TSH 15: If I had $10k to Start an Online Business, It Would Be ThisOct 30, 2023
Reading time: 2 mins 10 seconds.
I get asked all the time, what online business would I start, with a spare $10k.
In 2007 I asked myself this very question, with $10k ready to invest - here's what I started:
My online fashion accessories business:
I decided to invest my 10k into selling fashion accessories, and here was the list in order of most popular items in my store, to least, along with hyperlinks to similar products on Alibaba (cut me in if you start this business ;)
Here's how I found products and suppliers.
I Worked with suppliers holding stock:
I was pretty familiar with Alibaba and AliExpress, having started importing in 2005 as a side hustle. I set myself the goal of working with suppliers who carried stock, so I didn't have to hold large amounts of inventory to cover manufacturing lead times, and also so I didn't have to worry about MOQs (minimum order quantities).
Products that could use a swing tag and branded pouch:
I deliberately chose products that didn't require logos or branding to be embossed, lasered or generally printed onto them. For example when I had my shoe brand, I had to print my logo on the inner and outer sole, as well as the shoe box, so it was very much a bespoke, high MOQ sort of business. With the accessories, I wanted products that I could remove from supplier packaging and pop into a branded pouch, or attach a nice swing tag with my logo on it.
Take the bracelets for example, I would place them in a beautiful branded pouch, attach my swing tag, and they looked like they were made specifically for me - but in reality I was buying stock from a supplier who was probably selling the same designs all over the world - but I didn't care, it worked.
Focus on high margin products:
I only wanted products that I could sell for an 80% margin, that retailed under $40 - simple. The unit economics were great, and the products sold well because they looked great, the quality was decent, and the price was a low barrier for the customer.
I wanted small, light products:
I wanted to store these products at home, to save money on warehousing, and I wanted to be able to save money posting orders out to customers, so I chose small products that were under 500 grams that would fit into a small mailing bag. Given the shipping price of mailing bags was generally a flat rate - "everything you can fit into an a4 satchel", I thought it was be smart to source products where I could fit two, into one bag, so I could discount for upselling, and make my money back on the postage costs. I also wanted to be able to airfreight these products in from my suppliers, so I didn't have to hold much stock.
I kept my stock holding to a minimum:
In the past I had been financially crippled by having to adhere to suppliers high MOQs, and was finding that my working capital, or cash, was tied up in stock that I really couldn't sell that fast, so I didn't have money to build my brand or do any cool stuff to make my brand interesting. So this time, I ordered the smallest amount of stock I could, which was enabled by the fact that I was buying from stock, and my process was simply to buy stock, sell it, buy a little more, sell it, buy a little more, and so on. The cash that I was able to build off this small side hustle, was more than my first year of wholesaling to 200 stores globally.
I knew my limitations and I knew my plan:
People might read this and think that there was little or no intellectual property behind the brand - and they're right. However, it was a smart brand, because it achieved my objective or making me real money that I could use to better my life. A business like that is probably not worth a lot, and would never be sold for millions of dollars, but it was 1) easy and 2) successful.
The moral of this story is, that every side hustle is different, and there is more than one way to skin the ecom cat.
So what online business would I start, with a spare $10k? Probably the same one I did in 2007.
What business would you start with $10k? Drop me questions on Instagram if anything resonated.
Until next week,
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