Business is about finding opportunity and exploiting it to the hilt. Buy low, sell high. See an opening, cram yourself in there. If you can stick it to the man while you're doing it, and take advantage of an inefficiency, then you're golden. And that's exactly what one guy did to Walmart. Crushing it.
This is Ryan Grant. He's one bad mother. He quit his full time job in Minneapolis as an accountant and started buying cheap goods from Walmart and Target. But he didn't just stop there. He flipped those items on Amazon for a premium.
Business Insider did a side-by-side comparison of market capitalizations of Walmart and Amazon. In the past year and change, Amazon came out on top, and is roaring right on ahead. Walmart is struggling to keep up, and sells itself on price differentiation. That means there's a margin for profit for middlemen like Grant.
As an accountant, Ryan was making $150,000 a year — far above the salary of the average American worker. But he felt, he told CNBC in an interview, that he just wasn't on the right career path. So he started investing that sizable salary into a side hustle. Which turned into more than just a side hustle...
He started by organizing textbook buyback events, in which he would purchase on debt returned textbooks. Then he would resell those books on Amazon for a mint. This gambit was already netting him $10,000 a year! He parlayed this success into many more.
Next, he started investigating other areas of inefficiency. He scoped the clearance aisles at places like Walmart and Target for cut-price items. He snatched those up, and marked them up on Amazon for boku bucks. But before he made a buy, he used Amazon's App to measure how much they were worth. Smarty pants.
See, in economics, what allows Ryan to make a profit is imperfect information. Walmart doesn't know what Amazon is selling their goods for, or they're not researching it. They're missing an opportunity. Ryan put two and two together to make a profit, but it took some digging on his part. If there were perfect information, there'd be no margin.
So Ryan started buying toys up like wildfire. Barbies. Legos. You name it. Then he started getting into household appliances. Vacuum cleaners. Flatware. Cutlery. Everything you can imagine. He began stockpiling the stuff at his house, and using his place for inventory.
But eventually, Ryan was getting too big to keep his operation home-based. So he rented a 725-foot warehouse to put all his stuff. The operation ballooned, and Ryan needed more hands and a bigger space. He hired 10 other workers, and together they moved their inventory into a larger warehouse.
Whether Ryan was aware of it or not, he was capitalizing, and capitalizing big, on something called market inefficiencies or anomalies. Because Walmart was charging items at such a discount, they were missing out on what economists call producer surplus. Consumers were getting a buttload of consumer surplus, which made them happy. But Ryan saw the true price of the goods, and marked them at that.
In just four years, Ryan went from a solo operation raking in three to five-thousand a month to having a team of 10 others making $200,000 a month. In entrepreneurial language, this is called hockey stick growth, because if you graph it it looks like a hockey stick. Of course, it didn't just happen overnight.
Ryan needed the time to organize everything, and that's pretty hard with a full-time job. He had to make some choices, he had to sacrifice. The security of a desk job, or the risk/reward ratio of an entrepreneurial undertaking? Then again, who wants to sit behind a computer screen, chained to a desk all their lives?
Ryan wants to take everything he learned along his journey and use that knowledge to teach others with it. His next plan is to start teaching classes in e-commerce to help others start their own business and grow them like he did. Ryan might be the godfather of a whole new generation of internet businesspeople.
Eventually, you might need to quit your job if your side-hustle becomes your main gig. That's not always easy, even if you despise what you do. It's even harder if you like what you do. If you're going to do it, make sure to give adequate notice, and do it as amicably as possible. You don't want to burn that bridge.
But the time is ripe for this kind of thing. After the Great Recession, the entrepreneurial spirit seems to be on the rebound, at least according to The Economist. America is still supreme when it comes to "business sophistication and technological readiness," so we have the resources and acumen for this kind of thing. So if you've got it too... flaunt it.