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Check out Side Hustle #52 to learn more about driving for ride sharing comanies like Uber and Lyft..
I started my niche domination from a shoebox.
I’ve had many side hustles over the years, and this one might just be my favorite.
You might think that it’s one of my favorites because I realized over a 600% return on my investment… but you’re wrong.
You might think that it’s the fact that I dominated this niche on eBay for more than a year, but again… wrong.
Then it has to be the $10,000 in profit… wrong again.
The reason this has been one of my favorite side hustles is that I was able to run it out of a shoebox from anywhere in the world.
That’s right, for a little more than a year I was a SIM card mogul.
It All Started On The Golf Course. Literally.
One day while I was playing behind a group that was playing a little slow (and while I was waiting on the tee box to bomb a drive), I was searching eBay for a SIM card to buy and drop into my unlocked iPhone to avoid the high costs of roaming while traveling.
While I was searching the listings, I noticed that there was one seller who was offering 50 SIM cards for $150, or $3 each. The rest of the sellers were offering a single SIM card between $7 and $14.
My entrepreneurial eyes lit up as I saw an opportunity to buy these SIM cards in bulk and then resell them one-by-one for a nice profit. What happened next, I would have never guessed.
I contacted the seller who was offering this bulk buy and asked how many SIM cards he had for sale. His response was “more than 700”. I quickly wrote back offering $1 per SIM card for all 700+ SIMs.
The seller agreed to my price and I sent over the money via PayPal. I was officially in the SIM card business.
Over the next year I ran this SIM card business out of a shoebox filled with SIM cards, envelopes and stamps, and sold close to 1,500 SIM cards for a return on investment of over 600%.
The low price point, small space commitment (shoebox!) and the profit margins made this an awesome side business.
I was making 600% ROI but I could have made even more had I not made some big mistakes along the way.
I often find that we learn more from our mistakes than our successes, so I’m going to focus on the mistakes I made and how you can learn from them in your business or side hustle.
Mistakes That Cost Me Money
The first mistake was that I didn’t put enough effort into my headline and ad copy.
Yes, “copy” isn’t just a word used by Don Draper on Mad Men. It’s a very important part of selling anything using words.
I figured that a SIM card was a SIM card was a SIM card and you either needed one or you didn’t. The SIM card was a commodity, and the buyer was going to pick the cheapest one available on eBay.
With that mentality, I would price my SIM cards $0.01 less than the cheapest competitor. Yes, a penny honestly made a difference. I would know almost instantly when someone undercut my prices, as my orders would virtually dry up.
Then I got a little smarter. I decided that I would revise my ad, so it looked different, very different, from everyone else’s ad. I went so far to use a template to make it look like they were reading my ad on an iPad.
I rewrote my headline to included some benefits that the customer would experience when buying a SIM card from me. My SIM cards didn’t do anything anyone else’s SIM cards didn’t do, but I was the only one that mentioned any benefits.
I added a sub-headline that said:
“FREE Same Day Worldwide Shipping. Experienced International Shipper.”
I also went to great lengths to highlight early on in my ad to show that I was a trusted SIM card seller having sold “more than
200, 300, 400, 1,000, 1,200+ SIM cards” with “more than 200, 300, 400, 500, 600, 700, 800 positive feedbacks”.
I highlighted my international shipping experience by listing all of the countries I’ve ever shipped something to and I even created a map with a star for many of the destinations.
I fully detailed the terms of the sale including any shipping charges, expected shipping times, shipping method, the return policy and more.
The result was that I was able to consistently sell my SIM cards for more than other sellers.
I had successfully broken the bond between my SIM cards and the price of the commodity.
This was a major win, as I was able to sell my SIM card for a buck or two more than most people on eBay, but I still knew that I was leaving money on the table.
This leads us to my next mistake.
How To Make More Money From The Same Amount Of Customers
This was a low priced item that sold for an average of around $7. My margins were incredible, but at the end of the day a 600% ROI on $1 is only $6.
Sales volume did add up, but there had to be a way to make more money from the same buyers. I knew I had to figure out another product or service I could sell them.
The majority of the SIM cards I sold were being sent internationally. I had to assume that these people were buying a SIM card for their upcoming trip.
I decided I wanted to find an item that complemented their SIM card purchase with the hope that I would be able to increase the average value of my customers.
Since my customers were buying SIM cards, I decided that I wanted to offer them prepaid credits.
I started off by contacting each seller through eBay to let them know I could buy them prepaid credits and send them the PIN via email so they didn’t have to go buy them when they arrived.
When I remembered to email the buyers, I actually sold a few prepaid credit PINs, which validated the idea. The problem was that I wasn’t diligent enough and didn’t email a lot of my customers to see if they wanted to buy the credits.
Then I got smarter again.
A few years ago I had successfully automated the majority of the marketing for my rental properties. I followed this lead and connected my PayPal account to my Aweber account (an email service).
When someone bought a SIM card they would automatically get added to my list and get a request to confirm that they wanted emails with updates about the item they purchased. Although not everyone granted me permission to email them, I did get a number of people whom I could email about my offering.
Sure, I could have contacted each manually, but I felt my time was better spent on other things, so the automated route made sense.
I didn’t want to blast them with a sales email right off the bat, so I
crafted copied a variation of Derek Sivers’ “Best Email Ever” so I started off by sending them a funny and entertaining email. Here is what that first email said:
Just a quick update to let you know that your SIM card has been hand selected by a team of experts and has been carefully placed into a form fitting protective envelope.
The best quality assurance engineers I could find from around the globe have each individually inspected your items to ensure that it was in mint condition before it was shipped.
Our packaging department leader, who by the way has a 3rd degree black belt in parcel packaging, wowed the onlooking crowds from the marketing and labeling department as she placed your SIM card in a one-of-a-kind, form fitting, envelope that would give up it’s own life to keep your SIM card safe.
We all gathered around the loading dock and threw a magnificent party to celebrate your SIM card finding a great home.
Traffic on the streets of [whatever city I was in at the time] ground to a halt as the Police department provided a 4 cruiser escort to keep the crowds at bay to make sure your package was placed in the mail box before the end of the day to make good on our promise of same day shipping.
I sincerely hope that you enjoyed your shopping experience with me on eBay. I know I sure did and I’ll never forget you as I have placed your picture on the wall as “Customer of the Year”.
I can’t wait for you to come back and see what else I have for sale at eBay so we can do this all again!
Your caring eBay seller,
(The above is based on a true story but some of the events and character may have been made up, changed, or embellished slightly. What is 100% true, is the care and attention I took in creating my ad and fulfilling your order. And yes, even SIM cards that sell for under $10 receive the utmost care and attention.)
I did link to the other items I had for sale in this first email, but the reason for this email was to make them laugh and make then want to open the next email I sent them. A day later I sent them this email:
Hello and thanks again for buying a SIM card from me on eBay, I really appreciate your business!
Since you bought a SIM card, I wanted to ask if you’re coming to Canada?
Whether you are coming to Canada on business, vacation, or even just live in Canada, I wanted to let you know that I can buy prepaid mobile credits and email you the PIN.
By having your PIN before you arrive in Canada, you can activate your account and use your cell phone (and new SIM card) the second the plane hits the ground.
I have purchased prepaid credits for lots of my SIM card customers and I would be more than happy to purchase and email you credits as well.
If you would like me to purchase credits for you, please simply hit “reply” and send me an email letting me know how much credit you’d like to purchase.
This email sold more prepaid credits than I ever thought it would, and put more money in my pocket.
I was surprised that people would pay a premium to have someone go to the store and buy their credits rather than just finding a 7-11 when they arrived. My guess is that because these people were on vacation, a sacred time for most people and they preferred to spend a little bit extra to have someone else do the work for them.
I was more than happy to be that person.
Major Take Always That You Can Use In Your Business / Side Hustle
Entrepreneur Eyes: The first major take away from this successful side hustle of mine is to always keep your entrepreneurial eyes WIDE open. Opportunities are everywhere you just need to look at things a little different to see the potential profit.
You don’t even need to be able to source screaming deals like I did on these SIM cards. I’ve made more than $30,000 in profit selling an item that I purchased at full retail and then resold for a profit. But that’s a story for another day.
Headlines and Copy Matter: The headline and copy of your ad can make a huge difference on price and sales volume. Take the time to craft a really really really good ad that draws your customer in, erases all their fears, answers all of their questions and helps nudge them over the finish line.
Small little changes can make a big difference. By adding an image with the locations I’ve shipped to solidified my position in the market place as the international shipping expert. Do you think that someone from Mongolia or Qatar would be more comfortable buying from me or someone who doesn’t mention that they’ve shipped to either of those countries, let alone internationally at all?
A side benefit to a well crafted ad is that you don’t spend nearly as much time answering questions from potential buyers since all of the FAQs most people have are already covered in the ad copy.
Line Item Extension: It took me awhile to figure out that I could increase the lifetime value of a customer by offering my customers prepaid phone credits before their plane hit the ground.
Not only was this profitable for this side hustle but it has changed the way I look at all my ventures. I’m always looking at my businesses and am trying to figure out what else makes sense to offer to these same customers?
For example, would my rental property tenants like to have a vending machine in the laundry room? I’m toying with this idea and will be sure to report the results back if I end up trying it.
You would be surprised at how much money is being left on the table by businesses all over the world. Sometimes it’s hard to see the forest through the trees when you’re so focused on selling your main product or service.
Automation: If I would have implemented the automated follow up sequence to promote my upsell right from the start, who knows, I might have made twice as much than I did.
However, with great automation comes great responsibility. Just because you can use tools like Aweber to set up an automated email follow up sequence doesn’t mean you should bombard your subscribers with offer after offer after offer. Take some time to add value (even if it’s just purely entertainment value like I did with my first email) before and during the time you’re also looking to upsell or cross sell your customers.
Just look at how successful my first email was at getting my customers to open up the second email (you know, the one where I pitched my service):
If you don’t have any experience with email marketing, you might not think that 54.9% open rate is very good. Just take a look at these benchmarks where the average is closer to 20%-25% open rate.
Always Be Testing & Questioning: The only reason I made as much money as I did with this side hustle was because my entrepreneurial mind is always asking “is this the best way?”, “what can I change to improve profits?”, “what else can I sell these customers?”, etc.
If I wouldn’t have taken a look at my ad and decided to change the format and copy, I’m sure I would have ridden the price of this SIM card commodity down to a $2-$3. Instead, I was able to consistently charge more than my competitors and essentially put a floor into the pricing because when they lowered their price I didn’t lower mine.
Final Thoughts From A Shoebox Entrepreneur
Although I’m no longer a SIM card mogul, I think back on that time very fondly.
I loved hearing the “cha-chings” sound the eBay app on my iPhone made when I made a sale.
More importantly, the mistakes I made led me to make profitable changes to my SIM card business and many of my other businesses as well.
These lessons learned while working a side hustle are very valuable, yet often overlooked.
Of course, you’ll want to focus your time and efforts on side hustles that have good earning potential, but don’t overlook the value of trying something out that, on the surface, might not look like you’ll make that much money.
Some of the best ways to make money start with a small initial sale followed up by offering your customer a complimentary product or server at a much higher price.
What’s your current side hustle? Are you leaving any money on the table? Do you have any ideas on how you could make more money by offering a complimentary product or service to your customers? I’d love to hear from you so please let me know by leaving a comment. Thanks!
**My eBay Checklist**
I wanted to leave you with a checklist that you can use when writing an ad to sell something on eBay, or anywhere for that matter. This checklist is based off of my 15+ years of selling on eBay.
The checklist is a great reference to make sure you have everything you need in your ad copy to maximize the chances that you’re going to sell your item for as much as you can. From the headline to the description, to the terms of the sale and even a little copyright notice I put in my ads that has essentially stopped people from copying my ads (which was a problem before).
Brent blogs over at VOSA.com – Verified & Organized Strategic Advice – and is one of my newest blog buddies. He’s a super smart (and nice) guy, and I hope you’ve enjoyed today’s post by him :)