Latest / The Side Hustle Career Podcast with Fexingo: Second Income, Freelancing While Employed / How a Warehouse Worker Built a 5000 Monthly Side Hustle in Reverse Logistics
Transcript
- Lucas: So you order a pair of sneakers online. They don't fit. You send them back. That box goes somewhere — a warehouse, a returns center. And someone has to figure out what to do with it. That someone, that process, is a multi billion dollar industry called reverse logistics. Luna: And it's a side hustle that most people don't think about. But today's guest — well, today's case study — is a warehouse worker who turned that exact knowledge into a $5,000 a month consulting business. Lucas: Yeah, it's one of those hidden niches. The guy's name is Marcus. He worked at a major e-commerce returns center in Ohio for about four years. He wasn't a manager, wasn't an engineer. He was on the floor, processing returns, sorting items, dealing with the chaos of a million packages a week. Luna: And he realized that most companies are terrible at this. They lose money on returns — they don't know what to refurbish, what to liquidate, what to throw away. Lucas: Exactly. So in early 2024, he started offering reverse logistics audits on Upwork. He'd look at a company's returns process and tell them where they were leaking money. Within six months, he had three recurring clients at $1,500 a month each. By June of 2025, he was averaging $5,000 a month, working maybe 15 hours a week. Luna: And he did it without any certifications. He just knew the process from the inside. So how did he actually get started? Like, what was the first step? Lucas: He started by documenting his own workflow. He literally wrote down every step of the returns process at his warehouse — how items were sorted, what criteria determined refurbish versus liquidate, how fast they had to process things. Then he turned that into a simple checklist. Luna: So he created a product out of his experience. And then he went on Upwork and offered to audit other companies' returns processes using that checklist? Lucas: More or less. His first gig was a small clothing brand on Shopify that was drowning in returns. They had no system — they were just piling boxes in a corner. Marcus spent two hours looking at their process, gave them a report with five changes, and charged $350. That client then referred him to two others. Luna: And from there, he raised his rates. I think the key is that reverse logistics is one of those back-end things that companies hate dealing with. It's not glamorous, but it's essential. Lucas: Right. And the numbers are staggering. In 2025, U.S. e-commerce returns were estimated at over $800 billion. That's up about 12 percent from 2024. Most small to mid-size businesses have no dedicated returns manager. They just have someone doing it part-time. Luna: So if you work in a warehouse, or even in customer service where you handle returns, you have this insider knowledge that's actually highly valuable. You just have to package it. Lucas: That's the whole episode right there. But let's dig into the specifics. Marcus uses three main tools: a simple Google Sheet tracker, a basic camera setup for documenting returned items, and a free returns management software called Returnly for small clients. Luna: Returnly has a free tier? Lucas: It does for very low volume. And Marcus uses it to show clients what a professional returns process looks like. He basically sets up a mini-system for them, trains someone on it, and then checks in monthly. Luna: That's brilliant. It's not just consulting — it's a bit of implementation too. That's how you get recurring revenue. Lucas: Exactly. His typical engagement is: one-time audit to identify inefficiencies, then a setup fee to implement a basic returns workflow, then a monthly retainer for ongoing optimization. His retainer clients get a monthly report with metrics like return rate by product, average processing time, and recovery rate — how much of the returned item's value they recapture. Luna: And what's a typical recovery rate improvement? Like, if you're doing it badly, what can you get to? Lucas: Marcus says most small businesses recover about 20 to 30 percent of the item's value. They just liquidate everything at pennies on the dollar. After his system, they can get to 50 to 60 percent. That's huge money. For a company doing $10 million in sales with a 20 percent return rate, that's an extra $600,000 or more in recovered value. Luna: Wow. That makes his $1,500 a month fee look like a bargain. So the value proposition is crystal clear. Lucas: Yeah, and that's why he's been able to scale without a website, without a brand. He just has a clean Upwork profile and a couple of case studies. Luna: Honestly, if this episode helped you think differently about the skills you already have, that's exactly the kind of thing that makes this show worth supporting. If today was worth a coffee to you, that's the link — buy me a coffee dot com slash fexingo. Lucas: We keep this show ad-free, and listener support is what makes that possible. So if you find value in these stories, that's the best way to keep them coming. Luna: Okay, back to Marcus. So he's got these retainer clients. What does a typical month look like for him? Lucas: He spends about five hours a week on his main retainer client — they do about 500 returns a month. He spends another four to five hours on two smaller clients. And then a few hours on prospecting and one-off audits. Total maybe 15 hours, $5,000 a month. That's over $300 an hour. Luna: And he's still working his warehouse job? Or did he quit? Lucas: He quit the warehouse job in January 2025. He was making about $45,000 a year there. Now he's making $60,000 from the side hustle alone, plus he's got more time to grow it. He's actually planning to hire a part-time assistant to handle the data entry parts. Luna: So the side hustle became the main hustle. That's the dream, right? But let's talk about the barriers. What if you don't have warehouse experience? Can you still get into reverse logistics consulting? Lucas: It's harder, but not impossible. You could start by working for a company that does returns processing — even part-time. Or you could partner with someone who has the floor experience. But the real edge Marcus had was that he'd seen the mess firsthand. He knew the pain points. Luna: That's a good point. This isn't a side hustle you can learn from a book. You need to understand the physical flow of boxes, the handling of damaged goods, the negotiations with liquidators. It's very operational. Lucas: So if you're listening and you work in a warehouse, a distribution center, even a retail store that processes online returns — you have a goldmine of knowledge. The key is to start documenting what you know and offer it to small businesses that don't have a returns department. Luna: And the market is only growing. E-commerce returns are expected to keep rising as online shopping increases. This is a niche that's going to be in demand for a while. Lucas: One last thing Marcus mentioned: he keeps a list of liquidators and refurbishers he's worked with. That network is actually one of his biggest assets. Clients love that he can say, 'Send this batch to X, they'll give you 40 percent of retail.' Luna: So it's not just analysis — it's connections. That's hard to replicate. Lucas: Right, but you can build it. Start by reaching out to local liquidation companies. Ask them what they look for. That's how Marcus started. Luna: Alright, so to wrap up: reverse logistics consulting is a viable side hustle if you have operational experience. You can charge $300 to $500 for an audit, then $1,000 to $2,000 a month for ongoing work. And the demand is there. Lucas: And it's one of those rare side hustles where your lack of a fancy degree is actually an advantage. You're credible because you've done the work. Luna: Next episode, we're going to look at how a dental assistant built a side hustle in medical billing. That one's interesting because it's a similar idea — taking a back-office skill and offering it to small practices. Lucas: Looking forward to it. Until then, take a look at your own job and ask: what do I know that small businesses don't? You might be sitting on a side hustle. Luna: See you next time.