It seems too easy to be true that you could make millions by raiding the clearance aisle at your local Walmart or Target and then selling your haul on Amazon. But that's exactly what 30-year-old Ryan Grant is doing.
Less than six years after quitting his accounting job in Minneapolis to flip purchases full-time, his business now employs 10 people and is making well into the six figures in profits per year on revenue that he says nearly reached $6 million in 2018.
That money comes from buying everything from toys to household appliances on sale from retailers like Walmart or Target and flipping them online — mostly on Amazon, where Grant says "the bulk" of his company's sales come from, though his business also makes money selling items on eBay and Jet.com, among other sites.
"Pretty early on I realized I wasn't in the career path that I wanted to be on," Grant tells CNBC Make It about his former accounting job. "That experience really had me looking for other options and I was starting to explore ways that I could basically leave that job and have my own schedule and be on my own time."
To do that, Grant turned to the side hustle he had used to make ends meet in college.
As a student at Winona State University — Grant graduated in 2011 — he organized textbook buyback events on campus twice a year. He listed the books on Amazon and shipped them out to customers around the country for a profit of up to $10,000 a year.
The process worked simply enough: Using the Amazon Seller app he could see exactly how much he could expect to profit on each book and in what time frame. But the hours spent processing and packaging each order himself proved to be a bit much.
"Going through that process for one semester was enough to know that I didn't want to do it again," he says. "From there forward I did Fulfillment by Amazon the rest of the way."
Using Amazon's fulfillment services meant he could ship all the books in bulk using preferred UPS rates to an Amazon warehouse, where, for a fee, the online retailer handled processing and shipping out each individual order. It made his side hustle more manageable, time-wise.
And, when Grant grew more unfulfilled at his accounting job, it sparked the idea of going online to flip more than just textbooks.
After work and on the weekends, he scoped out the clearance aisles at Walmart, scanned a few items using Amazon's app and bought up toys, games, and home improvement items he realized he could re-sell for a profit. A receipt from his early days shows a variety of purchases, everything from vacuums to Barbies, LEGO sets to stainless steel flatware.
"I was putting in about 10 hours per week and I was making in the ballpark of $1,000 per month," he recalls. Once he was able to make the same kind of money reselling on Amazon as he had made at his accounting job, in September 2013, he quit.
"I was confident that if I had full-time hours to dedicate to selling online that I would be able to more or less scale that up," Grant says. Just three months later, in December, he notched $9,000 in profit on over $25,000 in total sales.
"Making that amount of money in one month was a big boost in my confidence to be able to scale up further from there," says Grant, who tells CNBC Make It that his accounting job had been paying him a salary of nearly $51,000 a year before he quit.
Boxes upon boxes destined for Amazon warehouses started stacking up in Grant's duplex so, in the spring of 2014, he rented out a 725-foot warehouse. He packed his Mazda 626 full of products on runs back and forth from other brand-name retailers like Target and Toys R Us.
"It was starting to basically take over my life because I'm coming home and there's product all over my house," he recalls. When the 30 hours of shopping and the 15 hours of preparing shipments each week became too much to handle alone, Grant hired his first employee, a friend who could help scour local stores.
Eventually it got easier to target the items that had the biggest opportunity for arbitrage. Seasonality, they realized, was a key factor. They could, for example, buy up discounted candy after Halloween and half-priced Christmas decorations around the New Year.
"Believe it or not, there's actually people buying those items out of season," Grant laughs. Still, even he was surprised at how quickly the business took off from there.
While Grant was pulling in "around three-to-five thousand dollars in sales per month" when he was first running the business by himself, after just four years he and his team of employees were seeing more than $200,000 in monthly sales. In July 2017, Grant had to move the business to a warehouse that's over five times as large as the first storage area he used for inventory in the business' early days.
And, those sales figures have only continued to grow, as Grant recently told CNBC Make It that he expects his business to reach roughly $8.5 million in annual revenue by the end of 2019 (sales are up almost 45% over last year). Over the past couple of years, Grant says, the fastest-growing aspect of his business has been the part focusing on wholesale arbitrage, which involves Grant buying products in bulk directly from brands or manufacturers before selling them online.
By partnering with brands and manufacturers to sell their items in bulk online, Grant has been able to grow his business faster — and, the bigger his business gets, the more brands are eager to work with Grant's company. "It was kind of like getting a snowball rolling," he says.
"We can leverage the existing account and the businesses that we work with to work with more and more businesses, both through referrals and ... just by name-dropping other brands."
Profits are heavily reinvested back into the company, and Grant even went from taking a salary of around $150,000 per year for himself after a few years with the business to reducing that amount to a base salary of around $60,000 in recent years. Grant's total compensation also includes regular distributions of the company's profits, though. While he declined to reveal his total compensation, he tells CNBC Make It he personally takes home six figures each year.
Part of the reason for his reduced base salary is because Grant has become more reliant on his employees while seeking a more flexible working schedule for himself. But, he also wants to keep putting as much money as possible back into the business. "The lower my salary, the more I leave in the business and the faster the business grows," Grant says. "And, then the more money I can take out later."
Of course, the team also made mistakes made along the way. They lost $6,000 when a faulty nail filing product for dogs got Grant's Amazon seller account temporarily suspended, for example. They also had to pay the fees Amazon charges for products that failed to sell and sat idly in Amazon's warehouses.
All the same, Grant believes he has found an easy and effective formula for success. "I think anyone can do it if they're willing to put in the work," he says.
Grant now dedicates much of his time to getting that message out. Grant consults and teaches e-commerce classes through his website. His hope is that he might be able to help a few people who might not be happy at their jobs find the same independence he did.
"I was just looking to have freedom of schedule and replace the income that I had from that job and now it's turned into a lot more than that," he says. Had he not quit his accounting job in 2013, Grant admits his life would be very different today. For starters, he'd likely be making less money and he would have a lot less control over his own schedule.
"The biggest thing for me is I wouldn't have the freedom or flexibility," he tells CNBC Make It. "I obviously have work to do and there's things that I have to do to keep the business running, but I can do it on my terms and I don't have to check in with anybody to say I have to take time off, or anything like that."
While Grant realizes that not everyone is in a position to take a major risk like quitting their job to start a business, he does have some advice to anyone who might be thinking about following in his footsteps.
An easy and "low-risk" way of getting some experience in the world of online retail arbitrage, Grant says, is to simply start with a few items you already own, but rarely use, and try to sell them online through Facebook Marketplace, Craigslist, eBay, or even Amazon. From there, you can take your profits and reinvest them by buying items from "a garage sale, or thrift store, or even a retail store on clearance" before selling those items online, as well. Repeating that same formula over and over again for several years, while reinvesting profits in the business, is essentially how Grant grew his multimillion-dollar business.
His biggest piece of advice, though, is simply "to get started as soon as possible."
"A lot of people will put it off for a long time, or they'll say they want to start a business and then there's always a reason why today's not the right day," Grant says. "But, if you take the first step of selling something that you're not using, it just increases the odds that you'll get the momentum rolling and it can turn into a lot of positive things."
This story has been updated.
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