Uncovering the Secrets to Flipping Retail Products for Big Profit

by Finding the Best Time to Buy

Steve Lindhorst 1

Copyright 2012 Steve Lindhorst All rights reserved. Please dont copy it in any way other than saving to your own computer. Its a lot of hard work to put this stuff together. This is not a free e-book. Print version: ISBN-13: 978-1475202809 Print version: ISBN-10: 1475202806 Legal Stuff Disclaimer of Endorsement: Reference herein to any specific commercial products, process, or service by trade name, trademark, manufacturer, or otherwise, does not constitute or imply its endorsement, recommendation, or favoring by the author. No relationship or endorsement between the author and any company is implied by the reference to corporations, brands, trademarks, or trade names in this publication. This book contains statements and claims relating to how much money one can make using these methods. Please understand that these are estimates and projections. The exact amount you can make will depend on your talent, your experience and how hard you work at it. The fact is, most people dont use the information they read in ebooks. So if I have to guess what the average person will earn from reading this, it would be zero. (Hint: dont be average.) Although the author has made every effort to ensure that the information in this book was correct at the time of writing, the author does not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause.

The two most important requirements for major success are: first, being in the right place at the right time, and second, doing something about it

~ McDonalds Founder, Ray Kroc

Table of Contents
Foreword by Chris Green ............................................................................................................................................................ 7 Chapter 1 Retail Flipping ......................................................................................................................... 9 Timing, timing, timing .............................................................................................................................................................. 9 Buy High Sell Low? .............................................................................................................................................................. 14 Chapter 2 What You Sell Doesnt Matter .............................................................................................. 15 Ask When Not What.................................................................................................................................................... 15 Thats Crazy! .......................................................................................................................................................................... 18 What to Expect Here ............................................................................................................................................................. 24 Selling on Amazon and/or eBay........................................................................................................................................ 26 Chapter 3 First: A Few Basics................................................................................................................. 29 Buy Low / Sell High (Duh!)............................................................................................................................................... 29 What vs. When ......................................................................................................................................................................... 33 Margin and Timing................................................................................................................................................................. 36 Chapter 4 Advertised Sales & Discounts ............................................................................................. 38 Sale! Buy Now! ..................................................................................................................................................................... 38 How do I know if this stuff will sell? ............................................................................................................................. 41 Clearance Sales ........................................................................................................................................................................ 45 4

Seasonal Inventory Clearance ............................................................................................................................................ 47 Customized Rewards ............................................................................................................................................................. 60 Coupons ..................................................................................................................................................................................... 65 Couponer Lingo ................................................................................................................................................................... 68 Couponing Forums ................................................................................................................................................................ 72 Your Equipment Makes a Difference............................................................................................................................... 74 Chapter 5 Right-Place, Right-Time....................................................................................................... 80 Un-Advertised Clearance Items......................................................................................................................................... 80 Products No Longer Carried ............................................................................................................................................... 85 Returned Merchandise ......................................................................................................................................................... 86 Expiration Dates ...................................................................................................................................................................... 87 Policy overview .................................................................................................................................................................... 88 Damaged Packaging ............................................................................................................................................................. 89 Packaging changes ................................................................................................................................................................ 92 Going out of business / Remodeling .............................................................................................................................. 92 Rewards Programs ................................................................................................................................................................. 93 Chapter 6 Buying Month-to-Month ..................................................................................................... 95 Buy When? Sell Then!............................................................................................................................................................ 95 January ................................................................................................................................................................................... 99 February ............................................................................................................................................................................... 103 5

March .................................................................................................................................................................................... 106 April ....................................................................................................................................................................................... 109 May ........................................................................................................................................................................................ 113 June ....................................................................................................................................................................................... 115 July ......................................................................................................................................................................................... 117 August................................................................................................................................................................................... 120 September ........................................................................................................................................................................... 124 October................................................................................................................................................................................. 127 November ............................................................................................................................................................................ 129 December ............................................................................................................................................................................ 133 Chapter 7 Selling Takes Timing Too................................................................................................... 134 When to Sell (Hint: Sell High)........................................................................................................................................... 134 Expand Your Possibilities with Research .................................................................................................................. 136 Will I lose money if I list my products during off-peak times? ........................................................................ 141 How do I price my items to take advantage fluctuating demand? ................................................................... 143 Auto-Pricingto the Rescue? ....................................................................................................................................... 146 Responsible Auto-Pricing .................................................................................................................................................. 149 Dealing with Price Undercutters ..................................................................................................................................... 150 Premium Pricing .................................................................................................................................................................... 152 Wrapping Up .......................................................................................................................................................................... 156 6

Foreword by Chris Green

If you are an online seller, you know that information is power. It's information that keeps you one step ahead of your competition. It's information that gives you the edge when sourcing products. This book contains information that can help you make smart buying decisions as well as implementing intelligent selling strategies. I remember the day when Steve sent me a text telling me that the Black & Decker jar openers that he bought at a pharmacy sold almost immediately after being received at the Amazon FBA warehouse for a nice and easy profit. I remember texting him back, "Welcome to the club." Sometimes a business model as fun and easy as this seems too good to be true. You see, I told Steve about this low hanging fruit about nine months earlier and I thought he had jumped in with two feet already. So, even though it seemed like he was a little late to the FBA party, I knew that once he had tested the waters, he'd figure out new ways to capitalize on market inefficiencies that had not yet been discovered. With his latest book, The Best Time to Buy, Steve has truly delivered. 7

The book you are reading right now is an incredible resource to both new and existing online sellers, but a type that did not exist up to now. Principles that may seem obvious to some are clearly presented so all online sellers can quickly grasp, and apply the information, improving their product sourcing strategies. The information is beneficial in several ways: First, as the title implies, it helps you identify the best time to BUY products for resale. It also compliments this with information about the best time to SELL your items in order to get the best price. By simply by being smart about WHEN you buy and sell, you can outwit, outsmart, and out-EARN your competition. This business is all about margin, and by applying the principles laid out clearly in his book, you can increase your margins by either lowering your costs, increasing your sales price, or (hopefully) BOTH. Chris Green Founder, FBA Power / ScanList 8

Chapter 1 Retail Flipping

Timing, timing, timing
A real estate salesman once said, The three most important things for successful real estate sales are location, location, location. If you buy retail merchandise for resale I would tell you that the three most important things for your success are timing, timing, timing.

Instead of always thinking what, successful sellers think in terms of when. If we get stuck on the what nothing ever gets sold. But if we focus on buying buying anything as long as its the right time, we will make money every time we leave the house. Buy low, sell high. is another popular phrase used in real estate. In fact, that little phrase is thrown around pretty freely. Some say it captures the very essence of business. Youll also hear it when people are discussing the stock market. It sounds kind of catchy and cute (at least to the person giving the advice). But its pretty meaningless when you consider that high and low cannot be predicted or defined in those markets. When the real estate market seemed healthier, people would buy a property, touch it up a little, and then flip it for a higher price. Some

10

bought when prices were on their way up, and did virtually nothing to the property then they flipped it for a higher price a short time later. Good flippers buy low and sell high. But how do we define low? Lets take the stock market for example how do we know if a stock has hit its low today or if it will bottom out next week? We dont know. A stocks price may go up, or it could drop more tomorrow. And how do we determine what high is? Its a relative term. Should we sell today or hold out for more tomorrow? The bottom line is that the old saying: Buy low, sell high only works if you can predict the market. But those markets are not predictable. What about us? Many of us buy retail products to resell online for a profit. We want to buy low, and sell high. But instead of 11

I thought it would be cool to have some sort of calendar that would tell me when certain products would be most likely to be discounted. Then I could plan my buying to get the best margins. On the flip side, the calendar could also point out peak times to sell certain products.

real estate were dealing with retail products. We are retail flippers. Can we predict when our market will be high or low? Absolutely! We have an advantage over other markets because the buying habits of the public are well-known and predictable. Of course they fluctuate some from year to year, but unless Christmas is cancelled we can be pretty sure our income will increase around December. Additionally, we know that right after the holidays, prices will drop and well be able to grab merchandise for a much lower price. We can count on that.

12

The fact is: timing is the factor that determines if well make fat profits or just scrape by with skinny margins. As I walked into a large store last year, I imagined putting on goggles that would highlight products that I could sell for a nice profit. (I was totally sober at the time, mind you.) But having a way to separate the winners from the stinkers would be helpful. Since those goggles are not available at the time, I thought maybe I could make a calendar that told me which products would likely be marked down at a certain time. Then I would know what to buy and when. I could plan some of my purchases and capitalize on the biggest discounts. On the flip side, the calendar could also point out peak times to sell certain products.

13

Buy High Sell Low?

As long as we dont do both were not dumb. People ask me all the time, Why do people pay higher prices for things when they could get the item cheaper somewhere else? Who knows? It doesnt matter. Most people dont buy things with the intention of reselling them. So they can pay what they want it does not make them dumb nor does it make us greedy for selling it to them.

14

On the other hand, we might ask, Why do stores discount their prices so much? Dont they know they could make more? It doesnt matter. There is a very good chance that the store holding a clearance sale is still making something from your transaction. So dont lose sleep over the incredible deal you got at Target or TJ Maxx they are probably going to do just fine.

15

Chapter 2 What You Sell Doesnt Matter

Ask When Not What
What should I sell online? It seems everyone wants to know what to sell. Youve probably asked the same question. Its natural. We are bombarded with advertisements for the latest and greatest of everything as a seller a logical impulse is to jump on the bandwagon and try to cash in on the latest and greatest too. Maybe youve tried that approach, I have, and Ive usually been disappointed. Chasing bestsellers is frustrating. By the time we figure out which product is a hot seller, its hard to get a supply of inventory at a reasonable price. And it seems like there are always sellers that can get products cheaper.

15

Besides that, the very nature of competition often drives prices lower. Lots of sellers, selling the hottest products makes for thin margins, and causes anxiety since there is always the possibility that youll wind up stuck with inventory after the product is no longer hot. Those are some results of focusing solely on what to sell. So what if we focus instead on when to buy? Imagine having the ability to look a few months into the future. You can see the next big product. You can see the demand coming ahead of most of your competitors. Could you use that information to earn more profit? Yes you can. But you wont do it simply by focusing on what to sell. You have to focus on when to buy.

16

What you sell is important, no doubt. But there are two other very important factors that will determine your success. When should you buy the things you sell? When should you sell for the most profit?

Cutting costs when you buy your inventory is the key to every other part of the eventual sale. Mess up in buying and you may not be able to make a profit at all or worse yet, you might take a loss. Every year the collective retail industry runs through a merchandising cycle to keep consumers buying all year long. Some of the holidays and seasons have been virtually high-jacked by merchants. Others have been created out of thin air to grow sales. For example, the Christmas season is several times larger than any other shopping season of the year. But then, on December 26th something amazing happens. All those new products, which people were fighting over just days earlier, suddenly become old news to the stores. As a result, sellers suddenly switched from hard-core selling to hard-core buying. The after-Christmas sale!

17

Thats Crazy!
Last year while having dinner with friends, I mentioned that I had just purchased a carload of products from a local retail store. I explained to them that Id already sold out once on the same product at five times my purchase price. So I was just restocking. He was dumbfounded. Thats crazy! he said. Im certainly not alone in making a living by buying sale merchandise from retail stores and reselling it online. So why doesnt everyone do it? And why do people think its so crazy? There are several myths about this method of making a living: Retail stores are not a reliable source for inventory. If I can get it on sale, everyone else will also be selling it. If an item is marked down by a retailer it wont sell for full price. Its too unpredictable no one knows when a sale might happen.

During the fourth quarter of last year using a combination of tools, persistence and timing I learned a lot of profitable lessons. I proved every one of those myths wrong. 18

Ive personally used retail stores within 25 miles of my home as a source of inventory for over a year. It has only gotten easier.

Unlike other sales (such as book sales) very few of your fellow shoppers are thinking about reselling what they buy. Its just a fact believe it.

As youll see below, retailers put perfectly good products on the clearance rack for a wide variety of reasons. People will still pay full retail prices or sometimes even higher for those very products.

Retailers dont just wake up one morning and hold a sale. They are predictable events. The entire year consists of promotions, and then clearance sales every month, all year long.

19

I used to believe all four of the myths above. After the holiday season ended I had some time to analyze things a little more. I came up with a pretty simple theory If I could predict the sales, I could source inventory at the lowest cost all year long. No matter what I sell. Likewise, if I could predict when the demand will be high, I could sell my inventory for the highest prices all year long. No matter what I sell. You may have gotten advice to follow the seasons and holidays and capitalize on them throughout the year. Some seasonal selling advice is baloney. Following will ensure you end up in the back of the pack. By the time you realize there is a demand for a product, you are likely too late to capitalize on it. Plus there is a lot more competition. Clearance sales and merchandising trends are much easier to predict than specific products.

20

For example, I can say with absolute certainty that there will be a huge clearance sale right after Halloween. But can you tell me which items will be hot? Plan for the sale focus on the when and not the what. Not every season will bring a profit online. Some holidays havent been heavily commercialized (yet). For instance, Mothers Day is a popular U.S. holiday. But its more of a day for eating out with the family than for shopping and sales. And seriously, you may have a day off around Labor Day, but are people being trampled at the local Walmart to get at the big sales? Not really. However, there are other trends less sexy for sure but predictable and profitable nonetheless. For example, do you know?

Which month has the most car sales? When do most marriages take place? In what month are most new babies born? How bout old babies? (just kidding)

Those are events that affect millions of people each year and each one has its big month. 21

Retailers know those cycles. Thus, their inventory ebbs and flows in response. Were especially interested in the time that they clear the old inventory. Because even though demand goes down, it is still there. The large retailers have to aim for the masses as small sellers we can provide products to buyers during the off-season. Another example: in my area when the holiday items are gone the gardening supplies arrive. Right about the time people start actually using the gardening products theyll be replaced by beach balls and sun umbrellas, and so on. Then, at the height of beach season the Back to School merchandise appears. What happens when during spring gardening you break your pesticide pump? What happens when youre at the beach and the kids bury the beach ball and no one can find it? Sometimes things get lost, and they need to be replaced. But the big stores have already cleared out their stock (which you probably bought for resale). Now the gardener or the frustrated parent will buy the replacement from you.

22

There are countless trends that are not directly connected to a certain date or event. For instance, every spring the term dresses rises to the top of Google shopping searches. Why? Primarily its because girls are shopping for prom dresses. (Well, I assume theyre girls.) Bathing suit sales go up in the first months of the calendar year. Why? Because people want to work on their tans before summer so they arent embarrassingly white and pasty. So even items that arent connected with a certain event or holiday are in high demand for a while - and then theyll be on clearance shelves.

23

What to Expect Here

Lets start with the bottom line: individual products come and go, but retail sales cycles repeat every year. Ups and downs come around predictably every year. This book is about using timing to take advantage of sales, coupons, and promotions which are nearly all temporary. It goes without saying that selling is important to us were sellers. But buying is even more important to the seller. I dont mean to insult your intelligence by discussing some basics. Like me, you probably have an understanding of buying and selling. Not everything you read here will make you slap yourself in the forehead and give you an Aha! moment. My hope is that when youre through reading this book youll have a better idea of how to plan for sales, find discounts, and use coupons and store discounts to lower your costs (and increase your margins) as much as possible. Well look at how we get stuck on finding what to sell. Once were un-stuck, we will see a huge increase in opportunities. We need to shop smarter, by using timing to our advantage.

24

Every sale or markdown cannot be predicted and marked on a calendar. But I expect that when youre done reading here, you will end up with some valuable nuggets of information that you can turn into valuable profit. After a few basic thoughts about buying and selling, well cover three main areas. First well look at how to use the retail sales cycles to buy. You should see how you can predict which merchandise will be marked down during certain times of the year. Buying when prices hit rock bottom gives you the most room for profit later. Then, well see how timing can work to get you bigger profits when you flip your products and sell them. Finally, well look month-by-month what you should expect to see discounted and in clearance sales.

Online or Offline?
The information will deal with obtaining products for resale both offline and online. I prefer to shop locally, offline. Well spend most time discussing brick and mortar store sales. By dealing with merchants face to face, Ive received deals I could not have gotten online. Plus, online purchases for resale often lead to frustrating quantity limits. On the other hand online shopping saves a lot of time with gasoline over $4 per gallon shopping online is gaining appeal.
25

Selling on Amazon and/or eBay

I thought I should also include a little something about where we sell. No matter where you sell, you still have to get inventory and you want to get it as cheaply as possible. Many years ago, I sold my first item online using eBay. Eventually I actually worked in their San Jose, California offices and became a national eBay University instructor. But that was a long time ago. Since then, eBay has changed a lot. While Im not the big fan I once was, I think eBay is still a great place to sell your items especially used products and collectibles. However Fulfillment by Amazon (FBA) has literally changed my business completely. I have things sitting around that I was once going to list on eBay. I simply hate the thought of stopping my day, and packing and shipping my item. With FBA, I buy the products,

26

ship them to Amazon, and let them handle the packing, shipping, and customer service. Youll notice I talk a lot about selling on Amazon in this book. But recently I began using Amazons Multi-channel Fulfillment more often. Now, I send my products to Amazon as usual, but besides just listing them on Amazon, I also list them on eBay. When a product sells in either marketplace, I have Amazon fulfill it for me. Im not cheerleading for a particular marketplace. But what Im writing about is from my own experience. And like I said earlier, it doesnt matter where you sell, or what you sell as much as getting the lowest price and selling for the highest possible. Its true whether you sell on eBay, Amazon, or out of the trunk of your car. Before we get into the timing of everything, lets cover a couple a few business basics. You may figure we could skip the basics. For most of us, thats probably true. But consider the most basic concept of buying for resale buy things at a low price, so you can resell them at a higher price if your price is fair, people will pay it and youll make a profit. Simple right? Everybody in business surely knows thator do they? 27

Consider the following: Most of the readers of my newsletter at: www.MultichannelSurfer.com are online sellers. I have always assumed their goal as sellers was to make a profit from their sales. I am also assuming that they would like to make as much as the market will bear. So Im always surprised to receive emails from sellers who scold me because I buy things at a low price, and resell them at higher (market) prices. In their mind, I must have pulled the item from the trembling hands of an elderly homeless woman and cruelly forced other poor people to pay over-inflated prices. (I dont do things like that by the way.) The fact is, no one is forced to buy anything I sell. If my prices are too high, my products wont sell. Besides that, the people who buy the things I sell had just as much opportunity to buy the items at clearance prices as me. All they had to do was show up at the store like I did. If you are offended by idea of finding a product at a really cheap price and selling it at a higher market price maybe this isnt the line of work for you. If you feel its morally wrong to buy the last few sale items and mark them up for resale online maybe this kind of work isnt for you. 28

Chapter 3 Fir st: A Fe w Basic s

Buy Low / Sell High (Duh!)
The law of supply and demand - It seems simple. The closer you examine it though, the more powerful and involved it seems. It literally shapes our lives.

In centuries past a persons basic survival depended on it. After the Industrial Revolution big business thrived from it. During U.S. Prohibition (1920-33) a massive organized crime syndicate was built on it. Nations have risen and fallen due to it. Universities continue to try to teach it. 29

The whole thing is more complicated than just Buy Low and Sell High. Actually there are four basic laws of supply and demand:
-

If demand increases and supply remains unchanged, then it leads to higher equilibrium price and quantity.

If demand decreases and supply remains unchanged, then it leads to lower equilibrium price and quantity.

If supply increases and demand remains unchanged, then it leads to lower equilibrium price and higher quantity.

If supply decreases and demand remains unchanged, then it leads to higher price and lower quantity.

30

Another very simple way to sum up the law of supply and demand is:

The price of any good will adjust to bring the quantity supplied and quantity demanded into balance.
The basics of the law of supply and demand must become second nature to online retailers. Well, thats the idea anyway were sellers. And in order to have something to sell, we have to either make it (not an option for a butterfingers like Yours Truly), or we have to buy it. Obviously, we only have a sale if someone else wants to buy what we have. They have to want it enough to trade their own treasure for it. The buyer they have the demand. In order for this whole scenario to be worth the effort, its pretty important that when we get our supply at the lowest price possible. It is especially nice when we find an opportunity to get our supply cheaper than our competing sellers. Its also really important that when we decide to sell our supply we sell it when the buyer really, really wants it. 31

When the demand goes up, a lot of people buy. When a lot of people buy, supply goes down. When the supply goes down, the price goes up. See how simple that is?

32

What vs. When

As mentioned earlier, most online retailers are focused on what to sell. The result is a lot of sellers getting caught up in trying to sell the hottest products all at the same time. Chasing the latest trend or best seller can leave you with hot potato inventory. You have to get rid of it quick or you lose. Lets look at an example: I cannot tell you how many times Ive heard this type of comment from sellers: Seller: Humidifiers are selling? Look at what theyre selling for! Where can I get humidifiers to sell?! Then they buy a dozen humidifiers just below the regular price, and they plop them all on Amazon or eBay. - What happens next?
Crane Ultrasonic Cool Mist Owl Humidifier

33

Sellers who bought their supply early can easily lower their price a little; they have a better margin, so they have room to spare. The seller who jumped in late on the hot product will now do well to break even on his humidifiers. All that work for nothing. Uh-oh. The sellers tune has changedand now theyre looking for someone to blameespecially if they feel they were following the advice of some online selling guru. Seller: I cant believe (insert name of guru) told me to sell humidifiers! I hate (insert name of guru). So are humidifiers a bad product to sell? Nope. As long as you get them cheap when the demand is low and sell them for a profit when demand is high they sell really well. Every single year for many years demand for humidifiers goes up. When? When the humidity goes down! After a freezing winter (dry period) things thaw, it begins to rain. Demand for humidifiers goes down. They go on sale, and its a good time to buy.

34

Then, about the time it starts freezing again guess what? Demand goes up! So does the price. Now you can sell those brand new humidifiers for a profit. Does that mean you have to be a humidifier seller? Of course not. What you sell doesnt matter. We should avoid getting locked into some arbitrary category of selling. Book seller, Art seller, Electronics seller, are all terms that cause us to put mental blinders on and miss profitable opportunities. For online sellers, what to sell isnt the problem. You can sell just about anything. The real question is when? When is it time to buy? When is it time to sell?.

35

Margin and Timing

The difference between the cost and the selling price is the margin. As my friend Chris Green (ScanPower formerly FBAPower) regularly points out, margin is the key to selling success. To make a profit, you have to get merchandise at a low price and sell it at a high price. Thats easy to say, but it is difficult to do. Large sellers get their merchandise at relatively low wholesale prices. For example, youve probably heard how Walmart squeezes their suppliers to get the lowest prices. The reason they have this power is that they move a tremendous amount of product. But if something goes wrong, large sellers like Walmart are stuck with large amounts of inventory. Often they liquidate it for pennies on the dollar. Their risk is high compared to small sellers. Small sellers cannot command the low (wholesale) prices that the large sellers get. It can be a challenge to get a really good margin, but small sellers have less risk. 36

If you buy half a dozen Transformers action figures, and they turn out to be covered in lead paint from China your business probably wont fail. However, if a large seller has a ship container load of those action figures, he could be in trouble. Okay, so as a small seller you need to buy low and sell high get a good margin on your sales. Are there any guarantees? No. Sale prices fluctuate throughout the year on nearly all merchandise. So, in order to get the best margin - two questions still need to be answered: When is the best time to buy? When is the best time to sell?

37

Chapter 4 Adver tised Sales & Discounts

Sale! Buy Now!
If you use retail stores to source your inventory, you know it can be a challenge to find products cheap enough to get a good margin. You already know: if you buy retail items for resale, the best time to buy is when things are on sale. Before blowing through this chapter, consider this: knowing why stores markdown their inventory, helps us know when theyll mark it down. Then we can be better prepared to get maximum profit.

38

Last year I bought a bunch of Black & Decker electric jar openers that were on the clearance shelf at my local Rite Aid store. The price was $9.99 each and they were listed on Amazon for around $55 with an Amazon sales rank of 41,000. Since I hadnt really sold appliances before, I wasnt sure if that sales ranking was good or not. But I figured Id take a gamble. I bought what they had (four), and listed them with Amazon FBA (Fulfillment by Amazon). I shipped them to Amazons warehouse the following day. A few days later I received the email that my shipment was being checked in at the fulfillment center. A little while later I checked my pending orders I already had orders for two jar openers at $49.97 each! On the following day, the last two sold.

The 3x Rule

Many Amazon FBA sellers, including me, use a simple formula to stay profitable. I try to keep my cost for an item below 33% of the low Amazon price. The final breakdown of the total is broken into thirds: 1/3 cost 1/3 fees 1/3 profit That means for every $100 I spend, I sell $300 in product.

$100 cost $100 fees $100 profit

I get my original $100 back, plus $100 in profit after fees. So basically, I can consistently double my money using this method. The formula works with $10 or $1000. In 39 fact it actually improves for higher ticket items.

I couldnt believe it. I just picked that stuff up off the shelves. Anyone could do that but everybody wasnt doing itlike my friend said Thats crazy! A few days later, I was at a nearby town and saw a Rite Aid store. I wondered out loud to my wife if that store might have the same clearance items. I stopped in and they did even more than the first store. As I checked out with two carts full of stuff the clerk said, Finally! Somebodys taking this stuff! Then he kind of leaned in close and said in a low tone, You know, Ill bet you could sell this stuff online. (Now why didnt I think of that?) After I started buying from retail stores for resale, it dawned on me that all I had to do was remove the price tags, label my products and ship them. Buying new items is so much easier than selling used books or anything used for that matter. I dont have to clean or repair things anymore. Also, when I buy products from retail stores I can often find multiples of a given item, which saves time when I list things for sale. Before I go much further, heres a question that a lot of prospective retail flippers have:

40

How do I know if this stuff will sell?

There are no guarantees what you buy will sell. However, both eBay and Amazon offer information that can help take some of the guesswork out of the equation. eBay Completed listings You can see about two weeks of completed listings on eBay by searching for an item, and then clicking Completed listings in the left sidebar. That will give you some idea whether there is interest in the products you may be considering. Be sure to consider the price of sold items, the number of bids an item received, and the shipping cost. You can also see what people are searching for by visiting eBay Pulse at: http://pulse.ebay.com/ Amazon Sales rank On each product detail page in Amazons catalog, you can find typical product information, as well as the items sales rank.

41

Sales rank confuses a lot of people. I think part of the confusion comes from the idea that bigger is better. Most people think that on a scale from 1 to 10 ten must be best. But its the opposite. The lower the sales rank number on Amazon, the better. Think in terms of the old Billboard record charts: would you rather have a number 1 hit or a number 10 hit? Number 1 of course. The problem is compounded by the fact that sales ranks apply within their respective category and sometimes even by subcategory or format. For example, there are millions of book listings on Amazon, and 42

a rank of 20,000 in the Books category is a decent ranking if youre trying to predict the likelihood of a sale. But hard-cover books, paperback books and Kindle books are each ranked on their own. So just because you find the hardcover version is ranked well, doesnt mean the paperback version will too. On the other hand, if you find an item ranked 20,000 in the Kitchen category its probably going to sit around for awhile. Sales rank gives you an idea of recent activity. So dont live or die by sales rank. Many of us have seen a stinky ranking drastically improve after just one sale. It is one indicator, but its only part of the decision making process. Most of the time, if I get the products at a low enough price, I can afford to send it in to Amazon and wait for a sale. Especially if Im the only seller offering the item through Amazon FBA.

43

Later Im going to get into more specific product recommendations by month. But what can you do to lower your cost when youre buying from retailers? Well cover several ways:

Clearance sales Rewards programs Coupons

By using one or a combination of these methods can net you incredible discounts on your inventory. Next, lets look at each one in detail.

44

Clearance Sales
These are my favorite kind of sales. There are dozens of reasons why items go on clearance; we wont be able to list them all here. But with some planning and common sense, clearance sales can provide you with a consistent income. In this chapter, Im primarily talking about advertised sales and predictable markdowns. Thats why Ive included Rewards Programs and Coupons. Those programs and coupons are often tied to those big sales, and they often have benefits that expire. Timing matters again. Later, Ill talk more about the un-advertised clearance products that can be found piled on end-caps and discount bins in stores everywhere.

45

Where are the clearance items?

End-of-season clearance sales are pretty easy to spot. In fact theyre usually heavily advertised. Sometimes merchandise is marked down right where it sits. For example, after Christmas toys can be found right in the toy section where they always are. As time goes on, the amount of inventory shrinks and is moved to another section and eventually even co-mingled with all seasonal items like wrapping paper and lights. What about other times of the year? For those clearance items, you may have to look a little harder. Obviously, retail stores are interested in selling things for full price if possible. Imagine assigning a value to every foot of display shelves in a store. Certain shelves would have more value to you as a store manager. In fact, even shelf space at eye-level is even more valuable than shelf space near the floor. So as the sales drag on, retailers tend to put the clearance items in back aisles end caps and corners.

46

Seasonal Inventory Clearance

Seasonal clearance sales are the easiest to predict. It is only common sense that after large holiday or season stores will clear their shelves to make room for more profitable inventory. After-Christmas clearance sales are probably the first that come to mind, because they are the largest of the year. But there are many more clearance sales through the year that can provide inventory for you at rock-bottom prices. For example: the photo at right shows a store in Michigan preparing for spring items. Just a day earlier, there were discounted toys on those shelves. Overnight they were Getting ready for spring: After the After-Christmas sale. 47 consolidated in another part of the store and marked down even more.

So even though there is no official After After-Christmas Sale, you can predict deep discounts on the items that hang around into February. And once again, when is more important that what. How to Prepare for a Clearance Sale Just before a large clearance sale - especially toy clearances after Christmas and before the holiday season begins stores will begin consolidating their sale merchandise. Plan to go to your local stores a day or two early if possible, and see what is available. For example, before last years after-Christmas sale, one store in my area was still loaded with Fisher-Price Imaginext toys. Demand for them was still high, especially the Batman-related toys. I knew from talking to a store employee that they were going to be included in the clearance sale. So I was early and bought as much as possible. They sold like a dream. Most clearance discounts deepen over time. So if the first big markdown is 50% the more popular

48

products may not last long enough for the 70%-75% discounts. 50% may be the best chance youll get. Youll need to know pretty quickly what to grab, because you will have competition from other shoppers. These sales are great opportunities for you to buy even if you dont plan on selling the goods until the season rolls around again next year.

49

But do you have to wait till next year to sell it? Absolutely not. Heres something that happened to me: After the holidays were over (January 2012) I stopped by my local CVS drugstore to pick something up. As I was wandering around I found an entire aisle marked down 75%. Among the finds were collectible Hallmark ornaments featuring all kinds of characters (evidently hanging Batman or a Smurf on your tree has become acceptable Christmas dcor). Anyway, these ornaments were originally priced between $14 and $20. A 75% discount left plenty of profit for me to try listing them on Amazon. So wait till next year or list them now? I listed them all, in fact I visited four more CVS stores and all but one had a bunch of ornaments left. 50

Within three weeks they have all but sold out. The prices? In most cases more than the original list price. So even if the store says the season is over you can still list your items and sell them other times of the year. But well talk more about that later. Once I discovered that CVS clearance sale, I quickly formed a plan and hit the other stores in my area. But I still just got leftovers. Imagine if Id known earlier about the sale and planned for it? If I had known earlier I could have been there to get a better selection, and a larger haul. Does it matter if I know anything about Hallmark ornaments? Nope. Does it matter if I ever sell them again? Nope. It doesnt matter what I sell. But my timing resulted in a profit. Again: the moral of the story? Timing is important get in early at a good price, youll make more money. Think when not what. Many large chain stores have pricing set from a database at central office. As inventory ages, it gradually gets marked down through the main computer and sent out to the individual stores.

51

Dont be surprised if one regions prices differ from another. A lot of the clearance merchandise has to be physically marked down by staff. If a store is extra busy or disorganized, prices may differ between stores belonging to the same chain. One store may have a 50% discount while a store in a neighboring town may have a 70% markdown. In the Midwest, U.S., one of my very favorite stores is Meijer. They have great discounts, and a good reward program. There is a store near my parents home that I shop when Im in town. On recent visit, I found an entire cart-load of items marked 75%-90% off the regular price. Woohoo! I figured Id hit the next closest Meijer store and try to get the same discounts. I went in, found the clearance section and found the exact same products as the first store. However, in this store they only had a 50% discount. Same chain different discounts. Even so, all was not lost. At the second store I found a bunch of archery accessories marked 80% off. I found archery stuff, baby stuff, ornaments and lacrosse balls none of which I know anything about or have a passion for. The only requirement is that it be profitable.

52

Be patient, and persistent. It is a very good idea to get acquainted with your local store managers. If you ask, they will give you a heads up so you can be prepared to buy as soon as the sale begins. In some cases, your local merchant will even give you a quantity discount if you ask. (This is another perk of dealing offline instead of obtaining your entire inventory online.) Last November Walgreens was having a sale on their toys. They had a deal of 3 for $14.98 on toys that were normally around $10-$15 each. Many were selling on Amazon for $20-$30 each. So I bought a couple of carts full of toys at the 3 for $14.98 price. Some of the toys Id found were $9.99. As I checked out, the cashier told me that at midnight, the $9.99 toys were going to be BOGO (Buy One Get One) and that the 3 for $14.98 deal would end. I asked her to hold my $9.99 items until midnight and Id be back after midnight. Then I went back and bought more 3 for $14.98 items. The night turned out quite profitable. All thanks to a friendly cashier. These sales arent arbitrary. Most large retailers have a markdown schedule.

53

Targets (unofficial) Markdown Schedule Heres just one example: Target is a large U.S. discount store that has a markdown schedule (unofficial) that you can use to your advantage as a seller. Other stores use similar formulas, and by regularly shopping the clearance sections you can begin to actually predict what type of merchandise will be marked down, and by how much. This is just an example to show you what you can find in your large local stores: Target uses their in-store staff to mark prices down. They usually mark their inventory down 15%, then 30%, then 50%, then 70% and sometimes 90% (if anything is left.) After that, they donate it to Goodwill or some other charity. You can spot the percentage of the markdown in the upper-right corner of the clearance price tag.

The 50 in the upper right corner indicates a 50% discount.

54

Plus, when you see several discount tags stacked on top of one another, its a good indication the discount is high. The WEEKLY Sales

Monday: Baby and kids clothing, Stationary/Office, Electronics Tuesday: Food, Womens clothing, Pet supplies, Bedding Wednesday: Toys, Mens clothing, Health & Beauty, Lawn & Garden Thursday: Housewares, Shoes, Lingerie, Sporting Goods, Media, Luggage Friday: Cosmetics, Hardware, Jewelry, Auto

Target is rumored to have secret clearance items (although Target denies this is intentional). They can most often be found around the edges of the Target stores. Items may be marked 50% off, but the true discount is more. If you find an item you like, use the in-store price scanner and you may get a nice surprise. Do a Google search for perimeter perusing to find forums with shoppers who have found these products and share their stories with other readers.
55

Ive found that this weekly schedule is not set in stone my local Target store varies quite a bit. Your store may mark down departments on different days. Its important to get familiar with your particular store. But you get the idea. You might be surprised at how many others are shopping the sales in your area but most of them are buying for their own use, not for resale.

56

Target has another formula that they use for holiday sales. This schedule also varies a little, but pay attention and you can get some amazing deals. Sometimes even 90% off! Use that Target RedCard that I mentioned earlier, and get another 5% discount. The HOLIDAY Sales As for Target, all holidays (except Christmas) follow what some call the 3-3-2 rule: The first 3 days after the holiday are 50% off. The next 3 days are 70% off. The following 2 days are 90%.

Holidays include: Valentines Day Easter 4th of July (in the U.S.) Halloween Thanksgiving (U.S.) 57

Target is only used as an example. With a little detective work you will spot patterns and sales cycles for other retailers in your area. Before we move away from Target though heres another little tip I discovered from a Target staff member near me: Mark-downs usually occur before the store opens in the morning at 8 a.m. Employees see the best discounts while they are pricing the clearance items, giving them an advantage. My local contact told me the employees are supposed to allow the items to sit on the shelf for a minimum of 15 minutes before taking them for purchase. Whats the moral of the story? If you want a shot at the best discounts get to the store early and shop like you mean it.

58

Walmart also has a published, clearance schedule (especially after Christmas).

December 26th, seasonal items are marked down 50%. December 30th, the discount deepens to 70%.

Just as with other stores, this schedule can vary with a few individual stores. But that is the official schedule from Walmart. Try and arrive as early as possible for the best selection. Ask employees in your local stores when they add to their clearance shelves. Theyre usually glad to tell you. Just the other day, I was shopping at my local Ross store and a staff member asked me if I needed any help. I told her I was just shopping the clearance items and asked, Do you mark things down for clearance on certain days? She said, Yep, Mondays and Tuesdays. It was that easy. And now you can guess where Ill be on Monday and Tuesday mornings

59

Customized Rewards
Todays computerized loyalty programs offer much more than just discounts. Coupons and discounts can be tailor-made for you based on your buying habits and delivered right to your email inbox or Smartphone. Stores usually want a minimum of a name and email address in exchange for membership in their program. Some want a little more info like your age, zip code, gender, etc. In return for your information, they get to track all of your purchases. That information gives them valuable data to create their own marketing campaigns for the future. The stores also know that if they reward you for shopping with them, youll keep coming back. In fact, 15% of a retailer's most loyal customers can account for as much as 50% of its sales. A loyal customer is 60

Keep your regular inbox uncluttered by getting an email address exclusively for your rewards programs and coupons.

extremely valuable. It has been estimated that it takes 12-20 new customers to replace one lost loyal customer Most systems award points based on the amount spent over a certain period of time. The more you spend, during a calendar year for example, the greater the discount when you make a purchase. You are not, however, an average customer. Since youre shopping for resale, your large purchases can get you to the top discount tier pretty quickly. Thats how I get 20% on my purchases at Rite-Aid (I hit the top tier in January). Rewards programs often exclude clearance items, so dont be surprised about that. Dont let that discourage you though. Think about the savings on items for your own use! When you save money on your household items, its still money in your pocket!

61

A Few of My Favorite (Offline) Rewards Programs:

Rite-Aid Wellness+ Program Rite-Aid Single Check Rebate Target Red Card (Debit or Credit) Meijer mPerks K-Mart shopyourway rewards Big Lots Buzz Club Rewards rewards R Us

Besides using rewards programs to lower your cost for inventory, there are deal sharing sites that will net you a nice check each month when you shop online. Just imagine: if you spent $3000 buying products (over a month) through a site like eBates.com with an average of 7% cash back youd get a check for $210.

62

Favorite Cash-Back (Online) Programs:

eBates Use eBates as a central portal to get to your favorite online shopping sites to get cash back every month.

FatWallet.com This is an incredibly valuable site to find deals, get coupons (without all of the usual hassle), and find great advice on everything from the latest deals to tax advice.

SlickDeals.net Real-time deals from all over the web. If you visit this site regularly, youll find it hard to keep up with them all.

Several companies offer special discounts when you use their own stores credit card. Discounts can range from a 2% up to 20% on all purchases through their store and some of them offer memberonly discounts and specials.

63

Store Credit Cards with Discounts

TJXRewards 10% discount at TJ Maxx, Marshalls, and HomeGoods stores. Kohls Charge Card 10%-20% off of in-store purchases. Target 5% off in-store purchases.

Thats just a few of course but aside from the pain of keeping track of more cards and accounts you can add the discount to your bottom line. NOTE: A note of caution about using credit cards if you do not pay off your balance every month you risk losing youre your discount. Late charges and interest will quickly eat up your profits. If youre not well-organized, and good with credit cards (Im not), then steer clear of the plastic.

64

Coupons
If you are serious about reducing your cost for inventory take a clue from couponers. You may have seen one of the reality shows dealing with extreme couponing. Even though you may not be as extreme as the shows participants you can learn a lot from them. When I saw the TV shows about extreme couponers I had an epiphany. I saw that they got multiples of their items (often for free) by using manufacturer coupons, store discounts, and whatever other discounts they could add. What could you do with several FREE cases of protein drinks, shampoo, or even maxi-pads? Sell them! Learn the ways of the extreme couponers and get inventory for free!

65

There are several types of coupons, both online and offline. Most stores recognize three types:

Manufacturers coupons The retailer is reimbursed in some way by the manufacturer for the discount.

Store coupons A retailer discount thats often independent from the manufacturer. Online coupons or codes (both manufacturer and store-issued)

The type of coupon is determined by who issues them. So you can see how it would be possible to stack or combine one of each type and not cause offense to anyone.

66

Just like everything Ive discussed in previous chapters, timing is really important with coupons. They are usually good for a limited time, and you can often combine them with existing specials. For example, in some stores you can use coupons on clearance items to get your inventory almost free. If you shop online, you can usually combine a percent-off coupon with free shipping. It all goes to your bottom line. You can use coupons to basically create your own clearance sale if you use them properly. Every store has its own policies regarding usage. Some stores allow stacking (using multiple coupons for maximum discounts), and when it comes to clearance or sale items, some allow the use of coupons and some do not.

67

Couponer Lingo
Couponers even have their own lingo. Youll see these terms quite often in fact, youll see more than these but heres a start:

BOGO or B1G1 - Buy One Get One (free) B&M - Brick and Mortar (physical stores locations) CATALINA Coupons printed on the back of your receipt or along with your receipt. DND - DO NOT DOUBLE (COUPON) MFG or MFR - Manufacturer MIR Mail-In Rebate

OYNO or OYNP - On Your Next Order / Next Purchase PEELIE On-Package Coupon PRINTABLE - Printable Coupon PSA - Prices Starting at STACK Use a store coupon and a manufacturer coupon on the same item. YMMV - Your Market May Vary WYB - When you buy

68

So getting stuff for free is one angle. But when I talk about couponsIm not talking about 25 off some Pillsbury biscuits. I look for a percentage off the total sale. Most coupon sites are for people using coupons to lower their grocery bill. Their focus is not the same as ours. Even so, if we learn the concepts that they use, we can put those discounts to work for us as resellers. For example, my brother-in-law works at Kohls. He gets their Friends and Family coupons that are good for a 20% discount, but thats just the beginning. Kohls has one of the best, coupon policies around. You can stack coupons there like crazy and it makes for some exceptional deals. There are some limits, and being familiar with the different types of coupons helps know how you can stack them. For example, some stores (such as Kohls last time I checked) will not let you stack percent-off coupons. You can however, stack a manufacturers coupon with a percent-off coupon, and if shopping online get free shipping. To top that off, you can sometimes use all of that on clearance items. 69

Here is my experience with Kohls: I was about to make a pretty big purchase of clearance items. I wanted to use the Friends & Family coupons from my brother-in-law, but the coupons (worth 20%) had expired. To top that off, my wife had misplaced her Kohls charge card and it was worth another 10% off. But Kohls policy is Yes we can! We went to the store and explained our problems. They allowed us to use the 20% off coupon plus they looked up my wifes information and we got the 10% off for using her charge card. All of that on top of the big discounts I was already getting from late-late-after Christmas stuff. We spent around $200 and saved $877. So yes Kohls can apparently overcome potential obstacles to a sale.

70

One

well-known

Amazon

FBA

seller,

Bob

Willey

(FBARocks.com), recently posted an image of one of his receipts from a Kohls shopping trip. He used coupons, on top of discounted clearance prices. He gave me permission to reprint it for you here (notice he paid $145.16 and saved $1298.85.) Youll have to put some effort into couponing but it pays off in a big way.

71

Couponing Forums
Couponers are a breed all their own. They have developed a knack for squeezing every dime out of a deal. The organization they display leaves me in awe. I simply cannot do what they do. I have learned a lot from the couponing forums. When it comes to sharing helpful information, couponers are some of the most generous people there are.

72

In the couponing forums they share deals, give advice, and cheer each other on. There are many couponing forums that are top-notch. But Im listing a few of my favorites below to get you going:

Coupon Divas Hands down, my favorite coupon site for finding deals for business as well as groceries. To me this is the easiest place to find the magic combination of coupons and specials resulting in FREE items.

The Krazy Coupon Lady Super helpful, thorough information for newbies and pros. Hot Coupon World Good beginner tips, and another helpful forum. A Full Cup Very helpful, and active forum. Got a Deal Good, active forum with recent hot deals and up-to-date coupon codes.

73

Your Equipment Makes a Difference You have to be there at the right time and you've got to be equipped. ~William Hastie
This is kind of a side point, but if youre going to cash in on all of these discounts and sales you cant operate in the dark. Since were looking for dependable, predictable income, we need to know what the profit potential is when we buy. When I began scouting for items to sell online, I went with my gut for what would sell and what would not. I had a simple cell phone with no internet access. In fact, internet access from a cell phone was pretty much just a dream at the time. If I found something I was unsure of I would call a friend, or my mom anyone with internet access. Id ask them to look the item up on eBay to see if it was selling. It was pretty tedious and I wound up with some products that turned out to be worthless. Just looking to see whether an item was on eBay was no guarantee of the likelihood of a sale. 74

Eventually, I got an internet enabled phone and figured out that if I texted an ISBN to Google, I could get back some prices in return. It was pretty archaic to say the least. But that led me to a hand-held scanner which I used on used books. It was wonderful at the time. The hand-held scanner held part of Amazons database for books, and it let me know whether I was likely to make a profit. It showed me the ranking, and the lowest five prices. The problem was it was not always up to date. I had to download the newest information before going out to scout because it wasnt hooked up to the internet. Besides that, if I found a product that was not a book, CD or DVD there was a good chance I wouldnt have any data at all from my scanner. Eventually I switched to ScanPower (formerly FBAScout) because it gives me real-time results on any product listed on Amazon. I use the app on my Android phone. As an Amazon FBA seller, I can even see how much Ill make after fees. This is not just a pitch for the product, I use it because it works like nothing else available ScanPower makes me money.

75

Without a Smartphone I could not use the program. Getting proper equipment is important. Yes, it seems expensive. But I liken my equipment to power tools in other professions. Lets say youre a carpenter. Imagine you and another carpenter were bidding on a job, and it needed to be completed in a short time. When you meet to submit your bid, you drive up in your horse and wagon. In the wagon are all of your hand tools. No power needed on your jobs. You have a beautiful set of hand drills and augers, hand saws, a full set of screwdrivers, etc. Your competitor drives up in his Ford F-150, in the bed is a nice toolbox full of professional power tools. Power saws, drills, laser levels, and so on.

76

You may be in great physical shape from using those tools, but you wont be able to stand up to the competition. The same is true in the business of retail flipping. You have to have some basic power tools to get the job done efficiently and profitably. That includes your shipping station and supplies. Even if you only ship to Amazon FBA you still need to pack things to send to them, and having the right tools for the job will translate into profit. How do these things relate to timing and profits? If you arent ready to take in a lot of product you will hesitate. I have done it myself. If I dont have the supplies I need or if I dont have the room I need to take in a lot of inventory I will hold off. I will admit, it has cost me sales. When the time is right, you have to act.

77

As I mentioned earlier, I use ScanPower on my Android phone when Im out looking for products to sell on Amazon. You can used your built-in camera on the phone to scan barcodes. I did that for a really long time, but the camera takes time to focus on each product and its just slow. I now use a small Bluetooth scanner to scan barcodes and then it talks to the Smartphone app. Its a lot faster and I believe it has paid for itself.

Get a 30-day free trial of ScanPower by visiting: www.ScanPower.com. Additionally, if you are interested in one of those little Bluetooth scanners, you can learn more about them at: www.mcsurf.us/Scanfob.

78

Besides seasonal clearance, there are some other reasons for clearance sales; theyre not as predictable, but profitable nonetheless. Lets take a brief look at those reasons in the next chapter.

79

Chapter 5 Right-Place, Right-Time

Un-Advertised Clearance Items
There are other ways to get discounts on your inventory. However they arent directly related to dates like the sales we just discussed. Finding the discounts mentioned below feels more like a treasure hunt. In most stores there is at least one spot that has a bunch of clearance items. There may seem to be no way to predict when these items will appear but remember were not focusing on what were focusing on when. If you ask the staff when they mark their products down you may find that they do it on a certain day of the week. That information can put you in the right-place at the right-time. Timing matters. 80

Store clearance items may be gathered to one place, on the same shelf. The clearance items may be also be found in their respective departments. You might find clearance-priced sporting goods in the sporting goods department, clearance baby items in the baby department, and so on. When you first enter a store, walk the perimeter and look for an obvious Clearance sign. If there is no sign, check the end cap shelves for a shelf with a hodge-podge of products (see photo at left). Sometimes youll find that each department has its own clearance items, but after they sit around awhile, they get moved to a more general, hodge-podge shelf. So cover all of your bases. Hodge-podge on an end-cap

81

It also helps to learn what the clearance tags look like in particular stores. Ive tried to memorize the tag colors in my area so that I automatically scan for certain colors: Store: Discount Tag Colors

Target: Bright Red Rite-Aid: Yellow Lowes: Yellow Ross: Pink K-mart: Yellow Ace Hardware: Red Kohls: Red & Yellow Meijer: Orange The list goes on, but you get the idea

82

Walmart has orange balloons around the store to mark clearance shelves. They can often be spotted from a distance floating near the ceiling. To make things even more confusing, some stores (such as K-Mart in my area) leave clearance items mixed in with the regularly-priced inventory. In that case youll have to figure out what their clearance tag looks like and just walk the store visually scanning for those tags. I have found $1000s Clearance Balloons at Walmart worth of products that way, while getting my exercise at the same time.

Clearance shopping takes patience and a keen eye. Last time I visited my parents in Michigan, I took some time to comb through one of their local stores. My time was limited, so I passed through the store sort of quickly, but I thought I did a pretty thorough job. But then

83

The following day, I returned to that same store to get a gift for my mother. While I was there I decided to double-check my previous days work. Even though I thought Id been thorough, I found:

15 NFL & NHL iPad covers for $.70 each Avg. Amazon price: $19.95 3 FAO Schwarz Silver-plated Baby Rattles for $6 ea Avg. Amazon price: $23.47 2 FAO Schwarz Porcelain Baby Dish Set for $7 each Avg. Amazon price: $25.00

The total potential profit of the items I missed on my first trip through that store was $378.66 So, take your time and look carefully for clearance items. Get to know your stores. It will pay off.

Now lets look quick look at why stores mark down their items for clearance. 84

Products No Longer Carried

A common reason items end up in the clearance section is that the store may stop carrying a certain brand or item. If a store has signed up to carry a new brand, they will dedicate premium shelf space to the new products and try to ditch the old. This type of sale is not as predictable as the clearance sales mentioned earlier but they are just as profitable. Since they are not advertised, many shoppers miss them completely, which gives you more opportunity. I have found discontinued merchandise marked down as much as 90% in some stores. In the discounted merchandise at the right I found three Braun electric shaver heads at 90% off. I paid $2.75 for each and sold all three the day they arrived at the Amazon warehouse, for $23.00 each. 85

Returned Merchandise
When an item is returned to a store, the store cannot put it back on the shelf to sell it as new. They may return the item to their main warehouse for credit. In some cases, the warehouse will give them credit and let them keep the merchandise, allowing them to resell it as open-box or something similar. Since thats the case, many stores will put returns on their clearance shelf. Thats why I carefully inspect clearance items to make sure everything is in New condition. Recently I purchased a small appliance marked down 75%. The box was a little worn on the edges and I got the impression that it had set around a warehouse for some time. I opened the box and found that it had indeed been opened before. All the parts were there but the owners manual was missing. In that case, I tested the appliance to make sure it worked, then I repacked it to save my potential sale. I found a manual online, printed it out in booklet form, and placed it into the package and still got a good profit out of the deal. But it taught me a lesson be careful that what youre buying can actually be sold as new. Sometimes the reason the product is available at a discount is because there is a problem. Dont let it become your problem. 86

Expiration Dates
You may at times sell food or healthcare products that have an expiration date. Its important that you pay attention to these dates. You may not just end up with an unhappy customer it could make someone sick and/or you may also be breaking the law. Amazon and eBay both have policies regarding sales of items with expiration dates. The policies have similarities. I think Amazons policy for FBA sellers it is the most strict. If youre not familiar with the policy, log in to your Amazon seller account and take a look at the FBA User Guide. Here is a portion of eBays policy:

87

Policy overview
Before listing food and healthcare items, be sure to familiarize yourself with federal and state laws and regulations. These items must: Have a clearly marked expiration date Be delivered to the buyer before they expire Not be altered or changed in any way Be stored safely before you ship them

88

Damaged Packaging
Retailers will often move a product with slightly damaged packaging to a clearance bin. If the item is still in new condition otherwise, I list it as new, and describe the damage. For example, I have a store nearby that sells salvaged goods. They carry primarily groceries with crushed boxes and dented cans. But they sell non-grocery items too About a year ago, I noticed that they had Trojan condoms on sale for $2 per box. Some of the boxes were a little roughed up, but overall they looked fine. They had quite a variety too! So I fired up my FBAScout and started scanning the various types. Now I didnt know this but condoms are quite popular on Amazon. They sell in 12-pack, 36-pack, 100-pack, etc. Well, since they have the same UPC ScanPower was taking its time finding the various offers. So I looked like a real weirdo standing next to the condoms for a really long time messing with my cell phone.

89

Anyway, most of those $2 boxes were selling for $9-$15 each on Amazon with FBA. So I loaded up the cart and checked out. I have to say I felt a little strange buying 40 packs of condoms. The checkout lady was on the older side, so I just kind of joked and told her, These arent all for me. They sold really well. After fees each box was equivalent to a $5 bill in my pocket so I was pretty happy. So I went back for more. (By the way I made sure to check the expiration dates!) In late November I loaded up the cart as usual. On that trip I also found a bunch of tubes of lanolin cream for breastfeeding mothers. (I learn so much doing what I do.) It was marked at a great price and so I bought a bunch of that to go with all the condoms in my cart. I also threw in some discounted Depends adult diapers and called it a day. On that day however, there was a new girl running the cash register. With my unusual variety of products I felt the need to use my theyre not all for me line again. But she had the best reply, when she said, Im not saying anythingI just figure theyre all Christmas presents.

90

The point of all of this isdo not pass up new items just because the package is less than perfect or you have an embarrassing product. One last thing to keep in mind: people often buy new items as gifts. If a package is damaged to a point where it would not make an appropriate gift dont take a chance. In my case, I figured I was pretty safe in assuming no one would give condoms or skin cream for breastfeeding mothers as a gift.

91

Packaging changes
A major package redesign may get items with the old design thrown into the clearance section. If there is no change to the product however, its fine to sell it online as new.

Going out of business / Remodeling

A couple of years ago, the Rite Aid store in my town moved from an old store in a shopping center to a new standalone store closer to the road. Even though they were only moving across the parking lot to the new store, they got rid of a lot of old merchandise. No one wants to stock bright, shiny new shelves with old dusty boxes. If you see a major remodel, or a store thats going out of business, speak up and ask the manager about buying some of their merchandise at a special rate. 92

Rewards Programs
One of the most overlooked way of saving on inventory when buying from retail stores is the rewards or loyalty program. If you combine rewards programs with coupons and discounts you can really increase your profits by saving on the initial purchase of inventory. Many of these programs were originally started to encourage credit

15% of a retailer's most loyal customers can account for as much as 50% of its sales. It takes 12-20 new customers to replace one lost loyal customer.

card use. Your reward was often airline miles, or other discounts usually unrelated to the store in which you were shopping. While that is still common, large stores have expanded their programs to include customers using debit cards or even cash. Rather than airline miles, customers receive discounts on future purchases at that store. I used to avoid rewards programs. I imagined junk mail, and junk email clogging my mailboxes. But then I started doing the math Every time I walk into Rite-Aid I get a 20% discount with their Wellness program. At Target, with the Red (debit) Card, I auto93

matically get 5% off the top. Big Lots has a program that gets me a 20% discount after I spend $20 at least ten times in a calendar year and the list goes on. I think of these programs as a foundation for my other discounts. Getting a blanket discount right when you walk through the door makes me try even harder for the sale items. Stacking rewards programs, and clearance items to lower my cost even more.

94

Chapter 6 Buying Month-to-Month

Buy When? Sell Then!
As I mentioned earlier in this book, if we know when certain products are marked down the most, we can buy them when they are cheapest, and get the best margin when we sell. Likewise, if we know when the highest demand for a product is, we can sell at that time to make the most profit. Maximum profit relies on timing.

95

I imagined a calendar that could tell me roughly what I should look for on a given month. On the other hand, I thought this buying and selling calendar would be handy to remind me of what sells at the same time. On the following pages, Ive put together lists of typical categories and products to buy or sell during each month of the year. Dont gloss over categories such as furniture or carpeting. You may not sell big heavy items, but along with those items are all kinds of related tools, accessories, and paraphernalia that are also marked down. These lists are based on my personal experience while living in Michigan and California and a lot of research. Your market will vary on certain months but the list makes up a very good guide try to get understand the reasons behind the discounts. Why do whole markets suddenly swing away from perfectly good products only to invest in unproven design and technology? Whats the connection?

96

Think of the connections between the manufacturer and the consumer. The manufacturer makes new models each year; they invest a ton of money in marketing, and they have to get the public to keep buying new things. Besides that, there are magazines, websites, blogs, and TV shows hungry for something to review and write about. Finally there is a world of consumers that are accustomed to having the latest and greatest products or designs. One way of launching these huge waves of consumer desire is to hold a trade show. Each year, industry trade shows make the news, and draw huge crowds. New products, styles, and technology is announced and released and suddenly last years products just arent good enough anymore for some people. The retail stores have to answer the demand for this years model so they have to get rid of perfectly good merchandise at a huge discount. Besides the holiday seasons, follow the big trade shows, and youll be able to predict when the clearance sales will be. 97

Learn to ask yourself questions like these:

Why is September a big month for selling furniture? Why is June a huge month for anniversary gifts? When should you watch for clearances on baby items?

Have a look at the month-by-month list beginning below:

98

January
The after-Christmas sales are everywhere during January as expected. Dont forget that some people will return their gifts for cash, and thats a good opportunity to buy for resale.

People in the U.S. will begin receiving their income tax refunds mid-January through April. This is a big cash infusion for shoppers and they will often spend the money on pricey items they would normally pass up.

New Years resolutions are also made at this time. Lose weight, eat healthier, and quit smoking are in the top ten resolutions. So exercise equipment and stop-smoking products are good to have on hand for selling.

99

Things to buy in January:

Barbeques: Most people are not barbequing this time of year, and a lot of them are trying to lose weight due to their New Years Resolutions. Stores will be eliminating older models getting ready for summer. Bicycles & Sporting Goods: The dead of winter isn't when most people are buying their summer gear, so you're likely to get some good deals. Again, this could vary if you're in a warmer climate. Calendars: Ive grabbed calendars at 75% off just after the first of the year, and resold them for full price through February. When buying, lean toward pop culture, collectibles or known artists and photographers. Carpeting & Flooring: This is another area, affected by holidays; a lot of sellers/buyers tend to miss. Most people improve their flooring before the family shows up for the Christmas ham. Merchants know demand drops after the holidays, so flooring prices tend to drop as well as much as 70%.

100

Christmas-Related Cards, Wrapping Paper & Decorations: These are items you may not sell until next season (about nine months away). But the savings can be up to 90%. Your buyers wont mind paying full price to get what they need for the holidays. NOTE: Unless they are collectable, avoid items that are dated such as a case of X-mas cards that say, Merry

Christmas 2004.

Digital Cameras: New models are announced mid-January at electronics shows, etc. Once new models are released, they become all the talk with shutterbugs, and the older models are usually discounted. Furniture: Most furniture companies release new products twice a year: in February and August. So January and July are times to watch for clearance sales, so merchants can make room for the new products next month. Digital Photo Frames: Christmas is over, and sales of these semi-expensive frames slow to a crawl. Watch for big discounts around January. Linens / Bedding: January is traditionally the month for white sales. Wait till the end though for the best sales, or save coupons and stack them for the biggest discounts. 101

Motorcycles: Cold, icy roads do not make for that magic Easy Rider moment. Prices are low on motorcycles and motorcycle-related merchandise. Office Furniture: Business is best for office furniture retailers in January, likely due to new offices buying up stock for the New Year. Toys: The after-Christmas toys are marked down 50-90%. Since youll be selling all year long, you will have inventory for buyers who need toys throughout the year. Buyers will be on the prowl for birthday presents all year long. Video Games: Most new video games come out in late fall for the holiday season, and they'll go on sale after the holidays are over. Wedding Dresses & Supplies: Most weddings take place in June. During this time of year, people are still recovering from the holidays so wedding related sales are slow. Time to buy!

102

February
Spring is on the minds of shoppers and tax refunds are in their hands. U.S. retailer Best Buy says flat screen TV sales jump just before the Super Bowl. Returns are up immediately afterward. That can be a good opportunity for buyers during this month.

February (or January depending on your source) is the least popular month for weddings. So anything wedding-related should be near rock-bottom prices.

What to sell this month? February is the month that sees the term dresses rise in Googles search results. Shoppers show special interest in prom dresses.

103

Things to buy in February:

Automotive Maintenance Items: In the dead of winter, people wont be waxing their cars or driving with the family to Wally World. Demand is low and so are the prices. Ive found waxes, scrub brushes, and auto washing detergents during this time of year, just to flip them within a couple of months. Bedding and Linens: Did you miss out on the linens and bedding in January? All is not lost - most department stores are still running those sales, and while they may have a smaller selection, you can still find great discounts. Digital Cameras: Since the newest cameras will have just come out at the consumer electronics shows, you can grab last year's models for less. The non-nerdy shoppers will be happy to buy cameras with established reviews. Heaters and Humidifiers: By this time of year, people interested in heaters and humidifiers probably already own one. Stores need to make room. The fact is though, if you have a dozen or so, you can still sell them over the summer. 104

Summer Sports Gear: In general, not many people are hunting, fishing, or having fun in the sun during February. I have found archery, fishing, and camping products at rock-bottom prices during these months. Valentine Clearance: After February 14, Valentine merchandise needs to move out for the Easter merchandise. Watch for pop-culture items and limited edition collectibles even if they are chocolates. I have sold limited-edition Hersheys products on eBay many times over the years. Video Games: Again, since video games come out in early winter for the holidays, discounts can be found during this month. (Personally, I find video gamers fickle they love em today and could not care less about them tomorrow. So I leave the game sales to other sellers.)

105

March
March is a good time to find last seasons summer sporting goods, and if you sell apparel last years winter coats, sweaters, gloves, etc.

Last fall, people bought products to winterize their homes and autos. Whatever remains of those products are deeply discounted this month to make room for fresh inventory.

More babies are born in August than any other month. So what? you ask. Those babies are six months old in March and theyre graduating to new sippy cups and rubber-coated silverware. Baby stuff sells really well around this time.

Additionally, tax refund checks are still in play. New laptops, TVs, and accessories are in demand.

106

Things to buy in March:

Boats: The big boat shows are over, and you can grab good deals on last year's boats and accessories. Fabric: Winter-related prints are out, summer fabric is in. Dont just look for fabric though, there are accessories galore that will be marked down buttons, appliqus and patterns all come to mind. Get discounts on the fabric and patterns for your buyers upcoming Santa outfits. Gardening Tools: If youre going to get a deal on garden tools, this is probably the last month to pick up last years items on sale. Golf Clubs: Golf is always a profitable area for online sellers. Avid golfers like to update their equipment. Since new models are coming out for the summer, your local golf shop is pushing the old ones out the door at a discount.

107

Luggage: Since March is between the popular vacation seasons, luggage (and related travel items) are discounted. Amazon FBA sellers pay for the space they occupy in Amazons warehouse so if thats you, make sure you can turn the large suitcases quickly. Televisions and Other Electronics: The fiscal year ends in March for Japanese manufacturers. Old stock is a headache for them, and profitable for you thanks to the discounts this month. Womens Shoes (more specifically) Boots: Last winters boots are finally on sale in March. If you sell apparel, you can clean up on designer-brand discounts. Sales will trickle through the year until next fall when you can really clean up.

108

April
By April, winter weather has broken in most areas. People begin working on their cars and homes again after the long winter break.

Spring cleaning items show up in both columns because just as people begin using them, the retailers move on to summer. Keep your eyes open for deals that you can turn quickly.

One thing Ive noticed, especially with cleaning supplies, is that brand names matter to consumers. Especially regional brands. People are very loyal to cleaning products that work for them so when they move, or for some other reason they cannot find their favorite brand, theyll pay a premium for it online.

109

110

Things to buy in April:

Car Accessories & Parts: Prices for parts and accessories are best around this time, before everyone starts working on their cars. Laptops: Laptop prices are even lower in April than they are during the back to school season. It seems the price dips come from most manufacturers announcing new models around that time, and needing to clear out last year's models. Office Furniture: Most home businesses start up the day after tax day (April 15th in the U.S.). You can usually find some great deals on those office chairs and desks. Snow Removal Equipment: Somehow, global warming has not been able to eliminate the need for snow shovels and snowblowers. If you can find a place to put them, youll be ready to make some bucks from the next blizzard of the century.

111

Televisions and Other Electronics: Japanese manufacturers' fiscal year ends in March, so they're eager to get rid of old stock. Model-specific accessories abound in electronics so dont get stuck thinking this only applies to big TVs.

112

May
In May, school is almost out, gardens are growing, and people turn their attention to outdoor summer activities. They also trade indoor cooking for barbequing and entertaining indoors. Keep an eye out for small kitchen appliances, some of these are still left over from last winter and buyers will buy them for wedding and anniversary gifts.

Next month, June is the biggest month for weddings it stands to reason that it is also the biggest month for anniversaries. Products that make good anniversary gifts (in June) should be a consideration in the month of May.

113

Things to buy in May:

Patio Furniture: As people begin dining outdoors they will want to update their patio spaces and outdoor kitchens. Look for last seasons items still hanging around. The stores will want to make sure theyre all gone to make way for new models. Party & Picnic Supplies: The season of outdoor eats is on its way, and even if you aren't having a barbecue until July, stock up now while the deals are good. Refrigerators: People are cleaning and upgrading their homes, and new refrigerators are coming out soon. Grab good deals on an older-model icebox in May. Vacuums: Since new vacuums come out in June, you should be looking for some deals in May. As an online seller, you dont have the same concerns the large stores have so you can carry last years models a little longer. People always need vacuums right? Dont worry get them low, and youll sell them with no problem.

114

June
By June, most people will have purchased items for the beach and other outdoor activities. (In fact, Ive seen beach-related items on clearance as early as March in California.) So, as soon as summer begins it seems its almost over, because the stores put summer items on clearance.

June through August are the months that most people move. They want to get into their new homes before school resumes around September 1. Most people thin out their possessions when they move. So they need things to decorate and furnish their new homes. These are good items to offer throughout the summer.

115

Things to buy in June:

Dishware: Wedding season brings deals on dishes to everyone, not just newlyweds. Tools: Just in time for Fathers Day, power tools are on sale. Shop before Father's Day for the best sales. Suits: Like power tools, Father's Day brings low prices on the suits every dad must have. Cookware & Kitchen Accessories: Graduations are coming up, so even if you're well out of school, take advantage of the grad-based sales for everything kitchen-related.

116

July
This is a big month to buy toys. Retailers need to clean the shelves to get ready for this years holiday season. Many Christmas shoppers begin buying in earnest after Labor Day, so watch for big (often lightly advertised) clearance deals in July.

Watch for wedding-related items around this time of year. June is the most popular month for weddings, followed by a lull in July. By this month, most brides will have purchased what they need for their weddings. Retailers will begin dumping this years inventory.

117

Things to buy in July:

Computers: Intel and AMD start ramping up for new stuff in July. Back-to-school sales get pretty good here too because kids are getting their first and/or replacement computers. Furniture: August is the second time of year that new furniture comes out, so once again you can get good deals the month before as manufacturers are trying to get rid of the old stuff. Grills: This is another example of product demand that dies off during the season of its use. By July, the folks that are going to buy a grill have probably already gotten theirs. So the stores are now going to make room for fall items. Grills and grilling accessories will begin to be marked down but people are still going to be grilling for a few months, so buy up!

118

Music Players: iPods are refreshed around the end of August / beginning of September. The old models suddenly become boring to many shoppers. But as with cameras and other electronics, a lot of people like the established versions since the bugs have essentially been eliminated. Toys: This is the big clearance to get ready for the fourth quarter, holidays. If you havent seen what kind of profit toys bring at the end of the year you really need to work at this one. It pays off big time.

119

August
The end of summer brings a big shift to retailers each year. Everything for spring and summer is on clearance and by this time of year, deeply discounted.

More babies are born in August than any other month. (Including me!) Having prepared for the birth of their babies in July demand baby items will begin to decline in August. Time to buy baby stuff. Ohand since all those babies are born in August last years babies are now a year old. That brings birthday parties, presents, etc. Good times for sellers who planned ahead for those things.

Dont forget that September will mark the beginning of the (college) academic year. There will be thousands of students moving out of home and into their own dorms and 120

residences. In about one month, those students will need furniture, books, supplies, laptops, and dcor for their new digs.

121

Things to buy in August:

Cosmetics: Ive found makeup on clearance and turned it for 700% profit. Department stores have makeup on sale in August so stock up for resale. July 4th Item Clearance (U.S.): If the United States are still around next year, youll see that people like to buy the flags and bunting that go with the holiday. Buy now, sell later. Linens & Storage Containers: As the kids head off to college, lots of stores have sales on new dorm supplies. If you missed out on the sale earlier this year, now's the time to buy. Outdoor Toys & Camping Equipment: If people havent picked up their summer merchandise by now they probably arent going to start. So since stores need shelf space for Back to School and the holidays everything must go. You can find prices discounted by 75%-90% all over the place if you look.

122

Posters: The college kids arent going to decorate with Thomas Kinkade, theyll use posters. Get the best discounts you can and be ready. Youll be amazed at what people will pay for posters and prints. This is one item you can find easier online than in your local store. School Supplies: Again, back to school sales mean good deals on lots of office supplies. You can either buy now, when the sales are going on, or later in September, when stores are getting rid of leftovers.

123

September
For online sellers September begins their favorite time of year. People start buying for the three big holidays: Halloween, Thanksgiving, and Christmas.

Even though September is a sellers month there are still great clearances on Backto-School items, gardening tools, and laptops.

This is the month for online sellers to really ramp up. This is where the best quarter of the year starts.

124

Things to buy in September:

Bicycles: New bicycles come out at the end of September. That means you can get discounts on the old beaters before winter comes around. Garden Supplies: Harvest time for gardeners, and whos buying gardening tools? Hardly anyone right now so they you can find a lot of garden supplies at 50%-70% off this month. Grills & Lawnmowers: Stores have to make room for all their winter gear, which means these big summer staples, will be on sale. Now if you dont sell the big stuff, you can still watch for the accessories especially in the grilling department. Back to School Supplies: As mentioned above, stores will be clearing out their inventory from all the back to school sales. Anything you don't need the first few weeks of school can be bought in September for even less.

125

Smartphones & Accessories: Would you send your daughter to live on campus without a suitable way to communicate with you? Of course not. But since she went to school at the beginning of the month she probably already has what she needs by mid- to late-September. Watch for the clearance items in this category starting at the end of September. Toys & Games: The Christmas sales start early at places like Toys R Us, and will continue through most of the holiday season.

126

October
Summer is definitely over and all summer-related products should be deeply discounted.

Shoppers begin winterizing their cars and homes. So if you bought winterization products in the spring make sure theyre listed for sale now.

In general toys will likely be the focus whether buying or selling. The profit margins can be outstanding. Amazon restricts their toy category to more experienced sellers during this time of year. That is an excellent reason to be using Amazons FBA program. FBA sellers are approved to sell in the Toys category during the holiday season.

Of course if you dont sell on Amazon, you can still sell your wares on eBay.

127

Things to buy in October:

Jeans: This little breather between the back to school season and holiday shopping season is a good time to find jeans on sale. To make it worth your while, make sure you familiarize yourself with the brands that sell. Cookware & Kitchen Accessories: Holiday deals start pretty early, this is one of the best times of year to buy these items. They will get serious use over the next three months, so turnaround will be quick. Toys & Games: The Christmas sales start early at places like Toys R Us, and will continue through most of the holiday season.

128

November
November shoppers tend to be serious about their holiday shopping, but they arent panicking yet. Gift sales are strong, but buyers are not shelling out the big bucks yet. Leave that to the procrastinating late-December shoppers. Meanwhile

You can pick up Halloween items on clearance, and store them for next year or list them right away. Some characters are evergreen, like Mickey Mouse or Batman. But if a character is hot just be-cause of a current movie tie-in, they could be big duds next season.

There are great deals to be found during Black Friday weekend. But youll have to do your home-work and youll have to be early. The best source Ive found for tips is following the couponing web-sites and forums. Build a plan, and work the plan.

129

Besides Christmas, the Thanksgiving holiday (U.S.) and holidays in the U.K. revolve around large family gatherings with lots of cooking. Demand for kitchen appliances and holiday decorations rises sharply this month.

130

Things to buy in November:

Aluminum Foil & Plastic Wrap: I saw this recommendation on LifeHacker.com and I thought it was pretty odd. But look at Amazon and youll see that there are actually people who buy these things online. A key to making a profit is bundling. Wrap a few things together, and increase your profits even more. Black Friday (day after Thanksgiving-U.S.): Although this is a manufactured discount holiday you can really cash in big on it. In this case the demand and sales happen at the same time. The only difference is you should probably hold your purchases for a few weeks to get the maximum prices when you sell. Halloween Clearance: This is pretty self-explanatory. Some of this Halloween stuff will be in demand year after year. Just beware of the flash-in-the-pan characters, otherwise you could be stuck with products that wont sell.

131

Electronics: Hit the stores during Black Friday and Cyber Monday for great deals on all kinds of electronics. Last year, I found a bunch of external hard drives marked down by over $50. I bought what I could and sold them at full price making nearly $50 profit on each one. The reason they were marked down? Most hard drives are made in Thailand which sadly had been hit by a typhoon, disrupting the supply. The result was, the store wanted to get rid of what they had because they couldnt resupply. On the other hand, demand was still high from consumers, so the hard drives sold very quickly. A good lesson to keep in mind. Wedding-Related: With Halloween, Thanksgiving, and Christmas all so close together, who has time for a wedding? Demand is low at this time of year. Besides that, if a wedding is planned for next June, brides will want the next years styles if possible. But then there are the othersbelieve me, this stuff will still sell next spring.

132

December
This is a sellers month, but as the holiday nears, retailers offer better and better deals to try to clear their shelves before the big day. So balance buying with selling. December also means nearly anything that can be given as a gift will sell. Shoppers regularly pay premium prices to buy certain toys or other gifts online. Why? Some have procrastinated, and have to catch up no matter what it costs. Others have children or friends that want a certain, particular item. Here are a couple random tips for December:

If you dont have it you cant sell it. Make sure youre well-stocked for sales during the first three weeks of December.

Adjust your prices more often than usual. Inventory is coming and going rapidly. A simple news story could send demand for a certain product sky-high. Keep your prices competitive in the marketplace. An auto-pricing service can really boost profits.

133

Things to buy in December:

Golf Clubs: It's the off-season, so golf clubs are cheaper to come by. Youll get a nice return on clearance items later. Pool Equipment: Youre probably not thinking of swimming in December right? Well, neither is anyone else. So pool maintenance products are dusty and discounted. Get all you can, because it wont be six months before it will be selling for full price. Televisions & Other Electronics: The sales continue after Black Friday and Cyber Monday, usually all the way up until the Super Bowl. Thanksgiving Clearance: There are some items (especially kitchen and dining) that will be discounted after Thanksgiving.

134

Tools: Tools get included in holiday sales people need to fix things to get ready for big family visits, plus you know how hard it can be to find the right tools to put up the decorations. Tools are a quick buy and quick sell. Wedding Supplies: Winter's back, which means weddings are slowing down and marked down. The more deeply into winter you get, the discount gets.

135

Chapter 7 Selling Takes Timing Too

When to Sell (Hint: Sell High)
To be a successful retail flipper you have to sell the stuff you buy. (There is also a name for people who buy and never sell in fact they have a TV show too its called Hoarders.) Once you have products to sell here are a few questions that come to mind:

How can I determine the time of peak demand for my products? Will I lose money if I list my products during off-peak times? How do I price my items to take advantage of higher demand? How can I determine the time of peak demand for my products? 134

There are a lot of ways to figure out when a product is hot. We can easily find Amazons Bestsellers or use eBay Pulse to see what is hot right now. But we are focusing on when not what. As stated earlier if you wait until something is selling like crazy, youve probably missed the boat on getting a really good margin. So we need to predict what will be selling before its popular.

135

Expand Your Possibilities Then Research

There are millions of products for sale on Amazon and eBay why limit yourself to toys? Lets expand our thinking to include any products that earn us a profit. Google Insights for Search can give us a pretty solid answer. Its one of my favorite tools for determining trends over time. Its a powerful tool to see if you should buy inventory or wait till the demand drops to a low bringing your cost down. You can get specific about some items, but generally I like to stick to more general terms. For example, if you get an opportunity to buy a bunch of Scooby Doo barbeque tools (not that they really exist) do a search for barbeque tools and leave the Scooby Doo part off. Your real goal is to see when people buy barbeque tools and when they are not buying barbeque tools. Remember early in this book I talked about humidifiers as an example of a product you might sell. When should you buy? And when should you sell? Take a look at what we find when researching humidifier:

136

137

Since 2004 interest in humidifiers has peaked in December and then drops to a low around the end of April. (Im pretty sure people arent giving humidifiers as holiday gifts.) So when would you sell? More importantly when would you look for humidifiers on clearance? Right after the peaks, youll very likely find humidifiers on clearance. Pay attention to the valleys on the graphs not just the peaks. Items will be marked down as the valley begins. Think about it the biggest clearance sale of the year is right after Christmas, right after the peak. Google Insight for Search doesnt give the actual number of searches. The graph shows the share of total searches that are related to your term. How about another example? Here is the result from searching back pack:

138

139

From this graph we can see (as expected) that back pack peaks every year in August. Thats right about the time school resumes. So we could expect to have good sales on back packs around JulyAugust each year. Now notice the valleys. You should look for clearance prices on back packs around September or October of each year.

140

Will I lose money if I list my products during off-peak times?

Last March I found a bunch of small ceramic heaters marked 70% off at Target. I bought a bunch of them for $6.98 and sent them to Amazon for fulfillment. They normally sell for around $27 to Amazon Prime members. As I write this, the weather is getting warmer across the U.S. In about six months, demand for those heaters will go up. So I have a choice. Should I hold the heaters, or list them for sale now? Should I personally store the heaters until next September or store them in Amazons warehouse? I hate personally storing inventory. I dont have room for it. And its earning nothing for me during that time.

141

Even though summer is close, if I listed my ten heaters for sale on Amazon using FBA, I will probably sell all of them before September. Even during the slow time of year (for heaters) I could still get around $22 for each one. After fees, I would net nearly $100. Thats cash that I can use to buy more items before September rolls around. That makes more sense to me since I get my initial $70 back, plus nearly $100 in profit, as soon as possible. Theres a good chance I would double my money again by September. Even though Amazon charges storage fees for using their warehouse, the cost is relatively small around $25 for all ten heaters for six months. On the other hand, I could hold out, and try to squeeze every nickel out of my inventory by stashing those ten heaters away somewhere, all to save around $25 in storage fees. So although you may not get top dollar during off-peak times, you can still earn a good profit if you bought your products when the prices were at their lowest.

142

How do I price my items to take advantage fluctuating demand?

Since timing affects everything, how do you set prices to remain competitive during the highs and lows of the year? If you use eBay auctions, you can let the market determine your price. I always felt a sense of justice when using auctions. As long as I created a good listing, and started with a fair price, I accepted what the market said. If you have fixed-prices however, such as eBays fixed-price items or Amazon listings, you have to constantly adjust your prices to reflect the ups and downs of supply and demand. Once you have a large inventory of various items, it can be difficult to stay competitive with your pricing. Im not just talking about prices dropping; Im also talking about prices going up.

143

Before the 2008 U.S. Presidential campaign, few people had ever heard of Sarah Palin. She was the Governor of Alaska, and suddenly she was thrust onto the world stage as the Vice Presidential nominee. People wanted to know who this person was. At the time, there was only one biography on Sarah Palin, and not many were printed only 10,000 copies. Overnight demand suddenly skyrocketed, the price briefly shot up to over $100 until the publisher printed more copies to satisfy the demand. At the supply increased, the price fell back to normal. If you were one of the few sellers at the time offering a copy of Sarah on Amazon, you could have easily missed the short (but high) spike in the priceand you would have missed a nice payday.

144

On the flip side, sellers who tried to jump on that short-lived bandwagon had listings of the book with high prices. As the prices fell, some did not readjust their offerings. Having a book priced at $100 when they are obviously plenty to go around just makes a seller look silly.

145

Auto-Pricingto the Rescue?

To avoid situations like the one mentioned above, many sellers often use an auto-pricing service. Autopricers adjust your prices according to criteria you set. You can decide if you want to always have the lowest price, and by how much. Or you can decide to average several of the lowest prices, in the same sub-condition as yours for your price. You also can choose how often and what time youd like your items repriced. The options give a seller a nearly infinite amount of choices. I will state right now that I feel its a huge mistake to fight to have the lowest price on an item. Chris Green, in his book Retail Arbitrage calls that the race to the bottom. But Ill bet you that if I asked a bunch of sellers what they should do when sales are stuck their first response would be lower my prices. Those same sellers get an auto-pricing service, and do you know what they do? They find the always make my prices the lowest button and click it as soon as they can. Then they blame the auto-pricer for their low profits.

146

Auto-pricers dont kill profits lazy sellers kill profits.

Sellers who automatically price to be the lowest trigger other sellers with the same automatic settings. Before you know it, the lowest dozen prices have been affected, and there is no more profit left in the item. Last fall, I found some electric turkey fryers for sale. (And no they werent for frying electric turkeys.) They were priced at $49.99, and I found them on Amazon right before Thanksgiving for $120. I bought the three units that store had for sale. I priced my fryers at the going price of $120 and all three sold within two days of arriving at Amazons warehouse. I kept watching those fryers though and with that kind of margin, I figured a seller would come along and say, I dont need to make that much, I can beat $120.

147

Sure enough, by Thanksgiving, the prices were down to around $69 each. That didnt make sense since demand was actually up! But enough people kept chasing the next sale that the item was no longer profitable. Mindless pricing exposes bottom-selling, auto-pricing sellers to sabotage. During a battle with an auto-pricer, a seller can tweak his own price to be lower and lower. The autopricer will respond by driving the competitors price down, further and further. There is a good chance they will sell out quickly at the artificially low price. The sellers that are left can then restore the price to regular market levels. If you choose to use an auto-pricing service, pay attention. Dont just let it run on auto-pilot. Most services allow you to set minimum prices in case of sabotage or even an honest mistake by another seller.

148

Responsible Auto-Pricing
As I mentioned before, some sellers are against auto-pricers. They feel that the services drive prices down overall. I suppose there is some merit to their claim, but by educating yourself on the workings of the service you choose you can stay above the fray. (I use RepriceIt.com and ScanPower) It is true, if you set your auto-pricer to always price five cents below the lowest competitor, and your competitor has the same settings you will both lose. To top it off, if your competitor doesnt know what theyre doing, and they price an item at a ridiculously low price you are going to get hurt. First of all, I dont recommend trying to have the lowest price. Competing on price is simply a losing proposition. I set my auto-pricer to average the lowest five or six prices, and then I even add a few cents to that. My hope is to avoid triggering the price drops that lower the market for everyone. Besides that, when I shop, I look at several sellers offering good prices. I also consider feedback, the sellers comments on the items, and how much experience they seem to have. I dont always go for the lowest price, and neither do my buyers. In fact, if I can tell Im dealing with a price-dropper, I wont give them my business. 149

Dealing with Price Undercutters

Some people will never get the point that dropping prices to get the next sale hurts the market overall. They feel getting the next sale is their top priority, no matter what the cost. Unfortunately, its short-sighted and not a good business practice. So how can you deal with undercutters?

Buy Out the Competition If you are pricing your items, and you spot someone that is drastically undercutting the market, buy out their inventory. Once its delivered, resell it for the appropriate market price.

Wait Them Out Sometimes its best to just set your own prices at the market rate, and wait. Your competition will sell out and youll get your shot.

150

Id rather wait than sell too cheaply especially when I have out-of-season merchandise listed. Last fall at Home Depot I found some drip irrigation kits for around $3 each on clearance. Normally they were $26 items, but there isnt much demand for drip irrigation supplies in the winter. I only had about six to sell, and I figured the demand would go up again during the spring thaw. I wanted to make sure I didnt have these things sitting around for over a year because with Amazon FBA the long-term storage fees could eat up my profit. When I sent the items in to Amazon, I priced them at full price. During that time, other people sold the same item for as low as $10 over the winter months. None of mine sold. Then, around March all six of my items sold for around $24 each. It just took a little while for demand to come around again. Take your time. Figure out when the next peak in demand is, and keep your prices up. Your competitors can take the low profits if they want they wont remain competitors for long. 151

Premium Pricing
Do you remember when Chryslers PT Cruiser was first released? The year was 2000. eBay was growing, and people were using it to sell anything they could think of at the time. When Chryslers PT Cruiser was launched, there wasnt enough supply to satisfy the demand. So many people wanted PT Cruisers that some were willing to pay $5000 above the sticker price. Many dealers and new car owners took advantage of that situation, and sold their new cars on eBay. eBay Motors was born. Do you think anyone would pay $5000 extra for a PT Cruiser now? (A quick check on eBay Motors will confirm that the answer is a resounding no.) The PT Cruisers moment in the sun, has passed.

152

As you may know, that additional $5000 that buyers paid is called a premium. Its an amount that buyers will pay that is over and above the regular price for an item. It doesnt just happen with cars A few years ago, I was watching the news in the morning and saw a story that a Tickle Me Elmo toy was the hottest thing for that years Christmas season. They also said they were very scarce. I checked eBay, and they were an average of about $85 each. I was instantly motivated to go shopping. I went to Target, and found the toy for $34 each. I bought five English and three Spanish-speaking Elmos, and listed them on eBay, fixed-price, $85 each. They all sold within two days. $400 profit, just like that. Once the holidays were over, there was less demand for the supply, and the price went back to normal. No more premiums on that one. 153

The PT Cruiser was a fluke for eBay. The Elmo toy was a fluke for me. We didnt see the opportunity until it was staring us in the face. What is behind this mentality? Why do shoppers pay more than the retail price for items? Its not always just because the item is scarce. It is often because its convenient especially for people who have procrastinated before the holidays. Another reason is the gotta have it mentality. Collectors, small inflexible children, and shoppers who are basically desperate will pay extra for normal products. Finally, some people will pay just so they can be first, its as simple as that. In the cases mentioned above timing is crucial. For buyers, the buzz eventually dies down. At some point, its impossible to be first any longer. It becomes impossible to be the only kid who has that cool new toy. 154

As a seller, to get in on the brief window where you can get premium prices takes careful attention. Using a scouting service is a must. But even with a scouting service, be careful about buying too much. If youre left with a truck-load of inventory when the bottom drops out, it could cost you dearly.

155

Wrapping Up
At the beginning of this book I said that the three most important things about the business of retail flipping is timing, timing, timing. I hope you can see the truth in that. I hope I got you to think in a way that helps you sell more.

You can make a lot of money if you learn when your stores mark products down. If you fail to take advantage of a clearance season even those with no official names you wont have another chance till next year. If you keep up with coupons and rewards programs you can easily lower your costs by an extra 10%, 20%, 30% or even more. But coupons expire use them when you can!

156

Learn when certain items go on clearance. Keep a record of what you find for next year so youll have a customized shopping plan.

157