling side hustle?
Reselling as a side hustle was an accidental endeavor.
I love traveling, and one of the best ways to travel for cheap is by using credit card points and miles. Often, the credit cards have a large sign-on bonus which requires a spend of up to $15,000 in 3 months.
As a single person, it is hard to spend large amounts unless there is a considerable property or income tax bill due.
I decided to look into reselling as a side hustle to spend money using my credit cards and get reimbursed as soon as the items are sold.
Since I resell in less than 30 days, I can use the bank float without needing to float any of my own money.
Wealthy Nickel Note: While I wouldn’t start a side hustle just to earn credit card points, this is a great bonus and provides even more extra income each year. Our own businesses help us increase our credit card spend so we can earn sign-up bonuses and rewards worth over $2,000 per year!
Do you do this full-time, or do you have a day job?
I do not resell as a full-time job since my goals are different. Of course, if I wanted to scale it, I would devote more time and energy and obtain more profit. At present, I devote two hours a day on average.
The time commitment, of course, varies by season. Amazon Prime Day and the holiday season (October through December) are the busiest periods.
How and when did you get started?
I have been doing the reselling business for the last four years. When I started, it was only one item and much lower dollar amounts as I understood the market. Gradually I ramped up. And I would highly advise anyone to start slow and expand only after learning all the ropes.
Do you have a mentor, coach, or training you used to help you get started?
I do not have any mentors. Just like my personal finance education, I read a lot and decided to get started.
Wealthy Nickel Note: While I think finding a mentor can give you a short cut to success and help hold you accountable, John is an example that as long as you’re willing to put in the work and research, you can make it work. There are so many free resources available online on almost any subject!
How much money have you made with your reselling side hustle, and what can others expect to make?
In 2020, my gross sales were $102,000. My sales in prior years have been as high as $150,000.
Note that a reselling side hustle does not have a high-profit margin. However, you can use it to learn the system.
If you want a huge profit, you should then expand into private labels. For example, if you see fidget spinners as a great item, you can manufacture your item, brand it, and then sell it.
Wealthy Nickel Note: “Private label” is often referred to as Amazon FBA (fulfilled by Amazon). It can be a very lucrative business with higher profit margins than reselling, but it does come with more risks and capital outlay. If you want to learn more, I interviewed Marc Andre, who made over $450K in 2 years with his Amazon FBA business.
You can even scale it with Facebook and Instagram ads, and having celebrities on Instagram or TikTok also do a paid sponsorship helps with sales.
When it comes to celebrity endorsements, it depends on the star and the number of their followers. Some are happy to do a sponsorship just for receiving the free product. Others expect substantial amounts to carry out a paid support.
You can also do a revenue-based share where the celebrity tells their followers to enter a code while placing orders on your site. The code can help you track the orders driven by the star.
What are the costs involved in the business?
Since reselling depends only on buying and selling items in demand, there are not many ongoing costs. But you do need to make sure you have:
- Adequate space to store the items
- Shipping costs which the profit can offset
- Enough credit to float between buying and selling.
- Advertising costs if you want to scale.
- Capacity to absorb losses if the demand for the “hot” item drops and you need to sell below your purchase price.
Tell me about the day-to-day activities involved in your reselling business?
Research is huge. You should know which hot products are being resold and where to source inventory.
80% of the time is spent on these two activities. Once I have the product and buying location nailed down, it is only a matter of ordering, receiving, and shipping the products.
How did you build the business up to where it is now from where you started?
For reference, in 2018, when I started, my gross sales were $10,987, and in 2020 it was $102,000.
On paper, it looks like a 10x increase, but a lot of it is due to the comfort factor with more risks.
When I started, I was focused on only one item and limited quantity.
Now I have expanded to over ten items and increased the quantity of each item as well.
Also, I am now more comfortable storing items from one year to the next if I am comfortable reselling.
A classic example is Christmas trees which are on sale after the 25th of December. If you can manage to buy and store them in pristine condition, you can resell them next year for more than four times the sale price..
What do you think made you successful where others have failed?
I was being patient and applying my financial philosophy to the reselling business.
I look at various income-producing assets in my investment life and decide how easy it is to liquidate and what I do when my investment philosophy is proved incorrect.
Similarly, in my reselling, I will decide which items have demand throughout the year and are more seasonal. The seasonal items are not liquid, and if you need cash in a hurry, you will need to sell at a loss. Sometimes a seasonal item might not sell as fast as I expect. I then have to decide if I incorrectly calculated the demand or if the need will resume after a few days.
Similarly, I resell safe items for the most part. Only once in a while will I take a risk on an unknown item. Sometimes, the strange item works out well. Other times my garage is filled with inventory I cannot sell. I donate most of the unsold inventory to charity.
How did your reselling side hustle fare during COVID?
When the 2020 recession started in March, I thought it would not be a good year for reselling.
However, with the stay-at-home trend catching on, gaming consoles have been one of the best deals. Everything from Sony Playstations to Microsoft X boxes to Nintendo consoles have been flying off the shelves. On each $400 product, you can make a $100 profit just by reselling!
What obstacles have you had to overcome to achieve success?
Sourcing inventory in large quantities after identifying a successful product is the biggest obstacle. To be honest, I am still working on it and have not solved it…
What are your goals for the future of your reselling side hustle?
Since I retired early from my job, I am considering expanding my reselling business. I have not talked about it before and have focused more on my website on achieving financial independence. If there is a sufficient audience, I might consider writing in-depth tutorials at a later date.
What are the pros and cons of this side hustle?
One of the biggest pros for me is that you can do most of the activities in your spare time from your couch. It is ideal for individuals looking for flexible timing without investing a lot of capital.
The main negative is the rapid change in demand. Any item which was hot last season might not sell this year. And you could be stuck with lots of unsold inventory. Also, profit margins are not huge due to increased competition. So while it is a great side income, do not expect to make a living unless you get fortunate.
What advice do you have for someone looking to get started? Who would be an ideal fit?
Start slow and scale up gradually. Be prepared to make no profit for the first two years as you slowly learn.
An ideal fit would be someone who enjoys learning about the hottest trends and staying on top of pop culture.
Items which resell for the highest profit are similar to meme stocks. Does anyone remember the fidget spinner? It was all the rage and then faded away.
Anything else you want to share?
Don’t expect to make a living wage from reselling unless you devote a lot of time and energy to it.
Start slow and expand.
Make sure your personal finance basics are covered, such as an emergency fund.
Other than that, have fun and give it a shot!
Thanks for sharing your reselling side hustle journey with us, John!
As a serial entrepreneur myself, I am always interested in what others are doing to make extra money.
I think starting a reselling side hustle would be great for someone who loves researching cultural trends, or hunting for good deals locally that can be resold for a profit.
There are so many options out there it can be overwhelming, so my advice is, if you see something that sparks your interest, give it a shot! Maybe it doesn’t work out, and that’s fine. On to the next idea.
If you read this far, leave me a comment on your entrepreneurial business or side hustle (even if it’s just in the idea stage). I’d love to hear what you’re doing and how the Wealthy Nickel community can help!
Looking for other side hustles similar to reselling? Here are a few articles on similar ideas to help you get started:
How This Teacher Quit His Job and Makes $75/Hr with as a Bookkeeper from Home (not super-related, but this is one of my favorite business ideas that I dream of starting one day 🙂