Side Hustling Ep. 3 Retail Arbitrage Dropshipping Business Grows Into 6 Figure Manufacturing Biz

Hey guys, Rules For Rebels here with episode 3 of our new side hustle series Rebels Hustle. Every Tuesday and Thursday we'll be covering a different story of a real life Entrepreneur who started a side hustle outside of their normal day job.

With each of these stories we're going to be covering what inspired their idea or how they thought of it, how they took action and made it happen, and where that business is today. 

For anyone new, and to recap for everyone, a side hustle is typically something you can start with little to no money, something you can start outside of your day job, and something that isn't going to require 40 hours a week or anything close to it. Whether you hate your job and are looking for a way out, or whether you love your job and are just looking for a little side income, everybody should have multiple streams of income.

Last Thursday we told the story of Max, a Scottish man who created a set-it and forget-it affiliate marketing business using Amazon's Associates program. This week we're going to discuss something even more substantial. 

Today we're going to be talking about Sarah, a woman who started a custom printed Candy heart business. What's really cool about this business is 

1. It didn't even start as a business, it started with her just wanted to get some gifts for coworkers and

2. This business which today is a manufacturing business doing six figures, started off as nothing more than a retail dropshipping or a retail arbitrage business which is something many of you guys are doing right now. 

Without further adoo, let's get started telling Sarah's story...

One big message and takeaway from today's story is this. If you're looking for something or a product and you can't find it, build it yourself. This is exactly what Sarah did. Sarah Kazynski was looking to buy some custom printed candy hearts for her co-workers, you know those chalky heart shaped candies we tend to see around Valentines Day. 

Sarah figured it would be a cute fun idea and thought surely it can't be hard to find that. Sarah started Googling, she searched high and low but didn't have much luck. In desperation she started contacting candy companies seeing if they had any ideas. 

One particular company reached back out to her via Facebook and told her they offered this service, and after e-mailing with them discovered the fee was very reasonable. Despite looking at their website and social media accounts she couldn't find any additional information about this service that they supposedly offered. Any mention of this service on the companies website and marketing materials was non-existant. 

Sarah e-mailed the company and explained that she worked in marketing and could help them with this, but nobody ever replied. As a marketer Sarah couldn't resist but to offer this service herself. She quickly threw up a 3 page template type website, something any of you could create using Shopify, Wix, BigCommerce, GoDaddy, etc. 

She posted these custom printed candy hearts at a price just slightly over what the manufacture would charge. This is essentially retail dropshipping or retail arbitrage. Not so different from finding a product on Bed Bath and Beyond or Target or Walmarts website, marking it up and re-selling it on eBay, Amazon or Shopify. Not very different than finding a product on Ali Express and drop shipping it to your Shopify customers. 

Now because Sarah couldn't find anyone offering this service, obviously nobody was competing for these keywords or this business so within a matter of days Sarah was ranking number one on Google for custom printed candy hearts


That same day she got her first order, and then three more, and then three more. Even though Sarah was just a re-seller or a dropshipper, she discovered the business was taking a lot of her time. She wasn't manufacturing, she was simply taking orders and then placing those orders on the manufacturers website having those orders shipped to her customers, keeping up with all the details was taking a lot of time. It wasn't just her either, the manufacturer themselves was falling behind with all her orders in addition to all their normal orders.

During the peak of the season they e-mailed Sarah and let her know they woudln't be able to fill every order of hers for the season. Now this is a common problem with dropshipping. Because your not actually handling the production or ordering of the products, because your reliant on a third party it can really throw a wrench in your business when inventory isn't available, prices change, etc. This is exactly what Sarah was running into. It was a bit embaressing but Sarah e-mailed some of her customer s and let them know she woudln't be able to fulfill their orders. Despite not having all her orders filled Sarah still made a nice profit that first season.

Custom printed candy hearts is obviously a seasonal business which only lasts a few weeks leading up to V Day. Sarah was thinking ahead however and wanted to be better prepared for when next season came around the following year and she didn't want to be reliant on an unreliable company.

Sarah was smart, she was good at marketing but she knew nothing about production lines, nothing about the candy business, nothing about production machinery or printing equipment.

Like most entrepreneurs Sarah decided to figure it out. Now this is another big lesson we can take from Sarah. Despite not knowing about any of these things, Sarah didn't quit, she didn't whine, she didn't say “OH MY GOSH I NEED A MENTOR”. She figured that shit out on her own!!!.

She started researching companies who make candy equipment and printing equipment. She found a supplier who stated they had a machine which could do what she wanted. However upon receiving the machine she realized that it didn't do the job.

Next she got on the phone and started calling around to all sorts of companies big and small. She found a company who promised to make a machine which would actually work. Now the downside, it was going to cost her all her revenue she made from the first year, and there was no gurantee the machine would work, what if it was like the first machine.

Despite that, because this was a side hustle and Sarah didn't “need” the money she made that first season, she decided to roll the dice and buy the machine. The machine showed up a month later and it actually worked. She ran that machine 12 hours a day, 7 days a week and was able to fulfill all her orders.

Sarah was now in a good place. She had the page 1 Google ranking, she had the ability to fulfill all her orders herself and not be dependent on a third party supplier.

It's a year later, Sarah has worked out all the kinks, she has some employees running the production so she can focus on her day job and the marketing aspect of her side hustle.

Despite having a six figure side hustle business Sarah still works her day job. This may seem shocking to many of you who dream of quitting your day job, but Sara wasn't really after the money, she was after the freedom and she got that freedom without having to leave her day job.

Because Sarah's boss knows she's not dependent on the job she has, she gets a little more respect at work. She wound up getting a raise, has a bit more scheduling flexibility at her day job, and all is good.

This is definitely something I can relate to. It was about 3 years after starting my side hustle before I left my day job. But one thing I realized towards the end of my employment “working for the man” was that work was a lot more tolerable when I knew I didn't have to be there. When my boss got on my case or I had a bad day at work, just knowing that if I really wanted to I could walk out. That I didn't need the job. That made it much more enjoyable.

I eventually did leave my day job. My side hustle income had grown to the point I could more than support myself, enough time had passed that things were pretty stable, and the business was growing to the point that it did need full-time attention. It just so happenend the company I was working for was starting to go downhill, new management was coming in, and overall things were kind of starting to suck which made the somewhat nervous task of quitting much easier to do.

One more lesson, and probably the most important lesson this story should leave you with is this. Sarah didn't know half the things she needed to know to get this business going, but she figured it out. She didn't quit, she didn't give-up, she didn't sit around waiting for a mentor to come save her. She did research, made phone calls, and just figured things out on her own.

This is something every one of you need to learn to do if you really want to be an entrepreneur. The definition of entrepreneurship is literally being innovative and solving problems, so if you want to be an entrepreneur you can't be the type of person who sits back and waits for someone else to solve your problem or waits for someone else to hold your hand. You have to be a go getter, a self starter, and someoen who can go tackle problems.

When Sarah couldn't find custom printed candies, she went out and found them by asking candy manufacturers. When the supplier she used couldn't reliably filled orders she found a way to do it herself. Then that first machine she ordered from China didn't work so she decided to invest her whole first years earnings into a new machine. She was able to do that because she didn't need that money, she knew her product sold and there would be orders the next year, etc.

This story tells us about probably one of the most important skills an entrepreneur should have which is resourcefulness.

Now in terms of how you could do something similar. This isn't quite as cut and dry as an Amazon Affiliate program like we discussed last week where I can just say okay go join Amazon Associates program, find a niche and start creating content.

This particular business requires a bit more outside the box thinking. Think about products you've sought out in the past but couldn't find. Think about a product which you maybe would like to customize but nobody offers that service. Think about something you wanted to buy for yourself or someone else but that didn't exist. These are great jump off points to creating a business like Sarah's.

There's one sort of way I can put a spin on this which would maybe make it easy to do, or at least easy to start investigating some ideas. You may want to look for a USA based company who provides marketing or novelty type products to large companies to advertise. Think about things that beer or liquor companies will give away at bars, things your company you work for gives away as swag, etc. Start browsing the suppliers of those products online catalogues and you may come across some cheap and interesting products which you could brand and sell on Amazon. Many of these companies don't just sell zip drives which say Xerox and lanyards which say Dell, some actually have some pretty cool or unique products. Also by sourcing this stuff domestically you can typically order in smaller quantities, you don't have to deal with the confusing or expensive shipping from China, and you may find an opportunity to brand or create a product right in your backyard.

As always I welcome your guys thoughts and comments. Drop a comment either in the comments section below this blog post if you're reading, or below this Youtube video if you're watching. Thanks for checking back in this week. I hope you guys enjoyed today's episode. Stay tuned for Thursday when we'll be talking about a women from Pennsylvania who made over $40,000 Pinning pictures on Pinterest. For now, Rules For Rebels signing off. Please like, comment, subscribe and share if you enjoyed this video and I'll catch you guys on Thursday!




No comments:

Post a Comment