Entrepreneur Success Stories #1 - How I Turned $600 into $4,000 within one month!
Welcome to our Entreprenuer Success Stories- where we give you an insight into how other entrepreneurs are making a success. This weeks story is from Nick, who managed to turn $600 into $4000 in a little over a month. So how did he manage this? Let's find out!
"I'm 21 years old and am an upcoming junior at Miami University in Ohio studying Economics and Business Analytics. I was thinking about going to school for supply chain management as I have an interest in importing but found out that I can learn a lot online and through experience rather than going to school for it."
You may have heard about importing products from China and then reselling them for a profit. In fact, it's actually quite a popular trend for young entrepreneurs, especially thanks to Alibaba, the giant amazon-like wholesale. Nick, who is only 21, decided he was tired of earning minimum wage and wanted to take a crack at it. His only problem was that he didn't have any money to invest in.
He had a little over $200.00 in the bank, but he needed more to buy his products if he was going to make any kind of significant profit. So he sold his PS4 and other things he had sitting in his room, managing to generate around $600. His parents thought he was insane. I asked him if he felt it would have been a big deal to lose this kind of money:
"At the time, that was all the money I had, but I found it extremely unlikely to happen as I research my products and do a lot of work before I even contact a supplier."
Getting into the business
Nick's strategy was to play the high volume, low margin game, which means he had to buy high amounts of product and sell them for a very small profit. If he sold enough of them, he'd make back on his $600 easily. But if he didn't sell any, he'd be stuck with a load of useless product.
"I didn't think it was risky if I took the right precautions. I use a set of guidelines when ordering products (unbranded, not trademarked, light/easy to ship and with a low potential defect rate). Furthermore, making sure your supplier is a trustworthy one and paying with payment methods that have you covered (PayPal, alibaba's trade assurance feature)"
Since importing products from Alibaba has become so popular, it can be quite hard to find a product that isn't already being shipped by massive power sellers who are selling them for incredibly low profit margins. Nick says it's all about finding a niche product, something that doesn't have too many listings so that you can compete in it.
It took Nick a few tries to find the perfect product. He found quite a few he thought were "slam-dunks", only to find out later it was already being imported by someone else. I asked him how hard he thought starting an importing business was:
"Fairly easy. I learned everything about importing from material available for free online (shout out to Will Mitchell @ startupbros). You will have a lot of questions at first (what should I get, what supplier do I use, what do I say to the supplier, what's MOQ, do I ship by sea or air, do I sell on eBay or Amazon, will my products even sell, what shipping company do I use, how much will shipping supplies be, when should I reorder stock, how much should I order, etc, etc) but with time and educating yourself you will find that you learn extremely quickly."
Once Nick had found his product, it was time to import. With only $600, Nick could only afford to import 50 units. Compared to some of the big giant orders Alibaba receives, Nick said he felt like an amateur ordering such a small amount, but he was happy to finally have made his first order.
Once his order arrived, to his parent's house no less where he currently lives, he needed to sell them. How? Through the tried and trusted method of eBay. Since his product was niche, he managed to get to the top of the listings by pricing the product very cheaply at first. The first few sales helped bump him to the top of the lists, and from there he was able to slowly increase the price of the product.
Of his $600, he managed to make $900. Not a great profit, but still a start. Nick says often people who are in the importing business never take the next step because they get deterred by not finding the miracle product that nets them $15 profit margins. The $900 allowed him to invest into more products and order more units.
A second bite of the cherry
Nick looked into a second product and this one was even better than his first. It had very low competition, in fact, there was only one other seller to compete with. He ordered bigger orders and began selling them on eBay. In the week I've been talking to him, he had grossed over $1,500 alone!
Now you may be wondering about how Nick manages to deliver all these orders. That's a lot of work to take on with packaging the products and then driving them down to the post office. I asked him how much time Nick was spending:
"Anywhere from 1-2 hours lately. I shipped 78 packages this morning which takes a good bit of time as you are the only person shipping labels, packaging, taping, and bringing them to the post office. I'm going back to school in two weeks and won't have the time to package anymore. I will hire someone to do it for me."
Nick doesn't want to just stop at $4k either, he has bigger plans to grow his business.
"My goals are to scale it as much as I can and hopefully make it more than a side business. I'm not sure but I've grossed $1.5k in the past week since I added a few more variations of my best selling product into my store. Sales are picking up very quickly and honestly it's a bit overwhelming at the moment. I'm hoping for $100k in sales in a years time."
So if you're interested in importing products, you might be interested to know that you can easily do it too. Nick did this all from his bedroom!
"Not much experience is needed. Knowing your way around a computer is the most important thing as 100% of your business is done on the computer. Everything from researching to contacting a supplier to tracking your shipments to listing them for sale, shipping orders, etc."
I want to thank Nick for giving us an insight into his business idea and plan.
If you've ever had any experience with importing products, let us know in the comments!