East Cobb Teen Catches Entrepreneurial Bug
A Walton High School senior starts business selling unwanted and partially used gift cards on eBay.
The American motivational speaker and author Earl Nightingale once said, “Success is the progressive realization of a worthy ideal.”
According to his book The Strangest Secret, only five people out of 100 will achieve the success and financial independence they want.
David Forman, a senior and track and cross country runner at Walton High School, has taken the progressive path less traveled.
At the age of 9, most boys are engaged in buying and playing video games.
His father expressed concern about his 9-year-old’s request.
“I countered my dad by saying, 'I don’t want to buy; I want to sell.' That’s kind of how the whole entrepreneur thing started,” Forman said.
Although ambitious at an early age, a 9-year-old has only so many video games to sell, which initially slowed his eBay aspirations. His persistence to create monetary opportunities for himself emerged again at age 12 when he began flipping broken laptops and computers he bought from Craigslist.
In the midst of one of his many computer purchases last summer, Forman became curious about an alternative way to pay for merchandise.
“I thought to myself, ‘Hey, if I had a gift card, this would be a lot easier.’ I never thought about it before but wondered if anyone was selling unused or partially used gift cards that had value on it at a discounted rate,” Forman said. “It was an interesting concept, but I didn’t know if anyone would go for that.”
Thus began his investigation of the Southeast for a company that bought back gift cards. His discovery: There was no defined business in the area offering such a service.
“I was always taught that entrepreneurs solve problems. Wherever there is a problem in the market, they will come up with an innovative way to solve the issue,” Forman said. “That’s the person who’s going to be successful.”
With an eye for detail and a small reservoir of money—about $5,000, saved from his laptop endeavor—Forman began buying back gift cards in October. He and his father operate as Cash Cow Gift Cards but officially became The Forman Group LLC in January. Finally, after doing business through Craigslist, Forman decided it was time to take it to the Web.
With the business expanding, Forman said he spends about 60 to 90 minutes during the week working around school and cross country. On the weekends he puts in five to six hours daily crunching numbers and marketing.
“I can’t give you definite numbers, but before the website we were making maybe five figures, and now that we hit the Web, we’re seeing six figures in terms of [face value in the cards that have been processed],” Forman said.
Cash Cow Gift Cards is home to more than 400 merchants, each with a different percentage next to its name. That number indicates how much the seller of the gift card would receive for that specific card.
Walmart yields an 82 percent buyback because it is a nationwide company and offers several goods and services to consumers. Chick-fil-A yields only a 65 percent buyback because it is scattered across 40 states and focuses more on one consumer need.
In terms of flipping the cards, Forman sells them at about a 5 percent markup to companies he has signed agreements with.
As far as payment to his customers, he guarantees speed. As soon as he receives the gift card and information, the processing begins, which ensures a payment in one to three business days.
Gleaning knowledge from his entrepreneurial-minded father has allowed Forman to look ahead to what he wants the company to become and what steps he needs to take to get there.
Forman, who will attend the University of Georgia in the fall, has recruited his future roommate to help him expand.
“The next step is branding the company,” Forman said.
He plans to expand his business by implementing the Facebook effect, except in reverse. He will start advertising at the major colleges in the Southeast, including Georgia Tech, Alabama, Auburn, South Carolina, Florida, Tennessee and Georgia, in the hope of roping in the smaller schools in their surrounding areas.
Forman wants to commission out jobs to high school friends who will be attending some of those schools to market and advertise more effectively. Eventually he wants to become a full buyback company.
“We want to make sections off that site where you can sell your gift cards, textbooks, iPod, cellphone, any electronics, that type of thing on Cash Cow, the website. Make it an entire buyback corporation. That’s what we’re going to try to do once we are off at UGA.”