When I talk to my friends outside of the startup world, one of the most common questions I get from them is “how do you start?” I usually tell them, “You just start. Figure out what you want to do, find people who have complementary skills to do it with you, and learn everything you can from the internet.” Then they’ll usually follow up with “But I don’t have a lot of money or any great ideas. Isn’t it very risky?”
You don’t need a lot of money or a great idea to be an entrepreneur
Many people have the false impression that they need a lot of money and a great idea to be an entrepreneur. That’s actually not true. Sure, its risky, but if you don’t have much money, what’s there to lose? Since I was 18, I started an online retailing company selling electronic products, a company that imports components of construction machinery (didn’t take off due to partnership misalignment in values), a non-profit for professional networking services, a small business consulting company, the premiere business organization in UCLA (not really a company, so consider that taking a break), Future Delivery and the company I have right now, RewardMe.
The first step towards entrepreneurship could be small
When I first started, I obviously didn’t have any money. The whole thing came as an accident when I raffled myself two football tickets and sold them on eBay. I felt something was lightened up within me, as if I have found a calling. So then I decided to trade TI-83 Calculators, which is something everyone needs for school. I would go on eBay during hours when everyone was asleep so I can buy the calculators without anyone bidding against me, and I would sell them during times when there were a lot of bid competition. If you used eBay before, you know it’s all about how many people are bidding against each other when your listing ends. Just like that, I would buy a calculator for $40 at 2AM, and then sell it for $60 at 1PM. A pretty good margin.
However, I was not satisfied. I kept finding people on eBay selling brand new products that are a lot cheaper than retail prices, and I wanted to do that too. I thought that these people must have bought in bulk and I would never be able to compete with them. But I lightened up when I found out about Dropshipping.
Dropshipping is perfect for College Students
For those of you who don’t know, Dropshipping is actually something pretty nifty. It allows you to go on eBay and sell any/all the products that your supplier lists BEFORE you buy the items. Once you have sold the merchandise to someone, guaranteeing a buyer, you THEN order it from your supplier with wholesale price. The supplier then sends the merchandise directly from its inventory to the customer, while printing your company’s name onto it as the seller. In this way, you don’t have any upfront costs except the small listing fees on eBay, you don’t have to deal with inventory, you only spend money when you already have products sold, you learn the ins and outs of running a business, and you get to promote your brand online.
Finding the right supplier is essential for retail businesses
As a first year in college, I was looking for a lot of quality dropship suppliers. They were really hard to find because most of them were either not very reliable, or they would be middleman companies that pretended to be a supplier when they were only a broker. Most real dropshipping suppliers have a ninja secrecy agreement not to promote themselves so they don’t steal business away from their established dropshipper customers. I had to go through a lot of research and Better Business Bureau data to finally come up with 2-3 decent dropshippers that sold electronic products like iPods, Digital Cameras, GPS and what not for a decent price. Just like that, I was making some decent revenue as a full-time student at UCLA. What makes it even better, is that I also bought all types of products with wholesale prices for my personal use. Running a dropshipping business not only creates an opportunity to make a profit, but also allows you to buy everything you need in life at a cheaper price.
Running a company is still hard work
One thing I must say is that running any type of business is not easy. It never is. You need to make sure you have the right marketing strategy and pricing strategy, deal with customers (both happy and angry), do some bookkeeping, and talk to suppliers when problems like backordering happens. I loved it because the hard work made me want to wake up everyday in the morning and make my business even better. It gave me the education and thrill that school could never provide.
One opportunity leads into another
As I was running my business, I developed a reputation among my network as being the entrepreneurial guy. After awhile, everyone who had any kind of business idea came to me for advice, and I would talk to them about marketing, operations, legal structures and the likes. As time went by, I slowly moved on from Dropshipping to other opportunities as they were presented to me, but I felt I would never be where I am today without the dropshipping experience. It made running a business less intimating and got me excited about the entrepreneurial lifestyle.
Some students make a good 5-digit income doing dropshipping part-time
When my college or corporate friends ask me about what’s a good way to start testing the waters of running their own business, I usually recommend them to start with dropshipping (and read Michael Gerber’s E-Myth Revisited). You can do it highly part-time, and it allows you to see if running a business is for you. My good friend Joseph also started his dropshipping business in college, and he made over $30,000 in profits in a year doing it part-time. Hands down to him.
There are obviously more ways to start off as an entrepreneur. Some people do the network marketing pyramid stuff, some people do consulting, and others go straight to high tech. Dropshipping is just one of the easiest ways to see if the entrepreneurial lifestyle is for you. Even though I strongly recommend it, you should do whatever floats your boat.
WOULD YOU LIKE YU-KAI CHOU TO WORK WITH YOUR ORGANIZATION?
If you are interested in working with Yu-kai Chou for a business project, workshop, speech or presentation, or licensing deal, please fill out the form below..