The $300K Side Hustle I Started With $500

Date

About 8 years ago I was searching for ideas to start a business. I was trying to find a product that I could sell online. I first started buying hockey tape at wholesale and trying to resell that on Amazon. I made a few sales but nothing worthwhile. 

I have been playing golf my entire life, so I went to my garage and grabbed golf clubs I no longer used. I listed these on Amazon and eBay. The golf clubs sold quickly on eBay (I soon learned Amazon did not have a good setup to sell used golf clubs).

Selling my old golf clubs was not a sustainable business, I only had so many in my garage. I needed a way to get a constant flow of golf clubs to flip on eBay.

I reached out to family and friends that I knew played golf and offered them upfront cash for their old golf clubs. The first purchase I made was for around $400 – $500. I listed those clubs on eBay and quickly flipped them. I would go make my next purchase with the cash I got back on my first purchase and so on. 

Eventually, I needed to expand beyond my family and friends. Each week I would scour Craigslist in my state and make offers on golf clubs that people were listing. Then on the weekends, I would take a few thousand dollars in cash with me and drive around my state picking up the items I made deals for.

The economics of it

Just like cars have a trade-in value, so do golf clubs. There is a website called PGA Value Guide. This website gave the trade-in value and re-sell value for almost every golf club manufactured in the last 40 years or so. I first went by this guide to make up-front cash offers on people’s golf clubs.

However, I found that I did not agree 100% with their trade-in values. I started using eBay’s advance search to get the average an item sold for recently and I would make an offer based on what I know it’s currently selling for on eBay.

I would consider the following factors when making my offer:

  • Age of the club (Newer clubs sell the fastest)
  • Club Type (Driver’s sell the fastest)
  • Brand (Had to be one of the top 5 or 6 golf club brands)
  • The volume of sold items of that club (I would pay more if I knew I could sell it faster)
  • Condition of the club (The better the condition, the faster it would sell)

As a baseline, I would offer about 50% of the value that I knew I could sell the club on eBay. However, I would pay a premium or discount from my baseline depending on the factors above. If the club was in great condition, only a year or two old, was a driver from one of the top manufacturers, and they were selling fast on eBay, I would end up paying up to 60-65% of the price I could flip it on eBay.

After an item sold on eBay, I would have to pay the commissions and processing fees to eBay/ PayPal, I would have to pay for a box to ship the item out in, and I would have to pay to the outbound shipping fees (I rarely charged a customer for shipping).

Here is an example of how much money I could make on a single club that had an average selling price on eBay $100 on eBay:

Sale – $110 (while I don’t charge shipping, I would inflate the selling price just above what the average selling price was but still offer free shipping)

COGS – $55 (55% of the average selling price on ebay)

eBay/Paypal fees – $14.30 (about 13% of the selling price)

Shipping Costs – $11 (Average USPS price to send out a golf club)

Packaging – $1 (I used uline to buy the boxes in bulk)

Net – $28.70 (26%)

So how did I scale it to do $300K in a year?

Driving around the state each weekend picking up golf clubs off of craigslist has its limits. I needed to find a way for people to just send me their golf clubs. I came up with the idea of a self-serve golf club trade-in website.

I had taught myself PHP and mysql from YouTube videos, and I already knew HTML. I used these skills to build Sellstant.com (a combination of the words sell and instant). 

I built a database of almost every golf club I could find (Brand, Make, Model, Year). I then ran a script to eBay’s API to get the most recent sales for every club in my database.

The customer would come to Sellstant, find their golf club, and answer a few questions about the condition of the clubs. I built a simple algorithm that would make a price adjustment based on the inputs from the customers.

The customer would add their quoted clubs to a cart and then checkout. After checkout, I built a script that would automatically generate a shipping label from UPS that the customer could print out and send in (I did require the customer to find their own boxes to send their clubs in).

I launched Sellstant.com on March 3rd, 2013. I had no idea if anyone would use it. Would they trust that after they send their clubs in that I would actually send them back money? I set up a Google Ads campaign and waited.

And it worked! People came and sold me clubs through this website.

Now on a daily basis, UPS would drop boxes of golf clubs off at my house (well my parent’s house, I started this operation in my parent’s basement).

Having the clubs sent to me and me sending back money, actually provided me a little bit of float. Most of the time I could get the clubs listed on eBay and sold before the check I sent out was cashed.

Sellstant.com gave me a consistent flow of golf clubs however it was not the most profitable way to make money reselling golf clubs.

Golf Shop Inventory Liquidation

Golf manufacturers come out with new golf clubs every year, making the old unsold golf clubs almost obsolete in these golf shops. I reached out to many golf shops in the area offering to liquidate their unsold golf clubs at the end of the year. I ended up having 5-10 accounts that I would regularly liquidate. The typical purchase size was around $3,000 – $4,000. The largest one-time purchase I made was for $11,000.

With the combination of golf shop liquidations and the steady flow of trade-ins from the website, I was eventually able to grow my yearly revenue to over $300K. My estimated net profit would end up being around 10-15% (I took on a warehouse, and I had hourly staff help me).

The End

I had dreams of growing this to be over $1M in annual revenue. However, I got stuck and cash flow became very tight. I started to accumulate inventory that was not selling. And I started losing some interest in the operations.

I worked my ass off for the $300K. And I started wondering if I worked that hard on something else, would it have better returns. Buying golf clubs was very capital intensive and required a lot of hustle. I eventually ended up offloading the business to one of my friends and I moved on to new things.

I have considered trying to take the trade-in website that I built and finding a way to help others start their own golf club trade-in business. Give them the tools to start making their own side money by flipping golf clubs. At this point, that is only an idea (maybe something I consider in the future).

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