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Mikeyjd checking in from Michigan

mikeyjd

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My entrepeneaurial journey all started back in late June 2014. My dad picked up a washer and dryer set on the side of the rode and brought them home. I was renting from my parents on the same property, so we shared a lot of projects. He was able to get both working with minimal effort and he asked me to try to sell them on craigslist. My first thought was $100 a piece seemed fair. Needless to say I had a huge response at that price and both were sold later that day. The next day my dad bought dryer at a garage sale and I sold it for $120 that night. That's when I knew we were on to something.

I started hawking craigslist for deals and started trying to get my hands on free stuff and next to free stuff (money was tight), while planning to reinvest into more/better inventory as soon as possible. Before I knew it I had over 20 appliances mostly non-working and decided to hire my dad as a part time employee for repairs. He has a mechanics backround and this stuff comes as much or more naturally to him than it does me and I was so busy with sourcing and delivering, that having him for this was extremely key to what has been an amazing couple of months.

In that last week of June I was able to sell 6 Appliances and profit $650 dollars on $1,220 Sales! I felt like I had finally found my niche. My wife and I had been praying for something to come allong to supplement my lagging flooring business. This has been such a huge blessing. She was able to quit her nanny job and become my helper on pickups and deliverys. It has been so enjoyable to have a job where my wife can be with me.

July was a whirlwind, I spent a lot of time building inventory. I put in some crazy hours just to do what I had to to make everything happen. It seemed like I couldn't put in enough hours to satisfy the demand of the market. All in all we moved 44 appliances in July for $5,865 in sales and $3,405 in personal profit. Plus the fact that I had 67 appliances in my inventory.

August is when things really caught fire from a profitablity standpoint. With many of my machines now having been aquired via trade in, my margins were much better. I also started listing my stuff for the most I thought the market would bear in order to slow down the sales enough to catch my breath. But.. they didn't slow! I do have less time into them now that repairs are becoming more routine though so the hours are becoming more like a regular work week. We sold 54 appliances. This time for $6,125 profit on $8,797 sales in 140 hours. It became my main gig rather than my side job at this point. I am having so much fun with this job, it still surprises me actually.

Fast forward 18 months from when we started. We've had 100k sales and 60k profit the last 6 months. I'm making about $75 per hour now, but I know that if I step away from this business my income disappears over night. I'm looking to take the knowledge and skills I've developed in this business, as well as some of my savings, to invest into things that will yield passive income and allow me to not be lifting heavy appliances in my 40's. My main interest right now is rental properties. I'm considering trying to flip a couple to start in order to fund several income properties. I'm excited to be doing what I am, but look forward to the day when I can walk away and never look back. I'm 29 years old and I'm hoping to never need to work another day after the age of 40. Thanks for taking the time to read!
 
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MJ DeMarco

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Great intro, love the hustle.
 

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There is a girl in my town that did the same thing. She now has at least 3 B&M stores and is the "go to" for all appliances.

Welcome and keep pushing that biz!
 

mikeyjd

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There is a girl in my town that did the same thing. She now has at least 3 B&M stores and is the "go to" for all appliances.

Welcome and keep pushing that biz!

Thanks. I've been averse to increasing my overhead prematurely. I currently operate out of a wharehouse with a showroom. My fixed costs are roughly $700/month, but I know in order to scale things in this business I will, in all likelihood, have to delve into the world of B&M. I'm still exploring other possibilities at this time, but it is the proven method for this type of venture.
 
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amp0193

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Hey Mikey,

Welcome to the forum. This is Aaron, I was on Appliance School for about a year until around August or so this year. My goal was to make enough steady income doing appliances, that I could ditch the day job in September, and work on the Amazon stuff in my spare time. Instead, I ended up working harder, and being more tired than a day of teaching, and was ultimately making less money.

After trying to make the used appliance thing work... I also came to grips with the difficulty of scaling such a business. The sheer amount of human resources, vehicles, and overhead to make a Mil+ biz a year work is staggering. There are other paths that are much more scaleable, which is why I gave it up. I'm making way more now with Amazon and my ecommerce site, for a lot less daily time invested. (i.e. I made $400 profit today, and the only work I did on the biz was answer 7 customer service emails, spent an hour packing 18 boxes, and sent off a wire transfer to china).

I was trying to come up with how to make appliances Fastlane. The solution that was in my head, but I couldn't yet put down in words, was what Ryan Finlay came out with: http://applianceswap.com/. There's your used appliance Fastlane... leveraging the time and resources of others. Another idea was starting a repair company, using sub-contractors to do the repairs... basically lead generation. The difficulties with this is finding the skilled and reliable contractors that will give your business a good name. I started work on this business, but gave it up to focus 100% on my ecommerce stuff. There are a few companies that have been successful with this model.

If you stick with appliances... try and come up with a way to change how people buy appliances, a way to smooth the customer experience. It is such an old industry, with no innovators shaking things up. Not a single company in Dallas had a website with inventory. I was the only one, and I had it set up on Shopify so that you could customize the whole order, including delivery time, power cord type, upsells like new vents/hoses... and I was getting decent sales from it using Google adwords. I think there is some potential there, but, when your time input = money output, you can only go so far.

Another good plan that I was implementing before I canned the biz, was using CallRail to create multiple trackable phone numbers that all went to my cell phone. I set up referral deals with the big property management companies, and gave them fliers with a custom phone number to put in the lease packets that they give out to new tenants. Just something you can do to build your network when Craigslist is slow.

I assume you've read The Millionaire Fastlane , and that is what brought you here. If you haven't read the book, read it asap. It will change your life.
 

mikeyjd

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Hey Mikey,

Welcome to the forum. This is Aaron, I was on Appliance School for about a year until around August or so this year. My goal was to make enough steady income doing appliances, that I could ditch the day job in September, and work on the Amazon stuff in my spare time. Instead, I ended up working harder, and being more tired than a day of teaching, and was ultimately making less money.

After trying to make the used appliance thing work... I also came to grips with the difficulty of scaling such a business. The sheer amount of human resources, vehicles, and overhead to make a Mil+ biz a year work is staggering. There are other paths that are much more scaleable, which is why I gave it up. I'm making way more now with Amazon and my ecommerce site, for a lot less daily time invested. (i.e. I made $400 profit today, and the only work I did on the biz was answer 7 customer service emails, spent an hour packing 18 boxes, and sent off a wire transfer to china).

I was trying to come up with how to make appliances Fastlane. The solution that was in my head, but I couldn't yet put down in words, was what Ryan Finlay came out with: http://applianceswap.com/. There's your used appliance Fastlane... leveraging the time and resources of others. Another idea was starting a repair company, using sub-contractors to do the repairs... basically lead generation. The difficulties with this is finding the skilled and reliable contractors that will give your business a good name. I started work on this business, but gave it up to focus 100% on my ecommerce stuff. There are a few companies that have been successful with this model.

If you stick with appliances... try and come up with a way to change how people buy appliances, a way to smooth the customer experience. It is such an old industry, with no innovators shaking things up. Not a single company in Dallas had a website with inventory. I was the only one, and I had it set up on Shopify so that you could customize the whole order, including delivery time, power cord type, upsells like new vents/hoses... and I was getting decent sales from it using Google adwords. I think there is some potential there, but, when your time input = money output, you can only go so far.

Another good plan that I was implementing before I canned the biz, was using CallRail to create multiple trackable phone numbers that all went to my cell phone. I set up referral deals with the big property management companies, and gave them fliers with a custom phone number to put in the lease packets that they give out to new tenants. Just something you can do to build your network when Craigslist is slow.

I assume you've read The Millionaire Fastlane , and that is what brought you here. If you haven't read the book, read it asap. It will change your life.

Thanks for the reply Aaron. I wondered why we stopped hearing from you. I'm glad things are taking off with the ecommerce site for you. I defintely see the challenges associated with getting to a million dollars a year. I know that I need to leverage my time differently in order to make it possible. I have a friend that has been nagging me to delve into ecommerce for a while now, he thinks I would excel at it. I've been putting it off to focus on my current hustle.

I have the appliance thing to the point where I can do 30-40 hours and still make 10k profit per month. I'm considering scaling it back a little to focus on generating more passive forms of income. I have grown up remodeling homes and think the rental/house flipping would be a good fit long term, but I need a way to generate the cashflow without it consuming my work day. I'd love to talk to you over the phone about what you're doing and how it's working for you. Thanks for the response :)

I've almost finished TFM. I'm a slow reader and have a hard time reading large chunks at once. I wish there was an audio version ;)
 

amp0193

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Thanks for the reply Aaron. I wondered why we stopped hearing from you. I'm glad things are taking off with the ecommerce site for you. I defintely see the challenges associated with getting to a million dollars a year. I know that I need to leverage my time differently in order to make it possible. I have a friend that has been nagging me to delve into ecommerce for a while now, he thinks I would excel at it. I've been putting it off to focus on my current hustle.

I have the appliance thing to the point where I can do 30-40 hours and still make 10k profit per month. I'm considering scaling it back a little to focus on generating more passive forms of income. I have grown up remodeling homes and think the rental/house flipping would be a good fit long term, but I need a way to generate the cashflow without it consuming my work day. I'd love to talk to you over the phone about what you're doing and how it's working for you. Thanks for the response :)

I've almost finished TFM. I'm a slow reader and have a hard time reading large chunks at once. I wish there was an audio version ;)

10k profit a month is great for a 30-40 hour hustle. You certainly had the game figured out more than anyone else, in terms of optimizing and improving. You have to build that initial startup cash somehow. When it came down to it... I think I just sucked at fixing washers, haha. Too many post-delivery failures! I think rentals/real estate is a great path, especially for someone like you who is good with their hands. There are lots of threads here about people doing that, and be sure to get on BiggerPockets forums also. Long-term, I will ultimately phase out of actively managing a business, and will transfer my wealth into real-estate and rentals.

There is an audio version of the book here. You probably won't want to pay full $24.95 price for it though, if you're almost done with the book.

I'll PM you my number. Message me back and we can find a time to talk.
 
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G

GuestUser140

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I also started listing my stuff for the most I thought the market would bear in order to slow down the sales enough to catch my breath. But.. they didn't slow!
That's a good feeling isn't it. Reminds you the market decides, not you. Go as high as it can bear! :)

Fast forward 18 months from when we started. We've had 100k sales and 60k profit the last 6 months. I'm making about $75 per hour now, but I know that if I step away from this business my income disappears over night. I'm looking to take the knowledge and skills I've developed in this business, as well as some of my savings, to invest into things that will yield passive income and allow me to not be lifting heavy appliances in my 40's. My main interest right now is rental properties. I'm considering trying to flip a couple to start in order to fund several income properties. I'm excited to be doing what I am, but look forward to the day when I can walk away and never look back. I'm 29 years old and I'm hoping to never need to work another day after the age of 40. Thanks for taking the time to read!
This is cool.

Food for thought:

Why change a working part?

Starting with nothing, you made all the money selling washers. Now you want to move to real estate.

Do you want to do real estate because of the passivity and because it's easier to work with bigger amounts?

Nothing wrong with that, but why not (also) think hard on how to scale this and divorce it from your time? There's no reason you can't sell 1000 washers a week. You don't have to lift them yourself.

90% of my stock these days... I never see.

But I do see the numbers and I like them.
 

mikeyjd

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That's a good feeling isn't it. Reminds you the market decides, not you. Go as high as it can bear! :)


This is cool.

Food for thought:

Why change a working part?

Starting with nothing, you made all the money selling washers. Now you want to move to real estate.

Do you want to do real estate because of the passivity and because it's easier to work with bigger amounts?

Nothing wrong with that, but why not (also) think hard on how to scale this and divorce it from your time? There's no reason you can't sell 1000 washers a week. You don't have to lift them yourself.

90% of my stock these days... I never see.

But I do see the numbers and I like them.

I'm not saying I'm walking away from appliances tomorrow, I'd just like to think that I won't need to work this hard or this much in a few years.

I like real estate because I have the skills for remodeling and managing properties until I can afford to turn them over to a management company. The potential for passive income is very real and homes have an amazing amount of intrinsic value.

I would like to be able to hire a manager to run my affairs. Thus far I haven't been able to make it a reality ;)
 

mikeyjd

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It's been quite a while since I've reported back on my business. We're continuing to do well with selling appliances. We still primarily sell refurbished machines, but we have several scratch and dent suppliers for selling "new" machines now and I'm very pleased with our current trajectory.

We have 6 full time and 3 part time staff that all get paid over market value for their work. We have a 30k sq ft warehouse with about 8k allocated for showroom space. Last month we had a record month (for no apparent reason other than reputation and momentum) over $93k sales and over $48k profits, not including salary for my wife and I. At our current pace we are projecting $750k sales and $300k profits for the year. I am looking at additional retail outlet locations but running into difficulty finding exceptional, trustworthy individuals to make that a reality.

I appreciate this forum greatly and have drawn inspiration from it on multiple occasions over the last few years. MJ is a true role model and voice of wisdom. If anyone has any questions about building an appliance company from nothing, I would be happy to be of service.
 

mikeyjd

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I also just finished "Unscripted " on audio last night. Loved it. I'll probably listen to chapters 40-54 a second time in the near future.
 

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