Gary Vaynerchuk loves his side hustles. When the serial entrepreneur turned social media mogul isn't busy running one of his successful companies, you might find him at your neighbour's garbage sale unearthing forgotten treasure, an idea he has discussed in his "Trash Talk" video series. That's right, despite being worth an estimated $160 million, Gary Vee still finds time for a side hustle.
His favourite method of side hustle: retail arbitrage flipping, or 'flipping' for short. People without much money may not be able to buy residential real estate and turn a house around for a profit, but retail items are another story.
The idea is pretty simple: Find an item listed at a discounted price, preferably something that a big-box retailer (Walmart, TJ Maxx, Target) is trying to get rid of on their close-out shelves and scan items. Next, check to see what the item is selling for online. There are a number of websites and apps you can do this on like Amazon or eBay. Once you find an item where there is a large enough price difference you buy it and "flip it."
"I am watching people literally go from being homeless to building up $50,000 to $100,000," Vaynerchuk tells CNBC.
Vaynerchuk believes this method of side hustle works particularly well for people who are in debt or looking for a way to earn fast. While his use of the term "homeless" may seem in the least dramatic — if not insensitive — think a recent college grad living in a girlfriend or boyfriend's home, or on a friend's couch, with access to the internet and no day job. He talks about "microdollaring" for the "young kid in debt."
While flipping may seem simple, there are some barriers to entry: shipping costs, transportation costs and access to technology like a smartphone or computer required to monitor the retail sites, and list and sell items. There also is a lot of competition on auction sites like eBay and through Amazon's third-party seller marketplace — Vaynerchuk is not the only person to have this idea. Software firms have even developed algorithms that online resellers can purchase to keep track of competitive pricing trends on individual items.
Ryan Grant was able to quit his full-time accounting job to focus on an online retail flipping business that is now earning him six figures in profits a year. It all started because Grant wanted to pay down his student debt faster.
What Gary Vee thinks it comes down to is people's ambition: "It takes grinding. … I see people that are in debt that are like 'I'm not going to Marshalls' and I'm like 'That's why you're a loser.'"
"It's happening at scale across America," Vaynerchuk says.
It is actually happening across the globe, and not only at the lowest end of the retail market.
An app based in Europe called Depop claims that its users are making as much as $300,000 reselling designer fashion items. Comments from sellers using Depop suggest that may be the exception to the rule — a few thousand dollars is more likely — and also often requires what amounts to a full-time job. But by one measure of market success, Depop's model is working: it recently raised $62 million in a round of venture capital financing led by VC firm General Atlantic.
No one should have any illusions that a side hustle is an automatic ticket to easy street: Nearly 1 in 3 American workers with a side hustle are still struggling to make ends meet.
Vaynerchuk admits in his #TrashTalk series that not everything can be flipped. But the "grinders" who can spot trends and are willing to hustle can turn a quick profit.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.