After years in retail management, which required 12 hour days and entailed five moves in six years, Winter Taylor’s life change forever when she learned she was expecting her first child. Quickly, Winter decided that her chosen profession was no longer a fit. “I was still producing, running one of the top locations in the chain, but staying at the store until 3 am wasn’t working for me anymore. I looked at my husband and we agreed, ‘we can do better’.” Winter and her husband, Jason, quit their jobs, went back to school and both earned MBAs at Missouri State University, with an eye to making a serious change in their lives.
Even before graduation, Winter had the itch to do something on her own. “I should have worked for myself all along. I have always been a ‘make my own path kind of person’.” But the question of what to do loomed. After initially considering real estate, Winter quickly realized she lacked the capital to jump into that, though she holds onto the hope of expanding into that down the road. In the meantime, the budding entrepreneur latched onto another idea; mobile phone resales. As Jason continued his education by starting law school at Baylor University, Winter saw that their new hometown of Waco, where Baylor is located, had its share of lower income neighborhoods and starving students, but that residents rarely lacked the newest mobile phones. She began to wonder what they were doing with their old phones and figured they may be sitting in drawers and perhaps some of their owners could use some quick cash. Mommy Makes the Money, LLC was born. In January 2013, she put an ad on Craigslist offering to buy electronics, particularly smartphones. Using cash advances on personal credit cards to finance the purchases, Winter soon had more product than she could handle and was reselling on eBay for a profit. “I would look up the value of the used item on Amazon or eBay and offer the sellers who replied to my ad 40% of that. More often than not, they took it.” Winter netted about $40,000 from her initial foray into business and it whetted her appetite for entrepreneurship.
As big players became more competitive with mobile phone trade-in programs, Winter started looking for the next outlet for her talents. From her days in retail, she was aware of retailer liquidation companies that buy unsold or returned product in bulk from brick and mortar retailers at pennies on the dollar. These resellers then turn around and liquidate the items directly to consumers or sell to discounters like dollar stores. Again armed with her personal credit card, Winter jumped right in and began her life as a small scale reseller. From her previous experience with buying and selling mobile phones, Winter realized she could also “stack” product; prelisting items and after they sell, purchasing them at a discount using sales and coupons to maximize her margin, then fulfilling the products to customers. As her business began to ramp up, Winter decided to look beyond eBay and began selling on Amazon, believing that there would be higher traffic and sales velocity on that platform. And she was right. Her Mommy Makes the Money store, has been growing steadily since inception. Using a combination of stacking and pre-purchasing items she finds deeply discounted, Winter continued to grow her eCommerce business. This success encouraged her to think bigger.
By May 2013, Winter needed capital if she wanted to keep expanding her business. Relying solely on credit cards and cash flow from current sales would continue to restrict her growth by limiting the amount of product available for sale. Winter received her first business financing through online lender Kabbage for $9,000. At the time, she was “amazed that someone would give me that much money.” Though expensive, the cash infusion allowed her to purchase more upfront product and rent a small warehouse. Through responsible debt management, including on time payments, Winter had her limit increased to $85,000 after a year.
With the warehouse space and some available cash, Winter decided it was time to try her hand at another aspect of reselling; pallets sold by the lot or the truckload. After an early pallet purchase, she unloaded them into her warehouse, removed the shrink wrap and realized that the quality and variety was not what she wanted to expend the effort on to list and curate individually on her Amazon store. So she came up with a creative solution and advertised a warehouse sale. “I was amazed at the number of people who came out and attacked the product, more than covering the cost and clearing out all the product in a matter of a few hours.”
In June 2015, Winter secured a more affordable line of credit with direct online lender Dealstruck, which has the mission of providing small business owners with unique, appropriate, and affordable capital with honesty and transparency. Dealstruck provided Winter with at $75,000 line of credit with a fully amortized 14.75% APR which makes for easy to handle payments. The line of credit is revolving, allowing Winter to draw how much she needs, when she needs it. This line gave her the ability to continue to expand into a different aspect of the inventory liquidation business.
A recent experiment included a Walmart truckload of 26 double pallets consisting of returns and unsold items, purchased for $7,000. Winter turned around and sold the still shrink wrapped pallets to other resellers for $500 each for a total of $26,000 and a net profit of $19,000, or a whopping 73%. With this success under her belt, Winter used $35,000 from her new Dealstruck line of credit to purchase additional Walmart pallets. There are more and more big things on the horizon for Winter and her burgeoning reselling empire. “I have a few exciting opportunities coming up for pallet purchases from Target for my Amazon store, and another potential to buy directly from a nearby Walmart distribution center and I could never fund those with credit cards. Small business loans are the only way I can be a player in this space, which I plan to be.”
eCommerce resale is still Winter’s bread and butter and sales for 2014 were $586,000, a 29% increase year over year. As 2016 starts and she finalizes 2015’s books, Mommy Makes the Money’s numbers are shaping up to be even better. The realistic expectation is for even higher growth with the capital available to finance increased inventory and the continued foray into pallet liquidation.
Winter has high praise for the Dealstruck team, stating “Everyone’s been great. The financing options were clear and the rates affordable. I absolutely recommend Dealstruck to other small business owners.”
One of Dealstruck’s goals is to help its borrowers build solid credit histories to enable them to graduate to bankability, meaning that they qualify for loans from traditional banks. That goal, coupled with a vision of growth, is propelling Winter forward. “The thing that makes me optimistic about my eCommerce future is that I’ve been very willing to try new things, and source products from different places, I really feel like I’ve just hit the tip of the iceberg for sourcing. But also, the longer I’m in business, keep turning a profit, and keep good pay history with my creditors, I should be soon to graduate to bank level funding.”
At Dealstruck, we believe we are a partner to each of our borrowers and are invested in and proud of their successes. And Winter Taylor is no exception. Congratulations to Mommy Makes the Money, and we look forward to being a part of your continued success.