Business Failures Over The Last 5 Years -Action Economics

In my efforts to achieve financial independence there are 3 pathways that I am working towards. The first pathway is saving up assets in retirement accounts like most people. The second is buying distressed real estate, fixing it up, and turning it into rentals. The third is through side hustles, with the idea that the side hustles will provide some active income after leaving the W2 world, and more importantly they give the ability to scale up and down if needed. I started some of these in order to jump start my kids’ wealth building, and have had some success. Overall these side hustles below have been failures.

eBay Reselling Stuffed Animals

This was the first legit side hustle we jumped into. When Mrs. C. quit her job we were looking for some alternatives to fill in the gaps. I watched some Youtube videos that showed people reselling stuffed animals on eBay and making some decent money doing so. The great thing about stuffed animals is that they are light! This makes shipping costs fairly low.

We started out with some pretty good success. Sourcing was easy. We hit up all the thrift stores around us and had hundreds in inventory with a couple trips. Everything was going well and we were making money…until we weren’t.

Covid hit and everything changed. The thrift stores were not open. When they did open, they didn’t have as much inventory and didn’t recycle it. It became really difficult to source new inventory. Inventory management became really difficult on our end as well. When you are storing hundreds of stuffed animals you need space, and we were running out of it. We had bought items without being selective enough and ended up stuck with a lot of stuffies that just wouldn’t move.

The post office didn’t help either. The cost of shipping greatly increased and it became more difficult for us to make a profit.

I can’t find my spreadsheets on this but from memory I believe we topped at around $250/mo coming in from this side hustle then it tapered off from there and eventually landed at $0 by the end of 2020.

3D Printed Ear Savers

In early April of 2020 I was laid off early from my Nuclear Contracting job just 48 hours after receiving my “essential worker” badge. Unemployment took several months to get going so on top of only earning a third of what I expected to earn from W2 income I also did not receive unemployment income and had no idea when it would come in. A friend of mine who is an Engineer was raving to me about how cool his 3D printer was and I thought this could be a good side hustle to get some income coming in.

I decided to buy a roughly $600 3D printer and start making ear savers for masks. In April of 2020 very few people were making these and you could not buy them from any major manufacturers. I listed mine on eBay and began selling them very quickly. Within a week I was selling them faster than I could produce them. Most of my sales were 5 packs. I could send 5 in a standard envelope and had to ship as “non machinable”, which cost I think the equivalent of 2 stamps.

My sister gifted me a 2nd 3D printer and I purchased a 3rd. It was not uncommon for me to send out over 10 orders a day. I started using a free design I had downloaded, and then with experimentation ended up with several variations. I made mine out of a more flexible filament than most sellers. I also made a “Jumbo” ear saver that I sold for a premium price. I had 1 printer dedicated to just this SKU. I then made special design ones with different colors. The pink ones sold well and I even made some Hello Kitty designs. My printers were running 18 hours a day. I had them set up in our living room and each batch took roughly 25 minutes.

I quickly paid for the printers and made enough money to cover some of our bills during the summer prior to receiving my unemployment. I ended up with one of my printers breaking and causing my supply to run out. I had to pause my listing and by the time I repaired my printer and relisted I fell way down the list on eBay. Rather than sending out 8 to 10 orders a day I dropped to 3 or 4.

Not only that but there was a massive race to the bottom. Many people were viewing these 3D printed ear savers as a charity and were selling for only their filament costs. I dropped from earning around $1.50 per ear saver to 50 cents per ear saver VERY quickly, then it dropped further to around a quarter and with the tightening of margins and the drop in sales I had to capitulate.

Thankfully my unemployment came through and I got all the backpay from the months of waiting. I also returned to work in August of 2020. After all expenses and paying for the machines I ended up with a total net profit of around $1,500. I have not gone back to trying to 3D print anything for profit since then.

Bulk Candy Vending

In July of 2021 I saw some Tiktoks of kids making money with bulk vending machines. Once in location, these things had a gross margin of around 75% and required little maintenance. We wanted to start a small business for Kid #3. The true opportunity arose where the bulk vending machine at the thrift store Mrs. C. volunteers at stopped being serviced. We contacted the owner of that machine, to see if we could buy machines from him, but he wanted to sell his entire business for thousands of dollars, which was much more than we wanted to invest in.

After being told that he could put a machine at the thrift store and at his Grandpa’s place of work, we ordered 2 machines for a total startup cost of around $380. Shortly after a friend of mine offered to let us put a machine at the auto shop he managed so we bought a 3rd for $170.

It started out fairly well. We could buy bulk candy and gumballs at Sam’s Club for a low price and the machines were getting used. About 2 months after starting I found a listing for similar used machines at $70 a piece. We drove about an hour from our house to buy these and purchased 7 of them with stands for a total cost of $735. We got a few of these deployed, but never had all of them out.

All machines and the initial candy load brought the total to just shy of $1,500. The first 6 months averaged around $100 in total collections, which wasn’t a bad path with the margins. Unfortunately this played out similarly to the ear savers. Our sales went down and the margins got squeezed. Some of the locations never did well, like the auto shop averaged $5 a month. Other’s like the one where his Grandpa worked at fell off dramatically after the novelty wore off.

The margin squeeze was extreme. The inflation between 2021 and 2024 hit food pretty hard. A box of 850 gumballs was $21 at Sam’s Club in 2021. Today I can’t get them at Sam’s and have to have them shipped. They now cost $40 plus $8 shipping. Peanut M+Ms were $11.98 for a 3.875# box, they are now $16.48. Mike and Ikes were $10 for 4.5 pounds. Now they are $26 for 5 pounds.

We removed all of the old style machines and are attempting to sell them. We have 3 locations now and in the next couple months our kid will finish paying off the loan for those machines, which will help with it being viable. Most likely we will need to keep the bulk candy empty and only have gumballs in the machines in the near future. I will not be able to sell the 7 machines we are getting rid of for the $700+ I paid for them. I will be lucky to get $350 for them. The likely buyer will be people who want 1 for a game room rather than someone wanting to get into this business.

Amazon Reselling Used Books

Honestly, this one breaks my heart. For a while this was a legit flourishing business. In our best year (2021) we had $48,000 in gross sales, paid the kids $5,600 in wages and had a $4,000 profit. Last year (2023) we had gross sales of $5,500, paid the kids $400 and had a profit of $80. Not great. This year is certainly a loss with under $1,000 in sales.

Why It Didn’t Work:

The fixed costs kept increasing: We paid a subscription fee for our Amazon store, another one for our scouting app, and another one for an app to make listing the items easier. We were paying around $100/mo on these fees. This isn’t bad when books are moving, but when we are in a lull it hurts.

The kids didn’t want to participate: The whole point of this business was to employ the kids so that they could contribute to Roth IRAs. Ultimately this was unsuccessful. The 2 younger kids did end up building between $1,000 and $2,000 in their Roth IRAs. While this is something, it is a far far cry from what I hoped to accomplish. They were too young and too immature to make this work. They would complain any time we tried to get them to work, and it just became not worth it. Our older kid, who is now 16, got a job at 14, so his time helping in the business quickly went away.

We didn’t have the time: During this time frame we never stopped rehabbing houses. It’s hard to prioritize thrifting for books when we need to get a unit online that will gross $1,000 a month. The best place to source is always library book sales. Most of these are in the summer and our schedule is packed in the summer. We missed 3/4 of the book sales in our area due to scheduling conflicts.

Increased competition: As with anything the more competition there is the lower prices get and only the most efficient operators will make money. We aren’t the only people who watched this side hustle on TikTok and wanted to join. Several thrift stores around us started scanning their own books before putting books out on the shelves. When we started we never saw anyone scanning at thrift stores, and by the time we stopped sourcing books it was very common for me to run into another scanner while doing it. Rather than full cart loads I was leaving a thrift store with half a dozen books. Our average profit per book fell from around $8 to $4, to $2, and our unsold inventory started to pile up.

Changes at Amazon: Amazon consistently changed the way it handled resellers. I kept hitting walls where we were not allowed to sell books, or other products, despite having an account in good standing. They increased the fees for aged inventory. They changed the shipping process, which the new process itself wasn’t terrible, but it took a while to learn.

Ultimately this stopped being worth the inputs of time and energy. Just before writing this I entered the disposal order for Amazon to delete our existing inventory.

Action Economics:

This blog has been somewhat of a side hustle. I didn’t start it to make money and I certainly don’t operate it to make money. Between 2016 and 2020 it was profitable, however it currently is not. This is due to several reasons. Mostly, I hate writing for the sales. The best way to make income from a blog IMO is through the Amazon Associates program. By inserting links in my articles I get a small percentage of sales made on Amazon when someone clicks on the link. I have a few articles that do OK from this. I would say 90%+ of my Amazon revenue comes from 5 articles. I didn’t like the amount of ads I was getting from Google Adsense where they put banner ads and pop up ads on my site, so I deleted these. I also have not pursued referral income in the last couple years. These would be deals through a company like FlexOffers that pairs content creators with companies. I would get something like $20 if someone ordered a life insurance policy or $50 if someone signed up for a specific service.

Traffic is of course another factor. My blog traffic overall has decreased substantially over the years. I am thankful that I have earned what I did over the years with this blog. At the times of revenue generation this blog effectively paid for our 2 trips to Universal Studios and 1 trip to Disney World. These are infrequent special trips that most families are not able to afford.

2014 $0
2015 ? (I Couldn’t find records for this, estimating <$500)
2016: $1,665: All Amazon
2017: $2,474: Roughly $2,000 from Amazon, $300 from Google, and the rest referrals.
2018: $2,255: Roughly $1,000 from Amazon, $400 from Google, and the rest referrals
2019: $1,790: Roughly $1,000 from Amazon, $500 from Google, and the rest referrals.
2020: $1,823: Roughly $1,600 from Amazon, $100 from Google, and the spreadsheet sales.
2021: $870: Roughly $650 from Amazon, the rest Google.
2022: $367: All Amazon
2023: $392: All Amazon
2024: $334: All Amazon

Note it costs around $500/year to run this site between the cost of hosting and additional security services from my hosting provider. It was originally a lot cheaper, but when my site got hacked I added an expensive security package.

The primary value of this blog is as a creative outlet for me and to force me to think and analyze economic strategies. Without this blog I would not have started investing in rental properties, I would not have started most of the other side hustles, and I would not have been able to help all my kids start retirement accounts.

What Next?:

For each side hustle I have learned something. Currently I am most focused on maximizing my W2 income and maximizing our rental property income. Both of these are much bigger in terms of efficiency of time and creative energy inputs than starting a new side hustle would be. In the last 5 years we have grown from 2 rental units to 22 units. Mrs. C. still occasionally resells on eBay, but other than that we will likely not be doing an side hustles until after I leave my W2 job.

What side hustles do you do? Any side hustle failures you would like to discuss?