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I got a job with Amazon the winter after I graduated from college, and have worked in various brand manager and supply chain roles there over the past 3.5 years (26yo). For a variety of reasons (kinda e/n), I'm now looking to leave the company and try the entrepreneurial route. That's arguably a stupid decision, but I feel like I'm in a decent position financially where I can at least give it a shot for a year - I've maxed out my 401k each year, have money in a Roth IRA and a separate brokerage account, and have a year's worth of emergency savings in my checking account plus a fair amount of vested company stock. For the past 3 years, I've been running a small side business selling collectible coins online. I spend an average of 5 hrs/wk on that currently, and last year netted $24k pre-tax. This year, I'm on pace to net a similar amount. While the business has poor long-term growth prospects, I'm confident that I can scale it in the short-term if I have more time to devote to it. I have a few other smaller sources of side income that could be expanded as well, and that I hope will eventually comprise a majority of my income. If desperate, I have another gig that could net me an additional $6k/yr but I'll try to avoid that if at all possible. I've been using YNAB to figure out how much income I need to sustain myself, and it looks to be about $35k post-tax, 2/3rd of which is housing. I'm renting, and don't have any need to buy within the next few years (not that I would want to in the current Seattle market). While I obviously hope to bring in more income than the bare minimum to cover my living expenses, worst case I feel pretty good about being able to hit that number. I have another chunk of stock vesting in a couple of weeks and plan to quit sometime after that. I've got a couple of minor health issues (nothing chronic) I'm going to try to resolve while I'm still on my health insurance plan. After that, I'll probably grab the Obamacare bronze plan for $2k/yr. I'm naturally a pretty conservative decision-maker, so this is going to be a big jump for me. But I've been contemplating this for about a year now and finally feel ready to take the plunge. Is there anything else I should take into consideration or plan for prior to making this move? If anybody here has done something similar, I'd really appreciate any advice or warnings you could provide.
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Jul 2, 2017 18:02
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What keeps you from scaling that upwards in the long run? Is it simply not having enough inventory / potential sales / something similar, or is it something you could fix with enough of a time commitment? 25K a year isn't much but it's very hard to beat the $/hour you're claiming. You're in a pretty good position to try something like this, so it's a matter of looking at the long term weakness you're talking about and (without lying to yourself) figuring out how much of a weakness it really is.
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Jul 2, 2017 21:53
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It doesn't have great long-term prospects as the market is shrinking. As you can probably guess, the demographic skews older. And as we're moving to a cashless society, fewer young collectors are getting into the hobby. The influx of new collectors doesn't seem to be keeping pace with the loss of older collectors, and the hobby has been in a downturn over the past couple of years. I think it's going to get even worse once the Baby Boomers pass on. The U.S. Mint and a few private companies are also doing a lot of damage to the hobby, just as the USPS helped cripple the stamp collecting market. Given all of that, I'm more interested in using it to keep me afloat while I develop a different, long-term sustainable business. I believe I can still grow it to net high five figures within the next year though.
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Jul 3, 2017 00:04
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Why do you want to do this? I get the how you could and your goals but I don't get why you want to drop your job?
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Jul 3, 2017 07:01
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There's a number of reasons, but the biggest one is that I get enjoyment and fulfillment out of working on my own business and do not get either in my current job (there are obviously worse problems to have and I'm privileged to even be in this situation). Other reasons include: I'm tired of corporate life and want to try something new I'm young and don't have many commitments, so I feel like now is as good of a time as any to be more adventurous in my career I moved to a new position within my dept several months ago but am still covering my old role as recruiting is doing a terrible job finding candidates I don't want to contribute any more to Bezos' push for world domination 1/3rd-life crisis
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Jul 3, 2017 07:34
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Ron Don Volante posted:It doesn't have great long-term prospects as the market is shrinking. As you can probably guess, the demographic skews older. And as we're moving to a cashless society, fewer young collectors are getting into the hobby. The influx of new collectors doesn't seem to be keeping pace with the loss of older collectors, and the hobby has been in a downturn over the past couple of years. I think it's going to get even worse once the Baby Boomers pass on. The U.S. Mint and a few private companies are also doing a lot of damage to the hobby, just as the USPS helped cripple the stamp collecting market. Given all of that, I'm more interested in using it to keep me afloat while I develop a different, long-term sustainable business. I believe I can still grow it to net high five figures within the next year though. I wouldn't worry about super long term planning until you know whether you can get this off the ground and hit your targets, but high five figures for a business that you can run part time is a very big deal. If you can keep scaling it past that point it doesn't really matter what the 20+ year outlook is; you can always transition out with a lot more money than you put in, and the broader category of collectible items is big enough that there will always be room for people to make a living. Don't take this to be too bullish because there are always tons of unexpected and/or creative ways to fail, but if you can do what you say you can it's relatively promising. You might want to spend a few hours and come up with some concrete ways to get to that number. Right now I assume you're using a spreadsheet or some basic bookkeeping software to track buys/sales, so sit down with it and look at overall volume/day. Are you getting your coins from Ebay and reselling higher? That means you have relatively unlimited stock to churn through but will probably have to put in a lot more time for cheap coin #100 than you do for coin #1, which will cut into your $/hour a lot at some point. Are you going out to garage sales and flea markets, then Ebaying? In that case you'll probably scale easier since it's just a matter of using more money to buy (effectively) bulk lots, but will need to list and ship a lot more - without automated auction software you'll also lose a lot of hourly rate on this. Learning how to make better auction descriptions, using SEO to set up a decent virtual storefront with a Google presence or maybe even buying an existing domain/online store etc. could all help here. Are there possibilities to make bulk deals with the grading agencies or some of the more honest "1000 uncleaned coin lot" dealers (do those actually exist?) to lower costs further? As someone who used to collect coins as a kid and quit like everybody else under 40 you're talking about, it'd be pretty fascinating to read about somebody running a coin shop, so I hope you keep posting.
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Jul 3, 2017 18:32
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If you make a ton of money, look into starting a SIMPLE IRA or (if you are making bucketloads) getting an EIN and starting your own solo 401k to shove more money into tax advantaged accounts. Keep excellent accounting records and look into possible tax deductions like if you have to travel.
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Jul 3, 2017 19:15
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I'll leave it up to you re: whether you want to do this or not, but if you do, you need to stop thinking of yourself as a coin seller and think of yourself as a publication. Write articles, videos, etc. Flood the web with content about coins and poo poo. You're in a good position because you're young so that will make people a little bit more interested in what you have to say.
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Jul 3, 2017 22:28
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Adar posted:I wouldn't worry about super long term planning until you know whether you can get this off the ground and hit your targets, but high five figures for a business that you can run part time is a very big deal. If you can keep scaling it past that point it doesn't really matter what the 20+ year outlook is; you can always transition out with a lot more money than you put in, and the broader category of collectible items is big enough that there will always be room for people to make a living. Don't take this to be too bullish because there are always tons of unexpected and/or creative ways to fail, but if you can do what you say you can it's relatively promising. Yeah, that's probably true - even if I can grow this into a decent 5yr business, I'll be happy. My hourly earnings are definitely going to decline once I go full-time into this though. I'm selling on multiple different platforms (including my own website) and plan to expand to others, so inventory management and posting listings will take up a lot more time as I expand my presence. I started out buying in bulk from eBay and a few other sites, but have now formed relationships with a few dealers across the country who sell to me directly and avoid platform fees. I did a little bit of garage sale prospecting in the past, but 99% of what I found was junk. Most people just had a few old U.S. Mint Proof sets or commemorative coins from the 90s, or maybe some old silver American Eagles- nothing I could really make a decent profit on. Bulk uncleaned coin lots (assuming you're referring to ancient coins) are never really worth it - sellers will pick out the nicest bronze coins and any silver coins and leave you with the junk. And if you do come across a nicer uncleaned lot, there's a good chance it came straight out of some unauthorized dig site in the Balkans. For ancients, I generally stick to more premium stuff. After I go through with this, I'll update the thread a few months out to give an update on my success/failure. moana posted:If you make a ton of money, look into starting a SIMPLE IRA or (if you are making bucketloads) getting an EIN and starting your own solo 401k to shove more money into tax advantaged accounts. Keep excellent accounting records and look into possible tax deductions like if you have to travel. Those are good suggestions, thanks. For the coming year, I'll probably be putting most of my earnings back into inventory, as coins are relatively slow-turning and I have to hold a large stock. I definitely need to do more research into tax deductions especially, as I haven't really taken advantage of my business expenses thus far. I've been doing my own taxes the past few years, but might have to hire somebody the next year just to make sure I've got everything nailed down. I've struggled with keeping on top of accounting in the past (making due with Excel), so will need to put much more effort into that going forward. CelestialScribe posted:I'll leave it up to you re: whether you want to do this or not, but if you do, you need to stop thinking of yourself as a coin seller and think of yourself as a publication. Write articles, videos, etc. Flood the web with content about coins and poo poo. You're in a good position because you're young so that will make people a little bit more interested in what you have to say. Yep, this is definitely part of my strategy. I actually started a coin blog/article site a few years back which now gets about 15k visits/mo, all organic. I haven't updated it in a while, and it only makes me $30/mo in AdSense revenue, but I've started building up an email list by offering a free coin collecting eBook to visitors who subscribe. The site's been gradually losing traffic on top keywords to a competitor site that I'm pretty sure is in a PBN (ranked #1 on Google across multiple keywords within 1 month of launch)- I'm hoping they get flagged and unindexed at some point, but in the meantime am still trying to figure out better ways to get value out of the traffic I do have. I also have a section for coin collecting articles on my new website (where I actually sell coins), which is now starting to pick up some organic traffic. I've found it's difficult to turn blog traffic into customers though, as most people are just looking for information about their own coins. I combined and adapted a bunch of my old blog articles into short eBooks and posted them up on the Amazon Kindle store for $0.99/ea earlier this year. I didn't really expect much from that, but I've surprisingly made $60 in royalties with 0 reviews and no marketing. I plan to keep listing more short eBooks on various coin collecting topics, and then ultimately adapt them into a larger eBook with a higher price point. Outside of those efforts, I'd like to get into YouTube as I think there's a fair amount of potential there. I could probably leverage the existing content I have to create some informational videos, and drive viewers to my email list. I've also considered creating a Facebook Group to promote my content but am a little bit leery about putting much effort into FB given the way they restrict post visibility.
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Jul 4, 2017 01:09
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Ron Don Volante posted:Outside of those efforts, I'd like to get into YouTube as I think there's a fair amount of potential there. I could probably leverage the existing content I have to create some informational videos, and drive viewers to my email list. I've also considered creating a Facebook Group to promote my content but am a little bit leery about putting much effort into FB given the way they restrict post visibility.
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Jul 4, 2017 02:40
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