Start this business with less investment and large profit...

I’ve tested a few different business ideas in the past: eBay drop-shipping, Gift Card Reselling(1+ billion market), Software as a Service, and Airbnb Rental Arbitrage( this is the business that I started with less than 5k).

Let’s explore all of them real quick.

Software as a service

I have worked for 3 different software companies in San Francisco. The startup costs are high as tech workers cost a lot of money. Once you built a successful product, you not only have to think about product maintenance, but marketing, and customer support.

These costs are fixed costs. Not only that, you will have to figure out a product that people will want. Is your product going to be B2C or B2B? The next phase is the market research; how many competitors/their funding level. You get the idea.

This summarizes profit margins for software companies pretty good. Most software companies have margin less than 20%. And most businesses would consider a 20% margin a great business.

Ebay Dropshipping

I started an Ebay dropshipping store in 2017. I’ve made probably $5000 in sales. Not a lot, but enough for me to understand my thruput.

Throughput = (time invested in researching for product ideas/niches + time running the dropshipping store) / the profit (revenue minus item costs)

So for example, I’d spend time researching for a niche product to sell on ebay, let’s say, snow gloves, and then I’d create an ad on ebay to dropship the snow gloves that I found from Alibaba.Let’s assume the gloves go for $15 on Alibaba and I would charge 1.4x of the original cost, so 15 * 1.4 = 21 dollars.21 dollars minus ebay and paypal fees = 19 dollars.

That means my profit margin would be roughly 19%. Well, 19% is still not a bad profit margin. Just to give you a reference point, Apple’s products are around .

Gift Card Reselling

I gave up on the business idea after 2 weeks. Too many scammers tried to hustle me. My time ROI was negative.

Airbnb Rental Arbitrage

I’ve been doing this for over a year now. My profit margin varies from month to month, but it averages from 42% to 58%.

This all depends on occupancy rate and the time of the year.

What is Airbnb Arbitrage?

In this case, you are renting a property out at a lower price and subleasing it out via Airbnb at a higher price. For example, you lease a 1-bedroom apartment at $1,000 dollars a month and rent out the same 1-bedroom for $2,000 dollars a month on Airbnb. Your net profit is $1k

Best part about this business model is that you lease homes and not own them. Once the business is up and running, I spend only a few hours each week managing the business.

Hope this helps!