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>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 opt
by 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 agoBut 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).