Digging For Profits: One Man’s Trash Is Another Man’s Hustle

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

[Music]

What is the easiest side hustle that you can jump into right away with little experience and little risk? Well, we have talked about it before, it's reselling. The art of buying something at one price and then selling it for another price, preferably a higher price actually, if you want to make money with it. Now reselling is how I got my start doing online business approximately a hundred years ago. Maybe I guess it was like 20 years, but it feels like a hundred.

And over the 825 episodes of "Side Hustle School", we have featured a number of stories of people doing it in various ways. Not surprisingly, given the intro, today's story is a case study in reselling, where an automotive painter with 30 years under his work belt finds more than scrap and the way spins at work. He fixes himself up with a new side hustle that brings in six figures in gross sales by his third year. We're gonna call it digging for profits. One man's trash is another man's hustle.

In case you want to do something like this yourself, we'll also include some advice from him. So buy low, sell high, and stay tuned. [Music]

Don Schafer of Tigard, Oregon is not new to the world of reselling. Growing up, he was the go-to parts guy on the playground, where he specialized in skateboards and bicycles. In his teenage and young adult years, he frequented thrift stores, where he'd purchase arm pulls of albums and cassettes that he would play until he got tired of them, and then turn around and resell or trade them.

In simple terms, Don belonged to a generation that still saw the value of something after the newness had worn off. This point of view served him well over the years, but as the world evolved, he noticed that people were putting less value on things with minor flaws. At the auto body shop he worked at, for example, he routinely saw parts being chucked into the bins due to a little bit of wear and tear. And the most common of these rejects were headlights and taillights. You see, when your headlight gets a crack in it, or it retains fluid, the insurance company says that you're entitled to a new one.

In most cases, your insurance will pay for the brand new headlight, the body shop orders it, then they put that new headlight in. To Don's utter dismay, they would throw away the old one, regardless of whether the damage was minor or not. Body shops will fix a dent or scratch on a car, but when it comes to something like a headlight, it's just easier for them to replace it entirely. Headlights and taillights are small money to shops that try to work as quickly and efficiently as possible, so it doesn't really make sense for them to invest valuable labor refurbishing them. When Don realized this, he had a light bulb moment of his own.

If they were throwing them away anyway, why not see if they'd give them to him to resell? Long story short, Don walked away from his shift that day with a couple dozen headlights and taillights, and he began sprucing them up in his garage. Some of them just needed a little cleaning and buffing, others required a bit more elbow grease. But the best part is, they were all completely free from the shop. Although it may not seem like it on the surface, this was actually a win-win situation.

The body shops often have to pay for their waste by weight, and Don taking some of the refuse off their hands meant that they would pay less over time. For the first three months of his new hustle, Don would pick up headlights and taillights from a shop he worked at, as well as seven others that his boss managed, spruce them up, photograph them, write up some descriptions, and then list them on Craigslist. So far, so good. But then things changed, or even leveled up, when he was contacted by a fellow headlight reseller in Southern California. This reseller wanted to see his inventory, so Don let him come over to his house to check out the lights.

After carefully reviewing what he had to offer, this reseller set aside six or seven different headlights and offered Don $500 for the bunch. He handed Don five $100 bills, packed his haul into his truck, and drove off into the sunset. Don was in shock. He walked back into the house and showed his wife, Cath, the $500 he had just made. He told her he thought they were really onto something here, and that was the point that he started to take it seriously.

He enlisted Cath's help to navigate the wonderful, wacky world of eBay. For the rest of that year, 2016, they spent nights and weekends hustling their headlights and taillights on eBay, bringing in around $25,000 in gross sales with a 70% profit margin. The following year, Don decided to drop a day off his work schedule so that he could dedicate more time to the hustle, which led to their numbers doubling. By 2018, they crossed the six-figure mark, bringing in $155,000 in sales. Now, like any growing side hustle, there have been some growing pains.

Attempting to stay competitive with Amazon, they tried to offer free shipping in 2018, but this ended up drastically cutting into their profit margin. It went from 70% to 50%. Still, not bad, more than $70,000 in net income. They've since implemented flat rates for their lights, $25 a headlight or $15 a taillight. And since making that change at the beginning of 2019, they've sold 118 lights, grossing $22,300.

Now that they've stopped offering free shipping, those profit margins have jumped to around 80%. So we asked Don and Kath for some advice based on their experience for anybody out there who wants to do something like this and list on eBay. And they said the more frequently you list on eBay, the better you perform in the algorithm. And also if you're posting consistently, your products will get seen by more buyers. It doesn't have to be every single day.

In their case, they may not have lights to list every day, but do it as consistently as possible. They also said one of the most important parts of putting together an eBay listing is getting good photographs of your items, which I try to stress all the time for anyone reselling. You want lots of lighting with a camera on a tripod and a neutral background for the shots so that potential buyers can see any flaws in what you're selling. Finally, they learned a really important lesson, which is that not all headlights are created equal, essentially. You know, in the beginning, they would process their lights on a first-come basis, but now they keep an eye out for more profitable headlights.

Those from BMWs and Lexuses, for example, they can be resold for up to $800. So now when new inventory comes in, they process headlights on a value basis, starting with those that will yield greater profits down to those that will not. And for their stock that isn't selling well on eBay, they turn to Craigslist, where the buyers are even more thrifty, but less picky. So in conclusion, Don's early days flipping skateboard parts on the playground ended up serving him well later in life. Is there a skill like that you can draw upon?

Is there a headlight hustle in your future? [Music]

So why eBay and why not something like Amazon? That's one of the questions we had, and Don said it was the easiest of all the selling platforms and it had a very broad buyer base. On a platform like Amazon, customers are generally looking for near-perfect items, and you're also limited to certain categories for selling, and you have to ship your item to a warehouse, so that it can be fulfilled by Amazon. So basically Don and Kat just didn't wanna jump through hoops only to work with Amazon.

They also wanted to represent their products themselves and take care of customer service on their own. So that's why eBay was a good fit. They said there are other automated sellers on eBay that are making six and even seven figures. So that's what they're aspiring to in their next attempt to level up. All right, now it's over to you.

What can you resell? What can you buy and then sell for a higher price in some fashion? Is there a secret lurking in your job somewhere? Is there something from your childhood? Is there something that you're just interested in?

Some kind of topic that you know a lot about, but that other people feel confused by? And of course it helps if that area, that topic, is something physical, some kind of physical product like headlights, or something entirely different, of course. These principles can apply in lots of different ways. Can apply in lots of different ways, in lots of different markets, on lots of different platforms. Basically, if you learn to do this, it's a skill that will take you far.

So I'm gonna leave you with that. Inspiration is good, but inspiration with action is so much better. A big thanks to Don and Kath for sharing their story with us. Today's show notes are at sidehustleschool.com/825. We'll link up their eBay shop if you happen to need a headlight or a tail light.

And I'll be back again tomorrow. My name is Chris Guillebeau. This is "Side Hustle School." [Music]

From the "Onward Project."