We saved one of the most interesting entrepreneurial business models of the semester for our final guest speaker presentation.
“Saved” is probably a bit misleading… It suggests some purposeful action on my—or our—part. This is not the case…
Rod Smith was our final guest speaker of the semester in large part because of three interrelated reasons. First is Rod’s high level of entrepreneurial success. Second is the fact that he recently purchased a beautiful “winter” home near Daytona Beach, Florida. Third, Rod was living there over the winter; nearly until the end of the Spring semester here. He returned to Monmouth just in time to graciously fill our very last guest speaker slot.
Back to “one of the most interesting entrepreneurial business models of the semester”…
Rod sells used Nascar racing parts on Ebay.
Maybe this does not sound like a “big time operation” or even a “good entrepreneurial idea”?… Think again!!
The entrepreneurial success story of Rod Smith is one of turning a hobby into a thriving business, creating and enhancing relationships, creating and taking advantage of opportunities, taking the right risks, and persistence.
Class member Marissa A. Abston provides further detail on this amazing story below. Enjoy!!
Mr. Rod Smith was the last speaker to visit the Midwest Entrepreneur’s Class for the spring semester of 2016. During his presentation he told us about himself, about his business venture, about his hobbies, and about what he’s learned throughout these experiences.
Mr. Smith is currently 61.5 years old. He is from Monmouth, IL. At the age of 53 years old he became a full-fledged entrepreneur. He told us that he was a partial entrepreneur until then. Eight to 10 years ago he briefly worked at the Chicago Speedway as a Pit Stop crewman. At one point he used to work at Monmouth College as the head of maintenance. He did not get a college degree. One thing he highlighted was that he had taken up a hobby that paid for itself.
Mr. Smith works through E-bay. The easiest way to describe his job is as an independent E-bay vendor. He specializes in the area of motor vehicle parts – particularly selling used parts from NASCAR. The supply end of his operation takes place mainly in North Carolina, USA, where he buys the goods he sells directly from NASCAR racing teams.
As an E-bay seller, Mr. Smith is required to pay E-bay a percentage of his profits. In addition to E-bay, PayPal is a vehicle used for transactions. They send a form to the IRS if their user makes $20,000 or more. Most likely that procedure is to make sure no one is skipping out on their taxes.
He informed us that there used to be 300-400 people that did what he currently does. The difference between them was they weren’t turning in E-bay’s fair share of the profits. The IRS cracked down on many virtual vendors when the wave first began as E-bay and sites like it arose. Now, after several years, they have regulations and protocol in place to avoid cheating the system. He believes it pays to do business ethically. Seeing the consequences his former competitors met, it seems he’s got it right.
In his business he has never needed to take out a loan. Mr. Smith says that’s due to his good skills in money management. He recommended that we all wet our feet in it. I noticed that not many of our speakers have self-proclaimed that they are good with their money management skills. This is a good asset to have under one’s belt. It probably saves money to have more skills because then he may not need to have an advisor since he is already adept in how to handle that. Even so, he has taken on an accountant to help him keep it all in line.
Mr. Smith’s working hours vary from 6 A.M. to 10 P.M. He travels around the country collecting parts and in the process enjoys his hobby. In order to collect parts he needs a trailer, which may vary in capacity depending on what is being hauled. Usually he flies down to Charlotte, NC since he’s “older” now and will stay in hotels while he has someone drive his trailer down for him. Mr. Smith invites his friends to journey with him and pays them to pick up the parts as he does the transactions along the way. I thought that was a valuable lesson – take your friends up with you and it’ll be a more fulfilling adventure.
To efficiently conduct business he always has a hunk of cash on him to make purchases on the spot. He eluded to the fact that you never know what’s going to catch your eye until you see it. In this business, you don’t want to be caught unprepared. In addition to purchasing and supplying used parts, Mr. Smith also supplies pit crew guys for lower end/ranked teams because it is too expensive for them to afford fulltime-travel pit crews.
High-volume E-Bay sellers like Rod Smith get a lot of questions from prospective buyers. E-bay vendors are required to put in descriptive details about the items. Sometimes people want lots of information about the item and its origins. Many people fear not getting what they see in the picture when shopping on-line. Things like “How many main caps are you selling here?” and “Does the package contain the same thing displayed in the picture?” are asked often. So Mr. Smith opts to put everything that you need to know about the item in the description as soon as possible. In order to clarify what is being sold –for example– he will have a quantity of 5 items in the picture uploaded, a total of 5 items listed in the title, and will have a total of 5 items matching the picture and title exactly within the package. He gives a complete 100% guarantee on what he offers.
Mr. Smith always has very good feedback. Nobody has ever reported being unhappy nor dissatisfied with his items. The only responses he has gotten outside of good or excellent have been a total of 2 customers a year reporting that they are neutral towards his items. 1000s of customers report that they are happy and well satisfied consistently. Rarely will he sell items right out of his brick-and-mortar shop, but when he does it is usually to locals or those who are desperate to obtain a part.
Mr. Smith’s suppliers and customers both trust his character as a business man which furthers his reach into the industry and market. Due to that, business draws to him because people know they will get good quality. In some cases he must keep items for a minimum of 2 years before selling anything because of a deal that he made with the suppliers. Those are usually secretive products that the supplier wants him to wait on selling to test that he is trustworthy as a partner. Due to his integrity he passes those tests with flying colors, and goes on to do great business with them. His business has high demand all over the world. Mr. Smith is also brought business because others recognize this trustworthiness.
In addition to earning suppliers’ trust he ensures that his customers get the greatest offer by carefully examining whatever he is shown before purchasing it. Sometimes he sells products for a higher price than he purchased it for because the item is so rare and can only be attained through NASCAR. Even so, he makes sure to never cheat his customers. Mr. Smith made an emphasis on the practice that he does not allow broken, dirty, or raggedy items to be sold regardless of the fact that he sells “used” pieces. He does his best to fix them up so that they operate as good as new or better. Then he sells it for a great price that is still cheap for the customer and profitable for him. There is a tool he uses often that cleans up even the greasiest parts they acquire. It appears that he is very fond of this tool because he boasted that it “works beautifully!” I believe that speaks to his character because he oozed the pride of a wholesome seller when he said it.
As Mr. Smith projected into the future, he said that they may need more workers down the road to keep up with the demand which is steadily increasing. Mr. Smith conveyed that hobby racers have increased despite the economy’s downturn. Such a trend helps his business grow. He told us that some equipment, such as engines, are much more difficult to transport. Occasionally his team has to take apart or split engines [or other major parts] in order to transport them. Tasks like that will eventually require more aid when he and his current helpers get older.
Following that he gave us a virtual tour of his winter house; it is very nice. Mr. Smith was pretty humble about it. One amusing insight was that he was nervous to touch anything inside for a while because he thought it was all too fragile. Though he enjoys his winter home Mr. Smith says he won’t sell his Monmouth home ‘for nothing’, he loves it here.
Another topic we shifted into was his two favorite hobbies. Mr. Smith likes golfing in his free time. He says it is a really nice pastime; especially in that southern weather. What he enjoys more is racing! He bought an entire racecar once from the UPS team at the end of a season. He told us that he raced himself [his times], but it hasn’t been for years. Mr. Smith would suit up his own cars with the parts he sold – he trusts what he buys. It’s the hobby that pays for itself [if you’re good at it].
Now he goes to car shows and engages in other ways. Local racers know him well. Instead of racing he has relaxed into driving an electric car and has only filled it with gas 5 times since he’s bought it. He found that amusing, because now he’s more interested in aspects that don’t involve him driving it although it’s a nice car.
After that Mr. Smith enlightened us that these things [our preferences] aren’t out of reach. He says it only takes 2-3 days to be taught how to create an E-bay business if that’s what you are interested in doing. Then he told us what he’d do different: Mr. Smith says if he’d lived in the Charlotte area he would have made a million dollars easily because it is flooded with racing fans and participants. But he’s glad he didn’t and he won’t because he doesn’t like the summer weather – it is north Daytona, too hot. Jokingly he also said it’s too easy to get lazy in that beautiful southern weather in Florida. Most of the class shared that sentiment with chuckles.
What is the biggest challenge Mr. Smith foresees? Getting older. A simple and straightforward answer. He says as time progresses it gets harder to get out of bed and start. He’ll never get bored with this, but he may get too tired to conduct business like he currently does – fully immersed in it 1st hand. So he’ll go with the flow and find a way to still go further with it.
Mr. Smith says this business has been a dream come true. In the past he thought he’d retire from Monmouth College at 75 years old. He would have been happy doing that. However, this turned out to be better and he is very happy with the results. Nobody tells him what to do now, but he does work with a team and they have to work better to have optimal performance. He left us saying “Drunk kids break stuff, it’s a part of the flow.” and laughed – that concluded our time with Mr. Rod Smith.
Listening to him, it is visible that you can go further in your career when you actually enjoy what you are doing. You are more likely to care about it and also more likely to explore how to do it better on your own time – it is no longer a chore. I think the essential lesson from our last speaker –Mr. Rod Smith– is that we can make a fulfilling life out of doing our hobbies as our occupation; work doesn’t have to be work.
By: Marissa A. Abston