Maximizing Your Retail Arbitrage Game

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Maximizing Your Retail Arbitrage Game

Maximizing Your Retail Arbitrage Game

By JoAnna Johnson

Discovering a hefty retailer's sale discount on a valuable item is a great opportunity to resell the item for closer to it's retail value. This is a common practice known as retail arbitrage.  Some resellers only sell new merchandise, while others will offer secondhand/open box goods also.  Resellers often utilize this strategy to build their inventory through discount stores and websites, pallet liquidators or "found deals" when shopping in brick and mortar stores. 

When you're shopping the aisles of your local discount stores like Ross, TJ Maxx, Marshalls or other retailers, keep an eye out for liquidation items that might be one-offs and close out items.  Ideally, you're looking for things that might seem unique and unusual.  The more unique the better!

Clearance discounting is a great way to move product, so if there are a lot of the same items at your store, you can safely assume the case is the same for other locations in chain retailers. Conversely, just because there is only one item presently, doesn't mean its not just the last one they put on the shelf that day and there may be more in the back stock.  It's worth asking an employee if there are any others available, especially if you've found a diamond in the rough. 

When you might have found a great discounted item, investigate the saturation of that particular item.  Take the time to look up the item (try searching with the Sellhound app for comparison pricing across multiple platforms).  Find out the specific style name (if at all possible) so that you can more accurately assess the saturation of the market for that particular item.

Check the sold listings (on every platform that you sell on) for your item to see how many have sold recently, how much they sold for and how many are currently available in the same size.  If there's a large discount margin, you can always compete with multiple other listings by pricing below the lowest competitor, but keep in mind if there are more available than the demand for that item, you might be waiting to sell yours for a while, or potentially, not sell it at all.  You might be the kind of seller who prefers to wait for the higher dollar, or you might be a quick flipper for less profit.  Either way, some finds are better passed on if there the market is flooded, just to avoid the possibility of over-investing in items that might not sell.

Like many business decisions, retail arbitrage is a calculated risk.  The ideal balance is found by picking items that are:

-unique,

-have a good demand

-a slim supply/competition

-a significant discount margin

-high resale value 

When you find all 5 of those points line up, you have a STAR!star

 

 

 


1 comment

  • Jessica Dupuy

    Thanks for all this great advice! Love it!

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