Is it really possible to make a grand in one day? One wheeler-dealer lets slip his secrets.
, 16:10, Tuesday 21 June 2011
In last week's episode of The Apprentice, the victorious team won over Lord Sugar and his team with a fictional magazine whose lead feature was entitled: "Make £1,000 in a day."
This got the team at Yahoo! Finance wondering: "Is it possible to make a grand in a single day? In other words, to end a day with £1,000 in hard cash that you didn't have that morning?"
Bagging a windfall
But what 'grand plan' could genuinely leave you with, say, 50 £20 notes in your pocket 24 hours later?
To find out, I asked a friend who has enjoyed a varied and successful career. Until a decade ago, he had a senior sales role at one of the world's largest corporations. Later, he set up a family business which still thrives today.
But he also makes substantial sums from wheeler-dealing: The simple art of buying and selling items for cash.
£1,000 in a day?
My hard-trading friend has made substantial profits -- several hundred pounds -- in just a few hours. For example, earlier this year, bought two high-end bicycles cheaply and immediately sold them -- after 'a quick wipe with an oily rag' -- to enthusiasts for over £450 profit.
In a single weekend, his tried and tested trading skills have bagged him £700 in quick order, but he has yet to make £1,000 in a single day. Nevertheless, he thinks 'a grand in a day' can be done, especially if one comes across a hidden gem or high-value bargain overlooked at auction.
One day, he hopes to hit the jackpot by finding an antique camera (such as a Leica) that could be bought for peanuts and sold for a potential profit running into the thousands.
How to do it
I've given my friend various light-hearted nicknames, including Steptoe (after television rag and bone men 'Steptoe and Son'), Stig (of the Dump) and Del Boy (after the much-loved Trotter brother). However, in view of his amazing ability to turn one man's trash into another man's treasure, his 'superhero name' is ReCycle Man.
My friend focuses on bikes, because that is an area he knows well. However, you could focus on anything you're passionate about or know well, be it films (for example old movie posters), vintage toys or clothes, retro technology, books, cars or sporting memorabilia.
However, no matter what your speciality is, the basic rules of turning a profit remain the same. With this in mind, here are his top 10 tips:
1. Know your niche
"Although Cliff jokingly calls me Steptoe, I prefer 'ReCycle Man' for its double meaning.
"First, I find old and unwanted goods, do them up in my workshop, and then sell them on for cash. Second, as a fitness enthusiast, I'm very keen on cycling to keep me healthy.
"Hence, I combine my hobby with trading by specialising in repairing and reselling bikes of all kinds. For the biggest returns, I specialise in top-end, classic and rare bicycles, but am willing to buy lesser bikes to flog for a quick profit. It's about finding your speciality and sticking to it."
2. Buy low, sell high
"There are two ways to boost your trading profits. The first is to find 'a diamond in the rough' -- something that resembles a wreck, but is a hidden gem for the expert. I look out for vintage bikes that might go for a fiver at the local dump, but could fetch upwards of £200 from collectors, even just for spare parts.
"The second way to turn a profit is to 'churn and turn' -- buying cheap job-lots and then flogging individual items quickly. While this may only generate, say, £25 per bike, it can be money for old rope."
3. It's all about arbitrage
"Trading is all about arbitrage: Matching weakness in one market with strength in another. So, get to know your outlets: Local dumps, council recycling centres, police auctions and second-hand stores -- anywhere where goods go cheap.
"Also, know your markets, such as eBay, Gumtree and free ads in local papers. Gumtree buyers are often local and turn up and pay in cash, which cuts down on time-wasting."
4. Do your homework
"As with any trade, you need to do your homework (which isn't hard if your hobby is also your trade). This means scouring the Web for the latest prices for vintage or rare makes, and keeping your eyes peeled when scouring around. A smartphone/iPad is a great tool to help unearth bargains on the spot."
[See also: Apps that can make you richer]
5. Think like an entrepreneur
"It helps if you think like a small-business owner and trade accordingly. Your key goal is to maximise trading profit and minimise effort. Don't tie up too much money in stock, try to shift goods quickly, and always remember that no-one ever went broke taking a profit!"
6. Be patient
"Fools rush in where angels fear to tread. If you're being outbid at an auction, don't be like a poker player on tilt and start throwing your money away. Keep your powder dry for another day, as there'll be more bargains later down the line.
"Like a good poker player, don't play too many pots. Also, don't be a forced seller; take your time to get the right price."
7. Don't go overboard
"If trading is your hobby or sideline (rather than your main income), then don't work at it night and day. Keep your dealing in perspective, especially if you're only doing it for pin money. Saying that, I sometimes bite off as much as I can chew -- at present, I have 20 bikes awaiting repair and resale in my shed."
8. Don't forget losses
"Don't imagine that you're going to turn a profit every time. Every now and again, every trader buys a pup [an item that turns out to be worth far less than it appears].
"For instance, I recently bought a quality, brand-name bike for a fraction of its true value. Sadly, on close inspection later, I spotted a hairline crack in the frame. This meant that I couldn't sell on the whole bike for as much as I'd originally planned. Even so, by removing the valuable individual components and selling them separately, I was still able to turn a healthy profit."
9. Don't waste your time
"Cost your time fairly and wisely. If it takes you 20 hours to make a grand, then your effective wage is £50 an hour. If it takes you 500 hours, then you're earning two quid an hour. Frankly, you'd be better off earning the minimum wage!"
10. Enjoy yourself!
"Some people are natural sellers; others find it a chore.
"If you really take to trading, then explore ways to make it into a career. However, dealing works best when treated as an enjoyable hobby which keeps you fit and active, while making money on the side. If you don't like wheeler-dealing, then don't pointlessly stick at it."
Beating the Apprentices
To sum up ReCycle Man, anyone with decent selling skills, a bit of time on their hands, and a talent for spotting value could make tidy sums in this way. That goes for anyone, no matter where you live in the UK -- your basic needs are an Internet connection, transport and a telephone.
Finally, ReCycle Man pointed out that, with six people per team on The Apprentice, each member has to make just under £167 for the team to bank £1,000. He reckons that this would be a walk in the park for a smart salesperson. Indeed, I sincerely believe that ReCycle Man would wipe the floor with the Apprentices!
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