Multiple streams of revenue. What do you think multiple streams of revenue means? Last week, we talked about it a little week. This week, we’re gonna delve into it a little further. Stay tuned.
From Philadelphia, the home of the Liberty Bell, Financial Freedom Radio starts now. Here’s your host, Raymond Jewell.
Good morning everyone and welcome to FinancialFreedomRadio.com. I want to thank you all for coming and downloading. We’re blessed that you’re here. Please share it with your friends. We build our listener base based on referrals. We just love to have you refer us to your friends and let them listen to us. If they don’t like us, don’t listen again. At least give us 30 or 60 days. I think you’ll like it. Let’s welcome Steve Bailey, our producer who is going to be the subject of attack today. One of the things that are important. I understand last week that you took people through multiple streams of revenue which is a good thing because in our personal economic coach process, our financial freedom radio process, we talk about multiple streams of revenue and how to make sure that you’ve got different streams or different sources that are coming to you at different times throughout the month or whatever. It’s always good. It’s one of the most elusive things that people have trouble with. They go to these network marketing companies and they sign up because they really have an entrepreneurial spirit in their heart. They want to do the right thing. They want to create multiple streams of revenue, they want to offset their mainstream of revenue, their income.
They join these businesses. The easiest one is network marketing which creates residual income and is a perfect model, but I have issues with it because it’s only as good as the leaders of the company. If the leaders of the company are flakey, then you’re going to spend your money and you may end up losing.
The product also plays into that too. I think your opinion may or may not be a little slanted, but the reality is the product has to be good or the leaders don’t really matter.
We’ll agree to disagree on that because I’ve been through many of them and I’ve seen the leaders cause them to just go crazy. My partner Steve Bailey has a business that he runs. He probably told you a little bit about it, but we’re going to smoke out the grease that makes the whole thing run and get him to talk about it because I’m sure he didn’t give you the nuts and bolts. You’re probably scratching your head going hey Steve, this is great but how do you do it. Steve, you want to come in here and join us in the room, or are you just going to be sitting in the bottom corner of your screen?
I didn’t see this coming so let’s see where this goes.
Yeah, thanks. On the one hand, I get to use our 2-shot for the first time so I’m excited about that from a techie point of view. I’ve never done this angle before.
So, I don’t know if you’ve talked about it or not, but Steve has an arbitrage business. He uses two resources called Amazon and eBay. Steve, explain to the people what arbitrage means to what you do in your business.
It’s basically the same as stocks, you’re buying low and you’re selling high. I just got a bunch of boxes delivered to me today from Target that I’m going to basically package up and send to Amazon. I pay a certain amount for them from Target and then I turn around and sell it on Amazon for a higher price. In a sense, that’s what arbitrage means.
You’ve probably heard movies of people doing arbitrage, selling businesses, and all that. It’s the same thing. It’s buying products at a low price and then selling it at a high price. Now, where do you go to sell them?
I started out on just eBay. eBay was what I knew. I touched on this last week. I had an attic full of junk from when I was growing up when my kids were growing up and it was all in the attic collecting dust and I started just dumping it all on eBay. This is funny because it’s grown over the years as I’ve been doing this. I started selling on eBay. Ray used to make fun of me, but I used to dumpster dive and get the boxes because I was too cheap to go out and buy boxes. I’d literally go behind our local Gamestop, it’s not illegal, I already checked in Delaware. I find decent boxes that are the size I need, I throw them in the trunk of my car and when I sell something, I put them in the box, put all the stuff in there, and ship them out. I printed out the labels onto my printer and I taped them down. That’s how I got started on eBay. Then as I started to get better I would sell the things on eBay, I would turn around and reinvest that money on eBay into going to yard sales and flea markets and things like that to get more product. Then I stepped into the world of Amazon because what I found from doing the research is people tend to trust buying from Amazon more than they trust buying from eBay. They think eBay is where you sell junk and Amazon is where you go to get the nice stuff. So I wound up selling some things on Amazon, some things on eBay. Those are the outlets that I’ve used and it’s evolved over time. Now I’m probably 60% Amazon and 40% eBay.
So who got you started in that? Did you hear about it from somebody or how did you discover it? A lot of times, people get emails and there’s a lot of network marketing gigs out there that will want to guide you to do it and sell your courses and all that. Everything I got was 100% learned by me. It’s funny you ask, because I never really sat down and thought about it.
We do probing questions here.
We started just collecting video games. I’ve always been a video game nut. I’ve always wanted to collect video games. I’ve watched a bunch of YouTube channels on people who went out to yard sales and they would find old video games and they would buy them for $1 or $2. I started doing that. There’s one guy I watch and he had like 100 videos. I watched every video over the course of a month or two. He basically had the same philosophy. Go buy a video game, if I need it for the collection, I put it on my shelf. If I’ve already got it, then I just turn around and sell it on eBay, get more money to go out next week to buy more stuff for the collection. At the end of the day, I’m basically self-funding my video game addiction by all the money I spend, I keep the ones I want and sell the rest. I take the money from selling it and go out and buy more. So it’s basically a free collection I’ve built over time. That’s how I’ve got started and it’s evolved as I stopped watching him, I started watching other people that were not only doing video games, but they were doing toys, electronics, and then it became a rule of thumb for anything under 1 pound or pop culture that people would be interested in buying. I started looking for that and testing different waters. I would look at hats, shirts, and shoes.
There were times where I’ve gone out to yard sales and I know that I’ve got a stack of games in my hand that I paid $5 for that I’m going to make $100 reselling. So I’m like okay I know I’ve done well here, I’m going to take some of the money I know I’m going to get that I’ve not yet gotten and I’m going to start testing other things. Maybe I’ll buy a pair of shoes and see how they do. I use it as an education to dip my toe into other waters.
Doesn’t it get confusing to try to figure out? Is there a lot of profit in it?
It depends. I’ve bought books. See Amazon is very picky in what they will let you sell. A brand new seller to Amazon is very limited in what you’re allowed to sell because they don’t know you, they don’t trust you. You can sell a very small set of things. They have this process called gating which basically says you’re not approved to sell this so you can’t sell this.
Let’s not get into the technical terms.
I’m getting into that.
Gating, let’s keep it simple for what we’re trying to do here. Gating basically means you’re not allowed to sell a product. One of the ways that you get allowed to sell more products is books. Books are pretty much wide open. That’s where Amazon got its start. I spent a lot of time learning how to sell books. Flea markets have books all the time, thrift stores are an abundant place to find books. Yes, there can be profit in this. Some things more than others. I bought a book at a thrift store about a month ago for 99 cents and wound up selling it for $89. There can be huge profits.
So, you’re using Amazon for that stuff, right? Amazon takes a cut, correct?
How much of a cut would be if you book for $2 and you sold it for $16? Talk to the software that you have that you use when you go to Goodwill for books. Walk people through the process of what you’re doing in Goodwill. You walk through the shop and you see a book you like. Tell folks exactly what you’re doing to determine whether that’s a sale you want or not.
I will, but let me finish the answer to the first question. The rule of thumb is whatever the prices is that Amazon is selling it for, ⅓ of that price is what Amazon is going to take as their cut, as a general rule of thumb. The amount they take is based on weight, availability, how much does it weigh, are they going to store it. There’s a lot of factors that go into how much profit is something. As a general rule of thumb, if something sells for $30 on Amazon, you can expect $20 in profit. $20 your money coming back and then you factor in how much a book cost you. If I pay $1 for a book and it’s going to sell for $30, I’m going to make $19. To answer your second question, There is specific software. My phone is a lifeline when I go into these thrift stores. THere’s specific software that you can use.
Can you name some?
I can, but I want to qualify it by saying this first. If you’re going to use Amazon to sell books, two apps that I recommend people start with because where I’m at right now, I have huge amounts of monthly expenses. The software that Ray is trying to get me to tell you costs a lot of money every month to use. I do not recommend people start with that software. Once you’ve got a steady stream of revenue coming in and once you start upping your volume and your gain, then you can start looking at spending money on software. The software I recommend everyone starts with is the Amazon Seller app. The Amazon Seller app is Amazon’s app for people who sell on their platform. It’s 100% free. You can use that software to determine profitability. A lot of people use it. I don’t because I go faster. The answer to the question is, I use software called Scoutify and ScoutIQ. Scoutify is when I’m looking at Walmart or Target for something profitable. ScoutIQ is for when I’m looking for a book. ScoutIQ is very specific in how it works. It’s just for books. I also go into this little handheld barcode scanner which isn’t blinding you right now, but it shoots a laser beam out and it reads the barcode off the back of the book. What ScoutIQ does is it basically takes the barcode, looks against Amazon’s database and determines how much Amazon is selling it for, determines how much of a cut Amazon is going to take, how fast the book sells, and then gives you a green light or red light to buy the book or don’t buy this book. When you go to books, you know what books aren’t going to sell. Danielle Steel isn’t going to sell, James Patterson isn’t going to sell, the odd books, nonfiction books, the history books, books you’ve never seen before. As you do it more, you get a feel for what works and what doesn’t work.
Basically, I go through and I scan the entire Goodwill in probably 10-15 minutes doing that. You can do the same thing with the Amazon app. The difference is the Amazon app won’t give you a green or red light. It’ll basically show you the sales rank and how much it sells for. It won’t say yes buy it or you shouldn’t. It’ll just simply give you the raw data. You pay a premium for that little bit extra AI analysis. That’s the basic gist. Amazon Seller works more for books and non-books. It just depends on what you’re doing. Scoutify costs me about $30 a month and Scoutify costs me about $50. I’m spending about $80 a month on just those two apps, but you can use these apps. My son is learning how to do this. He only uses the Amazon Seller app and does the exact same thing.
It takes a little longer and it’s better to understand the process before you start automating the process.
Let’s stick with books for a while. You buy the books and you bring them home. Now the only reason we’re still with books is that Steve walked me through this a couple of times so that I could see how it worked. I was curious. When you buy the books, by the way, as a sidebar, textbooks are great. I sold some economics textbooks and I sold a book that I paid, years ago, $50 and I think I sold the thing for $70 or $80.
Pro tip: one of the things I recommend just getting started. Get on Facebook Marketplace and put up a post saying if you have books that you don’t need, I’ll take them off your hands for free. I’ll come pick them up and take every book you don’t want and get rid of it for you. You accomplish two things. You get rid of the things that they don’t want which is a good thing. Number two: you can scan all those at your leisure in your house to determine if something is sellable or if not sellable. If it’s not sellable, you can turn around and donate it to your local charity and get the tax write-off from donating the book. So, it’s a win-win if you can do that.
Sticking with books because next week we’re going to talk about other stuff. I’m going to stick with this until Steve writes his course so you can buy it! You buy the books, you determine whether they’re valuable or not, and you bring them home and you put them on Amazon. You’ve got software from Amazon that you enter the books in, right?
It’s not even software. It’s just SellerCentral.Amazon.com. It’s all part of Amazon’s website. Anyone can sign up for a free account. Anyone can go on there and start selling. Anybody can use it to sell any books that they want. Once I’ve gotten the books and I’ve brought them home, then you have to go through the process of letting Amazon know that you have them for sale. That comes in one of two ways. There’s Merchant Fulfilled which is basically saying if someone buys my book, I’ll box it up and ship it to them. There’s FBA which is Fulfillment by Amazon. That means I’ll take these books that I want to sell and ship them off to Amazon’s Warehouse. If somebody buys them, Amazon will put them in a box, Amazon will ship it to the customer, Amazon will handle any returns that need to be done and I’ll just get paid. That’s what I’m doing with this Target stuff. I’m going to slap some labels on it to say it’s my inventory and I’m going to ship it off to Amazon’s warehouse. So when Amazon sells it, I just get paid. I don’t have anything else to do. You can either fulfill it yourself and Amazon takes a smaller cut because you’re doing most of the work or you can do Fulfilled by Amazon and they’ll take a bigger cut because they do all the work.
Then they send you a check every two weeks you get paid. It’s like feeding the beast. You gotta keep feeding the beast to get the money coming through.
That’s really a good metaphor because that’s what I tell people. What happens is, when I teach people how to do this, I say you only look for things that are in the top 1-10% of Amazon sales. If something is in the top 1% of Amazon sales in the Books category, that means the second it hits their warehouse, it’s going to be sold to somebody. It’s good in a way because as soon as they get the shipment, you see sales start ringing up. It’s bad in a way because all those 10 books just sold, so now I’ve got to go find 10 more books and send it. You have to keep feeding that beast if you want the paycheck coming in. It’s a grind and it is a constant grind. It’s never-ending. It’s non-stop, but if you find a niche that you’re passionate about, that you enjoy. I love video games and I love yard sale hunting and I love going to flea markets. The adrenaline rush when you find something. I got a game from Goodwill that I paid $1 for and I literally the next day sold it for $150. The rush you get from that just drives me crazy. It’s a grind, find a niche you like, find something that will get you motivated, and go out there and do the hustle.
We’re running out of time here.
I haven’t had a drink in 20 minutes. Are you done with me?
Sure. We’ll pick this up next week and we’ll make sure that we know where we’re leaving off. We’re going to keep walking through this. I want you to know that arbitrage is done in many other areas too. A lot of people do it in coins. A lot of people do it in stamps. You do it from the leisure of your house and you’re able to find products, you’re able to buy them at a low price and sell them at a high price. Some people go to their own outlet that they have for selling products. We’re just touching on a few. Multiple streams of revenue are very important because it’s really nice when you’re working, if you’re working full-time and you’re doing this as a part-time gig, then you’re able to put together a little business and it’s nice to get that extra check coming in. Eventually, one may build better than the other, who knows. We’re going to stay on this topic because it’s easy to get into if you have a passion for it. You’ve got to find your passion and we’re going to walk you through finding your passion in some of these episodes.
We’re going to depart a little bit from the blatant talking about economic models and macro view of your wealth and that kind of thing so that you get a little flair of actually how to do some of this stuff. We give you some of the theory, but if you don’t know how to do it, what good’s the theory? I want to thank you all for coming, downloading. Go to FinancialFreedomRadio.com and pick up the transcription. We’re going to transcribe this and we’ll have it on a podcast so that you can listen to it while you’re driving in your car or walking around the house or whatever you do. FinancialFreedomRadio.com. To watch the videos, just go to YouTube.com/FinancialFreedomRadio. Also, subscribe to our channel and ring the bell and we’ll send you a little email letting you know that we put up the next show. We’ll talk to you next week. FinancialFreedomRadio.com. Take care. God bless.
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