Profit Income is the second stream of my 7 streams of income series. Profit Income is the practice of Buying and Selling. There are many ways to do this and if you are not familiar this may be the lowest barrier of entry of them all. Yes, in the old days you needed some capital to get started but now with the amazing internet there are ways to do it without any upfront funds. This is the oldest entrepreneurial venture in the world. Think of your favorite brick and mortar store or street vendors if you live in a city. They buy products, add a premium to it, and sell it to you. A great example would be a $7.50 pair of named brand jeans with a $50.49 premium turning into a $57.99 pair of jeans. Those “50% off” sales don’t sound like such a good deal anymore, huh?
Well, as an entrepreneur or budding one you should know that the premium includes profit and overhead. When you lower your price for any reason, it comes from profit first. Your overhead is usually fixed costs. This is mortgage or rent if you have a traditional store, utilities, cost of staff if you have one, internet, etc. This is how most businesses work so get used to it if you intend to get started. The best way to maximize this stream is to minimize your overhead and find the best quality for the cheapest price.
That order is important because you’ll find most of your savings in overhead cuts. When buying and selling, usually the buying price is as low as you can get because they are wholesale prices. If your profits margins are small while buying wholesale you’ll need to find another product to sell. That is unless you are not buying wholesale, if that is the case start the business for real, get your incorporation, and buy wholesale.
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What was that way to do this without money? Can we go back to that? Of course. The internet has presented us with the opportunity to get into buying and selling while doing it in reverse order. Yes, selling something you don’t have, and then going to buy that product for less than what you paid for it. This is the way it’s done and can be completed without the customer having any idea that you didn’t have the product in hand. The customer rarely cares but if they did this can be hidden. The process can be a little confusing in the beginning and takes some coordination but if it’s something you want to do, you’ll learn. You can do one of 3 things online. You can buy online and sell online via Walmart to Amazon. This is very easy but the profit margins are small but hey you can make 5 dollars 100 times or 50 dollars 10 times. $500 is $500.
You can use what is called a dropshipper which is a company that fulfills your orders for you. Let’s say you sell masks online for $10. The dropshipper charges you $3 for the mask and $2 to ship. They handle the inventory and ship to whatever address you supply them with. You make $5 per sale. The last way does have upfront cost and is kind of an old way to do it but can get you better deals on the products. This would be buying in bulk from wholesalers and keeping the inventory yourself. This will save you money versus buying individually. The downside is again the upfront cost, keeping an inventory, and in addition to that, you’ll need to individually ship every item you sell. This is doable but a lot more work compared to the additional money you’ll make. Make the best decision for you.
In closing, profit income is a great way to make money on the side and learn how to run a business. This can quickly replace your income from your job with diligence and studying the best selling products on the internet. It is the most basic form of business. Buying and selling. Don’t be afraid to get out there and try. You may surprise yourself.
Food for Thought…You do the dishes.
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