My Money Making Mission - Will it work?

Discussion in 'Community Discussion' started by cjmabry, Apr 25, 2010.

  1. cjmabry macrumors newbie

    cjmabry

    Joined:
    Apr 25, 2010
    #1
    So, I'm a 16 year old, er, uh, entrepreneur. Or not. Anyways, I think I've found a way to make some pretty good money for being my age, but I am only 16, and have had a lot of failed "money making schemes" in the past. For this reason I decided to run it by you guys to see what you thought.

    First off, I make about 160$ spending 5 hours every Saturday cleaning (vacuuming, sweeping, mopping, nothing too dirty.) my church. Not too shabby.

    Now, my "idea." I have about $400 to get me started that I've saved. My plan is to buy iPod Touches with broken glass, replace the digitizers, and relist them.

    A seller I found on eBay consistently lists broken-screened (glass, not LCD) iPod in little lots of 2, 3 and 4.

    Last week, a lot consisting of:

    16gb 2nd Gen (eBay average 170.00$ - 200.00$)
    8gb 3rd Gen (eBay average 150.00$ - 170.00$)
    8gb 2nd Gen (eBay average 120.00$ - 150.00$)

    sold for $305.00 with free shipping. Had 21 bids. If these were repaired, they would sell for a combined low (as in if they each sold for the lowest price of the average sale prices) for $440. They would most likely fetch around 480$.

    Cost for repair parts, new headphones, and a USB cable for each of them would add up to be around $66. Leaving them, repaired and complete with original iPod headphones and a generic USB cable for only around $370. That's 100$ profit, for little work and a process that would take about 15 minutes each iPod.

    So, does this sound like a legitimate way for me to start making money or am I missing something here? Sorry if I rambled, I'll try to clean the post up, but I'll post it for now so i can get some thoughts.

    Oh ya, and It's great to be a member of Mac Rumors. Maybe if this works out I'll be a MacBook owner soon. :)
     
  2. wackymacky macrumors 68000

    wackymacky

    Joined:
    Sep 20, 2007
    Location:
    38°39′20″N 27°13′10″W
    #2
    It may work, though are you underestimating the time to repair them? More likely 30 min or so.

    If you've got nothing better to do with your time, fine.

    There are however lots of second hand iPods for sale. You don't want to get stuck with the stock not being able to shift.

    And also given your start up capital is so small; what if one of the first pods you buy is a dud (ie it arrives and more is wrong with it that just the screen)
    - You'll have no cash to keep going, and you'll be left in a battle with the seller.
     
  3. kellen macrumors 68020

    kellen

    Joined:
    Aug 11, 2006
    Location:
    Seattle, WA
    #3
    Add in ebay and paypal fees and it may not be worth it. Plus people scamming you. I would definitely double check your figures if you haven't figured in the fees.

    So you are 16? What I did when I was that age was get to know my car well by working on it fixing things. Then after comparing prices between the local u pull it and ebay, I found I could sell things for 10x what I buy them for with a little luck, usually around 3-4x. There was one part that costs me $1.50 and I sold for 50-75, sometimes getting 5-6 of them each time I went. Look into that.

    I was the same way growing up.
     
  4. cjmabry thread starter macrumors newbie

    cjmabry

    Joined:
    Apr 25, 2010
    #4
    The seller has more than enough feedback, and there are many pictures backing up every listing. I don't believe this would happen, but if it does, I think the seller would be more than willing to refund me based on his feedback I've seen. And selling them won't be a problem. Only in a VERY rare case will one sell lower than the lowest prices I've calculated. And as for time-consuming, it really isn't much - an hour or so buying, 30 minutes fixing, then relisting. Not really work at all.

    I'm definitely a smart buyer/seller, so I am in no way going to put myself in a position to get scammed.

    As for eBay and Paypal fees, they're not much. Maybe 3 or 4 bucks here and there. And because I'm buying more than one at a time, the profit increases greatly. Buying in bulk is good! haha. I definitely wouldn't be making enough profit in buying one iPod at a time. I'm hoping to eventually move up to lots of 4. Plus, with the addition of eBay bucks, buying an item practically pays for the fees.

    As for your car business, sounds solid. When I do get a car I'll be sure to look into it. Right now I've been getting used keyless entry remotes from some car dealer's my dad knows and selling them. Great profit there.

    Regardless though, I'll tell you how it goes. I've bid on a lot of two and hopefully I'll receive them soon if I win. I'm pretty confident in this :)

    Oh, and definitely thanks for the replies. I'm not meaning to sound know-it-all(ey) or cocky. I really appreciate the feedback and want to consider everything.

    Thanks a lot guys ;)
     
  5. callmemike20 macrumors 6502a

    callmemike20

    Joined:
    Aug 21, 2007
    Location:
    USA
    #5
    There's a lot of smart people out there, but there's always someone smarter than them...

    1. Think about the people on Wall Street. They are all smart, but they get screwed easily by the smarter people.

    2. Many smart buyers bought Toyotas, only to have them get them into an accident.

    3. Counterfeit money.

    4. FBI getting their computers hacked into by the Chinese.

    Basically, its all probable. Even if the risk is low, you still have to account for it. 4% risk can mean a lot if you plan on doing this often.

    Also, as others have said, you have to factor in the ebay fees, which can easily go well into the double digits.
     
  6. slpdLoad macrumors 6502a

    slpdLoad

    Joined:
    Jun 10, 2009
    #6
    Do not underestimate eBay and PayPal expenses and inconveniences. $3-$4 as you state is not accurate. Buying is no problem, selling is what gets you.

    -You pay a few bucks for listing fees
    -You pay around 9% of the item's final sale price to eBay one your item sells.
    -You pay ~3% of any money you receive to PayPal's fees.
    -After all said fees have been deducted, you will often not have any access to this money for 21 days due to PayPal buyer protection. You can get faster access if the people who you sell to leave you positive feedback in a timely fashion, but my experience has been that I can only get about 50% of my buyers to leave any feedback.
    -You also have to have some money set aside to pay for shipping for these items, since you cannot pay for shipping with the money the eBay buyer sends you.

    I would at least cut that $100 profit number in half.

    If the math still works out though, have fun and tell us how it goes.
     
  7. calderone macrumors 68040

    calderone

    Joined:
    Aug 28, 2009
    Location:
    Seattle
    #7
    No, eBay and PayPal fees would be much more.

    Based on an average selling price of $160, based on your estimate of $480. The fees would total roughly $15. For each transaction, not " here and there." That doesn't include shipping costs either.

    That isn't to say you want make some money, but is it a worthwhile venture? I would say no. Use the money to learn something new.
     
  8. ethical macrumors 68000

    Joined:
    Dec 22, 2007
    #8
    $85 for an hour and a half of work doesn't seem too shabby in my opinion! Especially not for a 16 year old! Of course, it doesn't compare much to his $160 a week for cleaning :eek:

    He'll get the shipping costs back from the buyer eventually anyway.

    I say go for it mate. You'll learn a lot along the way, whether it's how to build a mini ebay business, or how to handle losing all your money. Either way, it will give you a lot of experience that not many 16 year olds get.
     
  9. iOrlando macrumors 68000

    Joined:
    Jul 20, 2008
    #9
    in true capitalistic nature, the ebay seller of these ipod touches would figure out how much it would cost to fix the ipod touches (including the average value of time involved in fixing it) and then subtract that cost to reach the new ebay cost for the broken ipod touch, hence there would be not much value to add. Now of course if he were to do that, who would buy the item and fix it if no money can be made? so the listed cost for the ipod would be lower then this equilibrium price.

    the only way that you can earn value from the transaction is:
    1) you get your hands on the needed materials to fix the device for way cheaper than someone else.
    2) you are able to reduce the cost of fixing one by either fixing quite a few in short order or just having little value of time (i.e. you are fine making 10/bucks an hour while everyone else requires 50/hour).

    unfortunately, I'm sure there are companies that exist that do this already buying up broken ipod touches left and right (which essentially raise the price of these broken devices). the only way you can really make a good profit is if these companies are sleeping (and you can get your hands on a few broken ones for cheaper).

    of course, using ebay, you need to take into consideration fraud and other expenses that can very well wipe out profits quickly.

    so you can make some money one week doing this, but then the opportunity can close the following week. etc.
     
  10. cjmabry thread starter macrumors newbie

    cjmabry

    Joined:
    Apr 25, 2010
    #10
    From buying alone though i would make around 8 bucks back in eBay bucks which could go towards more iPods.

    And I've decided to sell them locally, bringing about 170 each for them with no Paypal or eBay fees.

    And as for learning something new, I'd say this is learning something new ;)
    Me saving up is going towards a MacBook, and a car, and I'm going to learn some iPhone devving. For now though, I need to just focus on making money.

    I bought a lot of 2 8gb 3rd gens today. 192 with free shipping. Ordered the screens for combined price of 42$, totaling 234$. I have multiple offers locally after posting a test ad on a local Craigslist-esque website that I've sold loads of junk on before. Free listing, do business in person type of deal. I posted an ad, 1 8gb 3rd gen for 170$ OBO (or best offer) and have already gotten an email less than an hour after posting.

    So, I'll sell them within a week or so of fixing them for 170$ each, totaling $340, won't have to deal with the hassle of eBay and PayPal, and won't have to deal with shipping, feedback, etc. Total profit around 100$. I think I'll spend 10 bucks each on headphones and USB cables though, so make it 90$ profit.

    So, 90 bucks for around an hour or two of work, including bidding, fixing, selling, exchanging with buyer.

    And the profit margin is only going to go up when I save up enough money to buy 4 at a time.

    Exactly. Experience is priceless :). While other 16 year olds are playing video games or spending there money on useless crap, I'll be learning how to make a profitable business.

    But the eBay seller didn't subtract the cost. It looks as if this guy has a lot of iPods coming in and just doesn't have the time because he lists so many. He starts them at 0.99$, free shipping. He doesn't start them at what he thinks it would cost to come out even on a repair, which allows me to buy them for a lot cheaper.

    --------------------

    And since this isn't a type of deal where I can be making money most of the time (it takes time for them to ship, etc.) I'll just be using this as a form of income to fund any other investments I may have in the future. I'd say 80$ a week if I could have two orders at one time (i.e. 2 iPods shipping to me while I'm shipping two out). That will, of course, take a couple of weeks of slow selling because of the fact I only have enough money to be doing single orders right now.

    Eventually I'm planning on buying a coke machine to put in my dad's car lot. That would be after I've established enough money to keep this going. Not to mention I could very easily get a job at Chik-Fil-A or somewhere around 10 hours a week and still maintain all of my business.
     
  11. Ttownbeast macrumors 65816

    Joined:
    May 10, 2009
    #11
    When I was 13 I did something similar of course it wasn't iPods and there wasn't really much of an internet or any ebay for that matter. I did the exact same thing you are doing but it was Bicycles. I would hit thrift stores and bicycle shops buying wrecks in bulk for as little as 50 cents per frame and building working bicycles from the parts selling them at anywhere between 15 and 30 dollars a piece. Any left over scrap metal I also sold. It's not a new concept but it is a sound one if you can deal in sufficient bulk for good parts to cannibalize. In my case 400 bucks would have filled up my entire back yard when I was your age as investment capital.

    In fact I probably didn't start out with more than ten dollars which got me 20 frames and I managed to build 8 bicycles to sell at first then reinvested. I don't think 400 may be enough in your case even though you have lower overhead. The investment is not just the broken iPods, but tools, maintaining clean work space, etc. I would say to you that you save up a bit more perhaps triple what you have monetarily and spend a bit more time researching your market for demand, study your competitors, research supply lines for better/cheaper materials and look into the costs of upkeep on your tools.
     
  12. cjmabry thread starter macrumors newbie

    cjmabry

    Joined:
    Apr 25, 2010
    #12
    Thanks for the great advice. Not just you, but everybody. It really helps.

    I agree about researching the market. So far the only real research I've done is searching completed listings to find out an average sale price of these, which gives me a good starting point in pricing when reselling locally. I hope to slowly but surely build up my money, three times what I have as you suggested, so I will be able to:

    1) Buy more in bulk so I can save money.
    2) Look for a wholeseller of repair parts, so I could buy those in bulk, too.
    3) Be able to have staggering orders. i.e. be fixing two iPods while two are on there way in and two are being sold.

    I probably should sit down and organize everything and create a business plan, so i would eliminate any of the first time questions I have. I think that's what I'll do.

    Also, the iPod's and screens should be here either tomorrow or Thursday, so I'll let you guys know how it goes.
     
  13. tennismanclay macrumors regular

    tennismanclay

    Joined:
    May 11, 2007
    Location:
    US-Texas
    #13
    Go for it man, im 16 too and the business experience you gain will be great, plus it really sounds like you will be making some extra bucks. And getting $100 extra a week or so is great for me, so it's gotta be good for you too.( i teach tennis 4 days a week at 2 different country clubs, just a few hours a day, but its easy and i enjoy it)

    anyways, my only advice is that a few days ago i bought 5 ipod cables for just under 5 bucks on ebay, with free shipping. So you might look into that if your going to include cables.

    Good luck!
     
  14. Beatricem macrumors newbie

    Joined:
    Apr 28, 2010
    Location:
    I live in Chicago
    #14
    I say go for it also. You will never learn if you can do it if you allow other people to talk you out of it. After all life is just a learning experience. If you never try you will never know if it will work or not.

    The item you are talking about sell is one of the ones that a lot of scamer are after. If you sell on Ebay or any where else just make sure you have the money before you sent anyone any thing. I would also suggest that you start with something else before you start selling your ipods to build up your feedback rating. You can do a little research on Ebay pulse and see what may be selling.

    Then you can go to goodwill stores and buy something that you think will sell on Ebay and list it for sell until you get a good feedback rate. I think you need a feedback rating of ten, then you can use the "buy it now" button instead of starting your expensive item at .99.

    Sometimes if you do not get any bids your item will sell for .99 cent. Experienced sellers on Ebay just be waiting for people who are just starting to make this kind of mistake and they will buy your item and then resell it on Ebay. Also make sure you add in the fees because they will seriously lower your profits.

    And another thing when you list your items list them for 30 days, it does not cost no more than listing for 6,7 or 10 days. It just might take longer than that to sell one of your ipods. Listing them for 30 days will save you a lot of money on listing fees.

    When I first started sell on Ebay, I learned this the hard way. I lose so much profit because I did not know this. Paypal will hold the payments you receive for your ipods if you do not have a current good feedback rating on Ebay and with them.
     
  15. cjmabry thread starter macrumors newbie

    cjmabry

    Joined:
    Apr 25, 2010
    #15
    I have around 40 feedback so I think I'm set.

    I never ship out without first receiving payment, too.

    Had no idea about eBay pulse though! I usually just do an advanced search for completed listings but this will help me so much! And I thought the 30 day listing was extra. Guess not. Thanks a lot man!
     
  16. Ttownbeast macrumors 65816

    Joined:
    May 10, 2009
    #16
    Good luck kid
     
  17. notjustjay macrumors 603

    notjustjay

    Joined:
    Sep 19, 2003
    Location:
    Canada, eh?
    #17
    Wow! It sounds like a neat venture to me, as long as you're willing to put the time into it. And, honestly, it sounds pretty low-risk. You buy a couple of units, you fix 'em up, you sell 'em, repeat. Small expenses each time. It's not like you're buying a lot of 10,000 broken iPods and then realizing you can't sell them all.

    My sister got into Etsy.com recently by sewing up a few whimsical creations (stuffed owls). She figured she'd sell a few, maybe make a few dollars. One of the satisfied buyers turned out to the owner of a craft blog. Pictures from happy owners began to circulate and soon she was selling as many of these things as she was able to churn out. She slowly raised the prices from $15 to $40-50 each, but they kept selling. Online sales, craft shows, even consignment shops were ordering boxes of them at a time.

    You never know when starting something small will become something big! Maybe you'll be the next neighborhood Apple repair shop. :)
     
  18. jtara macrumors 65816

    Joined:
    Mar 23, 2009
    #18
    Sounds good to me, except I would try to develop better sources than people selling lots on eBay. eBay is going to drive the price very near the real value.

    Craigslist, local swap meets, leaving listings on bulletin boards ("I will buy your broken iPhone!") will likely net you better prices. Of course, you will have to take more of a chance on condition. Then SELL on eBay.

    A plus is that this is something you can feel good about. You're doing something USEFUL, helping people out (paying them for something they may have though of as worthless, and selling other goods at a better price than they might have paid otherwise), and doing something good for the environment.
     
  19. Bwa macrumors 6502

    Joined:
    Jun 20, 2007
    Location:
    Boston & San Jose
    #19
    As a guy who is a professional entrepreneur, I'd look at ways to scale your cleaning business--are there other churches, community centers, private schools you can sell to? Will your existing client be a reference? Sure, the iPod business is sexier, but you can build repeatable process around a cleaning business--and never underestimate how much money there is in "boring" businesses.

    Given that you're 16 and likely have other things you're supposed to be doing (school), I suspect your time for either business is going to be limited. From that perspective, the iPod business might be easier. And as others mentioned, as long as you buy only a few at a time--and don't end up with too many busted units--you can incrementally grow the business.

    The way to truly scale your business is to get yourself into a situation where you make money while you're asleep. In a products business, this means selling product while you're not working. In a service business, this means employees working for clients and you're taking a cut off the top by providing connections, tools, job security, (pick your value add).
     
  20. cjmabry thread starter macrumors newbie

    cjmabry

    Joined:
    Apr 25, 2010
    #20
    Thanks! :)

    Wow, that's awesome about your sister dude. And I'd love to be the next neighborhood repair shop :p

    Heck working at the Apple store sounds like a fun job. Maybe someday?

    I totally agree. I am starting out on eBay though so I can get familiar with not only how the buying and selling is going to work, but getting familiar with the iPods themselves. Right now I really only know how to fix broken screens, but with experience I hope to be able to diagnose the problem and determine if I can fix it.

    I put up an ad a while ago about buying broken electronics and got loads of responses. I will definitely place a real ad very soon. Thanks for the suggestion!

    The problem is, my mom works at my church, so she gets me in there working. I don't think the cleaning business is scalable yet.

    As for making money when I sleep, that's what my goal is. If I can raise enough funds to be able to have multiple iPods being sold, multiple iPods coming in, and multiple iPods being fixed, I can up my profit margin by loads.

    And the icing on the cake - my Aunt owns a pawn shop. I'm going to talk to her about buying broken electronics from people, but mostly iPods because that's what I'm experienced in. And that will be loads cheaper than buying online. Heck, there's a place to sell them, too!

    Thanks for all of the tips too guys. I can honestly say the info I'm learning right now is more valuable than half of the stuff I'm learning in school. :)
     
  21. notjustjay macrumors 603

    notjustjay

    Joined:
    Sep 19, 2003
    Location:
    Canada, eh?
    #21
    It sounds like good money, which is cool. My church youth groups meet on Friday nights -- junior and senior high -- so the poor guy on Saturday often has quite a mess to clean up.

    If fixing broken Apple stuff works out, I'd think that would be good experience to have on your resume when you apply to work at the Apple Store...
     
  22. 63dot macrumors 603

    63dot

    Joined:
    Jun 12, 2006
    Location:
    norcal
    #22
    I commend the OP for his/her idea. I have no idea if it will work or not, but other teens (Jobs, Gates, Dell, Fanning, Spielberg, Packard, etc) had strong business visions they made into real income in just a couple of years after inception.

    If you hit it big with the repair idea, you won't have to go to college or finish like most of the above list. Many people who are business majors (me way back when) had the ultimate goal of being an entrepreneur and thought college would be the spark needed to train me into being an entrepreneur.

    This is a false notion.

    The basic fact is to come up with an idea, start with as little capital as needed at first, and then try it. If it fails, try another idea or modify your first idea. By age 18 or 19, you will either hit on something lucrative or you can always try the college option and take a break from being an entrepreneur.

    Having graduated from college late in life, and having been a successful and failed entrepreneur, having your own business is far more rigorous and stressful than school but is far more rewarding, success or no success. Ironically, being successful, while it has its financial perks, is very, very stressful, and can make you lose sleep when you have employees.

    And the best way to learn is to initially fail, or to succeed, fail and succeed again. What you are suggesting sounds brave and not for the faint of heart, but you won't know until you try it.
     
  23. cjmabry thread starter macrumors newbie

    cjmabry

    Joined:
    Apr 25, 2010
    #23
    I wonder if I could put that on a resume for the Apple Store. Because it is technically voiding the iPod warranty and taking money from Apple. Thoughts?

    Thanks! Great advice again. I would say I've learned a lot since I began trying to make money a couple of years ago. I had the same idea but with Nintendo DSs. Didn't pan out, but now I know why it didn't, and I've used what I've learned to perfect (no, to improve) my first idea by moving to iPods.

    And if and when I've saved up a nice amount of cash, I think I'll try my hand at the stock market. Just a little bit - maybe 100 bucks out of 2 or 3 thousand. It can't be all that different from the stock market simulator apps in the app store can it :D
     
  24. cjmabry thread starter macrumors newbie

    cjmabry

    Joined:
    Apr 25, 2010
    #24
    Well, a quick little update to anyone who cares.

    I received the iPods today, but after dissasembling them I realized I needed:

    1) Better tools - the ones that came with it broke, forcing me to delicately use a small screwdriver to take the broken glass off. Luckily I got better pry tools for about 4 bucks on eBay.
    2) A new rubber bezel that the digitizer is sealed to which seals the outer ring around the screen and holds the home button on underneath. The screwdrivers I used mangled this up. Luckily the part is only about 3 bucks with free shipping.

    So already I've learned a LOT. How to properly dissassemble an iPod, the necessities of proper tools, and all of the parts I'll need in the future.

    Looks like the iPod business will carry on once I get these parts in a couple of days. Should be looking to make about 60 to 70 dollars profit on these ones, even after buying the replacement parts and tools. So I'm pretty happy this is working out. I'll update soon after I've sold them.

    This should put me around $430 saved, which I'll turn around for more iPods. If I can do 3 orders a month which is easily possible, I'll be looking to make an extra 200 - 300 bucks a month on top of the $160 a month from cleaning. My goal is $1000 saved by July. Let's hope I can get there!

    I'm still sort of mad that I lose about a week that could be put to good use, but you live and learn right?
     
  25. Ttownbeast macrumors 65816

    Joined:
    May 10, 2009
    #25
    Your first lesson on overhead has been learned...... first thing I did after fixing and selling my first batch of bicycles was buy two new tool kits. You'll find that some of your tools will wear out quicker than you think and you'll have to invest some of those profits back in to maintain them. Keep thinking about those little costs they can add up if you don't stay on top of them.

    I would suggest becoming friendly with your local Radio Shack you may not get a discount but it gets easier if you are a regular there to find exactly what you need in a pinch from their project parts bins and tool isle.
     

Share This Page