I guess this is one way to make a living. Is it sustainable? Is it gratifying? Is it scalable?
The guy is a hustler, I can appreciate that. He works for himself, I can appreciate that.
However if lots of other people try to do the same thing then does all the competition create a situation where lots of people are squabbling over a few crumbs? It looks like its a niche. And its only a matter of time others try to muscle in on his turf.
> Is it sustainable? Is it gratifying? Is it scalable?
Why does Western Society have a fixation on only doing things that make sense for the rest of your life?
Who cares how long it will last. Who cares about The rest of your life. Do something that's interesting NOW.
Let him enjoy it for however long he wants. When he doesn't enjoy it, or it doesn't work anymore, he'll find something else to do that he finds interesting. That's great for him! Maybe it's not the life you want, but that's not what we're talking about.
I remember when the PS3 came out. There were a lot of people who were convinced it was going to be in real short supply so bought multiple at midnight launch to sell them on ebay. Unfortunately the demand wasn't really there and a lot of them ended up selling for below cost.
Most Americans don't know there's a subeconomy in the U.S. where Chinese merchants buy items from retail stores and sell them to customers in China. The successful ones hire people to shop in stores. What do they buy? iPhones, diapers, baby formula, LV purses, lottery tickets...
This was enormous for Apple during the iPhone 3G launch. Nearly every retail purchase was 5 iPhones, the max per customer. It was profitable enough that these were all bought on contract then cancelled, which I think was the only way at the time.
Even cars: there is a huge business of people buying up brand new luxury cars in the US, then immediately putting them on a boat to China. The manufacturers hate it, and try to write sales contracts to prevent it, but it's so lucrative that it constantly attracts new people into the game
There is perhaps no better exposition of the "double freedom" - freedom from society's productive capacity and the products made therein, and freedom to sell one's labour - of most people in society than the example of Chinese people buying iPhones made in China from the U.S.
since the new tariffs are being imposed on imports to the US from China, i wonder if we might see a reversal in the direction of this process at some point. i mean, could we start to see large numbers of US residents and other travelers visiting China and bringing back merchandise for resale in the US?
Yeah, I've had friends who buy iphones in the US and take it back home to china for relatives, because it's cheaper abroad..... How does that work, exactly? Is it because of some sort of luxury tax in China?
From the article:
> It defies something called the law of one price. That economic principle says that the same item should sell for pretty much the same amount of money everywhere it's available.
> Today on the show: We meet the modern middleman and we find out how he makes money doing something that should be economically impossible.
This is a very deliberately sensational way of looking at it. One of the big reasons the one price law works is because there are people who do arbitrage. The first comers to an arbitrage opportunity make a lot of money. Other people come in and try to undercut the first comers and so they make less money and so on. In the long term basically the arbitrage profit tends towards zero.
This strikes me as wildly unsustainable and something that just can't last, with a big caveat: I thought the exact same thing when people were doing this 20 years ago buying vacuum cleaners at Kmart and flipping them on eBay.
My understanding is that people (like this guy) who are good at this pretty rapidly graduate to doing drop shipping and more online speciality work.
In my limited experience with (3) people who do this, they never really scale/graduate. They just seem to have some different kind of hustle going on, often this is seasonal. When watermelons are in season they'll drive to the next state and buy a truck load of watermelons wholesale from a farmer. Then they sell the watermelons on the side of the road. Same thing with pumpkins near Halloween. Same thing with flowers near Valetine's. Sometimes they'll buy a couple cars and flip them. I think they just enjoy constantly doing something a little different.
I somewhat follow this field (listening to startup podcasts, this has become pretty common theme) and they always seem to graduate to online courses etc. Very few can get away from basically nickel and dimming their way to profitability. It becomes a high labour business with shoppers, packers, shippers etc. As you said, they either need to graduate to drop shipping which is less hands on but perhaps more saturated with more issues, or do course etc.
The guys that make a living in retail arbitrage usually end up buying direct from manufacturer in large quantities. At that point, they still call themselves a retail arbitrage startup because "distributor" is much less sexy.
Are there penalties to posting goods you don't have and selling them before you have them in-hand? Does Amazon penalize sellers for cancelling orders if they can't be delivered?
That's called drop shipping when you list an item you don't have. There's a healthy community of drop shippers in most e-commerce sites.
I'm sure Amazon and other sites do penalize for cancelling orders, so one has to do a cost-benefit analysis if they make a mistake in pricing. E.g. the source increased prices recently but do you want to risk your reputation of your online store?
The risk you're taking on is that you can fulfill the order more cheaply than what the customer bought it for.
Amazon does keep track of many seller performance metrics, including cancellation rate. I don't know what the softer penalties are, but they can and do freeze accounts, which is obviously horrible if it is your primary income.
They don't care whether you actually have the item in hand as long as you ship it in a timely fashion.
For some reason our office manager will only order stuff off Amazon which leads to funny scenarios where we'll get 12 pack of soda that was ordered from Amazon but was shipped from Costco with the Amazon sellers name on the billing but our office as the shipping. Down at the local Kroger the 12 pack was probably 15% cheaper...
This happened to me with eBay once. Ordered a set of socket wrenches. When the box arrived at my house it had a Sears online recipet inside with my shipping address
This is what /r/flipping is about 'buy low, sell high'. There's nothing new or novel about this, some people make livings doing this sort of thing using FBA and eBay.
Similarly there is /r/churning where you use credit cards and line of credit to extract profit by strategically exploiting promotional offers.
I love this part of the video (https://youtu.be/FknkqT5tHK8?t=57). "Traffic is hades" points camera to traffic moving along nicely. I'd love to live in a place where traffic like that is "bad".
Wholesale usually requires you buy so many units, and it becomes hard to manage your inventory. Even if this guy couldn't sell half of these, he could return them all to his closest Walmart for only the loss of his travel. Also hot items are usually either exclusives or something you could not be a retailer of. I know there are people that buy things up on Alibaba in bulk then sell them here on Amazon and eBay...the problem is that helps counterfeiters.
I used to do support and marketing for a retail arbitrage app called Profit Bandit.
I used to invite local users out to Grocery Outlet in Portland (bargain grocery store), give them all $50 and see who found the best/most profitable stuff.
Once when testing the app at a Goodwill down the street from the office I found a book we ended up selling for around $100 (paid $3 for it).
I got stuck in line at a K-mart during its close out sale with a man that did something similar with Magic cards. He buys the yearly packs, when they’re on sale. He removes the valuable cards. Sells them independently for $10+ dollars. Due to sales and extreme sales like the close out, he makes a few grand a year. Nice work if you can get it.
To add to what /barnesto said, he also spent 12 hours manually shipping these items. He knew a lot about the product (where it would be available, prices, demand etc) so I assume he spent some time doing research.
I'd be really interested in knowing real profit on this. I'm sure it's positive, but when you factor all these costs, the per hour pay isn't "$2500 in one day!!!"
Maybe he didn't and it is just luck, classic survivor bias.
Maybe what you see is just the highlight of what is essentially a full time job. I have a friend who exploited arbitrage opportunities, and made a few thousands like this. While it is easy to see the surface, there is a lot going on behind the scenes. He sometimes spent the entire day packaging stuff, most of his travels included visits to potentially interesting shops, he has to deal with shipping problems and dishonest customers, and he had a very good knowledge of the market. And while big wins sometimes happened, most of the money were made through a large number of smaller gains. He enjoyed it when he did that, a bit less now, and he makes more through his day job (nurse), so he stopped doing it.
there are lots of FBA apps that will let you scan a bar code and tell you how much it is selling for on Amazon, and will factor in Amazon's commission, shipping costs, etc and will tell you the absolute max you can pay for an item and still make X% money off of it.
There are forums where people talk about this stuff.
Or maybe he gets the sales data (or brochures), and looks up the big discount items on amazon. Eventually you get a feel for what is a good deal. I have done this in the past with 3g/4g modems, you know how much they sell for, you know when a sale will get you a good deal.
I am surprised Walmart don't limit how many you can buy. This seems like it is priced to bring people into the store, not make a huge profit for Walmart on its own.
[+] [-] padseeker|7 years ago|reply
The guy is a hustler, I can appreciate that. He works for himself, I can appreciate that.
However if lots of other people try to do the same thing then does all the competition create a situation where lots of people are squabbling over a few crumbs? It looks like its a niche. And its only a matter of time others try to muscle in on his turf.
[+] [-] grecy|7 years ago|reply
Why does Western Society have a fixation on only doing things that make sense for the rest of your life?
Who cares how long it will last. Who cares about The rest of your life. Do something that's interesting NOW.
Let him enjoy it for however long he wants. When he doesn't enjoy it, or it doesn't work anymore, he'll find something else to do that he finds interesting. That's great for him! Maybe it's not the life you want, but that's not what we're talking about.
[+] [-] fullshark|7 years ago|reply
[+] [-] pavel_lishin|7 years ago|reply
Is being a waiter, or a checkout clerk, or a fast food employee, or a Chili's line cook?
[+] [-] neaden|7 years ago|reply
[+] [-] ikeboy|7 years ago|reply
[+] [-] headsupftw|7 years ago|reply
[+] [-] kirykl|7 years ago|reply
[+] [-] camhenlin|7 years ago|reply
[+] [-] claudiawerner|7 years ago|reply
[+] [-] breakpointalpha|7 years ago|reply
They spent collectively north of over $20,000 USD on Levi's, iStuff, Nikes, etc.
Packed it all up into 10-15 suitcases for transit back to their home towns.
[+] [-] HillaryBriss|7 years ago|reply
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] i_phish_cats|7 years ago|reply
[+] [-] DubiousPusher|7 years ago|reply
https://www.npr.org/sections/money/2017/07/26/539552579/epis...
[+] [-] RcouF1uZ4gsC|7 years ago|reply
This is a very deliberately sensational way of looking at it. One of the big reasons the one price law works is because there are people who do arbitrage. The first comers to an arbitrage opportunity make a lot of money. Other people come in and try to undercut the first comers and so they make less money and so on. In the long term basically the arbitrage profit tends towards zero.
[+] [-] michaelbuckbee|7 years ago|reply
My understanding is that people (like this guy) who are good at this pretty rapidly graduate to doing drop shipping and more online speciality work.
[+] [-] Consultant32452|7 years ago|reply
[+] [-] giarc|7 years ago|reply
The guys that make a living in retail arbitrage usually end up buying direct from manufacturer in large quantities. At that point, they still call themselves a retail arbitrage startup because "distributor" is much less sexy.
[+] [-] sailfast|7 years ago|reply
[+] [-] sovietmudkipz|7 years ago|reply
I'm sure Amazon and other sites do penalize for cancelling orders, so one has to do a cost-benefit analysis if they make a mistake in pricing. E.g. the source increased prices recently but do you want to risk your reputation of your online store?
The risk you're taking on is that you can fulfill the order more cheaply than what the customer bought it for.
[+] [-] bootlooped|7 years ago|reply
They don't care whether you actually have the item in hand as long as you ship it in a timely fashion.
[+] [-] throwaway427|7 years ago|reply
[+] [-] s09dfhks|7 years ago|reply
[+] [-] ryanmercer|7 years ago|reply
Similarly there is /r/churning where you use credit cards and line of credit to extract profit by strategically exploiting promotional offers.
[+] [-] wtracy|7 years ago|reply
[+] [-] giarc|7 years ago|reply
[+] [-] surge|7 years ago|reply
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] lakeeffect|7 years ago|reply
[+] [-] scrabble|7 years ago|reply
[+] [-] partiallypro|7 years ago|reply
[+] [-] paulcole|7 years ago|reply
I used to invite local users out to Grocery Outlet in Portland (bargain grocery store), give them all $50 and see who found the best/most profitable stuff.
Once when testing the app at a Goodwill down the street from the office I found a book we ended up selling for around $100 (paid $3 for it).
[+] [-] virmundi|7 years ago|reply
[+] [-] ape4|7 years ago|reply
[+] [-] giarc|7 years ago|reply
I'd be really interested in knowing real profit on this. I'm sure it's positive, but when you factor all these costs, the per hour pay isn't "$2500 in one day!!!"
[+] [-] influx|7 years ago|reply
[+] [-] barnesto|7 years ago|reply
what he did was visit 17 Walmart's in 22 hours and drove 700 miles.
he paid $19.82 for each game and shipping averaged $9 per.
[+] [-] wtracy|7 years ago|reply
[+] [-] partiallypro|7 years ago|reply
[+] [-] GuB-42|7 years ago|reply
Maybe he didn't and it is just luck, classic survivor bias.
Maybe what you see is just the highlight of what is essentially a full time job. I have a friend who exploited arbitrage opportunities, and made a few thousands like this. While it is easy to see the surface, there is a lot going on behind the scenes. He sometimes spent the entire day packaging stuff, most of his travels included visits to potentially interesting shops, he has to deal with shipping problems and dishonest customers, and he had a very good knowledge of the market. And while big wins sometimes happened, most of the money were made through a large number of smaller gains. He enjoyed it when he did that, a bit less now, and he makes more through his day job (nurse), so he stopped doing it.
[+] [-] viggity|7 years ago|reply
[+] [-] megablast|7 years ago|reply
Or maybe he gets the sales data (or brochures), and looks up the big discount items on amazon. Eventually you get a feel for what is a good deal. I have done this in the past with 3g/4g modems, you know how much they sell for, you know when a sale will get you a good deal.
[+] [-] megablast|7 years ago|reply
[+] [-] dec0dedab0de|7 years ago|reply
[+] [-] awinder|7 years ago|reply
[+] [-] mattmurdog|7 years ago|reply
[+] [-] Upvoter33|7 years ago|reply
[+] [-] bluto|7 years ago|reply
[+] [-] jnettome|7 years ago|reply