This transcript was generated from the episode audio and may contain minor errors.
[Music]
Hey there rock star, welcome back. I'm Chris Guillebeau, this is Sadduceville School, always trying to show you interesting ideas and how they can be applied to create income generating projects without quitting your day job. Now there's kind of an interesting one today. It's like a throwback story. It's not something you can necessarily go out and replicate in the same fashion right now.
But I want you to hear it because in the early days of a new industry or a trend or a phenomenon, there's usually a lot of inefficiency. And that inefficiency allows for creative people to make money in a way that might not work years later. I remember 20 years ago when I first started side hustling, mostly because I was a terrible employee, but that's another story. I began selling on this brand new website called ebay.com. Now most people know eBay these days, but way back then it was very new.
And it was actually a seller's market because it was very inefficient. And people were just discovering this new thing about online auctions. So it wasn't that hard to have a profitable business on it, even if you were like me and lots of other people at the time who really didn't know a whole lot about business. In fact, in some ways, you could go and buy something at the store and then list it on eBay and people would pay more for it, which of course is crazy. That's how things work in the beginning of a new industry.
And in fact, the normal pattern of technological entrepreneurial evolution is that something will work really well for a while, but then you have to find something else. So today's story is a real life example of this principle. It's all about a college bartender who turns online shopping into an unexpected side hustle right after this. [Music]
Dana Massaro is an example of an accidental entrepreneur. She didn't set out to make money, but instead took advantage of an opportunity that came her way.
Back in 2004, she was in college and working at a bar to pay her bills. Around this time, she realized that she could get the comfortable shoes she needed for work much cheaper online than she could in the store. Now, online shopping had been around for a while at that point, but it wasn't something that everyone did. There were still a lot of people that only shopped at stores. Also, shipping was expensive or at least perceived to be expensive, but the shipping cost didn't increase when she ordered multiple items.
And if she spent more than $75, shipping was free. So when you combine this with the fact that most of her coworkers didn't have their own credit cards, she realized she could order stuff for her coworkers and they would both benefit. Remember, this was 2004 and she was in college working with other young people. So she framed it to her coworkers that they could essentially borrow her credit card to buy stuff online and then pay her in cash when she brought the items into work. At first, she wasn't even charging a commission.
She was just trying to save her friends a few bucks and get free shipping for herself. But after a few rounds of ordering clothes and shoes for people, something happened that made her realize she could expand the situation into a hustle. One coworker had ordered a pair of shoes that didn't end up fitting quite right. But then right then another coworker came up, saw the shoes, tried them on and they fit perfectly. The second coworker loved the shoes and she bought them right then.
And it was at that point Dana realized that she could buy clothes and shoes online and since it was so much cheaper than what was in the store, as long as she bought the right items, someone would buy them from her. So she started going online more often, ordering cute outfits and shoes in various sizes and bringing all the stuff to work. Naturally, that's when she started charging a small commission since she was assuming some risk in buying without a specific order. Her coworkers loved it. In fact, they loved it so much that when she would show up to work with a new box in hand, they'd all come running, arguing about who would have the chance to purchase first and they hadn't even seen what was in the box yet.
It really does remind me of my days on eBay. So Dana was definitely onto something and for two years she took advantage of this opportunity. At least once a week she'd order clothes and shoes. They would show up a few days later and she'd bring it all into work and see what she could sell. And she got smarter as she went along.
She had a couple of strategies she used to maximize her profits while still passing on legitimate online savings to her coworkers. Now first, she would pretty much only buy clearance items to keep the cost low and second, she made sure to show up at work right when people were beginning their shift, especially the people who were the most frequent buyers so that they had a chance to see things first. With these simple strategies, Dana would make anywhere from 50 to $75 all the way up to $100 per box. She did this once a week so that was at least $400 extra per month. And she says, well, it wasn't a huge business, but it made a big difference in my life when the recession came along.
What I lost for in tips I made up for by selling clothes and shoes. The system worked so well that she always had plenty of time to deposit the cash and pay off her credit card in full each month. And consistently paying off that credit card each month, while she spent more and more, may have turned out to be the biggest accidental benefit because after a couple of years of being a reliable borrower, she had a very high credit score. That eventually helped her buy a new car while she was still a college student. So it's $400 a month, a great credit score to help her with the next phase of life and some early entrepreneurial experience and skills that she could take with her no matter what she did next.
Not bad at all for a completely improvised reselling experiment. [Music]
So remember, we're living in the future now. Online shopping is a lot more efficient and common today. This project worked well because back then it wasn't and because the market of people Dana was selling to was essentially unbanked, meaning that most of them didn't have credit cards. That was her competitive advantage.
So the same kind of thing wouldn't work in the same way today, but that's okay because the point of the show isn't for you to listen to seven episodes a week and go out and start seven income generating projects, all based on what you hear. It's to teach you timeless lessons that can be applied in lots of different ways. So the question you have to ask yourself is, okay, 20 years ago, online auctions were totally new, very inefficient market, maybe 10 to 15 years ago. A lot of people still weren't online shopping all the time. So projects like Dana's could be successful.
What exists like this today? It doesn't necessarily have to be something that's totally on the cutting edge, although it can be. The key point is to look for inefficiency. On the show I featured a number of different stories of people who are doing other reselling businesses. And some of these probably wouldn't exist either if the world were perfectly efficient, if everyone had access to the same products at the same prices.
But because there's just so much stuff out there, it is still possible to find things like this. They may not work forever, but they can work for quite a while. Dana did this for two years, made $400 a month. As a college student, that was significant to her. There have been other stories we've looked at, people who've made $5,000 a month or $10,000 a month through a bit more advanced reselling model.
So there's always the next big thing. I encourage you to learn from the past and apply it to the present. That I think is the great challenge and the great opportunity of side hustling. [Music]
I hope you enjoyed this throwback story. As always, remember, inspiration is good, but inspiration combined with action is so much better.
If you wanna see the show notes for today's episode, just come to sidehustleschool.com/89. There is so much more to come on the show each day. I hope you are subscribed in iTunes or wherever you listen to podcasts. That way, whenever there's a new episode, you'll get an instant notification. You can also get those notifications directly on the site or by email, however you'd like.
Side Hustle School is for you. I'm Chris Guillebeau, and I'll see you tomorrow. [Music]
