168. This One Marketing Hack Earns Him $1.1 Million a Year

0:00Ever wondered how you could turn a basic truck and a dream into a million dollar business? Today, we're diving into one of the fastest growing industries, junk removal. With a market worth over$10 billion, this is a golden opportunity for entrepreneurs looking to start a full-time business or a side hustle. This is Ryan Atkinson, and you're listening to the Upflip Podcast, where we uncover the secrets of building and scaling successful businesses. And oh my gosh, am I excited for today's episode? Because joining us today is Andrew Thompson, founder of Jedi Junk Removal. In just over a year, Andrew grew his junk removal business from nothing to$1 million in revenue, all without any prior experience.

0:39He discovered the lucrative industry through YouTube, and now he's paying it forward by teaching others how to do the same on his own channel. Get ready to learn about how you can break into the booming market, navigate his challenge, and scale your own business to six or even seven figures. Andrew Thompson, super, super excited to have you on today. Thank you so, so much for being here. Yeah, no problem at all. Thank you. How are you doing? I'm doing good. And I'm excited for this episode. Junk Removal has been a really big ask for our listeners. But we want to learn, why Junk Removal for Andrew Thompson?

1:04Like, what made you start this business? So this is interesting how I got into it. I've never done manual labor. I've never done any type of physical labor ever. And I'm actually a software engineer. During COVID, things kind of hit the fan pretty hard. And I was just, I was working on an app, a startup, and ran through Investor Fund. It was a travel app. and I was not ready to program because I just did not want to go get a corporate gig programming. So one of my friends was like, hey, if you're just willing to pick up trash, you can make$1 ,000 a day. And I didn't believe him. I did not believe him.

1:37And I went to YouTube, classic YouTube, how to start a junk removal business or pick up trash. All these videos, make$1 ,000 a day. I had another kid on the way. So I was like, okay, you know what? I'll put my ego aside. I thought I was this like programmer, like taught, you know, cool guy. I'm a software engineer. I'm better. But I needed money. I had another kid on the way and you get paid that minute. So that's how I got into it. COVID. Yeah. A lot of great businesses are founded like during this time. I want to ask then, like what challenges did you have to overcome as you were getting started?

2:11What were those early challenges for you? So my challenges are probably a little different than most. I have a very intense programming, computer marketing background. So So that part was a little easier for me than most. I think that's where most people struggle. My struggle was it felt like I was going backwards, but I just was not ready to go program for another company when I'm like, startup just failed. And I was just, I'm not going to go do these algorithmic tests and blah, blah, blah, blah, blah. So my challenge was putting my ego to the side. I was embarrassed to tell people what I was doing, but I needed money.

2:45And now that I'm looking back, nothing's beneath anybody, right? Nothing's beneath any job. And it was a very humbling experience. And I think it made me a better person. But the biggest challenge for me personally was being okay mentally. Like I'm a software engineer. Now I'm picking up trash. But the money was, it was nice. I love it. Yeah, I think that's a hard thing for any entrepreneur to get over is like, well, I know I have this software engineering. Like I know how to code, but like, do I really want to go pick up trash? I think that's a step that anyone listening will have to take. and it was because of the YouTube videos.

3:21I was like, I knew there was potential. I can grow this. I can scale it. I can use my business skills, you know, to grow this. And I'm not going to just be a trash guy. Well, let's talk about landing that first customer then. You're like, okay, I've got this YouTube knowledge. I kind of know what I'm doing here. Like, I'm ready. I'll put my ego aside, whatever. Who is your first client and how did you land them? Then your first paying client, that's not a friend or family member. How did you land them? So, I mean, this is probably what a lot of people say. Good old services section on Craigslist.

3:48Craigslist. And then after Craigslist, I immediately went to Thumbtack. So Craigslist and Thumbtack. Now, would I suggest that for just starting? Yeah, probably. Be careful with Thumbtack, but Craigslist. Good old Craigslist. Interesting. That's actually, so I've hosted probably over 50 episodes on the F-Lip podcast. I don't know, somewhere around there. No one has actually ever said Craigslist. So we're going to get on that. No way. I promise you, no one has ever said Craigslist. Interesting. Yeah. So what's on Craigslist? What were you posting? Yeah. Talk services section and specifically there's like writing gigs, blah, blah, blah, gigs, nanny gigs.

4:23And then there's a labor manual section gigs. If you go under there, there's people like posting all of their services, like moving companies. And so there was junk and mobile companies in there and it costs$5 a day to post and it stays up for 30 days. But what you would see in the craves of services section is a lot of people would post multiple times a day and pay five bucks. So I did two times a day on average. Sometimes I do three day. So I do one at 9am and then one at noon. And it would just say junk removal. I was in Ventura County at the time before I went to Los Angeles County. But I had like my photos and the description of all the stuff I'd take.

4:57And it was just a really simple Craigslist ad, so to speak. So I posted every day, twice a day. It's 10 bucks a day, 300 bucks a month. And yeah, so Craigslist, I just hustled Craigslist. That is super interesting. So who is this first client? Is it like a residential home? Is it a commercial home? Talk to us about that. my first client who I'm actually still working with till this day, which is crazy. We've done other things together now. I'm pretty sure he was my first client, but it's one of my first few clients. He was this rich dude. I remember pulling up to his house. It was like a 2 million, I Zillow everybody's houses, right?

5:30Like, am I going to get a good tip or not? It was like a$2 million house. The dude's upgraded to like an$8 million house now. But I pulled up to his house. He's like, hey, my wife, she's got some Amazon boxes. And I didn't know how to price. I was like, I was still like, how do I price this? And I just shot out a number. It was like 200, 300 bucks. And his wife just had a whole bunch of Amazon boxes. And I saw like Christian Louboutin and Louis Vuitton, like just packages and Amazon boxes. So I literally just threw some boxes into the back of my truck, literally just cardboard boxes for 300 bucks.

6:00Took me 10 minutes. I remember this is the one job. I was like, holy crap. Did I just make$300 in 10 minutes? And that's where it started. And that's the beautiful thing about junk removal. It's not hard. That is so crazy. So I want to keep like snowballing this. So you got your first customer from Craigslist. What customer number was it when you didn't get them from Craigslist? So like, what was the diversification on landing your clients? Or was it all through Craigslist? I kept running Craigslist for quite some time, but it gets to a point where Craigslist brings you like a few leads a week.

6:32If you hustle Craigslist, that's not enough to sustain business. So then I got on a thumbtack, but the big one of how I got into the million dollars we'll talk about later when you're asked was Google ads. But the next one I went to immediately was Thumbtack. So Thumbtack is like a marketplace for buyers who need services. So buyers and, you know, providers, service providers. So you could be looking for handyman who can hang a TV or you need your house cleaned and whatever. But Thumbtack's difficult because it sells the lead. So if I'm looking for a junk removal or cleaning company, it sells the lead to three service providers, three.

7:08So three junk removal companies and you're fighting for these leads. So as soon as the lead comes on Thumbtack, I have to respond instantly because the other two companies were all fighting for the same person. Super annoying, but I hustled the crap out of Thumbtack and Thumbtack sustained me as well. And that kind of got me like really moving. Thumbtack and Craigslist in tandem. Interesting. So I want to talk about two questions here. We're going to hit on cost in the second question. First question, was it just you running this for how long? And then And what were some of those costs that it took you to get started?

7:39So I'm kind of known in the YouTube world for getting off the truck pretty fast. And it's because I scaled with Google ads, which we'll talk about later. But the cost was literally nothing for me. I was very lucky. I texted everybody in my phone, everybody, family, friends. And I was like, do you have a truck I could rent? Now, I could have like rented U-Haul or, you know, like stacked up jobs. We got a Penske, a U-Haul, Home Depot for the day. I could have financed the truck. I could have, but I was lucky enough to somebody who had a 2006 beat up box truck with 180 ,000 miles. I mean, he asked to sell it to me for like seven grand.

8:14I was like, can I just rent it for$400 a month? He let me rent that box truck for 400 bucks a month. So the only cost that I had at that point was just getting leads at like Thumbtack. Craig's this was negligible, right? Five bucks per post, but it was just the box truck. That was it. I did go get a dolly and use dolly for like 40 bucks off Facebook marketplace and a flat dolly for 10 bucks. It was like the two things that you really need to get started is just a hand dolly and a flat dolly. Interesting. So are you still only going to residential homes to pick up trash at this point? Or what's the main focus here?

8:52Is it just straight residential how you get to a thousand dollars a day? I would say 90 % of the jobs are residential. 10 % is commercial. My biggest commercial contract I've ever landed was 115 grand for one job. Wow. One job, one commercial client. What's the breakdown of that? Is that over like 12 months? Like what does 150 ,000 contract mean? So I should have been able to finish that in two weeks. Should have been able to, but the contractor that I outsourced part of the job to another company, we could talk all day about that. So I'll just say it was supposed to take two weeks, but it took a month and a half.

9:26I still had my two locations running at the same time while doing this big job. So that was one of our best months. But yeah, that was a big commercial job. 115 grand. I love it. Let's keep progressing there. Someone's hearing 115 grand. And I alluded to in the intro here, like you got to$1 million a year very, very quickly. What was that timeframe and what did you have to do in order to achieve that? So this is where I'm okay. Not to like toot my own horn, but this is kind of where I'm like known in the YouTube sphere and the junk removal community is I did 1.1 million my first year in junk removal.

10:03And that's because I moved to Google ads by the second month of being in business. Cause I just knew from all the research that I've done. And my friend told me Google ads is where it's at. You pay to get leads. And then And he's like, yo, you'll just spend 20 bucks, 40 bucks to get a customer. And then you can charge them 500. And I sailed my Google ads very fast from starting from 100 a day to 200 a day to 500 a day. I was spending$1 ,000 a day by month six when I got my second location going. So I was spending on Google ads alone, just Google ads near anywhere. It would vary, you know, anywhere from 700 to$1 ,200 a day.

10:41I was averaging that much on Google ad spend, running both locations. Interesting. What was the ROI from that? Are we talking like a 5X ROI from that? Yeah, yeah. So at the end of the year, I spent a little over like$260 ,000 on ads and I brought in 1.1 million in my first year. So it's like a 4.1X return. Plus I served about 2 ,500 customers. So I had 2 ,500 customers in my CRM, but I can remarket and so on. Oh my gosh, that is so interesting. And I want to talk about that. A question that comes to mind is like, was this a recurring business model where you're like, I'm going to go every week to this residential home and pick up trash?

11:19Or were these just like all one-off projects and you just happen to get to$1.1 million? And I ask that because it's different if you're doing project-based work where every month you start out at$0. And people listening, like, think about this in your business model. When it's project-based work, it's like$0 every month. You start, you build it. First day, you come back. But if you have a retainer to it, it's a little bit more scalable. So I'd be curious on how you did it. So, okay, this is the thing about junk removal. Residential junk removal is, I'd say 90 % of the time, 95 % of the time, these are one-off jobs.

11:47My average job size was like 500 bucks, anywhere from 400 to 500. And these are one-off jobs. However, you can remarket to them and some of them do repeat and they do give you referrals. I did have a decent repeat and referral rate. But generally speaking, you're running these Google ads and these are one-off customers. So you're constantly needing to feed the monster or whatever, feed Google or feed Facebook ads because you constantly need new customers. It's not like the cleaning business where you get a lot of recurring customers, which would be nice. However, however, there's some people in junk removal and I'm friends with a lot of them where they focus solely on commercial contracts with property managers, apartment complexes, nursing homes.

12:25As you can see, those people would need you more frequently, storage units that need clearing out. And that is another direction you can go. Interesting. for this one in particular, like how did you then price these jobs? I know for the first one, you said like, yeah, like 300 bucks. Like you guys look like you got some money. So I'll do 300 bucks. But how did you then systemize that? Are you going by wait time? What did that process look like in pricing that? Yeah, so pricing is one of those things that's like, it's really tricky in the beginning, but most people you'll call up 1-800-GOT-JUNK and just kind of like copy their prices and be a little cheaper.

12:55But at the end of the day, at the end of the day, you're charging by the volume taken up in your truck, whether it's a dump truck, a pickup truck, a trailer. You charge by the space used up and it goes in increments of you used up one eighth, used up a quarter, used up half, used up a full, and you just have prices. And then when it's heavier stuff like dirt, gravel, just anything just generally heavier than normal stuff, we tack on like other heavyweight fees. Okay. Super interesting. Yeah. I think it's interesting how you always like start to like price stuff and whatnot. And at the beginning, it's always like, oh, what is the top person pay?

13:27I'm just going to underprice them. But obviously at some point you do want to systemize and get a little bit more crafty with it. Yeah. Exactly. Progressing as well. And I kind of want to jump back to Google Ads. I think people would be super interested in Google Ads. Our listeners love marketing. They love knowing what are the new marketing tips? How do I get this? Google Ads in particular, and even Facebook Ads, are these like retargeting ads? Or how are you identifying like the right audience to go after? I'd love to hear your target audience that you went after for these ads and what you advise people like now.

13:54So Google Ads is a little bit different than Facebook Ads with like retargeting and stuff like that. And you can really hone in on demographics with Facebook Ads and Facebook ads are super powerful. Google ads is a completely different ballgame. Can you target? Kind of, you can exclude certain zip codes of cities that you can look up the median income level and stuff like that. But at the end of the day, you're bidding on Google on the keyword that customers are searching in. So the intent of the customer of what they're searching, for example, like if you go in and say junk removal Los Angeles, you most likely want junk removal in Los Angeles right now.

14:29So you're paying for your position of your ranking. And usually they show two to three sponsored ads. And now to even get a little crazier, they threw these Google guaranteed ads on top of the normal Google ads, which are called local service ads. They have that little Google guaranteed green check mark. Those sit above the standard Google ads. And those make it a little easier to get into the Google advertising game. You pay per phone call rather than creating Google ads and really like creating ad poppy and descriptions and landing pages and conversion tracking. Google ads gets very technical.

15:01You could lose all of your money if you don't know what you're doing with Google ads or you can make a fortune. Yeah, let's talk about the fortune piece of that at a very high level here. What are like the three things someone needs to know to get started with Google ads, specifically when it comes to junk. I know you are indeed an expert in this area, so I'd love to hear that from you. Google ads is like my bread and butter, my forte, but to simplify it down, so we can fit in this podcast, is you're running Google ads based on the keywords they're searching. So it's going to be stuff like couch removal near me, junk removal near me, whatever, whatever, right?

15:35Any of all those keywords, hot tub removal, spa removal, and you're targeting these keywords. When I've good ad copy, and then they click the ad, it has to go to a landing page. I would never recommend sending it directly to your website. Send it to a landing page that's targeted that says junk removal. It has your phone number giant at the top, a picture of you smiling in front of your truck. call now and then bada boom bada bang they land on the landing page like oh this guy does junk removal and then they call the phone number and you need to pick up your phone and close the sale so it's very simple in theory but there's a lot of things that go into google ads so make sure you do your research if you guys can get the google ads but it's like a never-ending river of just traffic you know it's never ending yeah but you do need to do it right like you said you can also So lose all your money if you're not doing Google ads right.

16:27If you have time, I can give one quick example of where people burn their money. Please, please. Yeah. So one example, when people start Google ads, they'll start with the smart campaigns. Don't do that. And then they'll go to the expert campaign. They'll do everything. Then they'll forget about marketing agencies won't know junk removal. So they won't know what negative keywords. Negative keywords are telling you, don't make me show up for this because Google is going to try to make you show up for anything related to junk removal. So what happens is you start showing up for things like dump, landfill, scrap metal, recycle, dispose.

16:57Like even the word garbage disposal is related to the keyword junk removal in Google's eyes. So most people, they just put in junk removal and they forget to put all these negative keywords and they just start blowing their money on trash. Trash is a bad keyword because people think the city's going to come pick up your trash for free. So most people burn their money on keywords like trash, scrap metal, garbage disposal, landfill. You can see where I'm going with this. So if you're going to do this, guys, you have to be so careful that you put in hundreds of negative keywords along with junk removal, couch, furniture, spa, removal.

17:32Andrew, you're the absolute man. And this episode is generally firing me up about the potential in this industry. And what else is firing up is at the Elflet Academy, you're actually going to be hosting a course there. Talk to us a little bit more about what's going to be in this course for listeners to check out if they want more information. Yeah, I'm super excited. They wanted to have me as a guest to do the course and all that stuff because, you know, I'm really excited for that. So the course is, it's jam-packed. I mean, it's, okay, where do I start? From the top, I go over legal structure.

18:03I talk about permits, licenses, W-2 versus 1099 contractors, taxes, insurance, DOT, all that stuff. And then we go into, there's so much information, 30 videos on marketing. I even teach how to run Google ads, four to five hours of it alone. how to run your own Google ads campaign. I go over pricing equipment. I mean, there's over a hundred videos. It's jam-packed. So everything I teach, SEO, running ads, scraping, math, emailing, it's all applicable skills that you can use in any home service industry, anything. If someone is just starting out in junk road, they're like, okay, I'm going to go to Craigslist, but I'm going to have an omni-channel approach here.

18:40I'm also going to do Google ads. What would you advise them for early on? first 60 days, 90 days on a budget per day for Google Ads? So here's the thing. Google Ads, I would approach every other advertising method before Google Ads because Google Ads is expensive. I'm talking like Facebook ads, Yelp, even if I'm taxable, you got to be very on top of it. Craigslist, in-person, yard signs, there's hundreds of things you can do. I would advise against Google Ads until you have a certain amount of money in your bank. So my rule of thumb is in junk removal, this is generalizing the statement across every city in America.

19:16Different markets can be a little bit different, but I wouldn't touch Google ads until you're willing to spend$200 a day. 200 bucks a day. Because just to be honest with your viewers, it's the best way to scale, but it's now the most competitive and the most expensive. So your goal should be to get to Google ads, but I would not go in unless you're a pro digital marketer, you know, because I don't want to advise your viewers to like just go burn their money on Google. But Google is where we all want to end up, right? Search engine optimization on the top. And then you also have Google ads on top as well.

19:48Interesting. So you're saying get to about an area where you can spend$200 a day comfortably to actually stand out. Six grand a month. And I would have at least minimum two to three months. I'd have 18 grand in the bank dedicated to Google ads before playing with the big boys. And that's just because I would have said the same thing a year ago, But when I started three years ago, it was a little less competitive. But now, just everybody's trying to play the Google Ads game. It's just you got to be careful with Google Ads. Like I said, unless you get an agency who runs Google Ads and knows what they're doing, you could maybe go as low as$100 to$150 a day with an agency.

20:24But if you're going to do it yourself and you really want to succeed, I would expect to spend$200 a day and have some money in the bank. Interesting. But for the listeners here, it sounds like your best bet early on is going to be Craigslist or even Thumbtack if it's day zero that you're starting to market this? So digital, it would be Facebook. It'd be Facebook all day. You can crush on Facebook ads and you don't need much skills at all. Facebook ads and then just Facebook is a social media tool, joining local Facebook groups. And my best trick is join all the local Facebook groups. It doesn't matter if it's realtor groups, just all the local communities around you.

20:59Like I live in Playa Vista. There's a bunch of like Playa Vista groups, buy, sell, yard, sell, and go add all of them as friends. Just start adding them. And then you build your friends list up to 5 ,000 people and you just start hosting on your Facebook and boosting posts and running ads. You will start getting so many customers from Facebook and you only need to spend five, 10 bucks a day to run Facebook ads and you can get phenomenal results. And then yard signs, if you're going to do pounding the pavement, yard signs work so well in junk removal. So Facebook for the digital side, yard signs for pounding the pavement side.

21:28And those two things, those two things alone, you can get to 20 grand a month. I've seen it countless times, 20 grand in revenue a month. And then six months from now, you can start running Google ads. But even still, people listening are gonna say$20 ,000 a month, like sign me up here. But I do wanna ask the question, what are your typical margins in the junk removal space? Obviously, if it's you, you can much better if you don't have a payroll, but what are typical like margins if you're doing$20 ,000 a month? So I'll tell you my margins and then I'll tell you what your guys' margins would be.

21:59My margins when I did 1.1 was 25 % and that's only because I was completely off the truck and I was completely off the phones. I built a call center from the Philippines. I had two agents running my phones full-time. I had eight employees and I had two trucks running. So I was completely off. I was just doing operations and making sure the business runs. So my margins were a lot lower, 20, 25%. but I'm still making a quarter million dollars not doing much. Now, when you first start this business like I did or anybody else does, and you're willing to stay on the truck, which you should for the first year, your margins to be as high as 70%.