$5000 ‘failure’ into a $170,000 salary

How Sydney uni dropout Andy Mai turned a $5000 ‘failure’ into a $170,000 salary

ANDY Mai went from uni dropout to earning $170,000 a year from his bedroom.

The 19-year-old from Sefton in western Sydney is one of a growing number of online entrepreneurs making big bucks from “dropshipping”.

Dropshipping is an e-commerce model where the seller doesn’t actually hold stock, but takes orders, purchases the items from the manufacturer and has them shipped directly to the customer.

The margins are low but it requires very little upfront capital — the only thing the seller needs to buy is ads on Facebook to promote their products — and can be done as a side hustle entirely online.

It has become increasingly popular with the growth of drop shipping companies like AliExpress and Taobao, which make it possible to purchase from — and if you’re successful, connect directly with — Chinese manufacturers.

“I found out about it probably six months into my first year of uni,” Mr Mai said. “I was watching videos on YouTube (about ways to make money), and dropshipping just kept coming up again and again.”

The son of Vietnamese refugees has been “obsessed” with making money since the age of eight, when his parents divorced and he saw his mum struggling to raise three children on a low income.

When he was 10 years old, he got into the popular online role-playing game MapleStory — but instead of defeating monsters and levelling up his character, he was more interested in buying and selling virtual items.

“I was obsessed with making money in the game instead of playing normally,” Mr Mai said. “That’s how I got my first taste of negotiating, of arbitrage, buying low and selling high.”

When he was in high-school, he got into the online shooter Counter-Strike: Global Offensive, and began doing the same thing with character “skins” — virtual cosmetic items that can be sold for real money — in the game’s online marketplace.

“By the end I had a collection of $2000 worth of skins,” he said.

From there he eventually moved on to real products, buying and selling clothing on Facebook, Gumtree and eBay. “I’d buy a Nike jacket for $40 and sell it for $80, or a North Face jacket for $50 and sell it for $120,” he said.

“I got my first taste of real money, not virtual money.”

After graduating high school with a HSC score of 94.95, he enrolled into an actuarial studies degree. Towards the end of his first year, Mr Mai started dabbling in dropshipping, setting up a few online stores selling action figures and fitness wear.

It was a huge failure. “By the end of four months I was down $5000,” he said.

But he stuck with it, eventually finding success with baby products. “Everything clicked, I started selling and actually made all my money back in one week,” he said.

During the three-month break, Mr Mai set himself a goal — if he could earn $500 a day consistently from dropshipping, he would put his studies on hold. A week before the start of the semester, he hit his target.

Today, he has “completely automated” his dropshipping business with a team based out of the Philippines. His online stores generate more than $350,000 in sales at a 20 per cent margin, earning him $70,000 a year in “passive” income.

His big business now, bringing in around $100,000 a year, is coaching others.

Mr Mai has a YouTube channel with more than 6000 subscribers and offers online courses ranging from a few hundred dollars to personalised coaching packages priced at $20,500 ($US15,000).

“What they get (for that) is basically my whole knowledge,” he said.

“How to build a team, how to automate the whole process, how to find products that will sell, how to scale Facebook ads — it’s not as simple as pumping in more money.”

Mr Mai’s “biggest motto” for finding products to sell is “don’t reinvent the wheel”.

“Go off what’s already working,” he said. “Look for products people are currently selling. Go through Facebook ads. If you see it in your news feed they’re spending money on ads. The fact that they’re spending means they must be making a return.”

For people getting started, he recommends starting with AliExpress. “When people buy, you ship it to their house,” he said.

“Eventually you start partnering up with suppliers. Once the supplier sees you’ve made over 100 orders from their store, (contact them) and say, ‘Hey I’ve been ordering a lot of your products, can I jump on a call to see how we can strengthen this relationship?’”

That’s “level two”. Level three is working with agents in China directly. “They go and source the items for you, go to factories, do the negotiation,” he said.

“They get a 10 per cent cut but that’s still cheaper than AliExpress.”

Mr Mai, who says he currently has around 10 clients paying for one-on-one mentoring and another 30 taking his online training course, is now branching out to offer social media marketing services for brands.

In two weeks he will fly out to Silicon Valley to meet with a small start-up that makes old-school music boxes featuring popular tunes like the Game of Thrones or Harry Potter theme song.

“They really want it to blow up,” he said.

Mr Mai says his goal is to be able to support his mum, who currently works as a sales representative in an optometrist store and in childcare while raising his two younger sisters.

“I want to make an extra $50,000 on top of what I’m making to spend on my mum so she doesn’t have to work two jobs, get her off working nine-to-five so she can live the rest of her life just chilling,” he said.

“She’s in her mid-50s. I don’t want her to wait until she’s old to buy nice clothes.”

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