My 1st COVID Side Hustle: Dumbbell Mania
[4 mins] My first side hustle during the COVID era and some lessons I learned
My close friends know I can’t resist a good side hustle. I usually keep those stories private, but I’m trying something new: sharing a few of them publicly. Some succeeded, most failed. Either way, they’re a part of me and taught me lessons worth passing on (don’t worry, I’ll still write about real estate).
Picture yourself back in the spring of 2020, COVID just hit. Very quickly, everything shut down and the world was on pause. Our company offices were closed until further notice. All social facilities were closed as we were ordered to stay at home. Personally, I was going through a breakup. Everything felt like shit. Let’s be honest: everything was shit. It was the perfect storm for me to move back home with my family in Atlanta. And while COVID brought along a ton of negative implications around the globe, it also brought opportunity.
Things started strong, but then even at home, I quickly felt isolated. My family’s home in Atlanta is triple the size of my cozy 1-bd in SF, but I still felt suffocated. And worse, I couldn’t escape. Not even to go to the gym. So I decided to bring the gym to me. I bought a bench, dumbbells, and mats, and leveraged the other half of our two-car garage:
With not much else to do, I was exercising regularly. I graduated from the 20-lb dumbbells like the hulk monster I am and needed to get more.
But this proved harder than I thought. Higher-weighted dumbbells were sold out, everywhere. It didn’t take much research to learn that supply chains were among the first “disrupted” aspects of COVID - remember the days of trying to get Lysol, face masks, and hand sanitizer? Capitalizing on the medical industry felt too immoral to touch. But the disruptions were in many other places.
And the disruption didn’t just affect items whose demand increased. It also affected items whose demand stayed constant. Producers were unable to supply materials to get to their customers. Even worse, it was really difficult to forecast consumer demand because nobody knew how long COVID would last. So even with demand constant, supply couldn’t keep up. This was a market opportunity.
I went to all of the sporting goods stores in my suburb outside Atlanta and tried to figure out which dumbbells were most popular, but also in short supply. The answer was clear, and in hindsight, obvious: adjustable dumbbells. People working out in their homes needed to be space-efficient. They needed adjustable dumbbells. And, at the time, only two big players existed: PowerBlock and Bowflex.
This was a luxury item was highly versatile, space-efficient, and extremely hard to procure. People were reselling for double, sometimes triple the retail price. So I thought, “why can’t I?” That was the business plan. That’s it. So now the hard part: how do I source these? Every retailer was sold out, constantly:
I called both manufacturers directly. Bowflex wouldn’t even return my call. PowerBlock confirmed I was too small of a fish. Which got me thinking…who are the big fish? So I asked, and the rep told me all the distributors in my zip code.
Okay, new plan: Get to the big fish distributors (Dick’s Sporting Goods, Academy Sports & Outdoors, and Johnson Fitness).
I quickly visited them all, multiple times. And after a few visits, I was able to find “the one.” The Willy Wonka. The Tony Soprano. The one who knew what time the trucks came and knew what inventory would be on it the morning of the delivery for their specific store. After a few more visits, I got to know them personally and built relationships quickly. After all, by this point, I was the “regular” looking for one item and one item only: adjustable dumbbells.
Now the playbook was easy: rinse-and-repeat for every retailer in the area. It wasn’t long before I developed relationships with all of them. From there, the execution was easy. I offered to cut them in. In return for some spare change ($50 - $100), I would be the first phone call they made when either a PowerBlock or Bowflex was on their schedule that morning. I’d get in my car, head over, and secure the inventory. Boom!
This brought me to one of the most important “business” lessons I’ll always carry forth.
Lesson: Relationships are the most powerful market force.
In my case, I built relationships with various managers. Before I made the offer above, I was a regular. I stopped to talk to them, hear them, and just shoot-the-shit about life, COVID, etc. It was from those conversations that I was able to get these partnerships in play.
This became my routine for the next several weeks. Even my bedroom, which doubled as my WFH space, was often filled with boxes that weren’t yet sold.
The selling was straightforward, since there were only a few product SKUs. I cross-listed on OfferUp, Letgo, FB Marketplace, eBay, and Craigslist. The margins were so great that I was even shipping these outside of Atlanta.
Naturally, as time went on, my unit economics got worse. Time-to-flip my inventory was increasing, buyer premiums were shrinking, and the manufacturers realized they could hike prices. My margins were reducing...fast! Which taught me another lesson:
Lesson: Know when to fold ‘em
It was time to hang up the hat. Gyms started reopening. And even if someone’s gym wasn’t open, nobody needed more than one set of adjustable dumbbells. I was also living with family, so you can imagine how happy my mom was with dozens of boxes of “shitbells” (her words) that she couldn’t physically move. Once my margin crossed below the 60% line, I made the decision to stop buying more and focused on offloading my inventory. My adventure was closing as fast as it started.
After all was said and done, I netted ~$20K. Not enough to end world hunger, but enough that the thrill gave me fresh juice in my life when things were pretty low. It also gave me some spare change to fund my next side hustle: building what I was certain would become “the next Airbnb.” But that’s an article for another time…