Pallet Flipping 101: $1600 Before Lunch

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this is the middleman method a real-life example of turning trash into treasure what's up what's up Nick loafer here welcome to the side hustle show because profit isn't a dirty word the thing that's exciting to me even after almost five years to do in the show is the endlessly different in creative ways the scientists elation community is generating those profits and this week's story certainly exemplifies that my guest today reached out with a unique side business he started 20 years ago and still does part-time in Birmingham Alabama John Wilker simply calls himself a middleman and essentially what he's doing is flipping industrial or commercial byproducts shipping pallets cardboard boxes crates you know big wire spools stuff like that and the cool thing is he usually gets this stuff for free because companies just don't want to deal with disposing of it and he doesn't store any inventory instead he picks it up and takes it down the street or across town and tells it to another company who needs it for part of their business it's a buy low sell high business model or maybe more accurately a buy for free and set a low business model but it's one that doesn't rely on Amazon or Ebay or any third party algorithm it's pretty simple in fact John's website is the simplest biz com if you want to go check him out and he says this business is one that could be replicated all over the map and I think in other product areas as well in this episode he shares how he found his first suppliers and its Aires buyers how he sets his prices and how he transports this stuff without having to store it notes and links for this one along with a free pdf highlight reel summary with all of John's top tips from the call are at side hustle nation.com slash middleman that's all on or I'll be back with my top takeaways from the chat with John after the interview ready let's do it bottom line is I'm a middleman and there's businesses out there that produce large quantities of pallets crates drums dunnage 55-gallon metal drums on and on corrugated boxes and they don't know what to do with them they get their inventory in and they're stuck with it would they take their inventory off of it now they have stacks and stacks of pallets they generate on a daily basis or create or whatever the case may be I go in and work out deals where I am gonna take these items off their hands so they don't have to mess with it and I'm gonna drive down the street and sell them to the businesses that need those items because they're shipping stuff out on them so I'm from point A to point B and it's quite simple in that aspect of it but it has to be set up in a correct manner for it to work and we'll get into that I'm sure yeah well we'll dive into the details now at all how it all works but maybe take me back to the beginning so you're working in construction you're working and remodeling like tell me about you for your first deal on this new business absolutely I had a partner that we were doing remodeling for houses and this was back in 98 and one cold December week we were supposed to work or bathroom remodel and for whatever reason the customer fell through for that week and I looked at my partner's name was Dane and I said well gain what do you want to do we don't have any other job lined up and he goes well let's go pick up some pallets and I go oh what's a pallet he does you know those wooden things that they have in warehouses I said well what do we do with them and he said well I'll show you okay the first place we went to it was a grocery distributor and they had 1500 pallets on their property and we approached them and what do you do with these pallets and they said please take them away so you just like literally roll up to the back door it's a like that stack of pallets over there what are you doing with them yes that's how you know I used to even kind of do that in some cases to this day but okay it gets a little bit more involved talking to the right people but in that particular case it was easy-peasy and back to you all I had was a pickup truck so and I didn't know all the other aspects of not having to lift all this stuff so we literally all day for the rest of that day did load after load after load of those pallets and we took him to a pallet yard to begin with but it was hard work we still made several thousand dollars and I don't know it was about four hours span just to get them all done so the pallet yard paid you for him you just had to get him there right so that was just the first day and the next day we went to a it was a wine distribution company and they literally had more than 2,000 pallets and they're all burying sorts and sizes and all about it and it was a lot of work those first few weeks because we were doing all the heavy lifting we didn't realize we could get help to do all that part of it you know get the forklift drivers to help us but again back to the pallet yards and they're not paying us a lot of money but we had such huge volume it was worth it yeah was it just luck of the draw that there happened to be a pallet yard nearby like why wouldn't the grocery distributor or the wine distributor just take it there themselves one they don't want to have to mess with it because any time they have to mess with their pallets or crates or dunnage or whatever the case may be they're taking the individuals out of their warehouse from the job that they normally need to be doing right so it's a nuisance to these businesses to have to deal with them some have to order these huge dumpsters before we come along and they're having to throw pallets or whatever into the dumpster or if it's corrugated boxes they're having to bind them up you know and crush them and it just takes away from their normal business activity and cost them money so we're a solution we become in this simplest Bismol become a solution to the suppliers problem okay so that's really the aspect some pay as to take them away yeah that's see that's really crazy to me it's like well getting my inventory for better than free exactly which is pretty awesome but like I got to imagine if anybody if any of these companies have been in business for any like the time they have a process to deal with anybody either contracting with somebody else like you or something more more elegant than like having their employees come in on the weekend to like break the stuff down I don't know like this seems weird that they just let it pile up and like they're waiting for some random dude with a pickup truck to come up to the back door yeah the solution is there's two options one getting a dumpster it's hard for you to imagine this because this is audio and how many pictures to show you but if you were to throw in a bunch of pallets into a dumpster 70% of the space it's gonna be air because not stacking them and there's chunky min there and they're all lopsided and and it's so inefficient and they have to get their dumpster literally emptied three times a week for some of these businesses and or like you were saying day he might have box trucks and they're having to get their guys there on a Saturday and throw them into their box trucks and haul them to the dump and pay the dump fees so those are the two methods or they have someone kind of like me but that doesn't know what they're doing that causes them problems that are actually trying to pick through and find certain sizes of pallets as the case may be and they're knocking stuff over and they're just trying to get a certain size which causes grief for the business owner as well okay thank you partial solution but it's actually a pain where I come in created this model where I have a better solution and get everything out of there okay so you take them straight to the pallet yard in this case I'm just curious like what do they pay you for each one well back in dollar dollar fifty two dollars maybe a fee for certain sizes that model didn't last very long okay after about three weeks of working it in that method I realized the businesses that the pallet yards were taking the pallets a personally a good product that I was selling to them for cheap and turning around and selling it to customers sure they have actual businesses that need okay so you say I can cut out the middleman I could be the middleman myself exactly but the problem was I had to figure out a way to juggle it where I didn't have to have a pallet yard right have any storage or and I didn't any I didn't want to have any employees I want to keep it as simple as possible so the way I constructed the deals is my suppliers are my pallet yard so to speak they hold the product and I'm basically driving up they're loading my truck and those first two weeks after I realized I don't want to sell these pallets yards for this little money anymore hi basically by hit and miss blanketed all the industrial centers around Birmingham and I would hit literally 30 to 50 businesses a day for a solid week okay tell me about that process tell me about what do you mean by hitting those businesses well fortunately they're all buttered up close to each other like a distribution center if you've ever seen a distribution center its overhead door overhead door office overhead door over you know dog get off dock office they're all just right next to each other and some had signs of dealing with pallets who they'd had pallets or crates or drums or whatever the case may be outside so I know to kind of go in and feel the waters out but literally just like knocking on doors right basically yeah so it did take me getting uncomfortable a little bit and going in there and finding out the information I wanted to find out what's that initial conversation like hey I'm I'm John I I'm interested in his tell it's like was a conversation go yes at first at first I thought it was I could not comprehend it so that I've literally filled the first few times that did it and went we have a flooded basement and that's all these pallets you know because I just it still was mind-blowing that people would give them away for free for no reason right and so after that I finally said whatever I'm just gonna I have a pallet business enlisted I was driving by I see that you have a lot of pallets and corrugated boxes here could you tell me what you do with these items to disarm them I would give them a drop-down menu do you get rid of them do you need to reuse them do you have to sell some sizes or what's your situation and they would just these are blue collar individuals and businesses I'm dealing with so they just open up and they just start walking me around saying this is what we need this is what we get rid of and they would just spell it all out for me and once I had that information I could construct a deal where I would become exclusive you know where I was gonna be the guy coming in there on a regular basis and getting everything and it took a little juggling but these accounts and these suppliers and buyers they're worth a lot of money sometimes I would go in and they actually needed pallets food so there'd be buyers have them we'd be bars as well so I had to go to buy a little time and go do over the next week knock on a bunch of doors to find that supply for that particular buyer if it was a odd size or an odd product yeah but it's I'm went on it all sort of match up yeah this is really interesting he's like you're going door-to-door essentially building this database this kind of connecting buyers and sellers like who needs what where can I find that thing and then playing matchmaker in a way because it's what's weird is like you said they're all distribution center like industrial parts of town you probably know in your town where those areas are mm-hmm it's like they're not they're not far from each other but they don't talk to each other like they couldn't drive it the two blocks down the road or like they just want to deal with it and so they said fine that's the beauty of it even though they don't have time to figure all that out plus again it goes back to the situation where they don't want to take the time to have to mess with it and even the ones that know that I'm getting their pallets literally 500 yards away from where I'm delivering Jim they get like they could like hear your truck like still backing up over there yes there are a few I keep it I still to this day we'll keep it on the down low and try to park where they don't see me but I'm literally pulling out loading up in one parking lot and crossing the street into another park like where the buyer is or from one side of a distribution center on one end to it in picking up pallets or crates or whatever and delivering to the other end of the distribution center do like company that yeah that's just crazy to me but good on you somebody's got to do it it's like you know go find a problem that already exists okay instead of trying to create a new one okay so you mentioned the like beverage distribution companies grocery distributors any other types of businesses that you found a sweet spot for this in electro distributors wire wholesalers custom fabricators bolt & screw manufacturers metal grinding refractories lighting and lamp companies rug products conduit companies these are all like buyers of pallets okay okay tractor parts ceramic injection company so you're dealing with some oddball type places but there's a lot of times it's heavy duty type businesses metal scrap yards fabricating steel you're just driving around the industrial parts of town and just knocking on doors well after a little while I did find a little a better method and I think I have a course that I teach people how to do this now of course another new side hustle right this is a side side hustle and I ended up your being able to get on Google Maps and on the satellite version of it you can actually zoom into these industrial parks and for the ones that actually keep these products outside you can tag the building find out and when you tag it on satellite view it'll show the name of the business the warehouse manager so you I started creating a route that I would go for prospecting so I wasn't just flying blind after about a month of doing this oh okay okay so I'm zooming in on like my hometown oh yeah like oh crap this guy has got a ton over here it's like buy a brewery that we go to kind of like in an industrial area exactly you could see them on the satellite view like there's just a mountain of it looks like pallets in the back okay done right excavating is the name of this company yeah there's a ton of them okay so the right next door is like rires I don't know what this company does but they've got a ton of them out there so you'd like kind of scout out on Google Google Earth first does it matter like I don't have first I gotta find the supplier right and then I gotta go find a bias like two sides of the equation well it's vice-versa so if you do find let's say it's your first day out and you found a buyer to begin with I would say I teach people to listen I'm busy for the next week how about I drop some samples off you know in the next week or so right so don't pin myself down and I've bought myself ten days to find their product if I don't have it yet okay okay so that's one method especially when you're getting started at this point at sixty-five suppliers and twenty-five businesses that buy anywhere from three to five products from them okay so I have the network built when you're starting off yes you have to juggle a little bit to get started okay do you own like a u-haul type of truck or is it still just the pickup trucks like I'm I'm thinking like well I've got my little SUV but there's no way I'm gonna fit more than like four in the back of that thing no that's not the way to go the easiest way when I started out like I said I had a pickup truck and I actually went through a couple of those and I stuck with that model because there's a way to actually put around 50 pallets on a pickup truck it looks a little ridiculous but when you're only having to go two blocks or 800 feet or five blocks to your buyer it's not that big a deal and you can do multiple trips yeah pickup fixture like stacked up eight feet high in the bed okay yeah so you do four stacks of about 15 is about what it is and you'll have oh my god yeah so it's a little ridiculous but it keeps it simple and I had a whole beater I got my f-150 and an f250 at one point that I got for $600 and it made me tens of thousands of dollars so I kept it simple for the first couple years yeah and then I switched over to nothing major but I still have a flatbed now that cost me 3500 bucks okay fair enough so that that's all down I guess worst case you could go rent a truck starting out or borrow a friend's truck or something if you don't have one that's right plenty of my students don't have a truck to start the business but they what they'll do is schedule several loads on one day like I had one guy down in Tampa he had first delivery or flipping of the pallet situation was 700 and hearing it a 24-foot flatbed and I think he made five six bucks profit per pallet okay so - 120 bucks he still made several thousand dollars in about four hours jeez that's that's a nice little side business right what's it look like today for you in terms of time commitment hours working and that sort of thing all right you know I actually made could I give you the this morning how about that I've got an example what triplet this morning let's do it starting at 7:30 and the first place I was delivered to as a tractor parts company so I picked up my truck drove five blocks to my supplier which was a refractory and they loaded a hundred and twenty-five pallets on in my truck with the forklift I tipped the forklift driver ten dollars and it took about ten minutes to load it and strap him down all right so delivery time and unload time I had to go three and a half miles to deliver to the the tractor part play so I hundred twenty five pallets and $7 a unit that I sell them to him for so my gross was eight hundred and seventy five bucks and I cost me ten dollars for the forklift driver five bucks and gas not even that so profit of eight hundred and sixty dollars and it was fifteen minutes so that was my first one that was the work for today no no actually the place I delivered to the tractor but place they had 106 or corrugated boxes right okay I'm bet they didn't wanna have to crush they fold them down for me and as they took off the last load they loaded 106 of corrugated boxes you know cardboard boxes double walled heavy-duty and it was you they've been used once so I strap those down and they give those to me for free saves in trouble and on the way back to where I parked my truck I dropped those off at a metal fabricator that needs some they were 48 by 40 by 26 and I sell those to them for four dollars and 75 cents apiece right so that I actually wrote that down with it so my total profit - gasps for bat delivery was seven hundred fifty four dollars and it took about 45 minutes basically jeez low demand I was heading back to where I park anyway so for today this morning and I was done by oh no ten after ten sixteen hundred fourteen dollars holy crap that's awesome yeah it's a it's a giggle on the way to work I mean even after 20 years it's not it's the simplest biz it doesn't require a lot of brain power by any means but it gives me the option of doing other things later in the day I could do it all day right but my brains too active and I have too many other interest to do it all day so I do a lot of other things as well and it's bought me the time and the freedom to be able to do other things yeah it sounds like it just really comes down to building that Network I was gonna ask on the you say okay I tipped the forklift guy ten bucks to load this stuff into the truck what happens if there is no forklift guy is then it's just like lifting all there's always the forklift guy it's just a matter of you know most of these guys hey this guy's gonna buy me lunch basically with giving them ten bucks right so some of them fight over wanting to do it okay now again this is a flatbed down a box truck so they're not having to load them inside okay that makes it a little easier for unloading as well with the rarer cage and and it's not all rainbows and unicorns every couple seven to ten days I kind of choose to actually load it myself because I need the exercise because it's got to get your workout in right it's my workout for the day so I'll Drive in sometimes and it usually happens every week and a half I don't want to wait on the forklift driver because he's unloading a truck that just came in right so I'll just back up to the pallets whether they're at and say on the back of my truck and this particular place than where I normally do that they weigh about three or four pounds so it's not like back-breaking by any means yeah just repetitive as I'm loading him on I go $5 $10 $15 $20 $25 30 no that's thirty seconds that make $25 type of thing and there's hundreds of them so it takes me about 15 minutes to even load it by hand it's not i work up a little sweat but please be in shape there you go there you go um is there a standard resale price so it's just kind of like open to negotiation everywhere you go since 95 percent of what I get is free whether it be the crate so the drums are the dunnage or whatever in the boxes I'd never have a price list I find out what the buyer is paying currently and I undercut and I sweeten the deal with another aspect of my business to to make their life easier so I'll become exclusive for that business okay that might contain maybe they have a bunch of junk pallets or crates that have been broken down or this any other and once a month I'll fall off something to the dump for them and have to pay 25 30 bucks out of my pocket but it gets my foot in the door and I end up selling them all different types of products you know the dunnage and the 55-gallon drums then I might have just started out with the pallet to get my foot in the door gotcha did they pay you cash on delivery do you invoice him at the end of the month like how does the payment work well that's a good question because my competition for lack of a better word they haven't taken a bath in three days that guess is the best way to describe them and they want to be paid right then when they deliver them right well for a business owner I have to stop have to go to the County Department I have to get a check written this any other and it's a hassle so when I come in to differentiate myself from those type of individuals that they might have dealt with in the past i invoice them and i usually have a 14-day net majority of them cut that the cheque within either a couple days or seven days the more they know about my business and the cash flow and everything about it the more likely they are to pay me pretty quick I don't have any 30-day nets it's mostly same-day like the ones I deliver today they've already cut the check and they're sent they'll be here tomorrow time so that's the main way I do it I have some that do PayPal but majority of them is just write me a check now I have Craigslist individuals that if I sell stuff on Craigslist that they'll pay me cash of course I don't know them yeah do you have a warehouse of your own in case it's not just like okay I'm gonna drive down the street and get rid of this stuff in 20 minutes it's like okay I got to sit on until I find a buyer know the suppliers that I have is my warehouse and I move enough product to keep them happy so it's a balance to make your suppliers happy your buyers happy and myself happy so I don't have to store them I don't have to sort them there's nowhere else involved and no employees involved as well so I could hire somebody in fact I'm talking to someone who wants to do a few days a week and get a percentage of what I do he's a friend of mine okay that's one aspect where I could go down to one day a week if he wanted to do all the work yeah I mean this is a fascinating little niche that I never heard of and appreciate you reaching out about it is there any like what are we missing is there anything else if people ask you that I'm missing that I'm overlooking before a lot of people who listen to your show it has a strong internet base to it right yeah and I kind of want to convey to those people because I have an internet business in the afternoon I own 22 web sites and I do a lot of lead generation right well if it wasn't for this business I wouldn't had the time to do all that and a lot of the businesses that are online you have to build the audience you have to build the email list you have to build out the website there's so many hundreds of steps that involved to get to the point where it becomes profitable in the time that it is involved to do that is extraordinary I've done it I know yeah so even though this side hustle has nothing to do with it with the internet or anything except for my selling the course and all if you can find a vehicle like this to be able to not have to work that 40-hour week in a devote have all this free time to be able to devote to maybe an online business that becomes at some point passive income I've never seen another vehicle as far as a business model like this where you're able to get 95% of your product for free and make the kind of money you do in a quick time span and allow you to have time to do these other things so that's one thing I kind of want to make sure people out there even though it doesn't sound like anything to do with the web it can truly benefit a side business like that yeah we've been very kind of online business focused and making an effort to include more more offline opportunities that we had the trash pickup episode a couple months ago it's something like this it's just like it you know simple matching people with problems and solving them for them so are you actively seeking new accounts new customers new suppliers or it's just like I am gonna let it ride with this existing network that I barely mentioned hiring a helper are curious like what's the next stage of this business for you well I actually do when it makes sense I do have a very up set it up to where I do I need to know but it just makes good business sense an example last week I have a heating and air business that supplies me with several hundred pallets well right over the fence line I noticed a business and I stopped by and they buy pallets so I was just taking them from one thin slide to the other and it matches up any time I can do something within a few blocks of another deal that I've already created lying on it yeah it just makes my radiuses and my time that much shorter so I'm always looking for opportunities in that aspect of it I advise people when they first get started with his business you can't be shy you have to actually go out there and knock on doors and and talk to people and create those connections it's not gonna you know just happen on its own but so yeah I'm actively always looking for perfect opportunities to match up with what I already created yeah how long did it take you before you're like I'm not doing this construction remodeling job anymore I'm gonna just do this I never did it again okay so is the last gig yeah and the last day I ever worked full-time I mean an eight-hour day was the day after I bought that buy last flatbed I wanted to pay it off all that money I'd put out I wanted to pay off in one day so cost me 3,500 bucks and the next day I just I think it was nine and a half hours so I made 3500 and that's the last time I worked at eight-hour day or a half you're John this is fascinating stuff and imagine we're just talking about one niche where you could play a middleman I'm sure there are hundreds of others that would probably have never even considered maybe you're closer to the ground on a certain industry in another you might know like oh you know there is a guy who comes to the warehouse or what I don't know there's just you know my head spinning on this one a little bit and appreciate you taking the time the website if you want to learn more about this is the simplest biz com viz John thank you so much for joining me let's wrap this thing up with your number one tip for side hustle nation take imperfect action and fix what's broken on the fly is really what I've done I didn't know what I was getting into when I started this and if all you do is plan and plan and plan you're never gonna get anything done and you'll create reasons for yourself not to to do it so invest your time and put yourself in a position where you've invested some time and now you have to figure it out so imperfect action and continually create something whether it be in business whether it be your hobbies if you're I'm into art and music or your relationships just always being create something you know that's gonna last a while so those are my two little tidbits when it comes to any type of business and especially for this one absolutely I think we can resonate with that take imperfect action figure it out as you go it's truth is you said hey I didn't know what I was getting into the truth is I don't think anybody knows what's that into when when you start and you don't need to it's kind of well you got to figure out that first step and then you know you don't have to know steps 8 through 100 afterwards kind of take it one step at a time John very cool thank you so much for joining me again the simplest biz calm and we'll catch up with you soon thank you my name I'll write my top takeaways from this call with John number one is to build your network kind of a recurring theme on the show but this is essentially a database business and it was built one conversation at a time remember John's conversation starting question was just could you tell me what you do with these fill in the blank this these palettes these crates these boxes whatever it is and even though now he's got dozens of suppliers and buyers today he started out just like you and I with zero and that leads me to takeaway number two which is all it takes to get started is one one buyer and one supplier if you could dedicate a morning or even a lunch break to knocking on a few doors you scouted it out on Google Earth beforehand I think you start to get a sense of what's out there in your community so I mean even while we were talking I was on Google Earth in my hometown of Livermore California and be like holy crap this guy has got just a mountain of pallets in the back of his building takeaway number three is to start with what you have when you have it so John had a pickup truck which was probably an advantage in this business but if you've got a deal that's gonna make you eight hundred dollars in an hour over the course of a morning I think you're gonna find a way to make that happen you could go over into u-haul or a flatbed probably for less than a hundred bucks a day and if you line up the deals like John does you'd have to go very far in in-between and you could stack up the the pickup or you stack up the delivery for the same day so you'll have to store anything I'm really curious to hear what you think of this one this was a totally new sign hustle to me and really curious to hear what happens when you go out and take action on it be sure to let me know in the comments for this episode at side hustle nation comm slash middleman at that URL you'll also be able to download the free pdf highlight reel with all of John's top tips from this episode that's it for me thank you so much for tuning in until next time let's go out there and make something happen and I'll catch you in the next edition of the side hustle show where I'm sitting down with the author of one of my favorite books to break down how you can double your business using the simple tactical triangle I'll see you then also on thanks for listening to the side hustle show at www.nasa.gov [Applause] [Music] you
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Channel: Nick Loper
Views: 93,039
Rating: 4.9079704 out of 5
Keywords: buy, low, sell, high, cost, business, ideas, shipping, pallets, side, hustle, buying amazon returns, reselling, ebay, amazon, buying bulk liquidation, returns, bulk, shelf pulls, buying, profit, liquidation, salvage, flea market, products, sourcing, bulq, making money, selling, bstock, auction, wholesale, thrift, work from home, industrial equipment, how to flip pallets, flipping liquidation pallets
Id: xonOn-ws7gk
Channel Id: undefined
Length: 33min 2sec (1982 seconds)
Published: Tue Aug 07 2018
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