Bottled Water Experiment
Purpose of Experiment: To prove my make money with no money business ideas can work.Hypothesis: It is possible to take less than $10 in startup capital and make money.
Experiment: Buy a 24-pack of bottled water and sell it on the side of the road. Possibly utilize the labor of pan-handlers.
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Step 1:
I went to my local H.E.B. grocery store the previous night of the experiment and purchased a 24-pack of Dasani water for $5.99.
I put the water in the fridge overnight to let it chill.
Step 2:
Quick Research.
On the way to a party, I stopped to ask a bum what would happen if I sold water by the highway alongside other bums, and it didn't seem like a pretty picture. He told me, "You are a rich college student, and the guy at the corner is trying to get a meal, the hungry guy won't be too happy with you."
To get around this, I wanted to partner with one of the regular bums who knows the in's and out's of panhandling. I made an agreement to meet at 3:00pm with this guy, William Austin to sell bottled water with me. I told him whether we sold all the water or not, I would give him $10 for his help.
The picture didn't come out so well, but in person he was all smiles and very jovial.
I also didn't want to get arrested or fined. A few nights ago I stopped to ask two very courteous police officers what they would do if they saw me selling water without a permit. One replied, "I can't speak for every officer, but personally I wouldn't bother you unless you start causing problems."
So I now had a partner and no real threat of legal action. The experiment was on for 3:00pm on Sunday Afternoon!
Step 3:
An hour before the experiment I bought two bags of ice for $1.29 each. I packed the ice and water into a cooler.
I could only fit 15 bottles in my cooler, so I improvised and put the remaining 8 bottles directly into the ice bags with ice. I then double wrapped them with clean garbage bags for easy carrying.
Step 4:
Withdrew $20 in case I needed change and to pay my partner.
Step 5:
I made this nifty "Water $1" t-shirt by taking on old shirt, turning it inside out (it had a logo on the front) and using a permanent marker to write on it.
I had a feeling this little gimmick would work very well.
Step 6:
Went out to go SELL SOME WATER. I went to look for William Austin at 3:00pm by the local Blockbuster like we agreed. When he didn't show up I asked another bum to show me where he lived. I found him under a bridge, red-eyed and looking extremely tired. He hardly remembered who I was and said he had to cancel on me.
Step 7:
A bit disappointed, I went alone to the highly trafficked intersection of I-35 and Riverside Drive. There I met a bum named Barry:
I've seen Barry before. He is one of the bums that holds funny signs like, "I gave up caviar for Lent" and "I need new wheels for my limo"
I told Barry about my water experiment, and promised to give him $10 for an hour of his time/expertise, regardless of how many bottles he sold. He was more than happy to help. We shook on the deal and became instant business partners!
Step 8:
START SELLING. Barry knew a little about water selling. He told me to hold three bottles at once and start walking down the idle lanes of traffic yelling "Water Water!" Barry put the "Water $1" shirt on and started selling water like a champ! I stood on a different corner in my plain clothes and started selling. My first sale came within 6 seconds of starting (and it was a $2.00 sale!)
In less than 30 mintues we sold all 24 bottles.
Click HERE to see a video of Barry in action. (1 MB video)
Click HERE to see our progress after about 25 minutes. (1.5 MB video)
Step 9:
Tabulate results:
BOTTLES SOLD:
Me: 14 Bottles
Barry: 10 Bottles
So to make a better profit, one would need to: Preferably perform the experiment by themselves, buy cheaper water, buy only one bag of ice instead of two, buy more than 24 bottles.
CONCLUSION: Selling bottled water can be much more lucrative than sitting on your couch on a lazy afternoon!
UPDATE: Bottled Water Experiment Part 2
Labels: Money Experiments
posted by Neville @ 4:08 PM
87 comments
87 Comments:
It will work pretty much like yours except im gonnna take one step further. Stay Turned!
Take a look at the site, keep up the experiments. They are great.
That was an excellent experiment. I can't believe you sold out in 1/2 hour. Wow!
Don't bother "working up the nerve"...JUST DO IT!
Jacob,
Looking forward to your money experiments.
Arbee,
I can't believe the water went so fast either. When I first told Barry about the idea, he said, "You're gonna need a lot more than 24 bottles."
Anonymous,
Surprisingly no one acted in a negative way. I purposely bought only Dasani water so people would be familiar with it, and I was dressed like a regular college student going to class.
Not that I cared all that much, but I did notice some stares and comments. I'm sure the comments went something like, "Why is that kid on the side of the road." I didn't exactly fit the model for the typical bum on those corners. I would also get lots of inquisitve looks when I whipped out my camera or cell phone!
Funny observation: Kids will stare you down and never break eye contact!
*making
A couple of thoughts though:
Your maximum profit minus materials/supplies is $15.43. From the outset, you made a mistake in offering $10 to your partner. That gives him a guaranteed of at least 65% of the maximum profit. Your maximum profit minus labor for yourself is $5.43 and maximum loss is $18.57.
In addition, for the time that he worked, you were paying him almost $20/hour.
I think a more equitable rate would have been $5. That comes out to be 1/3 of the maximum profit (which is the amount of work that he actually does). This also accounts for
(1) the risk that you're taking on in this experiment
(2) the time in planning / researching / purchasing the supplies
The other thing comment that I would add is that you're limiting your maximum profit by stating straight out the price. The value of something is what others are willing to pay for it. From the pictures, it looks like you're selling at some intersection where drivers/passengers in hot weather are a captured audience. I may have set the price at $2.50/bottle and haggled down. Maybe say 2 for $3 or something like that. [This price is geography dependent though] The price should also be tailored to the consumer. If you think you can get more from one person, you should definitely maximize that. In NYC, Dasani water from vending machines are at least $1.50, so that may be why I think your price is too low.
Along the Holland Tunnel leading into NYC, there are always guys out there that sell water and other drinks for upwards of $5/bottle. Sometimes the backup in traffic leading into the tunnels are there for an hour.
Now onto the positive things I saw. The choice in product was great. Basically, at the price that you set, that is a 300% profit margin. There are very few things that you can sell with such a high profit margin.
Anyways, keep up the good work..
Otherwise, great job!
Jonathan@MyMoneyBlog
First, $1 a bottle is too cheap.
Second, you forgot to take income taxes out of your profit.
Third, you forgot to take taxes out for your employee.
In other words, in a vaccum, it is a profitable enterprise. In the real world, maybe not so much.
I think America is the greatest country in the world, and because of all our luxuries, we now have some of the the laziest people in the world too! How quickly we take for granted all the hard work and bloodshed of previous generations to have what we have.
I grew up in America, but luckily I have travelled a lot and have seen how difficult it is to succeed in other countries (I won't even pretend to say I "know" how hard it is, because I don't).
Therefore I know that to get "rich" you really have to just get out there and DO SOMETHING. I'm not all that enterprising, I just realize how hard I must work to make it on my own.
It seems ironic that out of at least 10 people I asked, the only hard-working salesman I could find to help me was a homeless man!!
The pictures and videos are very helpful!
Sell your water, but align your
self with a local charity, perhaps a homless shelter and agree to donate a portion of the proceeds back to said charity
results:
1. You can buy the water tax free
2. the water might be donated by a local distributer
3.You will be able to garnish some very positive PR
4.You make money and make a difference
As the CEO of a nationally recognized strategic consulting firm we call it CAUSE MARKETING
All kidding aside think global and know that your formula will work.
You also prove that with a basic strategic business plan no matter how big or small the venture success can stick.
Job well done...
Know for the sake of being PC call your workforce homeless..BUM is...well call them homeless
and know i did a very similar collaboration with my new book Shut Up and Listen to Yourself as the proceeds are gogin in part to charity...it is available at
www.conceptsinsuccess.com and www.amazon.com
je
Thanks for the post. Another successful entrepreneur I know told me a very similar strategy, I guess great minds think alike!
By the way, what other ventures have you pursued?
I would love it if you continue to visit my site, but more importantly, leave your comments, criticisms and advice!
-Nev
At 35 I feel very lucky to be able to have realized success, but even more blessed to be able to share it and I am constantly looking for new and innovative ways to do so
Your blog is great contact me at
jestrin@conceptsinsuccess.com
and let's brainstorm, I think we could make some magic together and make people stop and take notice!
je
And that home filtration system doesn't make that water "free" either. Although the more water you drink, the lower the marginal cost of that water to you.
What amazes me even more is that bottled water usually is nothing more than bottled tap water.
You'd be making money AND creating jobs for homeless people.
Let's do some back of the envelope calculations (I'll exclude paying :
Variable cost per bottle: $0.35
Price per bottle: $1
Profit per bottle: $0.65
Bottles sold by salesman per hour: 24
(that's ca 2 per minute, one can't sell them much faster)
Profit per hour: $15.6
Minimum wage in the US: $5.15 per hour
As you see this job would pay three times the minimum wage!
This calculates into a full time job bringing in $32,448 per year (8hours*5days*52weeks).
If you priced the bottle at $2, as other commenters have advised, you would gross in a mindboggling $82,368 per year...
There is a small problem, at 24 bottles per hour, you would need 192 bottles per day. You would need some means of transport, which translates into higher additional capital expenditure.
Forgetting about that problem and taking into account only the value of the 192 bottle per day, the necessary capital amounts to a paltry $67,2.
Let's do some back of the envelope calculations (I'll exclude paying the homeless guy the ten bucks and will assume it's a one man company)
I love this blog. often there is opportunity right in front of us. I especially like the empowerment of the homeless man. I would not however call him a bum because that is a derogative term. It's clear that given the opportunity he was willing to become an instant entreprenur and probaly realizes that it beats begging.
It takes a lot of courage to ask someone for help. How much courage do you think that it takes to beg?
It was he that allowed you through his assistance to make money on his turf. You gave him an opportunity and he was astute enough to recognize and take advantage of it. You supplied the seed money and because he knew the market, he also made the most profit.
It takes a lot of courage to ask for help. How much courage do you think is required to beg. Bum, I think not.
http://www.choicechallengechange.com/
I think I would throw a twist on this, though. I would go into a high density pedestrian area, like a downtown area. Much more traffic; less likely to be run over. Besides, that is where all the vendors hangout. The only problem that I see is the vendors. They will likely get pissed if you are taking their potential business, and you have no license.
Very cool. I hope you don't mind, but I linked your blog on mine. Let me know if you'd like the link removed.
http://currente-calamo.blogspot.com
Cheers, Brooke
It sounds like you priced the product too low for the location, weather, etc.
Another $ per bottle would have made $29 profit. Not bad if it sold in one hour.
Without Barry, and with 45-60 mins, and increasing your price 50%, you should have sold all your product with just one guy. Therefore, you gain $10, from Barry's wages, and increasing the price 50% realistically should cut sales 30-35%, so you make the case last the full hour, or nearly so....appx $27/hr.
Additionally, may I suggest one of 2 things have happened. 1) You impacted the bums, or 2) independent of you, someone did this as well. I suggest this, as I bought a sealed bottle at an intersection, exactly as described here, in Austin, on the other side of town, and I have been offered water on several occasions, when I did not buy.
you broke the law right of the gate
-big brother
Work done by necessity vs by choice often produces very different results, and its obvious Nev understands this thoroughly.
I think such as experiment should be undertaken by myself and others to get 'back to basics' and think about the fundementals of being an entrepreneur.
-thanks Nev, what's next?
Health Forums
Good job helping the bum too. That's the best part.
It definitly is an interesting business!
Full circle or hampster wheel? I mean 'carrying water'..... now where have I heard of that before? letmethink, letmethink ummmmm ....oh yeah, I remember! The Ages, the Eons, the Millennia, the plight of humanity the deprivation, the drudgery of .... 'carring water'. Until PLUMBING! (YEAAAAAH! WHOOOOPPIE! HOORAY and HOZANNAS!) Until .... 'BOTTLED WATER'. (AAARRGH! UGH! OOOPH!) OK, so I don't like bottled water ( inane concession to the joy and necessity of water + the realities of modern life) but, Neville, what a wonderful idea and intriguing concept. I just need to think of a commodity more suitable to my notions.
clewis
One way to increase the profits might be to sell advertising to local businesses. You noted that you bought brand name water on purpose. On the side of the bottle opposite the brand name label you could attach printed up advertising. Maybe blocked out with multiple advertisements on each bottle, like your pixel sales on the homepage.
The customer is now going to be staring at the advertisement until they find a trashcan to throw the bottle away in. And they're probably not going to find one for a while since they're driving. Another captive audience just like your urinal ideas.
And to get the local business even more exposure to the prospects, you could attach ads to your "Water $1" shirts.
They took your concept, and made it global. They made super-water though, and you can sell subscriptions and make a lifetime comission on a heckload of levels. if you want to make some serious money with water, easily, THIS IS WHERE YOU NEED TO GO.
Nev, please contact me if you need any help with the website, im so certain you will like the opportunity, i am willing to help you with every step of the process if you need it.
Look at the product, the company profile, and a video, and you will see its the most incredible thing ever
www.xoomaworldwide.com/naturalstores
just been googlin on the charity water front and spotted your little experiment. good effort my son, get out there and do it. i've been thinking on the lines of a brand of waterr with the charity profit built into the price (just found the 'euphoria water' site which is knid of the same idea .
maybe there is something in the combination of both concepts , add that to something that's well desinged and got a few well meaning celebs behind it and the world's getting a favour.
ps not overy impressed by how many comments are purely looking for profits , but then they have probably been raised the american way.
anyway geezer , nice one
#29 uk
I just happened across your blog and read your Bottled Water Experiment post. This is great.
In my city, selling water at intersections is more like a religion. Therefore as some would suggest selling for $2 or more wouldnt work here. You have to go with what the market dictates. And besides, I feel selling bottled water for more than a buck is gouging.
I really like your guerilla approach. Here are some other ideas to consider:
As someone suggested, you could make your own ice. When my father would take road trips, he would fill up empty milk cartons with water, freeze it and break the ice up. Voila! If you know of anyone on a fixed income that receives food stamps (theyre not hard to find if you're in the right food market during the beginning of the month), the may be willing to purchase the water for you at fifty cents on the dollar. You could buy twice the water for the same price. And this is definitely a DIY project. If you do hire someone, consider paying less than you paid Barry. Also please stop reffering to those individuals as bums. That's so not PC.
If you were going to do this on a long term base, you may want to invest in some of those aprons with the pockets and print your price or message on it. You could wear it or the help. That would make you look a lot more legitimate.
Thanks for the post, I'm bookmarking this site.
Peace,
Mike in Bmore
this is awesome. If you think you can get more from one person, you should definitely maximize that.
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I liked the way you earned $5.43 in just thirty minutes with little bit of capital.