4 ms·

He 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 36

He 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 ago
While 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).
- anonymous5133 9y ago
  but blockchain AI ICO developer sounds more cool to my friends :(
  - ForHackernews 9y ago
    "Blockchain ICO" is easy money. People give you real cash for magic internet tokens. Then you do nothing. http://www.wired.co.uk/article/what-is-initial-coin-offering-ico-token-sale http://www.wired.co.uk/article/what-is-initial-coin-offering...
  - SmellyGeekBoy 9y ago
    I'd say "I make $200,000/mo" sounds cooler.
owens99 9y ago
> that would require shipping one item every 12 minutes assuming he never sleeps and works all of the 365 days He uses Fulfillment by Amazon, meaning after he buys the products he just ships them all to Amazon and Amazon will ship them to the customers when the orders go through. That saves 90% of the time required to operate a business like this. All he has to do is find and buy products where he can make a margin significant enough, send them to Amazon and list them in his store.
- deleted 9y ago
  [deleted]
fauigerzigerk 9y ago
>Remember that massive sales and trend data available to Walmart is not available to this guy [...] True, but this guy and WalMart are not solving the same optimization problem. Supermarkets are dropping prices on particular items to lure customers into their stores expecting them to buy other stuff as well. They try to maximize the profits they make on all of their existing and potential customers, now and in the future. Customer loyalty is a big deal for them. This is a very difficult optimization problem. When WalMart sells a particular item for a particular price, it is not a judgement on the real market value of that individual item. And I think that's what creates the sort of arbitrage opportunities that this guys is exploiting. He doesn't have to beat WalMart at their own optimization game only with less data as you suggest.
- ataturk 9y ago
  But he's buying clearance items, is he not? Clearance is "this didn't sell so we're blowing it out to get rid of it." I guess he's exploiting a geographic arbitrage where an item in one location doesn't sell but that doesn't mean it is worthless to all everywhere? There's a similar phenomenon with cars from the south brought up north because they don't have rust (hurricane damage notwithstanding).
collinmanderson 9y ago
He has a team of 11 doing it. It's not just him. It's a small business.
noetic_techy 9y ago
He takes the same item Walmart would discount in a localized area and makes it globally available. Someone browsing online doesn't know said item is on clearance in Backwater, Flyover State. Sure he has probably made some mistakes and bad purchases, but anyone worth their salt doesn't do it again. Take small risks and see if it sells. When you find a seasonal item or hot seller, you replicate it. This can wipe away any mistakes you made. This plus amazon fulfillment handling the inventory problem, might work well.
- deleted 9y ago
  [deleted]

hardwaresofton 9y ago

While 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).

anonymous5133 9y ago
but blockchain AI ICO developer sounds more cool to my friends :(
- ForHackernews 9y ago
  "Blockchain ICO" is easy money. People give you real cash for magic internet tokens. Then you do nothing. http://www.wired.co.uk/article/what-is-initial-coin-offering-ico-token-sale http://www.wired.co.uk/article/what-is-initial-coin-offering...
- SmellyGeekBoy 9y ago
  I'd say "I make $200,000/mo" sounds cooler.

owens99 9y ago

> that would require shipping one item every 12 minutes assuming he never sleeps and works all of the 365 days He uses Fulfillment by Amazon, meaning after he buys the products he just ships them all to Amazon and Amazon will ship them to the customers when the orders go through. That saves 90% of the time required to operate a business like this. All he has to do is find and buy products where he can make a margin significant enough, send them to Amazon and list them in his store.

deleted 9y ago
[deleted]

fauigerzigerk 9y ago

>Remember that massive sales and trend data available to Walmart is not available to this guy [...] True, but this guy and WalMart are not solving the same optimization problem. Supermarkets are dropping prices on particular items to lure customers into their stores expecting them to buy other stuff as well. They try to maximize the profits they make on all of their existing and potential customers, now and in the future. Customer loyalty is a big deal for them. This is a very difficult optimization problem. When WalMart sells a particular item for a particular price, it is not a judgement on the real market value of that individual item. And I think that's what creates the sort of arbitrage opportunities that this guys is exploiting. He doesn't have to beat WalMart at their own optimization game only with less data as you suggest.

ataturk 9y ago
But he's buying clearance items, is he not? Clearance is "this didn't sell so we're blowing it out to get rid of it." I guess he's exploiting a geographic arbitrage where an item in one location doesn't sell but that doesn't mean it is worthless to all everywhere? There's a similar phenomenon with cars from the south brought up north because they don't have rust (hurricane damage notwithstanding).

collinmanderson 9y ago

He has a team of 11 doing it. It's not just him. It's a small business.

noetic_techy 9y ago

He takes the same item Walmart would discount in a localized area and makes it globally available. Someone browsing online doesn't know said item is on clearance in Backwater, Flyover State. Sure he has probably made some mistakes and bad purchases, but anyone worth their salt doesn't do it again. Take small risks and see if it sells. When you find a seasonal item or hot seller, you replicate it. This can wipe away any mistakes you made. This plus amazon fulfillment handling the inventory problem, might work well.

deleted 9y ago
[deleted]