274: The Middleman Method: A Real-Life Example of Turning Trash into Treasure

This post may contain affiliate links. Please read my disclosure for more info.

Note: Click here to download John’s top tips from this episode.

John made $1614 before 11am the day we recorded this episode.

His business model? Buying industrial byproducts, the kind of stuff that’s used for shipping like pallets, cardboard boxes, crates, and so on, and selling them on for a profit.

John Wilker started out buying or being given pallets free by businesses that had no need for them and selling them to pallet yards.

Realizing the pallet yards were selling them for a profit to businesses that needed them, John saw an opportunity.

“Bottom line is I’m a middleman,” John said.

John hit the pavement and started knocking on the doors of industrial businesses, large warehouses, distributors, and scrap yards.

He asked if they had pallets and other shipping byproducts they didn’t need, what they were currently doing with these items, if they needed any items, and explained how he could help.

Wanting to operate without storage space and employees John has found the perfect balance between supply and demand. He spends his mornings picking up items from one business and selling them on to another just a few miles away.

“It’s quite simple…but has to be set up in the correct manner for it to work,” John said.

It’s certainly one of the more interesting side hustles, and it sets the cogs turning to think of other niches that can fit this model.

Tune in to hear how John found his first suppliers and buyers, how he sets his prices, and how he transports this stuff without having to store it.

Download the Free PDF Highlight Reel:

Click here to download John’s top tips from this episode.

Subscribe to The Side Hustle Show on iTunes!

Subscribe to The Side Hustle Show on Android!

Subscribe to The Side Hustle Show via RSS!

Or use the player app above to listen right in your browser.

Sponsors:

freshbooks-logo

  • Ripl – Step up your social media game with Ripl. Start your 7-day free trial today.

Learn:

  • How John saw an opportunity to become the middleman in his supply chain.
  • How he finds businesses with byproducts for sale.
  • The tactics he uses to sell his services to these businesses.
  • How he balances supply and demand with no need to store inventory.
  • What a typical day looks like for John.
  • John’s #1 tip for Side Hustle Nation.

Links:

Download the Free PDF Highlight Reel:

Click here to download John’s top tips from this episode.

You Might Also Like:

11 thoughts on “274: The Middleman Method: A Real-Life Example of Turning Trash into Treasure

    • Hi Tracy,

      John Wilker here from The Simplest Biz.

      I’m glad you did some research. The difference in this biz model compared to the examples in the article is that they article is refering to you having to own a pallet yard. That model would put you in a difficult situation. You would have to lease a property, secure it, buy forklifts, hire help to fix pallets, buy nail guns and supplies on and on. This model cuts all that out of the equation.
      I’m simply picking up perfectly good product – pallets / crates / dunnage / broken down corrugated boxes / 55 gallon metal drums / wire reels etc. (no repairs required) – having them loaded on my truck by the suppliers employees – strapping them down tight and driving a few blocks to my buyer. They unload them and write an invoice.

      When you go with the model described in the article – your life would become infinately more complicated. In fact the first pallet yard I sold to on my first day (that I mentioned in the podcast) made the mistake of moving from my model to the pallet yard model and forever more complained to me how he and his wife regretted it. He wished he never had moved away from the way I was operating. Because his 3 hour work days had turned into 16 hour days since he had overcomplicated a process that didn’t need to be complicated.

      I hope this helps. If you have any other questions, feel free to set up a phone chat. I’d be happy to answer any and all questions. After 20 years – there is not much I haven’t run into as far as problem solving when it comes to this biz model

  1. John, thanks for posting this. I also do websites and this may be something I can do on the side to generate more immediate income. You mentioned using Google Earth for routing. Use anything else along with it to keep leads/customers organized and for your daily scheduling? I’m using airtable, which has great database uses and has a free tier. I’m also a planner and spend way to much time just planning….

  2. John, also how do you have you business organized if I may ask. Is it a sole propr or do you have it as part of your other businesses say as an LLC.

    • Hi Sam,

      Personally Sam, I don’t have to use any type of scheduling these days beside a day planner. I see my suppliers on a regular bassis so I know what their situation is. My buyers simply text me or I check in once a week, especially if I know I am going to work (Meaning pick up and deliver **insiert product here**) a certain 5 to 10 block radius in a particular part of town. I pick up the phone and talk to my other buyers in that area the day before so I can knock it all out in short order.

      I don’t have anything against what your suggesting, but I simply look down at my day planner and know what I have to accomplish that day. You do have to keep a mental log or physical log of where your suppliers are in a certain area – until you memorize it by sheer repetition.

      In addition a lot of the buyers are on auto pilot – example 250 corrugated boxes and 100 pallets every tuesday.

      I hope this helps – feel free to set up an appointment for a chat on the phone if you have more questions. Just go the link here in my profile and sign up. You will get an email that will direct you to a page where you can click “book an appointment”

      Be Great,

      John Wilker
      Owner of The Simplest Biz

  3. Hey John,

    Great podcast. I even signed up for a call. Quick question. What places should I be calling to SELL the pallets to?

    Thanks. I’m serious about the business. Great podcast.

  4. Hi John:

    Great podcast and great business that you have started. Trying to be sure I understand your business model. In summary, you essentially pick up pallets for low or no cost and then sell them, and have been doing this for 20 years? That’s awesome. A few questions:

    In my geographic area, there are several businesses that do this, and have been doing so for 20 years. They are well known and work with other…”collectors” that they sub out to in order to gather more inventory. They have essentially developed a wholesale model which reduces their buyer’s costs and increases their profits. How would I compete with them?

    Would this business work in an area with a lower concentration of fulfillment centers?

    What about buyers that require only heat treated pallets. What do you do with the rest of your inventory?

  5. Hi Sam,
    The pallet yards you are referring to that supply businesses pallets have two issues.
    1. They have a minimum order required that really messes up a mid sized business cash flow. (think 500 to 750 units)
    2. Pallet yards have to charge a premium price because of high overhead. This model has next to nothing in overhead and can undercut their price and not have to require such huge quantity orders for the biz you are selling to.

    As far as heat treated pallets – I teach you where to get each separate type of supply in the course. Whether it be pallets types (heat treated included / Crates / boxes / 55 gallon drums etc.

Leave a Comment

Usually Hustling, Occasionally Social