Some people here have expressed interest in my business (former sideline, now primary) and conveniently there is an article on survivalblog…
https://survivalblog.com/unemployed-starting-home-based-business-w-l/#more-44752
I wrote this response as a comment, but promoted it to post due to length. It’s still a bit rough though.
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This article isn’t horrible, and in fact has some good stuff, but the author seems to completely miss the point:
“I am, again, currently unemployed. However, I finally took the initiative and started an online business to bring in some extra cash.”
She says this like it’s a revelation, yet she previously started and failed at two other businesses “I have had my own HR consulting company,[and] started my own sporting goods store”– what she really means is “This time I decided to buy and sell stuff online” thinking that it would be easier than working.
Online business is a BUSINESS. It’s got differences but it’s a business, not a magical unicorn that farts money.
Throughout the previous 25 years, she keeps going back to being an employee, subject to the whims and vicissitudes of others. This time is no different, she’s still got the mindset of an employee (do as little as possible, collect check).
Even with this statement– “In 2015 I saw the collapse in the oil and gas industry coming and decided that I needed to generate some “mailbox money” then to help supplement my unemployment insurance until it ran out. I was finally RIF’ed (selected as part of the Reduction in Force) in February 2016. My unemployment insurance ran out August 2016. Fortunately, I began prepping for that moment back in 2015 when I began investigating the fastest ways to make money and build a business. Not only that, but I doubled my efforts putting up canned goods and other consumable items.” — And so she reveals herself. She PLANNED to fail, coasting until her benefits were gone. She’s looking for the next ‘get rich quick’ scheme. She does start stacking, which is to the good, but that’s the only positive thing in the paragraph.
Then she discovers that there is a learning curve, and she’s gotta WORK at it! “There is definitely a learning curve to selling online. One must take into consideration pricing your items correctly, selling fees, monetary transaction fees, shipping fees, shipping supplies, time listing the items, negotiating with buyers, and other issues. I lost money the first month and began to run out of stuff to sell. I had to find another way to find stuff to sell.” — JUST LIKE A BUSINESS, who’da thunk it? And how do you lose money selling off your old cr@p?
“Although I knew I was going to lose my job, I was not mentally prepared for it.” — which is because she never really accepted that it was going to happen, which is probably why she never treated the online selling as a business.
“PayPal account … Since it was difficult to get money out of that account, I left it there for my “rainy day”. ” — NO IDEA what she’s talking about here. Paypal is linked to a bank account. You hit “Transfer money to my bank” select an amount, and in 3-5 days go to your bank and withdraw the money. Simple. Or use Paypal at POS machines instead of cash or credit. LOTS of real life stores accept Paypal.
“Finding Sources of Products Online To Sell For A Profit” — here’s another mistake. She’s buying cheap crap from alibaba and aliexpress to resell. That’s a REALLY crowded field, with no way to differentiate yourself except price, AND it’s all cheap crap anyway. Liquidation.com sells large lots of store returns and open box merch (mainly) which are going to have issues. I’m gonna guess at a 20-40% breakage rate, or in other words, only 60-80% of it is going to be good. Might be wrong, because it’s been a while since I looked at that stuff. I decided it was too crowded on the buy side with all the newbies bidding up the prices past where you could make any money. Never looked at bulq . com
“Starting an online store is not that difficult, but it is very, very, very time consuming.”– more unnecessary work and expense. WHY build your own store at all? For this kind of thing, use ebay. Even setting up an ebay store (if you have the volume) is straightforward, and your customers are already looking there! No bothering with SEO, promotion, or ‘driving traffic’. NO web fees, SSL certs, or site management.
“When I ran out of stuff to sell around the house, I had to begin using the money I had to begin buying stuff. Since it takes time to sell stuff, I began running out of money fast to buy stuff and to live on at the same time.” — translated, ‘after I lost money, selling off all my old crap, I discovered that buying a bunch of cheap crap and hoping to make a few cents on each sale, ties up money in inventory, and when those sales don’t happen, there isn’t any PROFIT.’
So she takes on debt to further her ill considered business model– ” I borrow money from them, buy the product and sell it with a bit of a markup; in return, they get their money back in full plus interest.” — translated as ‘ I enter another business agreement with FAMILY to piss away their money too.’
Then she looks at entering ANOTHER agreement, to take on MORE debt, but (I think) didn’t qualify as she doesn’t say she actually signed up for the “Working Capital”.
Finally she closes by expressing her fervent desire to abandon her business venture, and return to the bosom of Big Corp at the approximate age of 5o? 55? –” I’ve been unemployed for a year and a half. By the grace of God, I will find another job. ” –her own words reveal that she never thought of herself as ‘working’ at her online business.
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So what can we learn from this?
The nature of work is changing. If your entire employment history is one desperate transfer from one sinking ship to another, STOP! Get out! Don’t expect to continue finding a chair when the music stops. Sooner or later you won’t and you’ll be forced to face that. Act at the time of your choosing. Change industries, fields, or start that other business.
If you have warning that your situation will be changing, TAKE THE TIME GIVEN! Take it seriously and get prepped! She should have learned her lessons while she had the cushion of a regular paycheck, or she should have been actively looking for another situation… NOT planning to coast and milk her benefits until they ran out THEN start looking.
Business is business. Being online doesn’t change that. You still need to know how a business runs, what makes it successful/profitable, and you need to put in the work. What is different about selling online is that your startup costs can be very low, and you can start very slowly. You don’t need to rent a building, stock it with inventory, and hire employees. (she did the virtual version of this- exactly what you DON’T need to do.)
As she did, you can start by selling stuff you already own. Old hobbies, and collections that no longer interest you are good sources of items. There is no way you should lose money doing this. If you can’t take free stuff, and sell it for a profit, that should be a lesson for you! (assume the stuff has 0 cost basis as it’s just sitting there unused and unwanted) Again, businesses have costs. Shipping, fees, commissions, supplies, etc are all part of the cost of doing business. If the price of the item won’t cover those things, DON’T SELL IT. If you do, you are paying someone to take your stuff. In that case, you’re better off piling it on the curb, or having a yard sale. Many things WON’T be economical to sell online, and you should just have a yard sale.
This first part is your ‘learning’ period. You learn about Paypal and Ebay taking 10-13% You learn how to take good pictures so you don’t need to edit every one. You learn about shipping options and costs. You learn what sort of things sell for you. You learn how long it takes to measure, weigh, photograph, and list items, and you learn HOW MUCH you need to PROFIT on the item to make it worth doing! This is what she should have been doing during the year warning she had.
After learning the basics and building your transaction history and skills on ebay or etsy or your local FB group, then you need to start sourcing more stuff to sell. Decide what you LIKE looking for and LIKE selling. Do you have special knowledge or skills? Do you have a hobby or collection that gives you special insight? Keep in mind that ‘collector’ mindset will hurt you if you are doing it for profit. Keep in mind that each type of item will have its own learning curve wrt desirability, pricing, packaging, etc. For example, toy trains might interest you. You might start buying them at what you think is a reasonable cost, but it turns out they are all very common sets and don’t sell well unless deeply discounted. Every time I decide to sell some new type of items, I made mistakes in purchasing and selling. Sometimes they were VERY COSTLY mistakes. That’s why it’s very helpful to start out with items you know, and items that are LOW COST TO YOU.
Like any business, if you have low margins you need HIGH VOLUMES to make profits. If you can keep your margins up, you can sell a lot less and still make profit. You’ll work a lot less, and your costs will be lower too. This was the mistake she made. She had low margins on cheap crap, and was not in a position to sell high volumes.
Leverage existing networks/infrastructure. Ebay is the big dog for a reason. It costs you nothing but fees to get started on ebay. In the beginning ebay was like an online yard sale, but that has changed. There are sellers with MILLIONS of transactions. I routinely see sellers with 10s and even 100s of thousands of transactions. Almost everyone will go to ebay and search ebay, many of them looking for brand new commodity items or traditional retail items. Your listings are right there too! Whether you are selling one of a kind vintage items, or you aspire to 100s of thousands of sales, why NOT go where the customers already are? AND save the cost, time, and effort of developing your own store.
What sells well changes over time and is different for different sellers. Don’t build big inventory. Just in time works for little guys. Buy it with the goal of selling it right away. DO NOT sit on items! (this can be difficult for me, I like to let certain things age in my possession. You’re buying to SELL, not KEEP. Don’t get high on your own supply.)
The best way to maximize return on effort is to buy multiple items you can sell from one listing. It takes the same time to list a $20 item as a $200 item, or 20 items that are all the same and sell for $30 each. Guess which listing keeps paying you for the same effort?
Sometimes an item won’t sell for a LONG time. I’ve got stuff listed that finally sold after literal years. ONLY relist items like that if they are going to generate a good profit when sold, and when you have ‘free listings’.
Price aggressively. Use the “Sold Listings” search option to see what similar items sold for, then click on the “Sell one like this” button and start your listing from there. Always check if an item is selling, has dozens of unsold items just like it already listed, and what it actually sells for BEFORE buying the item. Even if you can double your money on that thrift store item, is it worth the effort for $5 net? If you don’t ask that question, you won’t make any money! Your goal should be to minimize any inventory. You want constant turn over on unique items, and quick sell out on lots.
Keep in mind that you need enough profit to fund more purchasing, and to throw off cash for your personal goals (eating this week, or funding the new bang toy, etc)
Do some research on youtube. See what other ebay sellers/ thrifters are doing. (this is a whole lifestyle thing, buying and selling online, with a vblog) Decide if it’s something that will work for you. (one prominent youtuber says they make good money selling Hometics power supplies. I see them all the time, so I started picking them up. I can’t seem to sell ANY. Not gonna pick up any more.)
Maximize your ‘edge’ whether it’s specialized knowledge, repair skills, or regional arbitrage (buying where an item is common, and selling where it is not.) Eventually, your edge might be that you can buy multi-pallet lots for thousands of dollars, and have your staff process the warehouse full for sale! You’ll be able to outbid me every time!
Finally, selling online is relatively easy, has very low barriers to entry, and can be profitable. Like most businesses, you get out of it what you put in. If it’s going to be a primary source of income for you, after that initial ‘trial period’ you need to COMMIT and put in the effort, but be smart and learn first WHERE your effort is best spent.
nick
Good points. I read that article soon after it was posted, and had pretty much the same reactions you did. Still more evidence, if any was needed, that most people aren’t very bright.
Excellent article, Nick. Since a great many people won’t take the time to read, or haven’t the reading comprehension to tackle it, I’ll sum up the most important point you made right here:
“TAKE THE TIME GIVEN!”
Anyone today in, say, their 50’s, is living on borrowed time, employment-wise. Even if you don’t have advance warning, the writing is on the wall, and your job may well disappear before you retire, or your much anticipated pension may disappear or be greatly reduced.
NOW is the time to learn new ways to support yourself, either as a sideline to bring in extra income or as a life preserver if the bi-weekly paycheck goes away. I’m 72 today, and God willing am going to live. learn and earn many more years. I can’t stand the thought of plodding along with what I learned in the 1950’s, hoping against hope someone still wants to buy buggy whips.
NOW is the time. Learn every day and for goodness sakes try new things. hint, there are any ways to make money online aside from “selling things”. I’m already a somewhat old man, and I surely can be a grumpy old man at times. but no matter how many more years I have left, I will never be an old man left behind, and since I severed all connections with salaried work many years ago now, I can never be fired, laid off, or watch my job be sent to China … and no one can hire a younger “college boy” to replace me.
TAKE THE TIME GIVEN!
I gotta copy/paste and print this all out, as I’ve done before w/Mr. nick’s stuff. Very valuable, because…..truth.
“Anyone today in, say, their 50’s, is living on borrowed time, employment-wise. Even if you don’t have advance warning, the writing is on the wall, and your job may well disappear before you retire, or your much anticipated pension may disappear or be greatly reduced.”
Hey, I resemble that!!!
I got bounced from my IT gig at IBM four years ago, just before I turned 60. My next-younger brother several years before that, likewise having been in IT for thirty years, and then bounced in his mid-50s. I have two other still younger brothers in their 50s and by some miracle they’re both still employed, one in IT and the other in real estate insurance at the management level.
I’m now looking at a dual path to bring in revenue here; one is through the VA’s vocational rehab program and that may or may not pan out; I’ll know more by this coming Thursday. The other involves working a home biz, like my wife is doing, via her own “exit strategy.” And it will involve selling some stuff online and learning a lot of the same things that Mr. nick has mentioned.
Thanks, Mr. nick, and thank you, also, Mr. Dave, for your encouraging words. If you’re that positive at 72, I guess I can cowboy up and get positive, too, at 64 (tomorrow).
@OFD,
I’ll admit, I was thinking of your work history when I wrote that bit about escaping one sinking ship after another. At least that’s the impression I had from this side of the keyboard.
There are a couple of other worlds opening up.
One is selling on FB. This appears to be a thing, and probably bears looking into for those interested in selling.
NB- you don’t just have to resell, you can create new stuff and sell directly on ebay too. ‘Course then you might have to drive demand with youtube vids or a blog. The replacement cable ends for my car door handle actuators are made by some guy who sells on ebay. Nice little niche market for him.
The other is creating stuff and selling on Etsy.com
Etsy is the ebay for craft items or handmade items. That’s the idea anyway, but I guess people use it for general sales. I’ve never looked too far into it. Perhaps someone here has some experience?
nick
I got bounced from a job, not because of my age, but due to an interface between the CEO and the software/hardware vendor marketing rep with big tits. I did not subscribe to the software vendor deception, the CEO was blinded by the wigglys.
Fortunately I was able to find another job, a dead end job at that. No advancement, no promotion, nothing. But it was fine. Paid enough for the bills and a little extra, weekends and nights were now back to being my own, and my stress level dropped.
I have been preparing for years for retirement. Did without a lot of stuff and skimped on others to build up a significant cash/stock investment portfolio that should last until I am 90 without issue. A meager retirement from my years at the bank, some money from the VA which I hope to increase.
I also have a part time job that pays about $1k a month. I also sub at the school to keep busy which brings in about $500 a month. That along with SS for me and my wife will keep us going. If worse came to worse the wife and I could live on $1.5K a month baring significant medical issues. Not well, but we could survive. SS is about twice that so we are in a good position.
The part time job subbing at the school is something to keep me busy. At the high school level the kids are mostly OK and I have no issues. They all know me from the sports pictures and most treat me with respect. The other part time job is because I enjoy doing the TV broadcast and consider it an interesting challenge.
I want to keep my mind active and as sharp as I can because there is dementia in the family history. Severe dementia that starts between 75 and 80. I am hoping to hold that off as long as possible.
The other option I have considered is to just spend myself into poverty by the time I am 80 and go on the public dole. Public housing, free (well to me) food, utilities, cable, cell phone and transportation. My mother was on welfare (would not admit so) living in SO CAL. Paid $100 a month for her apartment, $14 a month in electricity, but refused food stamps because that was welfare (a mind is a strange thing) and she was not going to accept welfare.
Thus I really don’t need to be selling items or determining a different skill set. Having been preparing for retirement for the past 20 years has really helped in that matter. I don’t really need the money, I just need something to do. I have found a reasonable venue to pursue that path.
My younger brother is a full time Ebay dealer in “vintage” car parts. He has extensive knowledge / expertise in interchangeability especially in 50’s – 60’s GM stuff. I certainly admire his moxie and entrepreneurship. He’s said that he typically ships 20-30 packages / day. His Ebay store has north of 5000 items listed continuously and has been operating for nearly 20 years.
Maintaining the Ebay store listings, dispute resolution, packaging and post office /UPS trips fill his day. In addition, his overhead includes more than 2 dozen “storage lockers” of inchoate inventory, property taxes more than most mortgages, daily fast food, yard and cleaning contractors. That is a lot of running to stay in place.
He takes working “vacations” from Ebay during the summer weekends to car shows up to 600 miles away from home, where he retails a van load of selected items. He tends to come back with more than he left with, to buy low and sell high. I suspect, but don’t know, that the trip expenses help minimize income taxes.
At any rate, his high overhead choices made from expediency have turned a cash cow into a hamster wheel.
Excelent reading and I hope I have learned something here.
I recently opened an Ebay sales point to get rid of a lot of stuff that I have acculmulated over the years and don’t want to take with me to retirement. It’s been far easier than I thought to dispose of this “junk” and I may keep doing it as I transition from full time IT Security to a “retirement” of managing my ATMs and other business. With paid for properties and Indian Nation health care my, “needs” will be modest. The biggest issues continue to be family related dramas.
My *job* life is pretty limited. I worked odd jobs through Uni, including several years at the local paper mill in Rhinelander, WI. Twenty years in the Army, and working for MrsAtoz since 1999. The good part of what MrsAtoz does with schools is whether Redumblicans or Dumbocrats in charge, they drop billions into K-12 for development. She’ll never be without work. You just have to go find it. Two military pensions, two SS incomes, investments will keep us comfortable as long as the FUSA keeps chugging along.
I also want to sell online. We have a garage and storage area full of *junk* to get rid of. Thanks for the great advice, Mr. Nick.
Two military pensions, two SS incomes, investments will keep us comfortable as long as the FUSA keeps chugging along.
That is a big caveat. I hope that the FUSA keeps chugging along also.
Yeah, if the FUSA goes TU, fiat, pensions, SS, Medicare, etc., are useless. Mad Max in effect.
One of the major issues with that article Nick linked to yesterday is that the woman has no value-add proposition. There’s just nothing special about her or what she can do. That means a race to the bottom. Assume she goes into the business of selling generic widgets, which cost her $100. Trouble is, there are millions of other people selling exactly the same product, which means prices will quickly converge on $100.0000. Actually, it’s worse than that, because many widget sellers will find themselves needing fast cash and will sell under their cost to get it. So pretty soon the market value for generic widgets becomes something less than $100. She not only can’t make a living doing it, she’ll actually lose money and quickly become one of those sellers who charge less than they paid, contributing to a panic among generic widget vendors.
The trick is to have a value-add proposition. If you can sell custom widgets, available only from you, that offer a perceived higher value to buyers, you’ll do fine. Most of the small businessmen on this forum take that approach. If someone wants Lynn’s software, they have to buy it from him at his price. Same with Mr/Mrs Atoz’s product. Same with our science kits. And so on.
The other approach is the one Nick takes. His product is not unique, but his knowledge of the products and the market is in-depth and hard-gained. He knows when something is selling at a yard sale for less than its market price, and grabs it. He buys broken stuff and repairs it, if it’s worth his time and the parts cost to do so. But that’s not something this woman can just jump in and do. Nick has years of experience, and he’ll eat her lunch until she’s devoted the time and effort to getting where he already is.
In short, the trick is to find your niche, develop expertise and if at all possible a unique physical product, and then focus, focus, focus on that expertise and/or product.
“…, the trick is to find your niche, develop expertise and if at all possible a unique physical product, and then focus, focus, focus on that expertise and/or product.”
There it is, in a nutshell.
I’m phone & tablet this evening, so I’ll postpone my follow up to Dave’s Ooma query until I get to a real keyboard. Watch this space…
I’ve been with Ooma since it started. My buy-in gives me free nationwide service and 80 international minutes/month for free for the life of the equipment. Been 10 years now.
Well then, why don’t you two slick operators collaborate or something on your Ooma setups and associated hardware and methods?
Enquiring minds wanna know, and all that…
I am quite interested and suspect others might be, too.
As I’ve said already, I’m staying addicted to the NFL until Brady and Belichick retire, at which time I’ll go cold-turkey, which I’ve successfully done before for other endeavors, less savory…
But then we’d probably wanna dump the cable and would be looking at landline/innernet combinations. Since we have Roku already, Netflix, AMZ, etc. And can stream from the computers or USB sticks. Not that we watch much anyway.
MrAtoz may well know far more than me, but here’s my take…
Ooma is the service/company and the Telo is the desktop device. As I mentioned, I bought both of mine on Craigslist – one even included a cordless AT&T base phone and 2 satellites. The activation comes with a phone number and we also ported both longtime AT&T landline numbers over, which happened much more quickly than both my expectation and their estimate. They have an office product, but I specifically asked if there was an issue porting an ‘office’ number to their ‘home’ service but they said it was all good.
There are a lot of options regarding the use of both numbers but I think the website would be better for explaining that than I would. There’s also the option of Premier service ($20/yr?) that offers other features. We opted for that but I doubt we’re taking advantage of its full potential. I think that might be how we get a text & voice mail anytime there’s a message left. Our only fancy implementation is that I bought a Linx device to hook up the office fax machine. It uses the office Telo’s second number as a dedicated fax line. The only charge (after initial purchase) is the monthly (unavoidable) taxes, E911 fee, etc. For us, it’s something like $4.75 each for home and office.
With a pipe to the interweb, we now have very inexpensive provider-independent phone service. I think home may have gone out once or twice in 18-24 months but a reboot of the Telo was all it took to fix it.
(Dad’s been kitten wrangling all morning – they managed to knock a map off the wall! – and is napping in the chair in front of the keyboard. This missive was nothing like fun via smartphone ‘keyboard’ so I’ll pause for now and see if there are specific things I can answer.)
Thanks for the info, Mr. SVJeff; I will look into it further now and make some notes accordingly.
I bought into Ooma for $199 when they started. I get Premiere Service for as long as the hardware lasts. They let the buy-ins upgrade to the “Telo” device when it came out for cost. I set up the second number for a home business we might have started, but haven’t used. I use the primary number on any application that wants a number if I don’t want calls from douchenozzles. I have two of the last generation Ooma handsets that work fine.
I pay zero per month due to the buy-in deal. Ooma wants you to setup the Telo between your modem and router/XXX. I have it set up behind the router and it works fine. Don’t want any hacking. It’s been a while since I studied Oooma operations, but they share bandwidth in areas to make the system work. I’m not a network expert, but sound quality is excellent. I’ve never had a problem with the various ISP’s since the Telo is behind the router.
And muchas gracias to you, MrAtoz, for your input.