Biography: The Rise of Ngo: Chapter 2
The next few months, I spent improving my system of “hot deal arbitrage.”
I remember attending lectures, sitting in the back with my laptop, glued to Fatwallet and Slickdeals. If someone posted a hot deal, I had to jump on it immediately, or else it’d be sold out in minutes.
One time, I remember skipping an entire day of classes to take advantage of a Best Buy price mistake. I missed a class on entrepreneurship in order to do my own entrepreneurship; I think my professor would’ve liked that excuse.
The best part of my system was I couldn’t lose money. I could do rough calculations of my profit margins before I bought the item.
- How much does this item cost me after taxes and shipping?
- How much has it recently sold for on eBay or Craigslist?
- How easy is it to sell this item, and how fast can I sell it?
- What will eBay and PayPal fees be?
- Can I overcharge on shipping and make a profit?
It was a foolproof way to make money because I could always return the item if I couldn’t sell it.
The more I did this, the better I got at it. Some weeks, I could make a thousand or two, but some weeks I would make zero. I was relying on stores having amazing deals, and some weeks, there weren’t any. I don’t think you could sustain a career doing this, but for me as a student, this was great.
Over the next few months, I started learning some business principles on my own.
- Patience. I had a slow week and decided to buy some low ROI (return on investment) items. I figured 20% ROI was better than sitting around with the cash doing nothing. Wrong. A few days later, I found an amazing deal that had the potential of 150% ROI, but I had no money. My cash was all tied up in that 20% ROI deal. If I had been more patient and waited for a better opportunity, I would’ve made a lot more money. From that point on, I made a rule to go only for 100%+ ROI items.
- Time. This business was taking up a lot of time. I had to constantly find the deals, list the items on eBay, print labels, pack the items, ship them, etc. To list the items, I bought some software and made templates using Auctiva. For the packing and shipping, I enlisted the help of my friend, who would stop by every day to pack the items and take them to the campus post office. I paid him $50 a week for not a lot of work.
- Research. I started going on eBay forums and finding out ways to save money and game the system. I found out I could save a lot of money by shipping with USPS flat rate boxes. Plus, they gave away boxes. My eBay account didn’t have a lot of feedback score, so I bought recipe e-books and pretty much bought feedback for $.01 each. I also researched the best times to list auctions and the best length of time to keep them going. Each day, I was getting better and better at this game.
- Competitor research. I knew I wasn’t the only person doing this hot deal arbitrage. There had to be other people making money from this, and I was sure they were a lot more experienced than I was. Whenever I had a really good item for sale, I would see who else was selling the item. I’d visit their profile to see what else they were selling and found things I never thought of before.
My specialty items were computers & computer monitors. Every few weeks, there would be a killer deal on a decent computer and LCD monitor set for about $350, usually from Dell. I found that I could sell the items separately: the computer for $350 and the LCD monitor for around $250, making a profit of $250.
What I liked about these deals was that I could sell them locally on Craigslist and save on shipping and PayPal fees. The best part was the turnaround time; I could list an item and sell it the same day. With eBay, I would have to do a 3-day listing, ship it to the buyer, and then transfer the money from my PayPal to my bank account.
Pigs get fat, hogs get slaughtered
Earlier, I mentioned that I did research to see what other guys were selling.
One day, I checked out a competitor’s profile and saw an interesting item they were selling. I did some research and saw I could buy the item for $50 and resell it for $300 on eBay. I found a contact on Alibaba from Guangzhou. What’s cool was we Skyped, and he gave me a discount on the order for being Cantonese. I sent a $2,000 Western Union money transfer, which was a required minimum for the order. If he screwed me out of the deal, that $2,000 was gone. Those were nerve-wracking two weeks.
The items came. In the next two months, I made a $25,000 profit. I went from making $8.25 an hour to $12,000 a month within three months.
I knew things were too good to be true, and my PayPal account got banned (not going to get into why). To make things worse, they froze $10,000 I had in that account for the next six months. Even though I made a good profit for that time, I think I would’ve made more over the long run if I stuck to my original system.
It felt nice to have money for once. I didn’t have anymore credit card debt; I could fill my gas tank to full each time; and I could take my girlfriend out to restaurants nicer than $5 Pho joints.
They say money can’t buy happiness, but trust me, life’s a lot better when you don’t have to worry about your finances.
The biggest takeaway from my eBay days was that I wanted to make my living on the Internet somehow. I could set my own hours; I could work from anywhere; and I could rely on the Internet because it was only going to get bigger. This was my calling in life. I had no idea what to do, but now I had a direction to go in.
Discovering Internet marketing
The first time I heard of Internet marketing was through The 4-Hour Workweek. I read it and got inspired, but I still didn’t know how to apply the concepts.
I spent a few weeks doing Google searches on how to make money online. The problem was I had no clue who was fake and who was real, and it seemed like everyone was trying to sell me something. Were people really falling for this shit? “Make $10,000 a day by pushing a button.”
Somehow, my web surfing landed me on a make money online blog, where the guy broke down his earnings made just from blogging.
Are you kidding me? $12,000 a month just from blogging? From John Chow’s blog, I went on to discover Shoemoney. His famous picture of an Adsense check for $130,000 blew me away and opened my eyes to the potential of Internet marketing.
I found these two guys to be pretty inspirational: John Chow is an older guy with a bad accent, and Shoemoney used to work in customer service and was obese. These guys had their disadvantages when they started out but were still able to overcome them and find success through Internet marketing. That’s what I realized: I had no excuse to not be successful.
I now saw that Internet marketing doesn’t discriminate when it comes to success. Maybe I don’t have the right look to be a model, or I’m not tall enough to be a basketball player. Or maybe I don’t have the right connections to get into investment banking.
But Internet marketing doesn’t care. It doesn’t matter if you have a college degree, what race you are, or if you’re living in a third-world country. All that matters is whether you have the skills to do the work.
So, now that I discovered Internet marketing, I spent the next six months trying to learn it.