The Magic of Leverage

My regular weekday supper with Sam has turned into a business meeting.

It's cool watching a 12-year-old figure things out.

He wants to work and make money, but he's got a problem.

Baseball.

The season just started, and he plays on two teams and has practice or games 5 to 6 days per week.

Couple that with his ridiculous homework, and there's little time left.

So the typical kid jobs, well, they just don't work.

Mowing grass? Hard to do from a baseball field.

Walking dogs? They tend to poop in the mornings while he's getting dressed for school.

He needs something he can do in his own time and pace, hence this business we're starting.

I still can't say the product, but we'll announce it soon - probably the week after next.

Anyway, we talked about how to sell it last night.

Door to door?

Online?

Hand out samples

Booth at a mall?

That could all work, but most have the same problem as mowing grass or walking dogs - there are only certain hours you can do it.

So, we honed in on selling online.

We hope our profit margin will be around 20%, equating to about $5 per order.

I asked Sam how much money he wanted to make; he wasn't sure.

I said it would be cool if he could make what someone working part-time for minimum wage made if he could do it from home, and he thought that was cool.

So $7.25/hour X 20 hours is $145.

At that rate, we need 29 sales per week.

Now, let's say it takes 15 minutes per sale. That's a little over 7 hours, which, although much better than 20 hours, would be difficult when baseball is in season.

Then there's the question of volume. Like, why stop at 29? How many more hours would it take to sell 59? 99? 189?

"Sam, how can we automate this?"

"What do you mean?"

"How can we set it up so that someone else is doing a bunch of the work and we're still getting paid?"

"Can you do that?"

"Google this: Amazon Fulfillment."

"You mean Amazon will ship it for us?"

"Yes, son, that's exactly what I mean."

Have you ever bought something on Amazon and seen where the order is: "Sold by So-And-So, Fulfilled by Amazon?"

It's pretty damn cool.

We can take our product and drop it off at the Amazon warehouse in Charlotte; they take care of the rest.

That means people all over the world can buy it 24/7/365.

"Sam, search Amazon for our product and see how many are selling."

"This one is similar and sold 80 last week."

"Sweet! How much do we earn if we sell 80?"

"$400."

"And how many hours do you work each week if people buy it on Amazon and it gets shipped automatically?"

It took him a minute to realize the answer to that question, and you should have seen the look on his face when he did.

I still don't know if this will work out, but, at the very least, it's got Sam thinking about things on a bigger scale than he could imagine just a few weeks ago.

And that, as far as I'm concerned, is worth it even if we never make a penny.