$100 Challenge: Bryce starts a dropshipping business

Bryce: [00:00:26] Welcome to another episode of Get Started Investing, a podcast where we attempt to answer some of the most common money and investing questions from our community. Now, if you are joining us for the first time, a massive welcome, We do strongly recommend that you scroll up and start at episode one. Now, while we are licensed, we're not aware of your financial circumstances, so any information on this show is for entertainment and education purposes only. Any advice is general. But with that said, my name is Bryce and as always, I'm joined by my equity buddy, Ren. How are you? 

Alec: [00:00:55] I'm very good, Bryce. Good to be back. Good to be back For $100 Challenge episode. 

Bryce: [00:00:59] It feels like it's been a while. 

Alec: [00:01:01] Well, we've been alive. Yeah.

Bryce: [00:01:02] So the last one would have been, well, I guess July, but it's the end of August now, so call it two months. 

Alec: [00:01:09] So how's things? 

Bryce: [00:01:12] Good. Good. Yeah, I think. Had a good time away and back refreshed and got some great ideas here to kick off the dojo to continue the $100 challenge.

Alec: [00:01:21] Yeah. Now, for people who are new to the show, welcome. The $100 challenge is our effort to save or earn an extra hundred dollars every month. Now, why are we trying to do that? Because little things add up to a big thing over time. When we're investing $100 a month, invested each month for 40 years just in the overall stock market in an index tracking ETF, and that is too much jargon. This fade will explain it, but if you just get the market average return for $100 a month over 40 years, that's $350,000. Good. So little things today can really start to snowball and add up to big things tomorrow. So even when the cost of living crisis is hurting and it feels like you don't have the money to invest ten, 20 bucks, whatever you can spare is worth it. 

Bryce: [00:02:17] Absolutely worth it. I was so pleased this morning. I was in our community on our Facebook group Equity Mates Podcast Discussion Group, and there was a comment from Nicola and it was just great. She said, I've been listening to the guys, I've been putting away 50 bucks, not touching it, just putting it in consistently. I now have three grand. 700 of which has come from the return of the stock market. Oh, wow. How good is that? 

Alec: [00:02:40] That was like her great return. 

Bryce: [00:02:43] She's like, I'm out. I get it now. This is awesome. Thank you so much. 

Alec: [00:02:47] She's just. She's made 30%. 

Bryce: [00:02:49] Yeah, she was. She must've put it in the semi semiconductors before something, but good one. And I think that's the point of this. It's just consistently putting whatever amount you can away over a long period of time.

Alec: [00:03:04] Now, Bryce the great thing about the hundred dollar challenge is the equity mates community is getting behind it. We've been getting some emails and some voice notes and here are some of the ways that the equity mates community are getting involved in $100 challenge.

EM Community: [00:03:29] Hey equity mates, this $100 challenge. I've decided to sit down with my banking app and find $100 worth of subscription services that I can hit and subscribe on. Probably a few streaming services in there and also some supplement type things that I can probably do without. Cheers. Hey, Equity Mates. This September, I've been brushing up on the trivia skills and heading down to my local pub for trivia night. No luck as yet, but it's worth a shot. The 100 odds challenge. I've just cut down completely on unnecessary groceries and. And just in case buys. Thanks, guys. Love the part. Hey, Bryce and Ren, to make up my $100 challenge, I've been taking a packed lunch to work over buying lunch daily. Thanks, guys. Love the show. 

Bryce: [00:04:24] Well Ren. Are you still continuing with your packed lunch drive? You kicked it off as the very first one.

Alec: [00:04:30] Yeah, I love that. So we're jumping ahead to what I want to do this month. But coming back from a few weeks away, I was certainly still in holiday mode with some of my spending habits, but pleased to say. 

Bryce: [00:04:41] What does that mean?

Alec: [00:04:42] I'll get to it. Okay. Good place to say this week. I've started to, you know, go back to some good habits. Yeah. And one of them is every day this week I've brought my own packed lunch. Nice. And that long. May it continue. 

Bryce: [00:04:55] Great. I actually took some. I took some inspo from you regarding overseas. 

Alec: [00:05:00] Probably not the first time. 

Bryce: [00:05:01] But actually the very first time. I don't know if you actually you did it when you went over, but the E-sim. 

Alec: [00:05:08] Well, let's let's talk about that. The last hundred dollar challenge episode. We were preparing to go overseas and so we both bought travel themed $100 challenge commitments things to do, I don't know what we're calling them. And so I introduced this E-sim yeah. And spoke about how that's how I'm going to be saving money, not using my dollar roaming and the $10 a day that Telstra would charge. Yeah, but instead turning my data off and then buying in a sim. If you haven't heard of E-SIM before and you are travelling there pretty epic. You basically just buy a data pack for whatever country you're in or whatever region you're in. So I went to Europe so I could just buy one for Europe and it was so cheap and I did it. It was great. 

Bryce: [00:05:53] Yeah. So I didn't start the trip with an Asian but quickly realised how much we're going to need Google Maps because we were just driving like we had a car for 35 days. Yeah, 35 days at ten bucks a day. You're looking at $350 phone bill. So I quickly moved to the E-sim and I think it was 25 or 30 bucks for ten gig or something, which is more than enough. Yeah. With wi fi. So yeah, absolute game changer.

Alec: [00:06:18] So good.

Bryce: [00:06:18] Saved me well over 300 bucks. It was great.

Alec: [00:06:21] So what was your.

Bryce: [00:06:23] Yeah. So mine was that we were going to go to the Kirribilli markets and sell hams. 

Alec: [00:06:27] Clothes that wasn't travel. 

Bryce: [00:06:29] No, it wasn't. But we genuinely did looking. 

Alec: [00:06:32] I hope people are listening there. Bryce didn't say he was going to sell his own clothes, his hundred dollar challenge like he was going to make $100 was to sell his wife's car.

Bryce: [00:06:42] Hundred dollars, $100. But the weekend that was available was the weekend before we flew out and it was just a little bit too much hassle. So safe to say yet again, didn't get that done. 

Alec: [00:06:54] If anyone would like to buy some of Harriet's clothes, DM Bryce. 

Bryce: [00:06:58] Actually. Actually love that. So we'll try and get that to that to the buyer by the end of the year and we'll see how we go. But before we get into what we're going to do, there are a few that have come through from the community as well. We've got Rosalie who said that she's been going through her budget and making some changes to some of the regular deductions that are coming out. So she's saved on her phone bill to the tune of $5 a month. She's gotten rid of two extra prime channels, saving $18 a month, and she's downgraded her KO to one screen and saved another $5 a month. But a big win was changing gas supplies, which in an environment at the moment where electricity and gas prices are going up, she's looking to save around $1,500 a year, which is pretty epic. So that's over 100 bucks a month in savings. So nice work, Rosalie. I think the point here is small changes throughout your budget can it can really add up over a 12 month period. So we've got another one that's come in from Ryan, he said as well as a little side hustle in event management. He's returning cans and bottles for a ten cent refund. He regularly gets between 10 to $25 a month, which is enough to pay for his streaming subscriptions. Every cent counts. If you have something that you're doing to save money, send us a note at contact at Equity Mates dot com and we'd love to hear from you.

Alec: [00:08:16] Yeah, well, let's take a quick break. And then on the other side, let's talk about what? We're going to do for this month to try and eat a save or earn an extra hundred dollars. All right, we're back. And we are talking hundred dollar challenge. This is our ongoing challenge to save or earn a little bit more money because $100 a month invested at the market, average return over 40 years is $350,000. 

Bryce: [00:08:49] It doesn't get any better. 

Alec: [00:08:50] Little things today can really snowball and compound over time. And that's what we're doing here. We're doing little things. I know what you are about to talk about for us, so maybe not so little. 

Bryce: [00:09:02] Well, the concept applies.

Alec: [00:09:04] To try and earn or save some more money so we can put more in our investment accounts and we can grow our wealth over time.

Bryce: [00:09:13] So on the 1st of July this year, what they call the default market offer or DMO in New South Wales for residential and small business electricity customers. Anyone signed up to an electricity plan. 

Alec: [00:09:27] So basically the electricity price. 

Bryce: [00:09:30] Your electricity price, the default offer is now going to be increased by 20%. So immediately you're getting a 20% increase on your electricity price boom. So what that leads to is probably it's worth having a look at your electricity supplier versus alternative electricity suppliers to make sure that you are getting the best deal because there's no guarantee that your supplier is going to stick to the 20. We had a call the other day from our sort of electricity agent, I guess, or those that help our utilities at the office and said that our current office supplier is actually jacking up by 30. So and he said, we can get you something that is much closer to the 20%. So I think it's worth doing your due diligence here, spending some time after work or on the weekend and just checking that your current offer is as close to that 20% increase as possible. 

Alec: [00:10:18] Yeah, I love that. I don't own a house, so what I'm about to say doesn't apply to me. But as you were speaking then, all I could think about was surely solar power. Not the business case for solar panels becomes more and more attractive as wholesale prices just keep going up and up. 

Bryce: [00:10:35] True. 

Alec: [00:10:36] Like they, if you couldn't, if you couldn't quite make the numbers work on last year's electricity price, bump the electricity price up by 20%. Yeah. You know, surely, surely the business case starts today. 

Bryce: [00:10:46] Yeah. Yeah. It could shout. Well, as you said, the challenge and the frustration for the two of us is that we are in a place to be able to put the solar on. 

Alec: [00:10:54] Purely because we want to put solar, there's nothing else. Yeah. Yeah. Well if we don't own a house we'll certainly get rejected from many houses this year.

Bryce: [00:11:02] Yeah, well, I was speaking to someone the other day and they said from the time that they got their first pre-approval to the time they bought a house was four years. Yeah. Oh yeah. Because they were just like, we just it's such a large amount of money. They just didn't want it. They were just like, We're just going to wait until all the dots line up. 

Alec: [00:11:19] I don't have that patience. 

Bryce: [00:11:21] And even the process of redoing the pre-approval every 3 to 6 months is not time consuming, but it's just you get the email. It's running out. Got to go again. 

Alec: [00:11:32] Yeah. It's tough luck, isn't it? All right. So let me get to what I am going to do this month. For me, as I said earlier, I came back from holidays and I think a lot of the good money habits that I had prior holidays sort of loosened. So this month for me is just to get back to the basics month. And so what do I mean by that? Well, first of all, I'm bringing my lunch in every day rather than buying it. I was in really good habit pre holidays. And then the last sort of the first week I was back, I think I bought lunch every day. So that's one. Second one is buying coffee like we have a coffee machine at work. Sometimes it's not great but it's free. So I think just getting back to just making coffee at work or at home rather than buying it. Yeah, a third one. So I'm a big fan of intermittent fasting, and intermittent fasting is just a fancy term for skipping breakfast and I'm going to get back to that as well. So just saving money there, but also like I just feel more energetic doing it. And then finally, I think it's time that I cut ties with a few streaming services. 

Bryce: [00:12:42] Okay, nice. 

Alec: [00:12:43] And there's one which has really been on the precipice for a while, which is paramount plus. All right. But it keeps dragging me back in the Perduta show. 

Bryce: [00:12:52] So they are on ten, though.

Alec: [00:12:54] I was watching Free to air. Actually, you were last night, right? Last night. Thank God you're here. It was good show.

Bryce: [00:13:01] And free to air means, use the app. 

Alec: [00:13:03] To so many ads. It was unbelievable how many ads? Yeah. 

Bryce: [00:13:08] Yeah, I'm not surprised. 

Alec: [00:13:09] It's almost a 1 to 1 ratio, I reckon. AD to show Side Point. So Paramount kept me with the Perduta show and then I was going to delete it after that and then the inspired unemployed show. But I think few of those streaming services have to go. So for me, getting back to basics in September, getting the sort of discipline back and that is bringing my lunch. Every day at work. Not buying coffee. Intermittent fasting, skipping breakfast and finally calling some of those streaming services. 

Bryce: [00:13:38] Nice. Well, I'm not quite going back to basics. I'm probably going the other way. 

Alec: [00:13:43] You are certainly going the other way. 

Bryce: [00:13:45] But just like you said at the top of the show. Small things done consistently over a period of time can snowball and compound into something great. And I think for me, part of the enjoyment of this challenge is actually creating $100 a month or more. And we know that there are a lot of people in the community who are really into the idea of a side hustle. Equity mates was born out of a side hustle. Small things compounded into what we're doing today. And I think that we have an opportunity to try and build something that's not going to generate a hundred bucks for the first month potentially. But over time, if we commit to building it, we should be generating more than $100 by the end of the year. 

Alec: [00:14:25] As there's a lot of use of way here.

Bryce: [00:14:28] Well, I mean, you don't have to come on board, but don't don't turn around. And this is a hyper successful dropshipping business and say, where's my car? 

Alec: [00:14:36] So that's what you're doing. Dropshipping. 

Bryce: [00:14:37] I want to try it again. I'm sure the fad has passed. 

Alec: [00:14:40] Before we get into the explanation. Yeah, explain the term. 

Bryce: [00:14:45] So Dropshipping is a concept where you create an ecommerce store online selling products, but you don't have to take any of the product in inventory or control any of it yourself. Essentially, you find a supplier who creates and warehouses that product, and then when someone puts in an order, they then ship it to your customer. So you don't have to buy inventory upfront. You don't have to put boxes of it in your house. You don't have to go to Australia Post to send it out. You are the one that just creates the store, does the marketing, and then sends your orders of all of that to a third party who then distributes on your behalf. Sounds simple. So this was a huge fad and that might still be. But I remember it was still big three or four years ago. It wasn't huge on Instagram. 

Alec: [00:15:37] When I put the TikTok investors together every Friday for Instagram, there's a lot of like 20 year olds living at home who are trying to teach you how to do a dropshipping business. 

Bryce: [00:15:48] It's typed into YouTube. It's all over it. Yeah, it's the classic. I'm driving a Ferrari because I've been doing dropship. So you got to take all of that with a grain of salt because I think the first thing to consider here is that there's obviously hundreds of thousands of people doing it. 

Alec: [00:16:03] Dropshipping was like its golden age was when Facebook ads were cheap and effective. Neither of those things apply now. 

Bryce: [00:16:12] Tiktok though. Anyway, so what I want to do when I've googled it and according to Google, there are six steps to creating a successful dropshipping business. One. Choose a niche to perform competitive product research. Three. Find a reputable Dropshipping supplier. Four. Build your online store. Five. Market your Dropshipping business. Six Analyse and improve your store.

Alec: [00:16:36] Sweet, it sounds so easy. 

Bryce: [00:16:37] So we've got four months until the end of the year. So I think the first thing that I want to do is find the niche, which is what I want to discuss today, find the nation that I'm going to set up or do some research on the store. Okay, so the niche part is the most important part, i.e. what are we going to sell? 

Alec: [00:16:55] So it's funny because I actually wouldn't have thought that finding the name is most important. Like the best dropshipping things that I've seen are product specific.

Bryce: [00:17:06] That's what I mean. Like if you go, we want to do pets. What in pets is the name in pets or we want to do golf?

Alec: [00:17:13] No, what I mean is like, maybe like this is just a select sample, but people find like weird and wonderful, like kitchen products on Alibaba and then they make like a platform for, like, that product and they make ads for that product and then they just sell that product like it's product specific. 

Bryce: [00:17:30] Yeah, that's the name. I'm saying it's kind of twofold. The way I think about it is you what you want. And you want a category that's people are spending money in and you can probably have a better chance of finding and marketing in nature. Like I need to be able to create an advertising for this. I'm not going to do something that. He's out of my realm of understanding. Or, like, whatnot. Like, for example, golf balls. Can you. Can you find super cheap golf balls? I know it's already out there, but a lot of this just comes down to how you market.

Alec: [00:18:01] It's all marketing. 

Bryce: [00:18:02] Yeah. So it's like, how do you market like super cheap golf balls or like a golf ball subscription service or like, is there. 

Alec: [00:18:10] A golf ball subscription service that's not. 

Bryce: [00:18:12] For, like, really shit Golf is. 

Alec: [00:18:14] Yeah, that's pretty good.

Bryce: [00:18:17] So without sort of taking too much time, that's where I want to start finding the niche. There is the pickleball thing that kind of keeps tickling my fancy, but I don't know anything about it.

Alec: [00:18:28] There's that other one that's come out of America as well, which is like tennis, but in a squash court. Well, like in a it's like it's got. 

Bryce: [00:18:36] It's got walls. Yeah. Yeah. So. So I'm actually thinking there's something in golf that's just because I know, I know people spend money on it. It's advertised. I've got a bit of a sense of like who the target market can be. And then similarly, we know people spend heaps of money on pets and it's just something that there would be little gimmicks out there galore. I don't know. Yeah. Have a bit of a sense of what people spend in that space as well. So those are the two that I'm kind of tossing around. Firstly, do you have any ideas? 

Alec: [00:19:06] Yeah, I reckon you should add a niche like household. Okay. And like weird kitchen and bathroom products is like what? I mean. 

Bryce: [00:19:14] They're like that thing where the guys strap the piece of plastic from under their chin to the mirror so when they're shaving, it catches all of the hair. 

Alec: [00:19:24] Be saying that. I would say that, but that's not the, um. No, like weird chopping boards and stuff like that. You know, I feel like that's what I say. You know, all these dropshipping experts. Like, that's the kind of stuff that I see them talking about. 

Bryce: [00:19:37] Okay, nice.

Alec: [00:19:38] I'll send you some video.

Bryce: [00:19:39] Okay. Send me some videos. If, if, if you have any ideas, we'd love to hear from you before our next $100 challenge episodes in the next couple of weeks. Send them through contact@equitymates or you can hit us up on our Instagram or Facebook discussion group. I'd love to hear some because by the next episode what I want to do is come with the products and then also a list of potential suppliers that are going to be able to fulfil these products. And we can do a bit of a discussion on what they are from there. We can then set up the shop through Shopify. Super simple, but we'll get to that and then it's all about the marketing and I reckon we can do this for about 50 to 60 bucks a month. So there is going to be a bit of a cash outflow before we start seeing some returns. 

Alec: [00:20:27] Here's my biggest challenge with it. The key skills that you need to do this well are digital marketing and website building. Yeah. And I guess and like just e-commerce generally. Yeah. A skill that we haven't demonstrated when selling our own merch. 

Bryce: [00:20:46] So the website stuff I'm not concerned about because yeah, it's like it's easy and it's built and it just it's Yeah exactly. It's good to go. I do agree that the marketing component which is probably the most important, is the biggest hurdle. But part of a side hustle. Ren is making small improvements week on week so that it snowballs into something big. Let's leave it there. 

Alec: [00:21:08] All right. Well, that's our $100 challenge. We'll see what happens with Bryce's business. That's turning into a whole different series. 

Bryce: [00:21:16] I know.

Alec: [00:21:16] But I'm here for the ride, so let's get it. 

Bryce: [00:21:19] Let's do it. So if you are making small changes to your budget or if you have ways in which you're generating an extra $100 a month, we'd love to hear from you. Send us a note contact@equitymates.com or as I said, you can find us on Instagram or the Equity Mates Discussion Facebook group. But Ren, we'll leave it there and we'll pick it up next week. 

Alec: [00:21:37] Sounds good.