If you are a regular reader, you are well aware of my latest financial adventure - retail arbitrage. I shared in a recent article how I had bought a remote control toy car at CVS and flipped it on Amazon for a nice profit. I was only able to buy a total of three of these cars before the shelves were empty. I still find it fascinating that products can be bought right off the shelves of major retailers and sold online for a profit. I think I am starting to understand why this works so well.
Plugging Into Amazon's Sales System
My method of selling on Amazon involves the use of their FBA (Fullfillment By Amazon) program. I pack up all of my items in large boxes and ship them to Amazon's warehouse. Amazon handles all of the shipping for me. Since the item is coming from Amazon directly, Prime members get free shipping. There is also the comfort level that goes along with an item that will be 'fulfilled by Amazon.' So, the lesson in all of this is that price is not the most important factor for many people when making an online purchase. For many people, doing business with Amazon is convenient and reliable and finding the lowest price is not number one. For those that are Prime members (free shipping membership) there is also the added benefit of free two day shipping as well.
Why Offline Prices Can Be Low Enough For Flipping
Bricks and mortar stores will drop the price on clearance items, they will also offer some items at super low prices to draw people in (loss leaders), and they may have simply made a large enough purchase that their wholesale cost is incredibly low. Being able to buy in a retail store and sell for more on Amazon is the exception and not the rule. As I discuss in my four hour video, you have to know what to buy and how much to pay. This is not as difficult as you would imagine, as your analysis can be done quickly using a bar code scanning app on your smartphone.
My Latest Flipping Success Story
Forgive me for being selfish, but I am only going to share the specifics on this one with the members of my private Facebook group. This group is open only to those that have purchased my four hour workshop. I will, however, share some of the general details. I found an item in the toy department at Target that I was able to buy for $13 that has been going for $30 to $45 on Amazon. Now, here is what makes my point about the whole Amazon FBA deal. There are a number of sellers offering this same toy for as low as around $21 but not FBA sellers. OK, I don't want to confuse anyone so let me explain. Individuals can sign up to sell on Amazon and then ship out their own orders (self fulfillment), but this is not how to make the most money. The product available through FBA that has the lowest price is the one that gets the order if the buyer clicks the 'add to cart' button (default option). The key is to make your product the default order option, and it is easy to do if you know how much to buy it for and you sell it through the FBA program.
OK, back to my Target toy deal. I bought three of these items and included them in a large shipment to Amazon's warehouse earlier this week. The minute they hit Amazon they sold and I made about $10 on each one as my net profit. I went back to my local Target and bought the five remaining of this toy again today and they will be shipped out to Amazon tomorrow. This same toy is likely sitting on the shelves of your own Target store right now. Also, there is a deal going inside Target that gives you a $10 free gift card on orders over $50. You can also pick up another 5% off if you use a Target credit or debit card (I got all of these benefits, but they were gravy and the deal would have worked without them).
Why Give My Students The Exact Product I Am Flipping Right Now?
The reason I am sharing this one in real time with my students in the Facebook private group is not just for the sole purpose of them repeating what I did. There is an overall learning experience here. How I flipped this one toy can be done over and over again with other products as well. I started doing all of this simply as research for an article I was writing. This led to multiple articles, and ultimately my four hour Amazon Flipping workshop. I understand that earning a few hundred dollars extra per month may not be a game changer for some of my readers, but for others it is. I can also share that once you start doing this you will get better and better at it. While my time is limited on numerous other projects, I can spend a few extra minutes when I am already at the store ostensibly sweeping up free money off the floor. Also, while I am not quite ready to share the details, I am working on some ideas of my own that would add a couple of zeros to how much I am making doing this... (to be continued).
For those that missed it, I am going to open up my offer from last week and honor that through Sunday night at midnight (December 21, 2014). I am once again going to give a desktop scanner to all those that enroll this weekend. Having a desktop scanner makes entering my products in the FBA system a breeze. Also, don't forget that you will have access to my private Facebook page where I disclose the toy that I am flipping right now on Amazon.
Click here for a list of all of my articles on Amazon Flipping and this special bonus offer.
Helping you make the most of God's money!