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28-year-old makes millions buying from Walmart, selling on Amazon
- the_arun 9y agowow!
- thecollate 9y agoI am surprised that there is so much margin. Is this because: 1. Amazon product delivery is so convenient that users don't mind paying little extra or 2. Walmart discounts products valuing their warehouse space more. Thus not realizing there was demand for the product elsewhere or at a different time. Seems like it would be simple for Walmart to figure out this arbitrage and shelve products for longer time. Any thoughts ?
- rjromero 9y ago3. When buying things from Amazon, if I don't meet the $25/$35 limit or whatever, I will sometimes, stupidly, search for something else I need from the store and will pay up to $5 more for it through Amazon. Things like folder separators, a pack of staples, etc.. You can get these things for $1 or $2 at Walmart, but on Amazon, maybe $4, $5.
- merb 9y ago> Things like folder separators, a pack of staples, etc.. You can get these things for $1 or $2 at Walmart, but on Amazon, maybe $4, $5. In germany buying stuff in bulk sometimes requires to travel like 50km, I've seen people plenty of times make bulk buys over amazon, because it is more convenient.
- SOLAR_FIELDS 9y agoExactly both - this is a temporary sort of arbitrage but is great for both these entrepreneurs and the end consumer in the short term. I will be surprised if they survive in the long term, since most of their business model is designed around the lack of Walmart and Amazon talking to each other. I think it would take a relatively simple collaboration between the two (though that might never happen) to completely destroy this business.
- TheSpiceIsLife 9y ago> relatively simple collaboration between the two Wouldn't this fall foul to some kind of anti-collusion laws?
- SOLAR_FIELDS 9y agoMaybe, I’m guessing it depends on the flavor-of-the-year government they would deal with when attempting such.
- thecollate 9y agoI think pricing trends monitoring aka camelcamelcamel.com would be enough for Walmart to figure this out. They don't need to actually talk to each other IMO
- SOLAR_FIELDS 9y agoLikely. They’ll probably stick some ML or data science person on it at Walmart Labs who ends up doing better at it than CamelCamelCamel because it’s his/her full time job and because they have a PhD in statistics or some similar field. Also because Walmart has near unlimited money to throw at these kinds of problems.
- maxerickson 9y agoOr Walmart could just dump the stuff back into their own fulfillment system. I doubt it amounts to enough merchandise for them to care about though, regardless of the margin. They make money on low costs and volume.
- SOLAR_FIELDS 9y agoIndeed, which is why it has probably skated under the radar for this long. I imagine this company’s success will eventually be its downfall in that the second when Walmart and Amazon see how much money is being made over this kind of arbitrage and that kind of money becomes significant they will quash it like a fly on the wall.
- wpietri 9y agoI will occasionally search Amazon for things whose prices I know, like Trader Joe's items or something I bought at a local store. Sometimes Amazon sells it themselves, in which case the prices are reasonable. But often, somebody random will be selling it at a large markup. My theory is that plenty of people are not particularly price sensitive and just want the thing to appear. I'm stubborn enough (or cheap enough) that I'm very reluctant to reward the arbitrageurs. But I'm sure many aren't.
- AznHisoka 9y agoI have a similar feeling when I look at houses to buy online. If I see the house was bought for 40%+ less just a few years ago, I refuse to give an offer. Even if the price seemed reasonable and it interests me. I refuse to reward people who bought low and want to flip it for much higher (if it increased reasonably, fine)
- tyingq 9y agoHow do you know they didn't invest a significant amount to fix issues? What they paid for it isn't a useful measure if you don't know the condition it was in. Comparable sales prices for recently sold similar homes would seem a better measure.
- rco8786 9y agoCertainly those increases in price are because the person put significant time and money into improving the property. It's not any more of a "reward" than your salary is "reward".
- geofft 9y agoNot certainly - it's very common for a neighborhood to shoot up in value (because of something that individual homeowners don't do, like a major employer moving in or getting successful, or a train station being built, or a nearby neighborhood getting full), and so the market value of the same home at the same condition can increase dramatically just because the neighborhood has more demand.
- tyingq 9y agoThe article mentions him buying clearance items.
- rgbrenner 9y agoOr they just dont care. Walmart sets a price to move X amount of merchandise. This guy sells to a small fraction in comparison. Lets say 1% (as an example). If Walmart increases the price, they could easily lose more than 1% of their other customers by attempting to capture this guys profits.
- refurb 9y agoThe margins can be big! I've compared Walmart or Target products on Amazon vs. in the store. Sometimes they are 200% higher, however it tends to be on low priced products. A bottle of vitamins on Amazon might be $9, but you can order them right now and get them delivered to your door. In the store it's $5. A LOT of people are willing to buy from Amazon evening knowing it's more.
- Spooky23 9y agoShelf space is valuable, and customers like full shelves. Walmart warehouses as little as possible — everything gets pushed out to the stores. So you’ll have regional and seasonal variations where a store will overstock to push more product. When that season ends, it’s more useful for the store to unload the inventory for cash quickly and switchover to the next thing. You can always spot a struggling general retailer when you see “holes” in the aisles or low-density merchandising... it’s a sign that the vendors are tightening credit terms. Amazon has a less competitive market position because people are buying stuff for convenience and there’s a high transaction cost due to shipping. Every major retailer is launching subscribe and save programs to nip at those Amazon convenience shoppers. Amazon needs the job-lot people because they are the only folks who can get a tube of toothpaste for 1/3 the retail cost. It’s a great strategy, until some psycho tampers with product by putting poison in toothpaste or acid in shampoo.
- jedberg 9y agoI’m part of group one. I have two kids. Putting them in the car to go bargain shopping sounds awful. Being able to order online and have it magically show up later that day or the next is worth the markup.
- giarc 9y agoI follow this company and guy... they have a bunch of partnerships with distributors and manufacturers directly which result in higher margins. Saying they buy at Walmart and sell on Amazon is only part of the business.
- wpietri 9y agoGood for him, but I really wish for a better class of business journalism. He's been doing this 4 years, and never made more than $150k/year. So he definitely isn't somebody who "makes millions".
- eli 9y agoYou're confusing the salary he pays himself with the success of the business.
- tyingq 9y agoThere's this: "Grant says the business is on track to top $8 million in total sales by the end of this year" But, the actual net margin is unclear. At least $150k, since he paid himself that. But it's not clear that it's millions.
- ssanders82 9y agothe article says "his business is making seven-figure profits"
- tyingq 9y agoHmm. Seems unlikely given the manual nature of shopping at WalMart, shipping costs, returns, etc, on an $8M revenue base. Edit: He contradicts himself..."four years later, we're a team of 11 and we're doing well over $200,000 in sales per month" $200k/month isn't even close to $8M/year. And you aren't netting 7 figures with $200k/month and 11 employees. Now I'm thinking this is just a puff piece for his get-rich-quick lecture series. Too bad, as it's probably still a decent story with the actual figures. Just not a rags to riches one. I'm also having trouble visualizing 11 people buying $8M (retail) worth of stuff from WalMart in shopping carts. That's $2k per day, per employee, every day.
- bayesian_horse 9y agoThis "company" may be doing something else, additionally to these flipping schemes. Seminars are mentioned. Consulting may be something else. Or some other form of ecommerce.
- nathan_f77 9y agoNice to know that 28 is still considered a noteworthy age for things like this. It must be getting pretty close to the cutoff though. You don't often hear titles like "32 year old creates successful business"
- tyingq 9y agoMaybe the older ones keep their ideas to themselves?
- nathan_f77 9y agoHaha yes, that could also be true. It doesn't seem like a great idea to share your formula and encourage lots of other people to start doing it.
- astura 9y agoThere's practically unlimited money to be made in the "I'll teach you to be rich" industry. It's much less work and much more lucrative than retail arbitrage.
- Blazespinnaker 9y agoVery hard to believe, you'd have to be very naive to reveal your arbitrage like this.
- cJ0th 9y agoIt seems he is already moving on by entering the self help/motivational speaker industry. > As his business is increasingly run by his team, Grant has reduced his salary down to $60,000 a year and now dedicates much of his time to getting that message out. He consults and teaches e-commerce classes through the same blog he has been using to track his performance.
- cjensen 9y agoIn other words, his business isn't working out very well and he has a lot of inventory risk. So he's "pivoting" to self-help.
- interestingcpp 9y agoIt may have been working fine, and he simply chose to pivot careers rather than scale what he had.
- deleted 9y ago[deleted]
- robryan 9y agoRetail arbitrage is already very popular on Amazon. It might not have much of a future though with Amazon heading towards not accepting those invoices when reviewing an account. I think the opportunity is probably too small and time consuming for big business to come in and destroy the opportunity. Similar to how small eBay sellers are able to import stuff straight off alibaba and make a profit.
- WalterBright 9y agoBack in the 80's, it was practical to buy software packages in the US and resell them in Europe at a substantial markup. After a while, more and more businessmen started doing this until the price differential disappeared. Classic arbitrage.
- joelrunyon 9y agoVery curious on his profit margins here. Considering an even 10% markup, you could easily do $5M+ and only clear 500k profit. Curious what the numbers that matter are like.
- Lordarminius 9y agoTitle should read: 28 year old used to make millions buying from Walmart, selling on Amazon; because he certainly will have to live with competition and reduced margins from now on.
- morganvachon 9y agoNot really. The company I work for has a similar setup; we bid on wholesale lots from the same places that Big Lots and other wholesale-to-retail outfits buy from. We flip those items both in our storefront and on eBay and Amazon. We don't do FBA but that's because we have a huge warehouse and competent shipping staff at our disposal. We clear enough for 10 competitive salaries and a comfortable income for the owners, and the rest is reinvested into the company. The company has been around for nearly 20 years (I've been with them off and on for seven of those years), and was one of the earliest online closeouts retailers back in the 90s. This is nothing new.
- stevenj 9y agoWhat's the name of the company you work for?
- bob_theslob646 9y agoLol, good luck is all I have to say to you. Invest well=) If you honestly think this is sustainable, you are mistaken. You are lucky to have done well all these years, but as more people get smarter, bye bye margins.( Same thing in every business.) More and more people will get into this space. Sure, you may be able to survive because you geta volume discount on shipping, but that's all dependent on you sourcing the product that these new people will be doing because all it takes is a smartphone and dream....
- morganvachon 9y agoPeople buying random clearance items from Walmart to sell on Amazon has zero impact on our business. We buy wholesale lots for thousands of dollars at a time, stock them in a huge warehouse, and employ a team of workers to sort, evaluate, list, and ship the items. A single person working from their basement can't even touch that. It's been sustainable for the nearly 20 years the owners have been doing it, and the rise of Amazon and eBay has caused an explosion of growth over the majority of that time. As for myself, my role there is multifaceted (mainly IT and website management, and helping out everywhere else as needed). I'm paid better than I was in government work, and I'm enjoying it a lot more.
- rootsudo 9y agoI did the numbers on some items, ikea on Amazon has a 50-75% margin increase on home/kitchen items.
- deleted 9y ago[deleted]
- sjg007 9y agoThere's a pure software arbitrage play as well, take for example, simple green which you can't buy from amazon direct but you can from a 3rd party reseller which ends up being a direct arbitrage from walmart.com.
- robertkrahn01 9y agoInterestingly enough it seems that public mentions of this don't destroy business. Here is a Planet Money podcast from 2015 http://www.npr.org/sections/money/2017/07/26/539552579/episode-629-buy-low-sell-prime http://www.npr.org/sections/money/2017/07/26/539552579/episo.... I thought at this time the days for arbitrage like this would be counted. Apparently not.
- dangoor 9y agoThere was a line in the article like “anyone can do it if they put in the work”. It’s still work with some risk, so I don’t think articles like this hurt the biz too much.
- SRasch 9y agoI think the reason is that it's a local arbitrage, and it's limited in sypply. He is buying from his local stores, who probably have limited amount of such products on sale. So there's probably room for more doing the same strategy.
- bayesian_horse 9y agoThe exploitation of the strategy can be limited by two factors: "labor" and "capital". It sounds like labor is the more limiting factor, though. Also, some of these prices aren't set at maximum profit per item, but there are other factors involved. For example clearing warehouses or attracting customers. In many cases, I suppose Walmart should be coming up with a way to sell direct to Amazon, but that may not be what they want, strategically speaking.
- seanalltogether 9y agoI wonder if Walmart simply can't afford to play arbitrage with clearance stock at the size of their organization. The amount of manpower and shipping time they would have to add to localized stock management might end up eating away at any additional profits. From their perspective Ryan is probably helping them out by emptying their clearance stock faster. If the local manager was smart he'd keep his number on speed dial.
- lbotos 9y agoI'm wondering if he's working with Gary V? The other day a friend shared one of his "hustle" videos on Social Media where Gary is hawking this and I'm wondering if it was actually "embedded marketing" for this guy.
- joering2 9y agoBack few years ago I was able to make extra $10,000 on Amazon by selling $200 packs of $2 for around $240 + shipping, because everyone thinks they are super-unique. Meanwhile a mere trip to a bank is required with request for a "$200 BRICK". I takes about 10 business days for BEP to ship it to your bank and you can order multiple times, no problem. My best month was December of course with I believe $18,000 in one month because everyone want to have a pack to give out as a x-mas gift. The work took my friend that I outsources about 3 hours a day. I only checked on her on the weekend and if she has any issues (merely). I remember how upset she was at me cause she knew the business but she couldn't afford to get Bricks from Bank herself. Eventually Amazon banned me for selling currency instruments, but it least 10 months.
- tyingq 9y agoThat you Woz?
- icantdrive55 9y agoYou made $18,000 net? Years ago, right before everyone had a smart phone, I had a Palm tx. I was at a going out of business sale at Goodguys. I saw Halo 3 Collector's edition on sale for $5.00 a game. I didn't know anything about video games, but in the back of my mind, I remember a friend telling me, "Don't rule out computer Games." I crossed the street, and got on Larkspur's Library Wifi. It was always on back then. Went to ebay, and even though my TX was slow, I started seeing $50 sales on eBay. Went back in, and bought all the games on the shelf. People were laughing when I bought all of them. The Salesman, laughingly said, I have three more boxes in the back. "Want them?" Me, "Yes" I still don't know why they had so many Halo games, and nothing else? Anywho--went home, and in the next few months, made $10 grand net on those games, and many happy moms. "I don't know what's in that game, but my son hasen't left his room." That it. Money gone. Never had a deal like that. (I have had a hard time competing in business. I just don't like the game of selling. When I had that Palm TX, I had such a gift. I could check out prices before I bought. I thought I found the keys to the city of selling. A year later, it seemed like everyone had a smart phone. Ugh.)
- hacker_9 9y agoThe Black-Scholes algorithm in effect.
- Jagat 9y agoI recently bought something from eBay (didn't search on amazon for some odd reason), and I received it from Amazon. Turns out the seller has an Amazon prime account, and all he does is provide the ebay-buyer's address on checkout. He netted $2 on a $12 product, and I found it amusing.
- bdcravens 9y agoThat’s a common thing, but amazon soon cancels the prime account for TOS violations. (Google “amazon to eBay arbitrage”)
- Scoundreller 9y agoThere's even software that will do it for you. I've seen Ebay sellers with tens of thousands of items posted, all from Amazon.
- bhouston 9y agoHe shouldn't share this arbitrage strategy because if others do it, its profitability will decrease -- like all arbitrage strategies.
- dmurray 9y agoHe shouldn't share it so long as it's more profitable than what he can get paid to share it by running seminars, selling e-books, minus expenses such as getting this article "published". There's not much in the article to suggest that is the case.
- galfarragem 9y ago"What's your religion? Arbitrage."
- shmerl 9y agoDoes it add any value? Seems like pure middleman profiteering without positive output.
- a3n 9y agoAnd? A gas station convenience store clerk gets a salary in part from selling sugar water that promotes tooth decay and cancer. What's the difference? Everyone has to make a living, and our economy is not structured to prefer "positive" output, it only cares about profit. If you call this guy into question, you should be looking at the larger picture.
- haser_au 9y agoLower price for consumers. Increased competition in the market. Increased product turnover for Walmart, meaning he helps those stores remain open. He has filled a gap in the market.
- shmerl 9y agoWhere do you see price reduction here?
- dsacco 9y agoProviding liquidity across markets.
- koancone 9y agoI am not sure what the point of these news stories is. Arbitrage opportunities have existed throughout history. How is it newsworthy? However, a basic understanding of economics would indicate that such market inefficiencies tend to disappear once widely publicized. I guess the journalist wants to grab a piece of the ephemeral surplus by publishing. In the same vein I don't understand why people share truly original ideas on show HN or waste their time contributing to open source. I guess everyone is wired differently. If I had been practising the sort of arbitrage the guy in the article was doing I would have been highly motivated to keep it secret, to minimize the number of new entrants (competitors), etc.
- eropple 9y ago> waste their time contributing to open source "Waste time." I shouldn't reply to this kind of antisociality, but this is gross enough that I feel compelled to. I contribute to open source because it is the right thing to do, because I have gotten so much from it that it is only right to pay it forward. You should be doing the same, not sneering at people with a sense of community to them.
- golf1052 9y agoYou're very right, the internet and technology would be very different if open source didn't exist. Basically saying, if you aren't only helping yourself and turning a profit you're doing it wrong is a little disturbing to hear.
- koancone 9y agoThe internet and modern computers are the result of Government and University funding (e.g. DARPA, UC Berkeley BSD) and corporate R & D projects like Xerox Alto / Start at PARC and Bell Labs Unix, C, etc. Free Open source volunteers merely imitated (Linux vs. Unix) or extended institutional or corporate sponsored projects or ideas. Without robust government and corporate funding of basic research in the later 20th century we would not have the well developed information technology industry we have today. People founding vanity projects, ICOs, and forking is not moving the industry forward. What truly revolutionary innovations have originated from open source software vs. just imitation or variation? Blockchain is revolutionary but the developers did monetize their work in that case (literally). In this society you need to earn money to live. It is mysterious that so many people in software want to practice their trade for free. I guess they love what they do but I think the quality of their work would increase if it was monetized. Monetization need not imply centralization or appropriation c.f. bitcoin. It just means assigning value and ownership to the results of socially valuable work. What is so evil about that? I think, from an evolutionary psych view why people think contributing to OSS is prosocial is because of something like a genetic tendency to share new technology with the tribe. In the ancestral environment it would have been uncool for one shaman to have monopolized a new flint knapping technique. But with the rise of trade and property right people can develop and protect their competitive advantage / economic niche and monetize their work for benefit of the whole of society why collecting a reward from their innovations. Free Open Source fanatics like the GNU people are stuck in the stone age and do the profession of software development a disservice.
- richardpetersen 9y agoIs it possible this is just a bit of PR spin by Wallmart to position themselves as being cheaper than Amazon or have I been working in marketing for too long?
- mabbo 9y agoMore likely a PR piece by Amazon- hey, go do sale arbitrage for us and we can both make money. Remember, FBA charges you money to use it beyond the cut Amazon seller already pay to sell in the platform. (Neat thing: a friend of mine was one of the devs on the Amazon FBA seller app that lets you scan barcodes at other stores and see how much you'll make selling it on Amazon)
- flashman 9y agoI read this article as a PR placement by Amazon. Amazon finds the guy (because they have the data on his sales) and connects him to the journalist, because Amazon wants to grow its Seller marketplace in the face of competition from Ebay and Alibaba/Taobao.
- LilBytes 9y agoMy friend does exactly this between IKEA and Ebay. Here in Australia, IKEA does not ship (not sure if they do else where) so she buys a heap of items at the Ikea stores and flips them online. She's been doing it for years and does pretty well at it. Here in Australia, IKEA stores are few and far between so her arbitrage is a huge value add for a lot of her customers since IKEA cannot (won't?) ship and traveling X KM's to pickup an item isn't an option for most. Personally, I'd rather buy X item from another retailer that has a product similar to the Ikea equivalent rather than use a middle man but. People really want to buy IKEA goods rather than the alternative. I can't see how this gentleman's equivalent will stand up in the long run but till then since Walmart's goods are less unique and more importantly, much more accessible. But still he's exploiting an OK market for now. The self help angle he's now peddling makes me suspicious that his income hasn't scaled as well as he would like now his business has grown. He's now got 11 employee's and a much larger footprint. His business overheads would have significantly increased and dropping from $150k to $60k a year for his salary would indicate his business Net has either diminished or hasn't grown as expected. Hence, peddling self help to generate additional income and exposure for his business.
- mr337 9y agoHere in US people are doing that with IKEA. The closest IKEA is about 2.5 hours way and you can put in a order through them and they make a weekly trip to buy your item and you can pickup it up locally.
- FuckOffNeemo 9y agoAh, thank you for the comment. I'm guessing IKEA don't ship any where in that case and that isn't specific to just Australia. Paying some one else for the luxury and buying it through an online medium like eBay is a pretty decent alternative to a 2.5 hour drive.
- Symbiote 9y agoIkea in several European countries delivers. Britain for example, since it's in English: http://www.ikea.com/gb/en/customer-service/faq/dispatch-and-delivery/#1364308958943 http://www.ikea.com/gb/en/customer-service/faq/dispatch-and-...
- dsacco 9y agoThis is cool. It reminds me of another three person team I’m familiar with that works on Amazon Prime arbitrage full time. They have a warehouse and an employee responsible for overseeing shipments in and shipments out. The entire business revolves around algorithmically identifying non-Prime merchandise that is undersold because it lacks the Prime label, purchasing the inventory, then reselling it under the Prime label with delivery and tracking guarantees. They found out pretty quickly that many customers preferentially buy Prime listed items over non-Prime items, and specifically purchase items they can quickly resell for a profit.
- MichaelApproved 9y agoHow do they identify those products?
- kennethologist 9y agoMost likely using Amazon Product Advertising API http://docs.aws.amazon.com/AWSECommerceService/latest/DG/CHAP_ApiReference.html http://docs.aws.amazon.com/AWSECommerceService/latest/DG/CHA...
- speby 9y agoThere are definitely quite a few people out there doing this. This guy is neither the first nor the last to be doing this type of product channel arbitrage. There is an acquaintance of mine who lives no more than 8 minutes from me who does this as a side-job and it brings him in an extra couple hundred to a couple grand a month. He obviously spends time as shown in this video going to WalMart, buying certain items, and then listing those items as being for sale through Amazon. His margin takes a slight hit sometimes when uses Amazon Fulfillment services to keep the item in Amazon's stock but he also spends time shipping items from his own basement. I imagine his fingers get a bit dry and cracked after handling so many cardboard boxes after awhile. Additionally, he does use price tracking and discovery tools to try and find the deals with bigger amounts of arbitrage between Amazon and WalMart. Because pricing is so dynamic and changing all the time, occasionally an item just barely breaks even as Amazon will sometimes magically update prices for its own goods to match or beat what might have been available at WalMart in their store. But it all depends and varies a lot.
- hi5eyes 9y agothis is like scourging the prices on runescape and alching them lool
- haglin 9y agoProblem is, I don't want to work with repacking stuff, or managing others repacking stuff. I want to build amazing software, and for that I need a larger company who can market my inventions and talk about it on conferences and road shows. I will earn less, but I will be happy.
- seppin 9y agoI don't think this story is about you.
- rmason 9y agoGary Vaynerchuk has demonstrated doing the same thing. But his sources are garage sales and dollar stores. He carries apps for EBay and Amazon on his phone so he can easily see whether the margin is worth his effort. He aims his advice at kids who can easily pick up $1-2K a month.
- ryanmarsh 9y agoGood to know retail arbitrage is still a thing. I guess the algorithms haven’t taken over yet!
- zootam 9y agountil the labor to manipulate all these goods drops to near zero- it will continue to exist.
- mattmurdog 9y agoThis is just a feel good story, I don't know why people analyzing it to death. He's basically no different than ab ebay power seller. But instead of buying wholesale, he buys clearance items.
- kpwagner 9y agoMany brands are "gating" their products on Amazon so only select resellers can sell them on Amazon. For example, the article mentions LEGO--restricted. You need to show Amazon proof that you purchased your products from a credible distributor in order to list your LEGO products. Receipts from Walmart are not enough.
- astura 9y agoLego is gated? Since when? I sell Lego on Amazon. It's been a few months since I sold any though.
- kpwagner 9y agoHuh. That's curious. Maybe you got grandfathered in. It's definitely restricted for new sellers. Anything Disney, which it turns out is a lot of stuff these days, is all restricted too.
- Godel_unicode 9y agoDo you have a source for this? I've never had trouble selling Legos on Amazon.
- kpwagner 9y agohttps://thesellingfamily.com/the-known-brands-that-are-not-allowed-to-be-sold-by-amazon-third-party-sellers/ https://thesellingfamily.com/the-known-brands-that-are-not-a... Also, my Amazon seller app. But I'm a new seller. From what I understand, some of these restrictions may not apply to sellers who have been around awhile and sold certain brands or categories before they became restricted. The deal about Walmart receipts not being valid I read in a forum post. When it comes to "retail arbitrage", it seems dealing with Amazon FBA is kind of like dealing with the IRS. You can walk on as thin of ice as you want, but Amazon can ban your account at any time. Some argue that items purchased retail should not be listed as "new" because they will have shelf wear. Some sellers laugh at this notion.
- Scoundreller 9y agoI do a similar thing on Ebay: Canada Post has been taking 5 or 6 weeks to deliver items from China that are shipped with free shipping. So, I'll buy 10x what I need from China when I need a part, then sell the rest on Ebay. Paying attention to things that I can ship cheaply (i.e. < 2cm thick) Lots of buyer will pay extra to get their spare part in 3-5 days instead of 3-5 weeks. Christmas time will be especially good to me :)
- AWebOfBrown 9y agoDo you not worry about unfit-for-sale goods? Getting a replacement means waiting those 5-6 weeks and often incurs return expense. Unless your margin is high enough that you can afford to buy extras for that purpose?
- jnordwick 9y agoMeat space HFT.
- IAmGraydon 9y agoIt's an interesting story, but isn't it far more efficient to find a single product that has good selling potential and just put your effort into sourcing that product? Instead of spending $1000 on 10 different categories of product, spend $10,000 on one product, thereby leveraging economies of scale.
- Godel_unicode 9y agoMaybe, but this is pretty basic portfolio theory here. Diversification means you have less effect on the price of any one good (consider that you need buyers for your goods) as well as less risk of an abrupt Amazon price cut wiping you out.
- booleanbetrayal 9y agoWalmart must be trying to dump inventory for the cost of an article. =P
- deleted 9y ago[deleted]
- nautilus12 9y agoIs this evidence that on average you can expect to pay more on Amazon? I thought part of the appeal of Amazon was that it was generally the opposite?
- jdblair 9y agoWhy don't Wal-Mart and other retailers get into this game themselves? They know their own stock, they could constantly compare their in-store prices to what they could make selling on Amazon. After they develop the processes it would just be part of their usual inventory management.
- anonymous5133 9y agoWalmart is not going to help their direct competitor. Ever since AMZ bought whole foods they know the game is very real and that whole foods could eventually scale up to something similar to what walmart has. They can just call it "whole foods warehouse" or something like that. Amazon will be able to compete because amazon is using technology for customer benefit while walmart is just using logistics, strong arming suppliers and employees. Those were advantages in the past but no more. Amazon is also doing logistics innovation and they're doing it better than walmart.
- elvirs 9y agothats a lie. almost all brands sell also on amazon and will come after your listings if you list their products on amazon. the fact that those are original products and you arent infringing any trademarks or other ip dont mean shit, ‘retail arbitrage’ is not allowed on amazon. your walmart receipts wont prove anything either. you must be authorized reseller who buys the stuff from wholesale suppliers of the product.
- m3kw9 9y agoClassic arbitrage opportunity trade
- sytelus 9y agoHe is doing $200K/mo. Assuming average sell price is $50, that would require shipping one item every 12 minutes assuming he never sleeps and works all of the 365 days. Just think about someone needs to stroll around Walmart and find all these 4000 items each month chosen meticulously, buy them, store them, package them and ship them. Then there is a classic and dreaded inventory problem. The items you bought from Walmart has no guarantee that they will get sold by same day, week or even a month. It's not hard to imagine that you will need 2X inventory and many of these items may go unsold in long tail easily wiping out significant profits. In fact odds are squarely not on his side because he is specifically buying items from clearance which probably means that Walmart had good confidence and insights that those items won't get sold easily. Remember that massive sales and trend data available to Walmart is not available to this guy so he needs to be extraordinarily lucky 4000 times a month or just plain genius. So I see lot of problems in claims being made. Unfortunately this reporting smells more like advertising and mostly link bait as opposed to investigative journalism with evidence and good data source. It is likely that on can find blindspots from inefficiencies in some nitche and make small profits but doing this at scale seems highly unlikely. I'm more on cautious side because Internet is littered with videos of people like this making claims of how anyone can millions by doing this and that. Usually that video is prelude to something they want to sell like books or self-help course or just get free publicity to boost their prospects.
- hardwaresofton 9y agoWhile I agree that there is some hyperbole in the article, I think it's worth pointing out that this is a fundamental (if not the fundamental) business concept: Buy/make a thing for price x and sell it for price x + profit. $200K/mo is a little much for this kind of low-hanging-fruit but easy/easier money DOES exist. Your next startup doesn't have to be a blockchain AI distributed whatever whatever that's going to change the world. If you can afford to use distribution centers (there are some that come ready made and will drop ship and do stuff for you), and can find a niche/gap in the markets and fill that niche/gap until it's no longer there. That said, this is low hanging fruit (basically arbitrage), and difficult in practice, as logistics (storing, shipping, inventory, etc) is hard. If you can do it easily, odds that others can too, and more will enter the market, and reduce your profit margin. I also don't need millions to feel like a success at such a startup -- If I were to make a setup like this (and I know people who have, though they focused on specific niches), and get away with 50K a year or 100K a year, I'd be very happy (assuming the logistics were little to no work after initial setup costs).
- binarysolo 9y agoParts of this are legit, but google "retail arbitrage amazon" to see a bunch of the strategies and pain points people run into. There's a reason this guy is selling seminars instead of just scaling what he does. Long story short - for clearanced items, Amazon's new gating policy is making it more and more difficult to grey market (legit, new, but not manufacturer authorized) products. Amazon's set up a system for vendors to police their excess, and they keep internal metrics on how many items are being sold through third party vendors... and once that number/dollar is high enough, they outreach to the vendors themselves and do a sales pitch so vendors can be active on their platform. For new items being arbitraged by a third party between like this Walmart->Amazon thing, Amazon basically sits on the sideline until the product accumulates enough sales, then outreaches to the vendor themselves. Basically the arbitrageur is doing market discovery for Amazon, and at the point where it's a particularly profitable item Amazon does their bizdev direct with the manufacturer to bring efficiency into their own marketplace. Really clever and virtuous system, to be honest. Most arbitrageurs now go for the private label option (buy unbranded items and rebrand with their own trademark) to avoid this, but once their product is popular enough to warrant it, Amazon responds by having their buyers clone an AmazonBasics version of them item. (See prior discussion: https://news.ycombinator.com/item?id=11533973 https://news.ycombinator.com/item?id=11533973)
- saidhe 9y agoJust think about someone needs to stroll around Walmart and find all these 4000 items each month chosen meticulously, buy them, store them, package them and ship them. Then there is a classic and dreaded inventory problem. The items you bought from Walmart has no guarantee that they will get sold by same day, week or even a month. It's not hard to imagine that you will need 2X inventory and many of these items may go unsold in long tail easily wiping out significant profits.
- guga84 9y agoThey try to maximize the profits they make on all of their existing and potential customers, now and in the future
- deleted 9y ago[deleted]