Ahh, side hustles. We all know the common ones:
What about side hustles that no one knows or talks about? Or side hustles that can really scale into big businesses?
Here’s one: concierge car buying and flipping.
It’s a killer way to make an extra $11k+/month without employees or full time commitment, and yes, it can scale.
How do I know? I’ve done it (more on that later)
Let’s start with concierge car buying.
“Concierge” car buying is an alternative to going to that hellscape that we refer to as a used car lot. It’s fundamentally a better experience.
WIth concierge buying someone tells you, “Ok, I want a white F-150, between, 2017 and 2020 with no more than 80k miles.”
It’s awesome, because us Americans are always buying cars, so it’s a great biz to start with friends and family, and then it can be highly referral-driven.
I’ve purchased 4 different cars through a guy that did this, and I’ve also sold a couple dozen cars with this model as well.
Here’s exactly how to do it, step by step:
Some states will require you to have a lot with X number of designated car spaces. This can be circumvented with shared lots or by using any small commercial space.
When I did this I used the lot of a small office space I was renting for another business.
Or if you simply want a wholesale license you won’t need a lot at all.
You just need to fill out paperwork, get a surety bond (Google it) and pay a small fee. It takes a few weeks and a few headaches working with a government agency.
Note: It really helps if you’re a “car person” to do this side hustle. You don’t have to be mechanically inclined, but it really helps to love cars and have a general knowledge of them. I didn’t, and that’s one reason why I hated and abandoned this project. It was definitely profitable, though.
This allows you to buy cars at wholesale.
Shoot, it’s almost worth getting a dealer’s license just to buy your own car for $4k less than retail.
For the first couple weeks just go to learn. Watch how the auctioneers and buyers interact. Learn the culture and go shake some hands. Notice how the online sales compare to in person. It goes by really fast and can be a bit overwhelming.
Start with friends and family, and make sure everyone buys an extended warranty from Manheim. Why? Because you don't want to be on the hook if something goes wrong, especially with friends and family.
Ask for referrals from these friends and family members after they use you. Or ask them to post about you on social media.
This almost needs to start as a referral-driven business, because you need people to pay you upfront. There's a lot of trust involved.
Once you have a customer, start by finding out what they want and then run an export like the one I linked above for upcoming auctions, filter out types types of trucks and send them to the buyer.
They pick out 2-3 options and indicate how much they’re willing to pay for each. You can provide guidance along the way, but almost all of this can be automated with Zapier, Typeform and ChatGPT.
Your fee? Around $750.
It’s a win-win. The buyer pays dealer price + $750 and doesn’t have to withstand the brain damage that is a used car lot.
And as for you? You can make $750 from 10 different buyers all during the same 3 hour auction.
Paying for the car can be the tricky part.
Once you win the auction you’ve gotta pay, so ideally the customer sends you the cash upfront via certified check or wire. The economics of fronting $25k for a $750 gross profit isn’t awesome.
The customer should ideally send you the max amount they’re willing to pay beforehand, plus your fee, taxes and other fees, and then you can send back the difference.
I honestly think this could net someone $11k per month without employees at 20 hours/week.
What if something goes wrong with the car after you buy it? Be sure to buy ones with manufacturer warranties or you'll pay the auction extra to get a warranty and pass that on to the customer, remember?
This business really works best with more expensive cars because there’s a more attractive value proposition. $100k car buyers could save $3-5k using you, net of fees, whereas a $20k car might only be a $1k savings, net of fees.
What about car flipping?
That one is much more simple, but you need more cash upfront. Here’s what I’d do:
You’ll need some cash to flip cars, for sure. But as you scale there are a dozen companies happy to short-term finance your cars while you take some time to sell them.
Here’s why I both love and hate each model
Concierge Love:
Concierge Hate:
I touched on this in last week’s newsletter, but I did not like this business. I don’t care about cars and I launched during the Texas summer and that auction blacktop is HOT.
I was buying cars that were too cheap for people and they were breaking down. It wasn’t a good customer segment. Also, my main business was doing really well at the time, so this just became a distraction. After buying and selling about 25 cars I pulled the plug.
Flipping Love:
Flipping Hate:
Regardless of where you are in your startup journey, I hope you learned something here. Thanks for reading!
FYI, we moved our TreeBizBootcamp.com dates to January and added a cheaper virtual option by popular demand. It’s fun to see it fill up with people I’ve been emailing with this last month or so. Hope to see a few of y’all there.
Please forward this to someone that loves cars and entrepreneurship. Have a great weekend!
Chris
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