Retail arbitrage (a.k.a. flipping) is simple. Buy a new or used item for below market value and then resell it at market value. The difference is profit and it goes straight into your pocket! There are endless online and brick and mortar stores you can choose from and many marketplaces you can sell at. There is no better time than 2019 to get into retail arbitrage.
The reason why I became a flipper for life is due to retail arbitrage and it is something I’ve been doing for decades.
Retail arbitrage is easy, fun and can make you a boatload of money. So if you’re interested, read on!
How to Make a Boatload of Money in 2019
1. Identify Your Niche
The first question people usually ask is what should I sell?
With millions of items out there, this is usually what stumps most people from getting started. The answer is anything that can make you money. But the easiest way to get started is to concentrate on things you know. Think about hobbies that you like or maybe the toys that you buy for your kids.
You’ll be surprised you know more than you realize. For example, if you just bought your kids a Hot Wheels’ Super Ultimate Parking Garage for $200 bucks, you already know what the market value is. And if you happen to see one being sold for $150 after discounts and coupons, then instantly you know that there is $50 bucks of profit to be made.
The same applies to hobbies as well such as sports memorabilia, stamps, coins, art, electronics, Legos, etc.. If you spent years buying, collecting and playing with any of the above, then you already know a lot about them. You know what’s hot, what they are going for, where to buy and sell and other little details that most not know about.
So the first thing about retail arbitrage is to identify your niche. Concentrate on what you know and then branch out to what you don’t.
2. Identify Market Value
Ok now that you have your niche down, the next step is to know how to identify market value of the items you’re targeting.
Before you attempt to buy anything, learn how to do research on market value and know how to calculate profit (next section). A lot of people fall into this trap where they think something is a great buy only to find out that there is no money to be made afterward.
You can identify market value two ways:
Simply send a few mins searching and you’ll be able to find out what others are paying and hence you’ll know what market value is.
If your niche is something small that can be sold and shipped, then definitely concentrate on the two major online marketplaces. eBay and Amazon have millions of people browsing daily and you can easily find what the market value is pretty much of anything. You’ll be surprised that many new items being sold are already discounted vs the retail price. That is the true market value.
However many times you’ll find used collectibles or antiques being sold for big money too.
If your niche is something big that can’t be easily shipped such as furniture, appliances, power tools then you want to go search on in person marketplaces such as Facebook Marketplace and Craigslist. See what people are selling similar items for.
For some ideas, check out 8 Things to Sell on Craigslist for Profit
3. Calculating Profit
Ok, calculating profit is next and this is a must before purchasing anything. You must know what your bottom line is and if what your doing is worth it or even at all profitable.
Profit = Purchase Cost – Shipping – Fees
Looks pretty easy right? Let’s look at each one.
Purchase cost not only includes the purchase price of the item but also taxes. Remember taxes is important to include because this could be another 5-15% on top of the purchase price.
Shipping cost is usually an afterthought but it’s important to know how much it costs to ship something if you plan on selling the item online. Go to UPS, Fedex or USPS and use their price calculators to see how much it would be to ship something.
For ideas on how to save on shipping costs, check out 4 Pro Tips On How To Reduce Shipping Costs
Fees include what marketplaces charge for listings. eBay and Amazon charge listing fees and selling fees so make sure you know what they are.
If you plan on selling your items locally and in person, then you can ignore shipping costs and fees however your audience shrinks down significantly.
4. Place to Shop
Now that you have all the basics down, next is knowing where to look. As for brick and mortar places, it can be anywhere that offers steep sales or clearance prices. Here are some places to check out:
- Big Box Stores – Walmart, Target, Best Buy
- Clothing Stores – Kohls, Macys, JCPenny
- Thrift Stores – Goodwill, Savers, Salvation Army
- Outlet Malls – Nike, Saks 5 Ave, Coach
I’m sure you have seen 50-90% discounts at some of the stores you visit weekly but never paid attention to them. Start paying attention to them because they can lead to big profits.
The list above is short but these are great places to start as big box, clothing, and outlet stores all offer steep sales and clearance discounts. And thrift stores offer amazing bargains if you know what you’re looking for.
Of course, you are not limited to these stores alone. There are thousands of retail stores across the country that you can shop at. And let’s not forget online.
Slickdeals is a bargain hunter website that almost every flipper looks at. It is a website and forum that posts nothing but great online deals that are found daily by contributors and site admins. This is also a great place to get started with. However, due to the massive number of people looking, many times the outstanding deals are gone within mins and competition is high afterward when selling.
5. Where to Sell
You can sell your items online or in person, you’ll have to decide which method is right for you.
- eBay – eBay can be used to sell anything. But it doesn’t always get you the highest profit since competition is high but on the flip side, there is no other marketplace that has as much buying power either.
- Amazon – Amazon is great when you are selling new things that you’ve purchased elsewhere. If you can search and find the product on Amazon then that means you can sell it too.
- Bookscouter – The best site for selling books. They show you prices from book buyers from over 10 different sites who are all competing for your business.
- Craigslist – If you want to sell locally for cash, Craigslist is the place to do it. The reach is enormous and everything is local.
- Facebook Marketplace – Same like Craigslist but you must have a Facebook account to use. More women use Facebook Marketplace since identities are all displayed upfront.
6. Additional Discounts and Rebates
It’s important to note, that besides grabbing things at steep discounts and clearance prices, there are still additional ways to get more discounts and rebates! These are the secret ways that a lot of flippers use to maximize profits with retail arbitrage.
- EBates – The best place to earn cash back on all of your online purchases. Cashback ranges from 1-25%.
- Amazon Rewards or Store Card – Instant 3-5% savings on all Amazon purchases made on the card.
Many stores also offer their own credit cards for additional savings and coupons thru mailing lists. Remember all of it stacks on top of each other including the steep or clearance prices.
Retail arbitrage can be a great source of income and can make a boatload of money for you in 2019. Although it may seem difficult at first, once you make your first flip…you’ll get hooked. Go out there and have some fun and dominate your niche.
If you guys have any additional tips, please share in the comments below!