By Nate Andorsky, co-founder and COO at Creative Science Labs.
I was a freshman in high school when we started talking about college in my house. My parents would foot the bill for school, but coming up with spending money was on me. To incentivize me, my dad would match any money I saved for college during high school. By the end of sophomore year, I had only saved a few hundred bucks working as a busboy. Worried I'd be attending college with no savings, I felt an urgency to get moving. At the time, eBay was hot and new and I decided to give it a whirl. I wasn't old enough to open a bank account, so I borrowed my brother's PayPal account. I sold old DVDs and made quick cash. It was easy and fun, but I quickly ran out of inventory selling my own stuff.
A Business Is Born
I opened Microsoft Word, came up with the name Easy Selling, and designed a logo and flyer. Printing out a handful, I hit the pavement the old-fashioned way, door to door, asking my neighbors for items they no longer wanted. My bedroom soon looked like I'd robbed a pawn shop. Within a few months, I had accumulated so much inventory that it was time to upgrade.
From my bedroom to the basement I went. My bedroom became my executive suite while all the photographing, packaging and shipping happened in the "warehouse" downstairs. I was selling Star Wars memorabilia, printers and cameras. When I'd visit a friend's house, I'd take mental inventory of items that looked like they were ready to be trashed. I'd chat with friends' parents and oftentimes walk away with computers, Palm Pilots or old children's toys.
Easy Selling taught me to be scrappy. I didn't know much about business and didn't have access to capital, both of which forced me to find my way through challenges quickly and cheaply. Out of necessity, I built my own website, created my flyer-based marketing plan, and used Microsoft Word Art for my logo. Soon, I was seeing the world through the lens of an entrepreneur, and learned the following lessons in the process:
1. Get the biggest bang for your buck.
It took the same amount of effort to sell a $40 item (with an $8 profit) as it did a $400 item (with an $80 profit). So I started hitting yard sales where higher priced items were available.
2. Focus your time.
In paying attention to both my time spent packaging and the expenses of shipping different products, I found that cell phones were the easiest to package and inexpensive to ship. Smaller, high-priced items soon took so much of my attention that I started a separate business focused on used phones.
3. Understand presentation.
As I invested more time and energy in the appearance of my listings, I watched my auctions increase in final prices by 10-15 percent. Higher perceived value meant higher bids.
4. Know where to market.
When shopping at Best Buy one day, I asked myself what its customers were doing with the items they were at the store replacing. I started putting flyers on cars in Best Buy parking lots, where everyone was an ideal seller.
5. Understand that reputation matters.
eBay was structured so that buyers and sellers could review each other. Because I was selling tons of product, I was labeled a "power seller." My rating was my reputation, and it helped customers feel confident in buying from me. Protecting my reputation became paramount, which forced me to learn how to offer exceptional customer service.
6. Don't rely on a third-party business.
What eventually put Easy Selling out of business was a change in PayPal's policy. Starting in 2007, it was freezing funds for high-volume sellers, likely due to the growing frequency of fraud. It impacted my cash flow so much, it killed the business. So many of these lessons still motivate my decisions. The biggest lesson of all was that I could create global reach from my bedroom with nothing more than a computer and time. To my parents and friends, I was a crazy kid asking everyone for their junk. But to the world, I was a business.
Nate Andorsky is a co-founder and COO at Creative Science Labs.