I'm surprised very few people here (no one?) is selling physical stuff. I have a profitable side project selling stuff online. I found a manufacturer through Alibaba, set up a website and now most of the work is dealing with shipping items.
I can just speak for Germany, but selling physical stuff is not that easy here. There are lots of regulations, for example on taking back and recycling used batteries, if you shipped them with the product, and stuff like that. Lots of things to take care about and have in mind, so selling physical stuff is not that popular as a side project, I think.