The Definitive Guide to Business

How two guys in their 20s built a $150,000 side hustle selling T-shirts on Amazon

Neil Lassen was 19 when he took a job pushing carts at Target for $8 an hour. He hadn't graduated from college and didn't have many options.

"This was both a blessing and a curse," says Lassen on his blog, Passive Marketing. He describes himself as a normal guy from Wisconsin with crazy hair.

"Over the next 10 months, this job would be the bane of my existence," says Lassen. "I dreaded going to sleep at night because I knew I would have to get up and go work where I was treated almost subhuman. After all, someone pushing shopping carts must be an uneducated fool, right?"

"Little did I know, taking this job was the best thing that ever happened to me. I was so fed up with the way I was treated, I decided to do something about it. ... One night after a particularly long shift in the scorching summer sun, I got back to my place and started researching."

In his research, Lassen came across Flippa, the online marketplace for websites, and through it found a listing for a website going for $40,000.

"This was a LOT for someone who had not even cleared $2,000 that summer working long days," he says. "I took a look at the website that was listed and was dumbfounded. The site was downright awful. The listing said that this site was making over $10,000 a month. I knew if this guy could make this kind of money with a site this bad, then I could, too!"

Neil Lassen
Source: Neil Lassen
Neil Lassen
"I know a lot of s--- is talked about starting T-shirt companies, and I completely understand why. Most people fail when they start one." -Neil Lassen, e-commerce and online marketing entrepreneur

Since then, Lassen, now 24, has graduated from college and is working full time for himself. He develops online and affiliate marketing for large websites.

He's also got an impressive side hustle. This year, he and his business partner Todor Karlikov made $150,000 in profit by selling T-shirts online. Lasson met Karlikov, who is from Bulgaria and now 29, through an internet marketing forum, and they have worked together on multiple projects.

"I know a lot of s--- is talked about starting T-shirt companies, and I completely understand why. Most people fail when they start one," Lassen says in a post on Reddit describing his success and teaching others how to replicate it.

Here are his five steps for building a successful side hustle.

1. When you see an opportunity, jump

In 2015, Amazon launched a service called "Merch By Amazon," a T-shirt print-on-demand and order fulfillment service. Lassen immediately knew that he was looking at an opportunity.

When the program launched, anyone could use the service. There were no minimum requirements for an order. Amazon prints a design on a T-shirt, ships it and takes care of back-end customer service. Flooded with demand, Amazon changed its policy. Now customers interested in using the Merch By Amazon service have to apply.

"You see, they first thought that this program was going to be used just by developers, but other people saw the money signs, and it quickly was changed to invite only," says Lassen.

"I am a god-awful designer and can barely use Photoshop but a few hours on YouTube tutorials and I was able to create enough designs to start paying some bills." -Neil Lassen, e-commerce and online marketing entrepreneur

With the Merch by Amazon service, customers do not pay anything upfront. The fee to Amazon is taken out on the back end, when a shirt is sold. How much you make in profit depends on how much you decide to mark up the T-shirts. Lassen says if a shirt sells for $19.99, he makes almost $8. If he sells a shirt at $15.99, he makes $4.28.

"You may look at the numbers posted and think, Why would you waste your time making $4.28 per T-shirt sold? The answer is, because you are selling on Amazon, one of the most trafficked sites on the internet. They get so much traffic each and every day, that if you set up your listing properly, you will see organic sales."

2. Start with what already works

Lassen and Karlikov piggybacked on pre-existing niches of popular T-shirt designs in the online marketplace that were already selling well.

"So how did we set everything up to make sales without paying a dime to market them? We based all our designs off niches and designs that were already selling! There is no need to reinvent the wheel here," says Lassen. "All we needed to do was find something that was selling well, and improve the design in some way."

Amazon ranks the items by popularity, and Lassen used this data to decide which shirts to produce. These rankings are called best sellers rank, or BSR, and they are found within the product information section under an item for sale. A clothing item with a best sellers rank of 100,000 means the item is probably selling an item per day, Lassen estimates, while a best sellers rank near 2,000 is selling about 25 to 50 items daily.

3. Use the Web to teach yourself what you don't know

Lassen didn't know how to design T-shirts, but he didn't want to start spending money to hire designers before he was bringing in revenue. He designed the first 125 to 150 shirts after teaching himself the basics with online video classes.

"I am a big believer in bootstrapping your own business until you can afford to pay other people to do the dirty work," says Lassen. "I am a god-awful designer and can barely use Photoshop, but a few hours on YouTube tutorials and I was able to create enough designs to start paying some bills."

4. Outsource using online marketplaces

Once Lassen had cash coming in, he started hiring designers using the freelance marketplace Upwork. He paid $4 per T-shirt design. He warned that designs could not include copyrighted work, such as Disney characters or trademarked phrases. He suggested checking any designs that anyone was slightly unsure about on either Trademarkia or USPTO.

Lassen learned to give potential freelance designers a test to see if they would get him in trouble by not properly checking the copyright of designs they sent to him.

"When I first hired someone, I let them know that they cannot use any images which are copyrighted, or infringe on any copyright someone else owns," he says. "Then, I will send them a T-shirt idea that is very clearly copyright infringement. If they copy it or do not change it enough to be considered free use, I will immediately get rid of that designer. The design may have cost me $4, but that is an extremely small price to pay to weed out the copycats!"

5. Know when it's time to sell

Lassen and Karlikov were making about $3,000 a month when they decided to try to sell one of their two Amazon Merch accounts. They hired the services of the website resale company Empire Flippers to sell the account for them, which they did for more than $73,000.

Lassen and Karlikov continued running their second Merch account on Amazon. In the last week, they sold 508 T-shirts for a total of $7,852 in revenue and $1,941 in profit. They are tracking to make nearly $8,000 a month in profit.

Today, Lassen is working on a software product to automate the process of finding shirts with a beneficial best sellers rank on Amazon. The software, called Merch Informer, will make the process of finding good T-shirt designs to mimic more efficient.

Most of the $75,000 the two made from selling shirts, or $150,000 total, has gone back into building their software, which will launch soon.