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NC State student drops out and earns $1 million with e-commerce business

An NC State student dropped out of college to start an online business, generating close to $1.5 million in his first year.

Posted Updated
Nate Schmidt 
By
Mandy Mitchell
, WRAL reporter

One look at his tax returns and it's easy to understand why Nate Schmidt decided to drop out of college to sell things online.

"I want people to know is this is a viable thing to do in the modern world," said Schmidt, 22, a former NC State student who is now a super-successful e-commerce entrepreneur.

Schmidt generated about $1.5 million in his first year of business, left school and is now on a mission to teach others about what is possible with some hard work and business instincts.

But this isn't a "get rich quick" story. Just mentioning that to Schmidt makes him wince and shake his head.

Nate Schmidt decided to drop out of college to sell things online. He earned $1 million in his first year and never looked back.

"I don't want to say anyone can do it because it requires, honestly, an insane amount of hard work and real dedication and persistence and endurance and grit and all that kind of stuff," he said.

Schmidt started his e-commerce career the way many things start, with curiosity and Google.

"The internet is an incredible place, because just about every bit of information that you would need to know you can find online for free," he said.

Once Schmidt convinced his parents to let him take a semester off from school, he spent all of his time studying the basics of starting an online business.

The first thing he sold was a $7 bracelet.

"I figured if I could make one sale with basically no experience, I could probably make a living off of it if I really poured all of my time into it," he said.

He was still delivering pizza at the time and noticed one of his co-workers wearing an Apple watch with a nice strap. He asked about it and got an idea. He could sell those straps.

Back to Google he went, finding a company in China which was manufacturing exactly what he was looking for. He built an online store and started drop shipping the product.

Drop shipping is a pretty simple concept which involves no upfront cost for the business owner. You simply link to the product, sell it from your own site, pass the sales information to the manufacturer who then ships directly to the customer. The downside is shipping takes longer, but this allows an entrepreneur to start a business without buying inventory.

It's low risk, and that's exactly what the college dropout needed.

"I was able to get these products, which were fairly good quality, and mark them up to sell them for $40, $50, $60 and that gave me a lot better margin to play with," he said.

He used the profit to advertise on social media, and that's when the real money started rolling in.

"Facebook knows really well what you like to see and what you are likely to buy," he said.

Schmidt's online store generated $84,000 on Cyber Monday last year on the way to a $1.5 million total.

He bought the BMW he dreamed about as a child and hasn't gone to a college class since. His parents, who he admits were skeptical, are pretty proud of the effort.

"I think the one thing that I am concerned about is how forcibly pushed college is, and how people who have no idea what they want to do in life and who have no plan for doing anything basically are being told that the best option for them is to go into massive debt through college," he said.

And while he is not advocating for people to simply drop out of school, he is hoping others see his story and consider the options that are available in a time when college costs continue to rise.

"Maybe if just a couple of college kids see this and are like, 'Wow that's an incredible story. Maybe I'll start looking into this.' Then that's a win to me," he said.

Schmidt's latest venture is a business where he teaches others about e-commerce. Having the credibility of a 7-figure year isn't a bad place to start.

"In the digital world, we have this whole new, basically, like, reality, that you can learn from, be a part of, build businesses in, and this is really where the future is headed."

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