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Ask HN: What is a way of making residual income with $5K a month?

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Ask HN: What is a way of making residual income with $5K a month?

#1

Post by hanyoon »

My friends and I have decided that we are sick of living paycheck-to-paycheck. We want to start a business together that would bring us residual income. I have a few ideas, but I am all ears if you have any suggestions.

A little about me: I am highly knowledgeable in HTML/CSS/JS, website development, wordpress, graphic design, online marketing, and social marketing. I've worked with companies such as ARCO Gas, AMPM, HiteJinro, Ballantines Whiskey, and the LA Dodgers.

I have experience and understanding of the current state of the web and effective marketing.

An idea: buy cheap high quality phone cases from China

* The $5K / mo would give us a variety of cases to choose from, as well as bulk discounts. Obviously, we would start small to test the market, maybe invest $1K in inventory

* Simple, modern website that makes purchasing easy on the web and mobile

* Highly targeted market. Example: (Item: a Justin Beiber case) Facebook ad target teenage girls in the USA who have liked Justin's facebook page

* Analytics, A/B testing, whatever I can do to maximize profits

* Sell $1 cases for ~$10; should result in very high ROI

* Even though the case market is saturated, with targeted ads I'm thinking it would be possible.

Any other ideas?

edit: Don't get whats with all the downvotes :/ We are legitimately trying to start something that would help us get out of living paycheck to paycheck, and are simply open to hearing ideas. Isn't this what the whole entrepreneurial spirit is about?

Re: Ask HN: What is a way of making residual income with $5K a month?

#2

Post by MarkCole »

If someone had a "sure-fire way" of making an extra $5k a month, I don't think they would be keen to share them.

In my opinion the case market is pretty saturated, and it's a hit or a miss about whether you get anywhere with it, or just lose your money. You say with targeted FB ads you can do it, but you need to get one customer for every $9 you spend, that's not a lot.

If you're looking to start a business, I'd highly suggest building/selling something that you can sell for much higher than $10. More in the region of $100 - $500. The plus side of this if you need to make fewer sales to reach your target.

You have skills that could make you an extra $5k a month and more, that would be much easier than peddling cheap phone cases. Take on additional consulting project for example?

Or optionally, follow the advice of many financial bloggers and simply cut your outgoings to prevent the living paycheck-to-paycheck situation.

Re: Ask HN: What is a way of making residual income with $5K a month?

#3

Post by olivierduval »

- "invest $1K in inventory" => no, start with orders THEN buy what's ordered...

- "Justin Beiber case" => warning: you can't use people (or pictures or cartoon or...) images like that... and the rights can be pretty high

- "$1 cases for ~$10" => didn't you forget taxes, delivery, lost,... business is not: sell $10 - buy $1 = profit $9

Well... I think you should take a look at the business side

Re: Ask HN: What is a way of making residual income with $5K a month?

#4

Post by Guest192038 »

Why not work backwards and start making sales before you have stock, so you know if the business is possible, and if so, what kind of margins you're working with to pay for advertising, inventory, fullfilling orders, packing, shipping, wages, rent, etc?

For example, setup your online store and buy your Facebook ad campaign for teen girls, and try to sell them the Justin Beiber case that you could potentially order from China. When they go through the order process, inform them it's 'out of stock', and flag a potential sale in your database. Now, analyze the numbers, look at how much your ad campaign costed, how many potential sales you generated, how much it would cost to order those actual cases from China, how much it would cost to ship them, etc, and see if the business makes sense. If so, start with a small batch of inventory as you said, you'll get more experience with the entire process, any hidden costs or time involved you overlooked, and go from there.

Re: Ask HN: What is a way of making residual income with $5K a month?

#5

Post by someone12345125 »

"Even though the case market is saturated, with targeted ads I'm thinking it would be possible." I spent a bit of time in this market years ago... YEARS Ago... Don't enter it. Your thoughts that targeted ads will work prove to me that you're not actually that knowledgeable in digital marketing. If you think that you're going to discover some magic formula to sell these cases that all of the cell phone case creators (including the phone manufacturers) in addition to amazon and much more haven't done and with an unbranded no name business and phone - you're fucking wrong.

Re: Ask HN: What is a way of making residual income with $5K a month?

#8

Post by PlzSnow »

I'm a bit horrified at the naivety of this post. I think the best thing you can do is just try it, with the presumption it will fail. Then learn the lessons why it didn't work and try and try again.

At some point you will realise that the notion there's a "sure-fire way to $5K" is completely absurd.

Some random notes on your idea anyway:

- No-one buys from independent websites, only Amazon, eBay, etsy etc

- You will get no traffic to your website

- Phone cases are a commodity, there is no chance you can charge higher than Amazon

- Buying Facebook traffic to sell $10 items doesn't work economically

- Justin Beiber will close down your website with cease and desist

- You will end up with a 1000 cases that you can't even sell for 99c

- The real money is in value-added high-price items, or in selling services

Re: Ask HN: What is a way of making residual income with $5K a month?

#9

Post by jackcosgrove »

Buy a couple duplex properties in an inexpensive midwestern or southern state. You'll have to save up some money to do this, and depending on that amount your margins may be nonexistent. Being a landlord is a lot less work than running a business and far less speculative, and the profit margins show it. But you asked about income, not profit.
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