College Student Pays Off Loans by Flipping Classic Video Games

This transcript was generated from the episode audio and may contain minor errors.

[Music]

Hey, hey, what's up? Welcome to Sidusle School. This is Chris Guillebeau, your host. I'm really excited about today's story because it's all about classic video games. Video games were basically my parental guardians when I was growing up and I have such fond memories of so many different games and classic systems.

Now you may not care about that, but that's okay because this story's about somebody who makes money with flipping classic video games. He's actually a college student who's got some loans, he's got some debt, in fact, and he wants to pay off that debt. So he looks at something that he already knows about, already actually has a bunch of games to begin with, but then he goes much further than just selling his own games, figures out how to buy and resell these games, ends up paying off a $4,000 loan in a really short period of time, and then goes on to make a lot more money as well. Now the principles of reselling are the same regardless of what market you're looking at. So even if you don't care about video games, there's probably something else out there that you might be interested in buying and selling or something that you already have.

If you too need to pay off a loan or make some quick cash or just learn more about the world of side hustling, reselling can be a great entry point. So I'll tell you all about that. This whole story is coming up after this quick thank you to our sponsor. [Music]

Teaser Esposito was born in 1986, a year after the Nintendo Entertainment System, also known as NES, launched in North America. I remember that time very well myself.

I was seven years old and when I got a Nintendo, my life changed. I spent hours upon hours playing the very early NES classics, Super Mario Brothers, Duck Hunt, Excitebike, Ice Climber, and the list goes on all the way to Legend of Zelda, the original one, and Final Fantasy, the original one, and more. Video games shaped my entire childhood. So when I stumbled on this story, of course I paid attention. I'm about eight years older than Caesar, but we're in the same generation.

His life was also shaped by games. Growing up, he played the NES, then the SNES, or Super Nintendo, on and on through many different consoles. In fact, at one point he owned a dozen video game consoles and literally thousands of games. I thought I was hardcore. I had maybe five systems at once, so obviously I have to tip my hat to Caesar.

The purpose of Cytosol School is not to tell you about video games, alas, so let's fast forward a bit. Caesar was in college and had also just gotten married. He worked the usual part-time jobs and was one year from earning a degree in geographic information systems. But he also had a student loan from his freshman year of $4,000 that was bothering him. Now, a lot of people listening probably think that a loan of $4,000 is no big deal.

I know we have all kinds of listeners with some really serious student loan debt. I totally understand that, but let's focus on what his problem was and how he solved it, because in the end, he could have paid off a loan of much more than that. First, he realized he had a ton of inventory just lying around that he could potentially sell. He didn't want to sell all of his games, but he began listing many of them on eBay, Craigslist, and another auction site that no longer exists. By doing this, it wasn't just about trading the games for cash, he improved his process.

He was really excited about gaming, so he learned when he wrote his listing titles and descriptions to let his passion shine through. For example, he wouldn't just say, "I have a copy of Mega Man 2 for sale." He would say, "Get the Mega Man that started it all." No, it's not just the original Mega Man, that game actually wasn't that good, but then they came up with Mega Man 2 and it was so much better. "I have a copy and you need to own it." After doing that for a few weeks, he generated $500, but he knew the solution wasn't just to sell all of his inventory. In doing that, he'd simply be exchanging one asset per another. He needed to actually make money by buying something at one price and selling it at another.

So he began going to yard sales in flea markets. Inevitably, most of them, at least the larger ones, would have at least some games for sale. He was already an expert, but he became even more of an expert at understanding the average selling price for these games. Using that startup capital of $500 that he had gotten from selling his own games, he began to buy and resell more and more games. Once in a while, on a flea market shopping excursion, he would hit the mother lode, like when he found a vendor selling more than a hundred classic NES games, as well as a comprehensive collection of Activision games for the Atari 2600 system.

Now, most people don't have any idea about what these old games are worth. And to be fair, it's not like all of them are worth a lot of money, most of them aren't. Knowing how to spot the diamonds in the rough collection of cartridges was Caesar's competitive advantage. He kept buying and selling, and within two months, he'd made enough to pay off that $4,000 loan that was bothering him. Then he kept going, earning between $1,000 and $3,000 a month for most of the next two years.

After that, he had graduated and begun a career and just moved on to other things. In addition to the pride he feels from being able to pay off his loan himself, he also likes the fact that, even though he's not gaming as much now, he still has this knowledge. He can still use that knowledge to make extra cash whenever he needs to, or whenever he has extra time. [Music]

Awesome, congratulations to Caesar. And yeah, Mega Man 2, so much better than the original Mega Man, for sure, hands down.

So why did this work? Why is this a good market? Well, Caesar operated using the sell what you know principle. Like he was a subject matter expert about video games, particularly classic video games, classic cartridge console games. So going into this, all he had to learn about were some basics of reselling, like how to write good copy, how to find a good source for the items you need to buy.

That's what he had to learn, but he already knew so much about the subject itself. Now, there is some contrarian advice, or a contrarian model that says, it doesn't really matter what you know about, you should sell what people buy. So in other words, somebody who doesn't know anything about video games could also enter this market and do just as well, or maybe not do just as well, but they would be able to do well for themselves. But in this case, he focused on that sell what you know principle. And whether you like a particular market or not, consider these qualities of the video game market.

Okay, so four qualities here. Number one, it has a large user base, lots of people buying video games, even classic nostalgic games, there's a huge market for that. Number two, those people are used to spending money because to get video games, you have to pay for them. Number three, there's an established marketplace for buying and selling these items. It's very common to buy and sell them on eBay, Craigslist, other sites, et cetera.

Nobody is surprised by that or put off by that. And number four, there's a global supply chain that lends itself to arbitrage opportunities. So to break that down, what I mean is that there's a lot of inventory in a lot of different places. And if you look at different sites, the games are selling at different prices. It's sometimes possible even to buy them from one site and sell them on another.

And that gets a little bit more complicated, but the point is there's just a lot of possibility here because this is not a market that is 100% efficient. It never will be. So you might not get rich doing something like this, but if you need to make some extra money, you certainly can. Back in the day, I used to do this a lot. It's not difficult even now to go and make 20 to $30 an hour doing it, and maybe even a bit more.

Again, probably not gonna get rich, but if you wanna make some money or pay off a loan, why not? And of course, we've got a bunch of other reselling episodes in the archives that you may wanna take a peek at or take a listen to, as it were, if you're interested in this model. Thanks so much for being out there. You are amazing. As always, inspiration is good, but inspiration with action is better.

Today's show notes are at sidehustleschool.com/679. That is for episode 679. I'll be back with you again tomorrow for the weekly recap and so much more coming up next week. Once again, my name is Chris Guillebeau, and this is "Side Hustle School." [Music]