NevBlog

Neville's Digital Surrogate Brain

Archives for May 2007

Making More Money Than His Job

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The Bottled Water Experiment (and part 2) were some very interesting experiments in a micro business, and since then I’ve got tons of feedback about them.

However it’s always cool to see someone else take the idea to the next level. Here’s a guy who saw these water experiment posts and tried it out, and is currently making more money selling water than his job!

Checkout this comment on part 2 of the water experiment:

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I started my own water business after reading this post. I put a twist on it however as I replaced the stationary location with a backpack lined with a trash bag full of ice and bottles, and parked my car in a stationary location with the ice chest and other water to come back and refill. I am MOBILE! I made the shirt that says “Bottled Water $1” and headed to the river on a very hot day. People could not believe that I was doing this, everyone thought the idea was so awesome, and I couldn’t take credit. But I did sell ALL my water. 200 bottles on the first day.

I did this 5 days in the first week, for 4 hours before my shifts as a manager at chick fil a. I found out that I was making more money from selling bottled water than from my real job. So I posted ads on craigslist, offering to pay college students $10 an hour to do my bidding. I got 14 responses, and hired 5 people. Now I have a guy at the river, one at the biggest local park, two on the college campus of VCU and one in the popular downtown business sector. Each person generates about $100 a day for 4 hours of work at ten dollars an hour. thats 20 hours of labor for me to pay so 200 dollars gone, but 300 dollars are mine, minus my costs of getting water from costco, which costs me roughly $100 dollars each day. and I make $200 a day for myself, and all I have to do is go buy water once a day. Thanks nev!
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I love how he took the concept, put a small spin on it then scaled it to make $200/day. That’s some serious summertime cash (not to mention good experience)!

Inventory Control Tattoo Experiment

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When I first started House Of Rave I was in high school and going to college soon. I didn’t have the space to store inventory or the money to buy it.

To solve this I used a drop-shipping business model where I sell stuff, but send the order elsewhere to be fulfilled. This worked very well because I could concentrate on the marketing aspects and not worry about inventory.

Managing inventory is very difficult and generally incurs lots of over head costs. I’d rather leave this to the pro’s and focus on what I’m good at. However since I’ve never kept inventory myself, I decided I wanted to give it a try. So I decided to perform an inventory experiment with a cheap, small and convenient product.

Temporary Tattoos.

If you go to Google and search ‘Barbed Wire Tattoo’, HouseOfRave comes up on the first two image results:

The images take you to the barbed wire tattoo page.
Those pictures were taken by me about two years ago when I was doing some product photos. I put a temporary tattoo on my roommates arm and took these photos to show what the product would look like when used. Since then they’ve jumped to the top of the image results for people typing in ‘Barbed Wire Tattoo’ and ‘Barbed Wire Armband’ and other various searches.

The search results vary from time to time, but I get a lot of searches for those keywords coming to HoR. However since I’ve switched suppliers, the new supplier doesn’t carry temporary tattoos, so I was forced to pull those items. However I still wanted to capitalize on the traffic the tattoo pages and images were pulling in. My new supplier offered to carry the product, but this was an optimal product to try something with.

So the Tattoo Inventory Experiment was born. I basically bought a bunch of temporary tattoos from the manufacturer of them and send them out from my house.
Since the tattoos are extremely light and thin, I can keep tons of them without a lot of space. They also sell for over a dollar a piece plus shipping, but cost me only a few cents each.

My ‘warehouse’ is an old shoe box, my ‘storage racks’ are just labeled envelopes, and my ‘shipping department’ is a box of envelopes and some stamps. Basically a mini-business in a box!

So when I get an order which includes a temporary tattoo, I simply write out the customers address on the envelope, insert the tattoo, slap on a stamp and send it from the mailbox at my house.

Getting into the real nitty-gritty numbers of the order costs:

–Cost per tattoo: $0.20
–Cost per envelope: $0.02
–Cost per Stamp: $0.39
–Total Cost for One Tattoo Shipped: $0.61

HoR automatically adds a standard shipping fee to the price of the tattoo, so usually people order other items plus a tattoo. Perhaps I should make it really cheap if someone orders only the tattoos. This way I can entice more buyers who simply want the tattoo and nothing else from the site.

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The next step was uploading all the new tattoos to House Of Rave and create product photos. This went relatively quickly since it’s all the same type of product. Photoshop editing took the longest.

All the final tattoo images can be seen on the temporary tattoo page.

Setting up this whole thing took me about one day. The total cost for everything was $60. So far I’ve already sent out a few tattoos via this method. It’s not the most professional way of sending a product (the tattoos arrive to the customer in a hand-written envelope with no packing slip) but it’s just a small experiment. Of the 200+ tattoos I have in ‘the warehouse’ I only need to sell about 30 or 50 of them to break even.

Managing my ‘warehouse’ in a shoebox is easy, but if I had larger products and THOUSANDS of them, it would be a nightmare!