Packing Cube Sales Earn $6,000/Month With No Inventory

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

Welcome, my friends. Welcome to a new week of Side Hustle School and also a new week in your life. I realize it's not just about the podcast. You've got a life, you've got things you are building for yourself. It's my goal to support you in that with this daily 10-minute investment in yourself, just helping you think about different ways to make money or different ways to do something differently, to create more of a future for yourself, whatever your situation in life, whether you love your job or not, Cytosle can help you for all kinds of reasons.

Now, over here, we are in the last couple of days of the Cytosle Society relaunch. Over the past week, we've been welcoming in lots of new members to our online community. It's a place where you can get feedback, a place where you can share your idea, ask questions, connect with people about resources, different tools. We're going to be forming some subgroups in the near future. We also have at least one guest expert who's going to be facilitating some calls. I'm excited about that. If you have not had a chance to check it out yet,

I would love to welcome you into the program. It's going to close again really soon, and you can join with no commitment at sidehustleschool.com/society. All right, so today, we're going to look at the Fulfillment by Amazon model and creating your own products to sell using that model. As part of our Year 3 Leveling Up, we're trying to go above and beyond and say, "Okay, here are the stories, but what else can we take away from this? What actionable steps or practical info can we give you?" This story includes three questions you should ask when researching products to sell, as well as a pricing guideline, really specific info here. How much should you charge if using this FBA model? If you

don't know what FBA is, well, I'm going to tell you about that too. In this story, a presidential pencil holder and a keen eye for travel gear leads to a $6,000 a month travel business. In fact, it's a side hustle that packs a punch, so stay tuned for that story. Travel strategist Scott Bright was burned out and frustrated by the 9-5 grind. He'd been hired straight out of college and couldn't help but feel that he wanted to be his own boss. Some of his friends were running their own companies, selling their own products,

and exploring the world. Scott felt it was about time he got a piece of that action. So he began by looking for business models which would help him leave his job, but that he could also run while traveling. A friend recommended he look at Amazon's FBA service. After that friend had started a successful business of his own, importing and selling outdoor goods. If you're not familiar, FBA stands for fulfillment by Amazon. We've talked

about it a number of times on the show. It's a program that helps people start and manage an e-commerce business. With this model, Amazon keeps the stock of a product you sell in their warehouses all over the country. They take care of the processing, handling, shipping, and returns of your items. In return, they take a significant portion of the money because they're not doing this to be nice.

Still, because Amazon has so many customers, it's a model that's working for a lot of people. This seemed like a great solution to Scott, so he devised a test to see how it worked. He created a simple political satire product, namely a pencil holder. This pencil holder was called Dump A Trump in the run-up to the 2016 election. So I'll let you search for yourself to see how it looks if you're curious, but let's just say it doesn't feature a flattering angle of the current occupant of the White House.

This initial product saw a ridiculous amount of success and taught him a few lessons about selling on Amazon. Specifically, he learned a great rule of thumb for pricing. That rule is you should aim to charge 4 times the amount the product costs to manufacture and ship. So, for example, if your product costs you $4 to make and $2 to ship, you would want to charge at least 4 times $6, which I believe is, I don't know, what is that? Let me get my calculator. Oh, I think it is $24.

With the income generated from that product, Scott was able to quit his job in December 2017 and book a one-way ticket to Vietnam. He figured he'd come back when he was good and ready or when he had his next great business idea. But the longer and further he traveled, the more he wanted to keep going, so he began to look for opportunities to tie his passion for business and exploration together. He began interacting with more travelers, both online and with social media, and he noticed some common trends. One that really stood out was the gear people brought with them when they traveled, specifically the bags and rucksacks and suitcases people used.

The most aesthetically pleasing and functional pieces were really expensive, and the more reasonably priced ones were ugly and far less functional. Realizing this, Scott began thinking of alternatives for lightweight budget backpackers. He felt there had to be a way to create affordable gear which was functional and looked good. With the knowledge he already had of Amazon FBA, he set out to research products he could make and sell. Now, I already gave you that pricing guideline. Here are three key questions you should ask

when researching products. He used these questions himself. Number one, are people already buying similar products? Number two, is there already a healthy amount of competition? And number three, can you comfortably charge the consumer four times the initial costs?

There's a lot more we could say about all that, but let's keep going for now. Only once all three of those boxes are checked does a product become eligible, at least in Scott's mind, for Amazon FBA. And the only product which met those criteria for Scott was packing cubes, which he was able to have affordably made and shipped from suppliers on Alibaba. I use a packing cube myself when I travel, just one. It's where I put my clothes in.

You can kind of compress it and save some more space in your bag. So Scott reached out to a few friends and created some mock-up designs for his cubes, a sunrise, a sunset and an icy mountain scene. You could call it the Instagram trifecta of packing cubes. He then sent those designs onto the manufacturers to get samples. He judged the quality and eventually placed his first order. He also gave his new business a name, Well Traveled

Gear. Now, unlike his first project, this wasn't a cheap startup. Scott had around $35,000 to invest in the business, but all that money came from his pencil holder earnings. So he's essentially just reinvesting back in the business, but to create a different product. Now this gave him a significant budget to play with, but it also didn't require him to dip into his life savings.

Those startup costs were spent mostly on buying inventory. He spent $30,000 on 5,000 units of the packing cubes, which were then sent directly to Amazon. He never had to touch the inventory. The other $5,000 went to brand development, advertising, and creating his Shopify website. He says the key to starting a brand in a competitive space like luggage is to find your little sliver of the market and go all in on serving those customers. This will allow you to build

a brand which attracts the right type of customer who can then become an evangelist for what you create. So far, it's working out pretty well. Well Traveled Gear has sold around 2,000 units per month since starting, which works out to around $6,000 in monthly revenue. Now going forward, Scott wants to focus less on Amazon and more on bringing more people into his website. Even in the years since he started this new business, he's seen the luggage market change a lot and wants to make sure he has more control and isn't at the whim of Amazon's algorithm.

It sounds like he's packing his bags with ideas and income. So in this story, we have a great transition from a gag gift to something that has more potential to sell for a long time and build a brand around. So the gag gift that he was selling the pencil holder, it is pretty amazing that something like that can sell so well. We've had a lot of stories about something that's a trend and kind of takes off and does tens of thousands of dollars in income and sometimes more than that. So that of course is a success of its own, but I think he was really smart in recognizing, okay, this is something that's going to pass. It's not going to be here forever. So how can I apply the

knowledge that I've learned and sell for something that could last perhaps for longer than a political cycle or whatever it is? So good for him. Now I do have one critique based on his website. I want to take a look at his about page and our longtime listeners, you probably have heard me talk about this before. The about page on your website is the most important page after the homepage. I mean, everybody always thinks about the homepage, but when

I go and look at somebody's website, I'm always curious like, what is the story behind it? Who is the person who's doing this? Who is the person who is the team? Whatever it is. So on Scott's website, he's got a prominent page that's called about and the footer it actually says our story. So it's a page that says here's our story. It's about us. But

on that page, he doesn't actually have a story. He doesn't actually have anything about him. All he has is a really short single paragraph that says well traveled is built for your next journey. Whether you're backpacking, trekking or escaping to white sand beaches will keep you organized. So not a bad couple of sentences, but that's it. There's nothing

else there. There's no photo of him. There's no story of why he started this business. There's no you know, here's how it's going to change your life. Like there could just be so much more there. And if you're just trying to sell one off, if you're just trying to sell something

to somebody and never sell to them again, then maybe that's not that critical. But since his goal is in fact, to build a brand, I think it would be wise to invest a little time there. So just a suggestion. And also, I've been reading a lot about Amazon FBA recently myself, I read this article that I'm going to share with you, I'm going to link it up in the show notes, just kind of a crazy article about the competition in that space, this whole article about how there were overseas sellers who leave, you know, false reviews on their competitors listings to try to get them delisted by Amazon. And then once you get delisted, it's like a, you know, huge pain to get back up. And there's like a whole cottage industry

that's starting now around helping people, you know, get relisted after they've been taken down by a competitor. So just some crazy stuff there, I thought it was notable. So I will link that up for you in the show notes if you'd like to read. And let's see what else? Well, speaking of those show notes, those are at sidehustleschool.com slash 758.

This has been episode 758. As mentioned, we're in the last couple of days of the side of social society relaunch. I would love to have you join our online community and check it out, see if we can help you give you a little boost so that you can have a success story of your own. Information about that is also on the website sidehustleschool.com slash society. All right, that's it for me. I hope you have a wonderful day wherever you are in the world.

My name is Chris Guillebeau. This is Side Hustle School.