In this article, we will talk about John Muscarello and the things he learned during his Amazon journey.
Today, I’m super excited to bring you, John Muscarello, from the side hustle experiment. Why? Quite simply, he started with one business model and he decided to stop that and change to another. And I want to learn a little more about what he’s learned and hopefully share some insight with you as well.
Who is John Muscarello?
He is @sidehustleexperiment on Instagram, YouTube, and pretty much everywhere, and he started his Entrepreneurial journey 5 years ago. He started flipping furniture from the Facebook marketplace and Craig’s list and made 25,000 the first year, just doing it on the weekend.
Things were going great until he hit a problem. When he went home to New York, at Christmas time, people wanted to buy items and he was not in Pennsylvania, where he currently stays now. Which cost him a lot of sales. Which made him realize that there has to be a better way. The furniture genre is big, but it wasn’t working at the level he wanted it to be.
What made him go to Amazon?
One of the things that made him go into Amazon was when he first took his job. He had an agreement that if he performed well in that job, they will reward him with a substantial amount after 3 months of work. Then came the end of the year, when he was supposed to receive a raise, but was denied, even though he had earned it. At that moment, he realized that he had to be in control of the money that he can make and not have anyone else have control over it.
That was the moment he started going into furniture, then he came across a video by a man named Reezy Resells, which had the stereotypical “How to make money online” tagline. Which he thought was ridiculous at first, but he was the type of person who trusted the process, that if someone had success in flipping furniture, he would find success in it as well. He did that. He went to the thrift store and flipped through his first books, which yielded him his first experience of profit from flipping items.
John Muscarello then went all in and scaled up. He went on a road trip scouting for books and going to conferences to learn more about item flipping. After quitting his job, he got into bulk books and lost his supplier due to the pandemic. He found a new one and then graduated to 4,500 square feet of warehouse in a year.
How was his experience scaling up his business?
His first year went great, but the day he moved into the warehouse, the restock limits hit for the first time. He figured out how to do Merchant Fulfilled books but realized he didn’t like doing it. After the first year, his business was running smoothly, things were going well, and he was selling on eBay. But then restock limits started to get worse right before Christmas time, and it hurt booksellers. He was able to send in 10,000 units, then it quickly went to 8,000, then to 6,000 then to 4,000. Which is when he realized he had enough.
John Muscarello was fortunate enough to have built a network by selling books, through social media platforms, and he knew many people who were doing online arbitrage as well, so he leaned on them.
What pushed him to take the next step?
John was on the fence; knew that he was one of those people that had to be forced into doing something. So he locked himself into a decision by making a video saying that if he didn’t spend $1,000 on online arbitrage products, he would give away $1,000 to someone. He posted the video on Instagram and a friend of his helped him through the process of spending the $1,000. Slowly but surely, he tried to do online arbitrage, eBay, and books. He tried a system of alternating between the three weekly, which worked for a while, but as soon as he dropped one, the others fell apart.
John Muscarello realized that it wasn’t a good financial decision; had the warehouse for another 8 months at the time, but through the money; saved through the business and with what he wanted to do with online arbitrage, and would have enough money until the end of the lease if it didn’t turn out okay. Then, he felt the pressure of going into all that red, but realized that it was an investment for the future. That if he did both, he wouldn’t get better at online arbitrage, and realized what would be the point of doing books if he was going to leave, anyway.
He sold all the book equipment, which made it impossible for him to do books anymore. He knew that he might have relapsed back to books if he had a bad day, which made him have to focus solely on online arbitrage which ultimately worked out for him.
8 Things I Learned about Reselling on Amazon from John Muscarello
I interviewed John Muscarello where we talk about his Amazon reselling journey and what he's learnt about Amazon arbitrage after selling books and maintaining a warehouse. John shares his experiences with learning from his business mistakes and growing as an entrepreneur.
What does the business look like right now?
The book business was pretty much finished. He did close to half a million the year before that, but this year it went down to 90,000. Which was a big drop. That was the most stressful part of building online arbitrage, seeing those numbers plummet, and didn’t realize at the time how much cash flow he was going to lose by building up his online arbitrage business. The online arbitrage business did. $600,000 last year. Once he focused on online arbitrage, his returns grew exponentially. It was another piece of the journey.
Why doesn’t John Muscarello give up?
For him, it was the hardest to let go of the books, but he always knew that the progression would be from books to wholesale potentially, but his mind changed. It was a learning lesson for him. He doesn’t quit because he sees the potential in his business, and though it may have hit some rough spots, he knows what he’s doing. Whatever happens with the business he had foreseen, and whatever happens, it happened for the betterment of the business as a whole.
What are his thoughts on having extra revenue streams?
He thinks that it’s all well as long as they can run multiple businesses and keep them improving. Due to his experience with running both a book business and an online arbitrage business, he realized that running a book business wasn’t easy because books can’t get automized, unlike an online arbitrage business. He had to split his attention between multiple avenues such as eBay, Merchant Fulfillment, and online arbitrage, and he didn’t know how to do online arbitrage at the time. But compared to the giants in the industry such as Warren Buffet and Jeff Bezos, they got rich on one specific thing, and only then did they diversify their revenue streams. Which he states is a good path to go on.
Why did he stop selling books?
Books were too volatile for him, there was no rhyme or reason for how much storage they gave you at a time. He does state that now, it’s different and that it is a lot clearer now as to how much they’ll allow you to sell, and books don’t sell quickly. Books aren’t an easy thing to do on a large scale. He was tired of being tied down in the warehouse. With books, he wouldn’t be allowed the freedom to travel to do conferences or work remotely away from the business. The pandemic also was a factor in his decision, because two years prior when he quit his job, Amazon said that only essential items and health items, he realized that he should’ve quit by then. But there he realized that essentials were items that would be bought any time of the year, unlike books which didn’t have the largest customer base.
What did he learn on his journey building the Online Arbitrage business?
At first, he thought that it would be a smooth and easy transition since he had been already selling books on the platform and had been successful for 2 to 3 years; he knew how to read and keep a chart for books, so it shouldn’t have been hard for him. He said that it seemed easy.
For him, it was hard, due to scaling onto a larger business, he has to juggle a multitude of social media platforms, and having to search for items for hours upon hours. He had gone and searched through thousands of products just in the last year, but he said, that’s what you have to do to be successful. You just really have to push through. You have to understand how the business works and how the business scales. There are a lot of opportunities out there. It just comes down to putting the amount of effort and time into it to find the opportunities and test them out.
He did the online arbitrage challenge with Chris Grant. This allowed Chris to teach John about test buying two or three units at a time, which was new information for him. He was under the impression that you had to buy 18 or 36 which caused him to pass up a lot of opportunities. Just keep test buying he says, but wide not deep, but some see how it goes and see where it goes.
How does John Muscarello deal with leverage and scaling?
The highest he ever spent in a month was $40,000 and that had taken him aback at the time, but he resolved himself by stating that he knew what he was doing, even when people were unsure and were voicing their opinions against his choices. John had a rough patch around June or July where his return on investment was at 4 or 5%. He went hard in apparel, but they subsequently got returned the following month.
Something that changed the game for him was downloading everything, dividing the sales by the returns, coming up with a return percentage, and then buying items that only had a return percentage of under 10%. He is still buying apparel, but now it was way more targeted and has lower returns.
It’s one of those things where he started the business where he thought that he wanted to have whatever he had on the credit cards to be inside the bank, in the event of an emergency, or if he doesn’t get paid. He didn’t like the advice of getting a Plum Card, or anything of the sort, because it’s one of the worst things he says, especially if you don’t know what to do. You just have to trust that you know what you're doing.
What are his plans for the future?
John Muscarello wants to grow the Amazon online arbitrage side of his business. Everything now is preparations for his business, wants to do 1.5 million dollars in sales this year, 2 million is a stretch, the back-to-school season is a huge time for the business, so he’ll see where it goes from there. Also wants to put a team in place, which he knows will take a substantial amount of time and effort. He started a Discord, the FBA Inner Circle, which he uses to help a ton of people there. He wants to sell the dream, but he also wants to be realistic about it, that even if it is a dream, you still have to put your time and effort into building it each and every day.