Bottled Water Experiment – Part Deux

During my first bottled water experiment I learned how to setup shop and shamelessly sell a product. The next item on my agenda is to delegate that task to others while I do nothing.

During the first experiment I met a homelss guy named Barry. He has a can-do attitude and also likes to make money. What he does NOT have is Capital and transportation.

Well I do.

I recently tracked Barry down and gave him a proposal. If I set him up with several cases of ice cold bottled water and a couple of ice chests, he could sell the water all day (instead of simply begging for money) and we would split the revenue down the middle. Obviously at first I get the sour end of this because I will be paying for everything…..but I also don’t do a fraction of the work he will have to do.

SO LET’S GET STARTED:

The previous day I went to Walmart and loaded up my car with 5 cases of water and one ice chest.

120 bottles of water cost me $19.80 + tax. The cooler cost me $18.86 and tax.
Total Spent so Far: $40.22
Even if he sells all 120 bottles, I will barely make a $20 profit on the first run.

I then brought all the products home and began cooling them:

Each 24 pack case had 3 gallons of water and packaging:
1 Gallon = 8 lbs.
1 Case = 24 lbs.
5 Cases = 120 lbs.

I could only fit 3 of the cases for cooling overnight. The rest would be cooled in the ice chest later.

The next morning I met near the selling corner where Barry and I agreed to meet at exactly 10:00am. He showed up exactly on time (Seriously, the SECOND my watch hit 10, he showed up riding a bicycle). Unfortunately for us, it was gloomy and under 70 degrees (I’m in Texas approaching summer…what the hell!?!)

I gave him another shirt I made that said “Water $1″ on both sides. I forgot to take a picture but it looked exactly like the last one I made:

Barry then immediately started selling the already-chilled bottles of water while I made an ice-run (I didn’t buy ice in case he didn’t show up). I went to 711 and bought 40 lbs. of ice, a sandwich for Barry and a spare box (box was free). The total came to $9.22 . Total cost of experiment so far: $49.44. The chance of making a profit are pretty much gone now.

We loaded up the ice chests with water and ice, Barry did most of the work.

I had got the spare box from 711 upon Barry’s request. He had an idea where he would place the box saying “Bottled Water $1″ further down from his starting point, informing drivers of the approaching vendor.

Before I saw what he wrote he said, “Damn, I spelled ‘bottle’ wrong and I misplaced the dollar sign.” It was too late to change the spelling, and we both agreed the comedic value would probably increase sales!

Before I left for class, we took a pic together. A guy in a wheelchair took it. I accidentally had the camera on black&white mode. I only sold one bottle of water, and that was on accident. A taxi driver saw me carrying the “Bottel” box, smiled and pulled out a dollar. I sold a bottle before I even reached the median, without trying! Keep in mind the purpose of this is to delegate the grunt work.

Barry tried his best to look clean, I even brought him an old pair of shorts I no longer use.

FIVE HOURS LATER…..
I came back after he had been selling all day. He sold exactly 60 bottles, meaning we had 60 bottles left. The combination of cold + gloomy weather + Tuesday = not a great day to sell.

The fact that you can sell 60 bottles of water on a cold day made us look forward to the upcoming sunny, swealtering days!

We split the $60 in half.
Barry got $30.
I got $30.
So in the end I LOST MONEY. 49.44

BUT ALL HOPE IS NOT LOST. This Wednesday Barry will sell the remaining 60 bottles. It shouldn’t cost me anything as the bottles are still being chilled with the same ice in the coolers.

We also want to give Barry a “brand name” by making him the “Water Guy” that everyone knows and trusts. People are more likely to give money when it looks like you are working for it.

This water experiment might actually turn out to be a decently lucrative side income for me in summer. I will be in Austin over the summer, and Barry is willing to work everyday. I will keep posting updates on the progress!

-Nev

Blog posted on: May 4, 2005

67 comments on “Bottled Water Experiment – Part Deux

  1. Tracy

    What street are y’all selling on? I’d like to see this ^_^. I couldn’t tell from the pics.

    And yeah, it was strangely cold today, what the heck?

    By the way, I’m following you blog closely now since I like your style and I’m trying to train myself to manage money. I’m not so great right now, lol, and I have a lot to handle this summer.

    Reply
  2. mark

    don’t get too successful!

    barry’s gonna break out on his own as soon as he hits a benjamin!

    Reply
  3. Neville

    Tracy,
    This is the Northbound corner of Riverside and I-35.

    Mark,
    It is pretty much logistically impossible for Barry to accomplish this without help:

    5 cases of water = 120 lbs.
    2 bags ice = 40 lbs.
    2 coolers = 10 lbs
    Total = 150 lbs of bulky, perishable product that needs to be obtained from different stores and storage locations.

    He has nothing to lose but his time. With my know-how, we can transform him into the “Water Guy” and start making him (and me) some real money!

    -Nev

    Reply
  4. Cap

    oh snap. 60 bottles on a not too hot day. Either people love water bottles, or Barry’s one heck of a salesman.

    I think most of it is a convenience factor. Whats that particular location like? I’m sure u’ve thought about it all already Nev, but just wondering. cuz i’m sure the location plays a big part.

    great job, even a $20 profit will set u up nicely for future sales. I think for now, splitting it 50/50 is a good idea, gives Barry more incentive to sell and work.

    Cap@stopbuyingcrap.com

    Reply
  5. FMF

    Nev — Keep up the good work — I’m loving this series.

    You’re on the right track. Getting others to do the labor is the way to go. Once you get all the kinks worked out (which days work best, optimal weather conditions, etc.), you can multiply this idea all over the city. Who knows — you could even then extend into other cities in Texas. If you end with 1,000 people selling water across the country and you make $30 on each per day, that’s pretty good. ;-)

    FMF

    Reply
  6. Flexo

    (In regards to the “get a job” comment, I’ll bite…) Nev, this is the perfect time for you to do this: as a student. Once you get out into the “real world,” it can get pretty hard to find time for creative experiments.

    Reply
  7. Smarty

    Nev, can’t you make your own ice so you didn’t have to buy the extra?

    Some ideas to promote and increase profits:
    – more signs pointing to your location (advantage notice also allows people to prepare money)
    – on hot days you can raise price to like $2 (rather emotionless but corporate-like)
    – or stay on the same price and maintain a good name and recognition
    – start a chain: hire another bum in another location and so forth… (like FightClub) you job becomes basically running around collecting money
    – when business takes off, buy wholesale water (reduce costs)

    At any rate, good job. Keep us updated.

    Reply
  8. Flexo

    I can see it: The first rule of Neville’s Water Club is you do not talk about Neville’s Water Club.

    Reply
  9. Johnie

    Good Job! Well done. Too bad the weather didn’t help out.

    Can you tell us a little more about the market price/competition in the area? How much are other stores nearby selling their water?

    Not only are you learning about business, but you are also helping out the less fortunate.

    Another idea would be to raise the price to $1.50. In some cases, you’ll find that people will tell Barry to keep the change as a tip. This will let Barry earn a little more dough for good work done.

    Lastly, I like your idea about turning Barry into a local celebrity.

    Finally, this also reflects how important it is to be in the right place at the right time. Look at it from Barry’s perspective. If I remember correctly, Barry was your second choice “employee.” He was only picked because your first choice never showed up.

    But anyways, I’m rambling on. Keep up the good work.

    Reply
  10. oldbull

    I agree with Flexo about now being the time to experiment. I have been lurking watching your posts with interest. I have no doubt that you will be a success in the business world. Why? a – you are smart, b – you are not afraid to take risk, c – you are not afraid to get your hands dirty. 1% inspiration and 99% perspiration is not far off the mark in the real world. My only concern for you is that you seem to want conquer the world in 60 minutes. Have you ever heard the story about the young bull and the old bull standing up on the hill looking at a herd of cows….experience means a lot, but not everything. Don’t let me discourage you, but also don’t be surprised if you don’t succeed at first. Most people who are successful have failed more than succeeded. It’s better to have tried and failed than not to have tried at all (God that’s a lot of cliches)

    Some background on where I’m coming from: age: upper 30’s; engineering undergrad, MBA, Sales Management. Automotive industry. Spent last 2 years working in Europe – currently in the Motor City.

    Keep up the good work. I find it to be can’t miss reading

    Reply
  11. Anonymous

    Sorry to say but it is easier to make money when you have no rules like taxes and such.

    I realize it is an experiment and all but what you are doing is illegal and promotes pan handling and just like the squeegee guys can lead to aggressive behavior for the motorists just wanting to get where they need to get.
    G

    Reply
  12. Neville

    Cap,
    The people who regularly pass by this corner always see bums, and they LOVE it when they see a bum working and not simply “bumming”. I personally never give money to a bum just sitting there with a sign.

    Anonymous,
    I do have a job. Like I said before, making money in creative ways is 10 times more rewarding than making it through a job.

    Arbee,
    Thanks :-)

    FMF,
    Yes, I am trying to think a little bigger with this idea. First I will try to focus on making Barry “The Water Guy” and possibly get some press and a legal permit for him to sell. Thanks for reading!

    Flexo,
    I agree, it will probably get more difficult to do crazy stunts like this out of college, but I don’t think I’ll ever stop doing them. I’m just wierd like that :-)

    Smarty,
    40 lbs. of ice is hard to make! Its easier to just buy it, and takes less of my time (one major part of this process is to reduce the time I have to do work). Good ideas for a more efficient business.

    Johnie,
    Yes, Barry was a second choice, but a much better find (And not a crack fiend like the first one). He loves making money and he has the most outgoing personality out of any bum on Riverside….and so far he hasn’t gone back on any promises.

    Oldbull,
    I am very aware that most people fail 10 times more than they succeed. I’ve already experienced failure (or mediocre results) in businesses I’ve persured…..but like you said, failing is part of the whole process. Hope you continue to bring your experience to the table in the form of comments!

    Anonymous,
    I don’t care. I’m making money. I am currently looking to get Barry a permit so he can legally sell without worry of being hassled. There are bums all over this corner 24 hours a day, at least Barry is working and not begging. People often don’t want the water, but will give him money because they appreciate his effort.

    -Nev

    Reply
  13. mdunn

    Nev,

    Re: Going legit

    I stole your idea and spent some time on a lazy weekend afternoon looking into what it would take to go legit.

    It’s almost graduation time again and that means lots of (thirsty?) people in a concentrated area (hopefully on a hot day). Figuring there will be little brothers and sisters, I even considered selling cans of Coke.

    I live in Princeton, NJ but I went to school in Philadelphia, PA. There are a LOT more schools in Philly than there is in Princeton. Knowing this, I looked up what it would take to get a permit to sell at graduation.

    Maybe it’s different where you are, but in Philly, you need to pay a one time $250 “business privilege” tax/fee/whatever to the city. Then you need to get a business license from the city Dept of Licenses and Inspection. Offhand I forget the number there, but let’s assume it’s another $100/year. Since I would be selling consumables, I would also need to get inspected by the Dept. of Health (or some such organization). Again, assume $100/year.

    On top of that I would have to pay taxes on my sales and if I hired anyone to help me, I’d have to put away unemployment and various other related taxes. On top of that, there are restrictions on where and when I can sell. Since I’d have to pay the Universities for a permit to vend on campus, it would be better to do it from the sidewalk.

    Last, but not least, you’ve got legitimate food trucks (if you’ve never been to Philly, you wouldn’t understand) who are trying to make a living vending. They have a wider selection and will reduce your margins (damn competition!). Not to mention that they will probably call the cops on you. Since you’ve got the legit paperwork, you probably won’t go to jail, but this will take time to prove (time is money – esp. when your competitors are stealing your sales) and your potential customers will probably see this.

    If there was one lesson I learned, it’s this: don’t do business in Philadelphia. I’m still looking into this for Princeton – since we’re a much smaller city, it’s more difficult to get the paperwork and city code online.

    Good luck, but I doubt you’ll find this is cost effective!

    Reply
  14. Anonymous

    Nev,

    Very interesting experiments and still better postings with pictures and all!

    I agree with mdunn! He has done far more homework but I basically think of three costs that you are able to avoid – as of now – rent, cost of doing business (license, permit, inspection, etc.) and Taxes. – But for how long can you do that and if it becomes more permanent business, these issues will come up in most of the places.

    Reply
  15. nickel

    I’ve been aching to try this sort of thing during our neighborhood garage sale with my kids. I was even planning on making them custom shirts, just like Barry’s. Unfortunately, the neighborhood association pulled a fast one this Spring and announced the big sale less than a week out, and we already had plans that weekend. Oh well, guess it’ll have to wait.

    fivecentnickel.com

    Reply
  16. Anonymous

    It really seems to me that most people are missing the point of your experiments. They’re there to learn. It’s not like you’ve stated that your life goal is to the water distributor of your town…You enacted a business proposition to learn skills. What does it take to start an idea? How do you get partners? How do you get better partners?

    A lot of numbnuts don’t really get this one. The difference between legal and unenforced.

    You also learned how to figure out profits vs. costs. I mean, everyone is so critical yet I know a lot of companies that need this sort of experiment yet they’re playing with millions.

    Reply
  17. Xooma Water

    Beautiful. This is one of the best illustrations of a sub product list that I have ever seen. Nice work. You can only lay so many bricks in one day. If you would like to be even smarter with your water distribution and expand world wide, follow my links to http://www.hugehangover.com Rehydration is the solution to becoming a vertual millionaire.

    Cheers, MikeKing.

    Reply
  18. Geoff

    Well done to get started. Let the regulators and lawyers catch up later. If its a success you can afford to pay them off. If its a failure at least you have tried. Just read how Branson at Virgin started.

    Reply
  19. Anonymous

    A simple yet brilliant idea. I came on your blog just cause i`ve got the same name. Really an interesting blog which i hope will finally get me to manage my own money.

    Cheers, Neville from Malta

    Reply
  20. sinnerMan

    mDunn did some good due diligence. However if Neville were to make Barry a business partner and just file a “doing business as” form, he should not have to worry about unemployment taxes or the employer part of social security and medicare (about 7.5% of base salary).

    Good experiment. The pictures you manage to take with CEOs is probably the most memorable part of your website apart from this water experiment. Send me an email from the contact form on my website about your San Francisco plans and we could meet up and talk about investing.

    Asif

    Reply
  21. Jason P

    I started my own water business after reading this post. I put a twist on it however as I replaced the stationary location with a backpack lined with a trash bag full of ice and bottles, and parked my car in a stationary location with the ice chest and other water to come back and refill. I am MOBILE! I made the shirt that says “Bottled Water $1″ and headed to the river on a very hot day. People could not believe that I was doing this, everyone thought the idea was so awesome, and I couldn’t take credit. But I did sell ALL my water. 200 bottles on the first day. I did this 5 days in the first week, for 4 hours before my shifts as a manager at chick fil a. I found out that I was making more money from selling bottled water than from my real job. So I posted ads on craigslist, offering to pay college students $10 an hour to do my bidding. I got 14 responses, and hired 5 people. Now I have a guy at the river, one at the biggest local park, two on the college campus of VCU and one in the popular downtown business sector. Each person generates about $100 a day for 4 hours of work at ten dollars an hour. thats 20 hours of labor for me to pay so 200 dollars gone, but 300 dollars are mine, minus my costs of getting water from costco, which costs me roughly $100 dollars each day. and I make $200 a day for myself, and all I have to do is go buy water once a day. Thanks nev!

    Reply
  22. Jason P

    I started my own water business after reading this post. I put a twist on it however as I replaced the stationary location with a backpack lined with a trash bag full of ice and bottles, and parked my car in a stationary location with the ice chest and other water to come back and refill. I am MOBILE! I made the shirt that says “Bottled Water $1″ and headed to the river on a very hot day. People could not believe that I was doing this, everyone thought the idea was so awesome, and I couldn’t take credit. But I did sell ALL my water. 200 bottles on the first day. I did this 5 days in the first week, for 4 hours before my shifts as a manager at chick fil a. I found out that I was making more money from selling bottled water than from my real job. So I posted ads on craigslist, offering to pay college students $10 an hour to do my bidding. I got 14 responses, and hired 5 people. Now I have a guy at the river, one at the biggest local park, two on the college campus of VCU and one in the popular downtown business sector. Each person generates about $100 a day for 4 hours of work at ten dollars an hour. thats 20 hours of labor for me to pay so 200 dollars gone, but 300 dollars are mine, minus my costs of getting water from costco, which costs me roughly $100 dollars each day. and I make $200 a day for myself, and all I have to do is go buy water once a day. Thanks nev!

    Reply
  23. Anonymous

    Ever thought about the legal ramifications/costs? You mentioned that you talked to the cops in the first experiment, but that was just a short experiment.

    If you research the legal requirements and costs, how does the profit get hit! How about a totally legal experiment 3 to try the concept, but this time have it legal and give a valid comparison to regular stores.

    I’d be interested to know if you need to increase your prices to make it worth while!

    Adrian

    Reply
  24. Anonymous

    Don’t forget to add in incidental costs: wear and tear on your car, fuel, the cost to power the refridgerator to cool the water the day before, the cost of a new refridgerator when the old one dies. These can cut into your profit.

    Reply
  25. Dan

    I wonder if you could bypass any legal ramifications if you put a very small note on the bottom of the shirt sign that reads “recommended donation”. This way you aren’t really selling anything, you’re giving it away for free and collection “recommended donations”. As far as I know this is perfectly legal and legit in most counties and states in America. If you get hassled by authorities you would just explain to them that you are doing a fund raiser for your school/church/organization.

    Reply
    1. Anonymous

      Cops have been known to use this same trick to catch speeders. A cop holds a sign that says homeless in large letters and “not” written in tiny letters above the word homeless, and with his other hand he is holding a speed gun behind the sign.

      Reply
  26. Anonymous

    I was laid off from my job in Miami, Florida (where it is hot as hell 24/7, all year long) and started doing this to make ends meet. Thank God, it's going to keep me out of foreclosure.

    Reply
  27. cynical_s.o.b

    i think the most interesting part of this experiment is the fact that you managed to find the only homeless guy on the planet who just doesn't take your money and run , do you have any insurance to make sure this hobo doesnt steal all the money he has earned from selling water and disappearing

    Reply
  28. Anonymous

    Nev, there are ways around everything, however it would not be a bad idea to take tax out of the sales, this would allow you to incoporate your idea in to a small business and claim the expenses involved.

    You would even be able to right off Barry.
    If you wanted to, you could even call Barry's cut a "donation" and right that off as well.

    Any way, I would be surprised if your still doing this project.

    Enjoy!

    Reply
  29. david420

    dude, i love this idea! i just moved from louisiana to northern cali with my girlfriend and our 2 kids. i plan to try some of your ideas soon and really appreciate your blog! it may keep us from moving into a tent cuz moneys gone! anyways, please email me dude, i need all the pointers i can get! thanks and sorry bout punctuation, im on my psp cuz computer crashed :(

    Reply
  30. DreaKJ

    I like your attitude.

    I live in Chicago and there are homeless people who sell a magazine Street Wise. Its distributed to the homeless for free and its for them to sell. A cool way for them to work. We also have subway performers (dancers, poets, singers, rappers). However, what most remind me of your experiment are the homeless people that actually sell water at major street intersections. Others sell candy or fruit.
    Of course there are some that just hold signs reading God Bless and others that shake a styrofoam cup and you with a few coins in it. They really bug me.

    Its interesting how thrifty people can get when they haven’t a lot of options and need to make a profit.

    Reply
  31. Lady Billionaire to Be

    Neville,

    I love how you did this and made it work! I also love that Jason took it on in a big way! I think it’s too easy to make things overcomplicated and harder than they need to be. I am on your site, because I am looking for ways to make some quick daily money while I start a new job and get my real estate wholesaling business automated and outsourced. I am going to come up with something like this for myself!

    I love the simplicity of it and the creativity of it. Thanks for your experiments and sharing of results! Please keep doing them and sharing them! Thanks again!

    Patricia

    Reply
  32. David Harrison

    Hey Nev I loved reading this challenge as a new comer to your website – I must say it is very inspiring :)

    Now, have you a chance to try Part 3 of this experiment this summer?

    Reply
  33. Pingback: Book In Two Weeks – Day 1 | Neville's Financial Blog

  34. Lady Billionaire To Be

    Hey Neville!

    I have enjoyed your blog immensely, and I did your water experiment and sold bottled water at Venice Beach this summer! I did it with a friend, and we did pretty well. We each cleared about $60 to $80 for each of the days (about 3-4 actual hours of selling approximately each of 2 days that we sold). The 1st day in traffic we sold just bottled water, and the 2nd day, we sold both bottled water and Monster drinks ($1 for water and $2.50 for Monster). We sold on the street where people were stopped on their way to go to the beach and find parking, and then we sold ON the boardwalk at Venice Beach.

    We did pretty well in traffic but MUCH better on the boardwalk. At one point, we couldn’t sell them fast enough, and then a police officer walked up and stopped us. We had sold $75 worth in less than an hour in that spot! The police officer told us we couldn’t sell on the boardwalk at all and couldn’t even get a permit because food items are not to be sold by vendors, only by the people who pay rent in actual locations. We were SO BUMMED!

    It is, however, pretty exhausting (due to my recovering from heart surgery and a couple of other issues). I was trying to see if there was a way to hire someone else to do it, but they would also have to be careful not to get stopped by the police and would need to be someone who would really promote it. My friend and I haven’t gotten to that point yet of how to do it, and with most things, it is VERY dependent on LOCATION. We haven’t been back to do it yet, but I do want to thank you for getting me out of the box of what I could do to earn money.

    Reply
  35. Heinrich

    Hi!

    How about you start selling water in front of night clubs, at like 3-4 am when everyone is leaving, drunk and longing for water?

    Drunk people are way more irrational, so you can sell them at a premium price (3 bugs or so per bottle).

    Reply
  36. NeedCash

    Has anyone who has done this been hassled by police or arrested? Or do they give you a warning and allow you to leave? Are there any legal places to do this?

    Reply
  37. KY

    Do you feel bad at all knowing that you’re taking away money from other homeless people who sell water and actually need the money?

    Sure you’re helping one homeless man, but you’re muscling out every other guy who needs to make a buck, just so you can sit back and have a summer job. And judging from what I’ve read, you’re a privileged college student who doesn’t need the money.

    Just to clarify, not trolling here but honestly feeling sympathy for the other homeless people who are losing business. Kind of reminds me of a big corporation like Walmart shutting down small local businesses.

    Reply
    1. Neville Post author

      No one else was selling water KY.

      Just me.

      So I wasn’t “taking” anything from anyone.

      If you read part 2 of this experiment, you’ll see I LOST MONEY trying to help a homeless guy sell water (repeated that 8 times, only documented it once though).

      Reply
      1. KY

        Ah I see, I must have misread your first post then. I assumed there were other homeless people selling water on different corners or something, who would not have approved of you hustling on their turf, and that was why you teamed up with Barry, an “insider.”

        Would still be nice, if you decide to continue this, to give some of your profits (after the initial costs of the first run go away, like the cost of the cooler) to the neighboring bums in the form of clean drinking water (i.e. some of those bottles) or blankets or something. Or in some way for the bums to help themselves (maybe expanding your labor network to include a guy on different major intersections). Just a thought, maybe I’m being too idealistic.

        Reply
        1. KY

          HA just realized this post was back in 2005. Couldn’t tell since the date at the top is only Month and Day.

          So was there any Part Trois? What ultimately became of this experiment and Barry? Don’t leave me hanging on this cliff!

  38. Nike Free Run

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    It seems too complex and extremely broad for me. I’m looking forward for your next post, I will try to get the hang of it!

    Reply
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  41. Anonymous

    neville how do you make sure he isn’t going to take the money and leave before you come back to take your 50 percent?

    Reply

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