This is the first article Mrs. FrugalStu is contributing to the blog, I hope you enjoy her perspective!
So you might be thinking about getting involved in a side hustle. Awesome! Side hustles are the best. But just know, they aren’t always as simple and easy as you might think. I learned this when I became a Quality Provider for BabyQuip – the Airbnb of baby gear.
We are all about side hustles in our house, and one day the husband (FrugalStu) said I should check out BabyQuip. I put it off for a while, but finally decided to look into it. I really had no idea what it was about, except that I would be able to rent out the baby equipment that I own. Sweet. Seems pretty awesome, right? Otherwise my gear would sit in a closet, waiting for the next kid to come around anyways. Might as well try and make some extra money off of it!
I explored their website, watched a couple videos, had a phone “interview” and a week later I was a Quality Provider. However, soon after my first two orders, I ran into some problems that led me to quit. Before you jump into any side hustle, do a little bit of research. Trust me, it will save you a lot of headache.
Before You Start, Consider These Points
I wish I talked with an actual Quality Provider and asked some questions first. Here is what I wish I knew or understood better before I committed to BabyQuip:
- It’s $100 to get started on their platform
- There’s an insurance fee each month
- BabyQuip takes a 20% cut of whatever you earn
- Baby gear needs to be in like new shape. No tears, stains, missing pieces, etc.
- BabyQuip seems to be really great in places that attract tourists
- You might be subject to rental and service taxes
- Your city or state may have laws that make this business model illegal for you to operate
- BabyQuip is more of a network, not a competition
I want to make it clear that I fully support BabyQuip as a business. I think it is a fantastic idea! These are just the issues I ran into as I got more and more into it, and some of these things are the reasons why it didn’t work for me. Let’s briefly discuss each of these points.
The $100 signup fee really isn’t a big deal. It’s to cover the cost of the website they set up for you and get their insurance coverage in place. I was able to make this money back with my first order, which was for two highchairs and a pack n’ play that someone rented for 12 days.
The insurance fees are based on your order amount each month. If you have less than $150 in revenue in a given month, there’s no insurance cost. Anything over $150 in revenue starts at $30, and increases in amount every few hundred dollars of revenue you make. It may seem steep, and it is if you are only getting $150 in revenue each month, but at the same time, it will protect your behind from some serious legal stuff that could go down.
Just like many of the other platform businesses, BabyQuip has to earn their keep too, so 20% of whatever you make goes to them (except tips I think).
Equipment and Location
I didn’t realize that my gear had to be in pretty much perfect condition. This meant a lot of what I originally thought I had to offer was not going to work. I didn’t have as much inventory as I originally thought I would.
Also, I realized that the people who are really making money from this are those people who are in touristy areas, and popular vacation spots. My city is not like that. I happened to get my first order within my first two days of being live, but I think that was just coincidence. Then I had nothing for almost 2 months.
Some Quality providers have 4-8 of these foldable cribs (affiliate link above).
Taxes and Laws
Tax laws vary widely between cities, states and counties. BabyQuip provides people with a service. I knew that my state didn’t require service tax – AWESOME. But then I found out that it does require rental tax. They tax any tangible item that is rented out to someone else.
When you become a Quality Provider you become an Independent Contractor for BabyQuip. You are NOT an employee. As an independent contractor you can start your own business if you want (like a sole proprietorship or LLC). Well, I personally didn’t want to have to do any of this, but once I learned I needed to pay rental taxes, I learned that I needed to register my business in order to do so.
I went to my city hall and had a few conversations in person, and via email with employees there. Long story short, I found out that me running BabyQuip out of my home was technically ILLEGAL in my city. WHAT?! Seriously?! I wasn’t able to get my license if I:
1) allowed customers to come to my home, and
2) kept inventory in my house.
They suggested I get a storage unit, but that just doesn’t make sense because I am using the gear I rent… I found out that I could appeal, but that would require paying more money, the city would have to interview all my neighbors, and then it would go to a public hearing! Crazy, right?
I wanted a simple side hustle, and I wanted to be a good, honest, law-abiding citizen. At this point I realized this wasn’t possible so I decided to ditch the side hustle.
Lastly, what I didn’t realize about BabyQuip when I was first getting started is that it is like a network, or a big team, not necessarily a big competition. If you are coming in and want to just undercut everyone’s prices to try and get the most orders, this might not be the business for you. You can transfer orders to other providers, and you can work together to fill orders that you might not have enough inventory for. At first, I was concerned about this, but then I realized how awesome of a system it is. The more growth in providers, and the more awareness the company gets, the better everyone will do.
One thing that didn’t really resonate with me though is their culture of premium or top-notch baby gear. That just isn’t my thing. Give me a stroller that I can push, and we are good to go!
I also wish I had reached out to some providers to find out how they like it, how much they make, what equipment is popular, etc. I did this after I had already signed up, and that is how I found out more information about my state’s tax laws. Had I called her first, I could have avoided a lot of hassle.
BabyQuip is great, it just wasn’t the right fit for me. I think it is definitely worth it if you have good quality gear, and you live in a place that is popular for tourists and visitors. Also, if your local laws aren’t as rigid as mine. There are things I definitely wish I knew before I signed on, because ultimately, I don’t think I would have. However, this was all a great learning experience, and luckily, I pretty much broke even. I’d say it was a side hustle “experience,” not a side hustle “fail.”
What are some of your side hustle “experiences?” Things you expected to turn out a certain way, but didn’t? Have questions about BabyQuip? Visit their site, and don’t be shy to call or email a Quality Provider.