Turning $20 Into $5000 - Jeffreys Challenge

[jeffrey]

Nate and I were having a discussion and whether it's possible to turn a small amount of money into a nice bit of savings over a 6 month period. I told him I could do it and that was the initial beginnings of this challenge.

I know that the people here at the forums are quite creative and many have much more knowlege than I, so I decided to invite everyone to take part in the challenge too. I'm hoping for a good number of people to try as the more that do, the more helpful it will be to all involved.

If I'm the only one, I hope to show that it is possible to turn a small amount of money into something more sizable over a relatively short period of time.

I will be using ebay as my primary mode of truning the $20 into more money and I will list all my expenses along the way. For simplicity, I will do a $1 = 100 yen conversion although this rate actually fluctuates daily and is currently about 105 yen = $1.

I will go out and buy some items this afternoon and list them on eBay tomorrow and hopefully get the ball rolling right away.

[jeffrey]

I spent about 30 minutes looking for things to sell yesterday (no cost - all were within walking distance of my home) and found a number of possibilities, but most didn't fit the $20 starting budget. The problem is that eBay listing fees will eat up the $20 rather quickly. Technically, I won't have to pay them until the next credit card payment arrives, but to be conservative, I will count the money as being gone when I list the products.

So I had a dilemma of how to get started on the tight budget - and then it came to me. There was a hobby shop I visited that is selling a number of items I think I can resell for a profit. Most are over my $20 budget. To lessen the risk, I talked to the owner and asked if I could come back and take photos of certain items he has (I explained a friend in the US was looking for things and I wanted to make sure they were the right ones before buying them) and he agreed. So I will take pictures today and list the items tomorrow.

This means that on the money side, I have greatly reduced my risk (if I'm wrong and the item doesn't sell, then I don't have any dead stock and am only out the listing fee). Where I will increase my risk is on the supply side - I will be in real trouble if I sell something on eBay and then go back to the store and find the item has been sold. I will therefore ask what type of supply he has for each of the items to lessen the risk that they are all sold out.

[jeffrey]

I spent about another 30 minutes yesterday taking photos and have decided on two items that he stocks. One is a set of Star Wars trading cards and the other is a set of Coke bottle caps - he has multiples of both these greatly reducing the risk that they will be sold to someone else if I sell them on eBay. I'm writing up the listing at the moment and will list them tomorrow to make sure they are placed on auction at a better ending time.

That also got me thinking about some other things I can do. pepsi is currently running a campaign out here for bottle caps for Star Wars that are exclusive to Japan. I can sell these as long as the campaign is running without purchasing the bottle caps unless I sell them. This works out well because I also get free drinks in the process. Kelloggs is also running a Japan campaign which again could lead to both some extra money and free breakfast cereal. I'll think a bit more on those this weekend.

[jeffrey]

Hmmm...I received a rather nasty email today saying that this challenge was "worthless" because it costs more than $20 to begin selling on eBay ("You can't just start selling on eBay. You need to invest in a digital camera, a scanner and other equipment").

The purpose of this challenge is not to provide a step by step guide on how to turn $20 into $5000. The purpose is to generate ideas so that you can adapt them to your own circumstances. Yes, it's true you need a digital camera (there really isn't a need for a scanner - I've never had one in 8 years selling on ebay). Each person will have to look at the resources available to them and work from there.

In the same light, most people won't be able to sell the same items that I sell. Since I'm in Japan I have access to items most people don't.

The challenge is to see if you can come up with a way to generate extra money. By each and everyone sharing their successes and failures, it should help others to avoid certain pitfalls and help in other areas.

[BCompDude]

Well I think its a fine idea. . .I have the 20 dollars set aside and am conjuring up ideas on what to do with it as I type this. It is certainly not worthless.

[DivaJen]

I'll be surprised if I turn $20 into $200, let alone $5000, but I appreciate the challenge of looking at what my resources and talents are and figuring out a way to put them to work for me. I may invest a quantity of time such that my hourly pay will work out to be quite small, but if I spend the time doing things that I enjoy (hobbies, for example) then at least it will be time spent well.

$20 certainly isn't going to be seed money for a new business venture, but if $20 can be turned into $40 and $40 into $80, eventually there's some real money there to play with.

[jeffrey]

Due to some unexpected issues, I wasn't able to list my items on Friday. I find that my items don't sell as well on weekends as during the week, so I'm going to wait until Monday to list them.

I also rediscovered another way I can add some money at little cost. When I first started on ebay, I used to collect used phone cards left in phone booths in Japan. I haven't done that in a long time just because the profit margin wasn't as high as it was for other items I can buy and resell. With the $20 start, these will be a good base to start with again since I find them for free. Once I get a bit more of a cushion, I'll probably stop selling them and move to more profitable items, but it is a good way to start with minimal costs. If the auctions go well but I decide not to sell them any more, maybe I'll bulk sell the cards to other to sell - then I can make a little money without much time spend and someone else can also make some extra money. Something to think about.

[joeswife]

well i for one am interested in how you can do it. id love to be able to try to turn it into more money. there are some places like ebay that dont cost as much, but i cant rember what they are right now. id love to try to start selling on them.

good luck
ericka

[jeffrey]

Originally Posted by joeswife

well i for one am interested in how you can do it. id love to be able to try to turn it into more money. there are some places like ebay that dont cost as much, but i cant rember what they are right now. id love to try to start selling on them.

I've tried a number of other auction sites that don't cost as much as eBay and I've found everytime that items either don't sell, or sell for much less than I can get on eBay. It's a kind of catch 22 - if you move to another auction site, you make less, but unless people move, there will never be competition for ebay and ebay fees will remain high.

I'm sure there are some specific items that will sell better on another auction site, I just haven't found them yet.

[jeffrey]

I listed 2 auctions with the inatial $20 - one cost $0.70 and the other $1.55 bringing my current total to $17.55. Both items are available at a local hobby shop so I didn't have to actually purchase them before hand - I just went and took photos. That means if they don't sell, I'm only out the listing fee and not the cost of the items. While a little risky, the shop has plenty of both sets. I decided to list them at a set price to hopefully increase the $20 a little quicker.

The <A HREF="http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=7169282783">Coca Cola Coke Bottle Japanese Korea World Cup Pin Set</A> is a set that I sold when the world cup was going on and it usually sold for between $25 and $50 so I have it listed at the high end. My cost is $25 - if it doesn't sell in the next few days, I may lower the price a little.

The <A HREF="http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=6193294724">Star Wars 7-11 AOTC 16 + 3 Insert Card Set</A> is also a set that I have sold in the past - it is a bit oversold, but still should get between $5 and $10 since it includes the insert cards. My cost is $2.50. Hopefully I can sell a few of each to build up the money and move onto items with potentially greater profit margins.

I've set the shipping price at slightly higher than the actual shipping costs - this will help defray the paypal fees and final value fees (although it won't eliminate them). My fingers are crossed. The nice thing about these two sets are that if they do sell, I can relist them again as long as the hobby shop has them in stock.

[jeffrey]

I took about 15 minutes and set up a <A HREF="http://5000challenge.blogspot.com/">blog</A> about this challenge - the content will basically be the same as I post here, but I set up seperate google ads on it to see if I can generate a bit of money from them. The key to making this work will be to try and get some of the persoanl finance sites to trade links with my new blog since bringing people to the blog is what counts. That can take quite a bit of effort, so I'll try and do that a bit at a time. I don't expect this to generate a lot of money, but it should add some extra dollars to the total savings with no set up costs.

[jeffrey]

I had a conversation with a few friends last night that may turn into a new stream of income. They have items that they want to sell, but not the time to do it. I offered to sell the items for them - either for a flat $10 fee or 25% of the final price, whichever they prefer. The nice think is that there is absolutely no risk for me - they pay for all the listing fees and final fees. They are supposed to bring some items over next week and I'll see how this works out.

[jeffrey]

<b>Current Total</b>: $17.55

Things haven't turned out exactly the way I had hoped, but then that is part of this experiment. Neither of the two auctions has sold. I was hoping that they would sell rather quickly and I could list multiples of them to get a better base, but things have not worked out that way. The good thing is that I didn't actually buy either of the sets so I'm not stuck with inventory. I've decided to lower the price on both of them to see if I can sell them before the auctions end.

I did receive some items from my friends to list on auction and we agreed on the 25% of selling price for them. Most of them don't look like they will sell for a whole lot of money, but again, it's a 100% risk free listing for me so I'll see how those turn out. my plan is to list those auctions on Monday.

[jeffrey]

<b>Previous Total</b>: $17.55

<b>Current Total</b>: $18.93

Things have certainlt started out slow - I need to come up with some more ideas soon if I'm going to make it to the goal. Onlt one of the two auctions sold at the reduced prices I listed - the card set for $5.95 + $3.00 shipping. The final value fee was $0.26 and the paypal fee was $0.56. As mentioned before, the cost of the set to me was $2.50. Shipping came to $2.00 - I had placed an extra $1.00 onto shipping to help lessen the impact of the listing, final and paypal fees. That means the profit was $3.63 - not a lot, but since I can do this again and again, not much more work for me to list the auction. So, I placed <A HREF="http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=6194875838">another auction for the set up on ebay</A> which cost another $0.70.

Even thought he coca cola set didn't sell, I <A HREF="http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=7170740872">placed it up again</A> (another $1.55 listing fee) because there were 7 people that had put it on their watch list. I'm not sure why it didn't sell. If it doesn't sell this week at $39.95, I will give up on that.

So after totalling up my small gain and the expenses of listing again, overall I'm still under $20.

The good news is I received about 15 items from a friend that wants me to list them for him - since he'll be paying all the expenses for listing and final value, I don't have to worry about that. I will get 25% of the final price.

[jeffrey]

<b>Previous Total</b>: $18.93

<b>Current Total</b>: $18.93

hmmmmm, my strategy obvioulsy needs some refinement. I really though that the card set and pins would sell - goes to show that you can never tell with ebay. I'm sure I'll place some items up that I don't think will sell and they will be quite popular.

Time to sit down and tweek the strategy. I do have the medals from the Olympics and World Fair that my friend gave me to list and I'll keep my fingers crossed for both his and my sake that they sell reasonably well.

I did notice that I received a very small amount of money one day from the ads on <A HREF="http://5000challenge.blogspot.com/">my $5000 Challenge Blog</A>. I've decided to add up whatever has been produced there at the end of each month and write it down once instead of an a daily basis.

[jeffrey]

<b>Previous Total</b>: $18.93

<b>Current Total</b>: $22.56

Ah, for the little joys in life. Another of the Star Wars card sets sold which means $3.63 profit after all expenses which actually puts me a couple dollars ahead of the initial $20 starting point finally. The better news (fingers crossed) is that he may be interested in multiple sets, so I will wait putting another set on ebay until I hear from him on that....time for bed since it's closing in on 1:00AM out here in Japan

[vince]

Very Interesting challenge but I doubt ebay will be the key to this whole thing. Their fees are too high. You would make more if you focused on your blog adding a page a day and let adsnse take care of the rest. Just my opinion and I am an ebay powerseller. Good luck

[jeffrey]

Originally Posted by vince

Very Interesting challenge but I doubt ebay will be the key to this whole thing. Their fees are too high. You would make more if you focused on your blog adding a page a day and let adsnse take care of the rest. Just my opinion and I am an ebay powerseller. Good luck

The key to making ebay work if I can will be finding products with larger profit margins. With only $20, I'm limited in purchasing higher priced items at the moment that would give a bigger profit margin, but hopefully that will change in the near future.

While I hope that ebay will be the main area, I also plan to try to generate money in other areas. Getting a blog to earn $5000 in six months is also a pretty difficult task since you need traffic to generate that much money and it takes time to generate the traffic. That is why I'm doing both and hopefully I will be adding some more streams of income along the way.

Still no word if the buyer will take multiple sets of the cards - still have my fingers crossed there since that would be a nice little boost.

[jeffrey]

<b>Previous Total</b>: $22.56

<b>Current Total</b>: $22.56

Still no word on the other card sets. If I don't hear anything in the next 24 hours, I will list another set.

I listed 5 auction for my friend with Olympic related themes. The deal is I get 25% of the final price and he pays all fees, so no risk on my part in this.

<A HREF="http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=5222229163">Japanese 1964 Tokyo Olympics Medal Olympic Japan Fuji</A>
<A HREF="http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&rd=1&item=5222232787">Japan ese 1964 Tokyo Olympics Medal Olympic Japan Bronze</A>
<A HREF="http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&rd=1&item=5222234471">Japan ese 1972 Sapporo Olympics Medal Olympic Japan XI</A>
<A HREF="http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&rd=1&item=5222236743">Japan 1964 Tokyo Olympics Kappa Flag Pin Olympic Japan</A>
<A HREF="http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&rd=1&item=5222239090">Japan 1964 Tokyo Olympic Ring Pin Olympics Japanese NR</A>

Hopefully all those will sell for a few dollars at a minimum - I don't know much about Olympic collectibles so not sure what to expect there. I still have some more items to list for him when I find the time.

[jeffrey]

<b>Previous Total</b>: $22.56

<b>Current Total</b>: $22.56

The auctions that I put up for my friend have done much better than I expeced thus far. Since I have no experience with olympic collectibles, I wasn't sure what to expect and figured if they all sold for about $5 or so, we would have done well. All the auctions have at least one bid with one of the pins already having been bid up to $39 which is a pleasant surprise for both of us. My take is 25% of the final price so that should add a few more dollars to the total when they end next week. I guess I should keep my eyes open for Olympic pins from now on when I visit flea markets and such.