On the KHON morning news Kirk Matthews profiled a new business in Kakaako called We Sell Things for You.
6 enterprising Punahou graduates created a consignment sales business using EBay as their sales vehicle. For a $5.00 fee they’ll photograph the item you want to sell, write a description for it, and post it on EBay for sale. When the sale is complete, they take a commission on the proceeds: 30% for anything less than $100, 25% if over $100 but less than $1,000, and 20% for anything over $1,000. The business started as a way for them to make some extra cash while in college, offering the service to family and friends, yet it quickly became pretty lucrative for them, enough to rent space on Queen Street for both storefront and warehouse. The news story showed a packed warehouse (great customer demand) but turnover is quick: they are selling over a thousand items a week—you do the math.
Did they get lucky? That’s not the way I see it: There’s a lot to like and inspire with this short story. First that it’s a classic Business 101 case study: provide a service that fulfills a need and people are willing to pay for. They have a “fixed” transaction fee—the $5.00—and they increase earnings as they improve their service, learning their craft along the way: the six are college students studying business, finance, marketing, communications, and art. For example, a better quality photograph and better written description enhances the perceived value of the EBay posting, maximizing both selling price achieved and their commission.
They didn’t reinvent the wheel: perceptively they moved into a small business niche revealed by a mega-power they already knew about, EBay. It’s an idea that would have died with other reticent wannabe entrepreneurs intimidated by the huge market capture of that mega-power, thinking they couldn’t possibly compete. Yet here you have six high school graduates who only saw that as an opportunity to let the big guy do most of the hard work—actually making the sale—for them.
They started small, testing their idea with friends-turned-customers who would give them quick, direct, and honest feedback on their pricing structure, service, and operations. In this controllable experiment they could assess if the fledgling business opportunity was for them; was it something they could really enjoy and commit to over a longer term? They continued to study, and learn, using their part-time business as a real-time laboratory in which to test the validity and usefulness of their academic instruction. I can imagine them in a college business class: they are the ones who asked questions and challenged instructors for more info while their peers were content to diligently take notes. Their new business grew larger as their confidence and abilities grew, and larger volume was assured: it’s a no-brainer trash to treasure business niche.
An idea worth stealing, and common sense simplicity worth copying. They are great role models for every high school and college student you know, and for many of us old hands who think we know all about what makes for a good business.