
Retail Arbitrage at Walmart [video] - westondeboer
https://www.youtube.com/watch?v=FknkqT5tHK8
======
padseeker
I guess this is one way to make a living. Is it sustainable? Is it gratifying?
Is it scalable?

The guy is a hustler, I can appreciate that. He works for himself, I can
appreciate that.

However if lots of other people try to do the same thing then does all the
competition create a situation where lots of people are squabbling over a few
crumbs? It looks like its a niche. And its only a matter of time others try to
muscle in on his turf.

~~~
grecy
> _Is it sustainable? Is it gratifying? Is it scalable?_

Why does Western Society have a fixation on _only_ doing things that make
sense _for the rest of your life_?

Who cares how long it will last. Who cares about _The rest of your life_. Do
something that's interesting NOW.

Let him enjoy it for however long he wants. When he doesn't enjoy it, or it
doesn't work anymore, he'll find something else to do that he finds
interesting. That's great for him! Maybe it's not the life you want, but
that's not what we're talking about.

~~~
padseeker
I'm not sure what your hostility is for. It's a question of relevance to this
forum specifically. Thanks for the downvote.

You railing against "Western Society" strikes me as off base, like you have an
axe to grind. It doesn't matter to me if he does it once or for the rest of
his life. That not why people post stuff like this to hacker.

However what does matter is this video was shared on HACKER NEWS, probably
because of its entrepreneurial based content. Most of the links posted here
have some sort of connection to either technology, science and/or
entrepreneurship. It's not the latest javascript library, but he is using eBay
+ hustle to brick and mortar stores to generate revenue.

The question is it's relevance to this forum. The guy is trying to make a
business, and exploiting gap between supply and demand. That part is
interesting. The reason why it's relevant is "can anyone use this video to
recreate a similar business?"

Is this video demonstration of a potential service a sustainable, repeatable
and potentially scalable business model for others to emulate on this forum?
My humble take on it is NO IT IS NOT.

 _> Who cares how long it will last_

Literally most of the people who come to hacker news. We're not to watch some
guy drive 700 miles to 20 Walmarts to buy 100+ monopoly board games. Most of
us are interested to see if this can be a real business idea.

Which is why I conceded certain points about the idea. He's working for
himself. He's hustling. I don't know if he does this full time or in addition
to his regular job. There is something impressive to what he's doing. Making
$2500 over the course of a weekend is pretty impressive. And if you could keep
making $2500 per weekend doing this kind of thing that would be of interest to
me, even if it isn't my thing.

~~~
refurb
_I 'm not sure what your hostility is for._

I would assume because he isn’t doing something sustainable or long term so he
takes any criticism of that personally?

~~~
HeyLaughingBoy
Late reply, but my take is that he wasn't being hostile. He had a genuine
question about why that should matter.

And I agree with him. Not everything needs to be sustainable. Not everything
needs to be profitable over the long haul. Sometimes getting set up to take
advantage of a one-time event (e.g., "Snowcopalypse" T-Shirts) with a short
horizon is worth doing and worth studying for future opportunities.

My personal take on what he's saying is "adapt or die."

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headsupftw
Most Americans don't know there's a subeconomy in the U.S. where Chinese
merchants buy items from retail stores and sell them to customers in China.
The successful ones hire people to shop in stores. What do they buy? iPhones,
diapers, baby formula, LV purses, lottery tickets...

~~~
camhenlin
Even cars: there is a huge business of people buying up brand new luxury cars
in the US, then immediately putting them on a boat to China. The manufacturers
hate it, and try to write sales contracts to prevent it, but it's so lucrative
that it constantly attracts new people into the game

~~~
ams6110
Why would manufacturers hate it?

~~~
unethical_ban
Alternative to the other explanation: The only reason it would be a grey
market activity is because the vehicle is more expensive in the native market.

So Widgets Ltd. is selling widgets for $100 in China, but $30 in the US. Lots
of money to be made in the gap.

~~~
gh02t
Indeed, I suspect it has to do with manufacturer's wanting control over prices
and supply. E.g. a manufacturer thinks they can charge a higher base price in
China because they are a luxury foreign brand.

------
DubiousPusher
For an idea of how this business goes on an average day.

[https://www.npr.org/sections/money/2017/07/26/539552579/epis...](https://www.npr.org/sections/money/2017/07/26/539552579/episode-629-buy-
low-sell-prime)

~~~
RcouF1uZ4gsC
From the article: > It defies something called the law of one price. That
economic principle says that the same item should sell for pretty much the
same amount of money everywhere it's available. > Today on the show: We meet
the modern middleman and we find out how he makes money doing something that
should be economically impossible.

This is a very deliberately sensational way of looking at it. One of the big
reasons the one price law works is because there are people who do arbitrage.
The first comers to an arbitrage opportunity make a lot of money. Other people
come in and try to undercut the first comers and so they make less money and
so on. In the long term basically the arbitrage profit tends towards zero.

~~~
DubiousPusher
I think the point is more that it's strange that these giant retailers who've
gotten to where they are because they are basically experts at selling goods
retail are creating these arbitrage opportunities and largely ignoring them.
Intuitively, what you'd expect is for the retailers to find a way to close the
arbitrage gap. But in the U.S. we have this kind of strange notion of
retailers setting prices based on guidance from the wholesaler or producer and
then not allowing any price negotiation. These retailers are used to a world
in which realizing the resulting arbitrage was not worth anyone's time or
money but the internet has changed that and they haven't adapted.

~~~
noir_lord
My partner makes 'spare' money arbitraging between TK Maxx and ebay in the UK,
she follows all the big fashion vloggers on youtube then buys the stuff she
thinks will sell based on spotting trends across them, she frequently makes
100% margin and averages >50% (across everything).

She does it because it's fun and she's bored but so far she's _really_ damn
good at it.

I find it funny that someone with an advanced degree in finance spends her
spare time doing that but it's a hobby and she makes more than I do playing
Chess (which is zero) so I can't laugh.

------
michaelbuckbee
This strikes me as wildly unsustainable and something that just can't last,
with a big caveat: I thought the exact same thing when people were doing this
20 years ago buying vacuum cleaners at Kmart and flipping them on eBay.

My understanding is that people (like this guy) who are good at this pretty
rapidly graduate to doing drop shipping and more online speciality work.

~~~
Consultant32452
In my limited experience with (3) people who do this, they never really
scale/graduate. They just seem to have some different kind of hustle going on,
often this is seasonal. When watermelons are in season they'll drive to the
next state and buy a truck load of watermelons wholesale from a farmer. Then
they sell the watermelons on the side of the road. Same thing with pumpkins
near Halloween. Same thing with flowers near Valetine's. Sometimes they'll buy
a couple cars and flip them. I think they just enjoy constantly doing
something a little different.

------
sailfast
Are there penalties to posting goods you don't have and selling them before
you have them in-hand? Does Amazon penalize sellers for cancelling orders if
they can't be delivered?

~~~
sovietmudkipz
That's called drop shipping when you list an item you don't have. There's a
healthy community of drop shippers in most e-commerce sites.

I'm sure Amazon and other sites do penalize for cancelling orders, so one has
to do a cost-benefit analysis if they make a mistake in pricing. E.g. the
source increased prices recently but do you want to risk your reputation of
your online store?

The risk you're taking on is that you can fulfill the order more cheaply than
what the customer bought it for.

~~~
joemi
Amazon has performance targets that sellers should meet. Last time I saw them,
the Pre-fulfillment Cancel Rate target is under 2.5% and the Late Shipment
Rate is under 4%. (I'm not sure if they're different for different types of
sellers on Amazon or if those are blanket targets for everyone, though.) If
you end up on the wrong side of those targets, Amazon sends a warning, but
you're not immediately suspended. It's unclear to me exactly at what point you
do get suspended... I've seen it happen only when one of those rates gets up
to 10% or so, but I've also seen it happen when one of those rates just goes
about 1% higher than the target, so I suspect there are a lot of factors
behind the scene that are considered (by an algorithm) before suspension/loss
of selling privileges like negative feedback rates and other data Amazon
measures for each seller.

I'm not a dropshipper, btw. Just someone who's been in charge of a book
store's online sales (including on Amazon) for a while. Dropshippers actually
drive me crazy because they're usually really bad customers. Many of them make
lots of demands of the seller like emailing the tracking number separately
(even though Amazon emails it automatically), and removing any pricing info
from packing slips, or removing my store's name from packing slips. One drop
shipper even asked that I put their store's name onto our packing slip and
remove my store's name. All these demands that dropshippers have really slow
down our order processing, since almost every single other order we get has no
special demands.

Additionally, since they're not the end recipient of the shipments, if the end
recipient has a question or issue they have to pass it along to us, and they
often do so very poorly. They're often rude, frequently muddle the question,
and sometimes make additional, outlandish demands, like "my customer thinks
it's taking too long. send another book via overnight shipping or I'll leave a
negative review!" I try to report as many of the worst offenders as possible
to Amazon, but that takes time out of what I should be working on instead, and
often Amazon doesn't care because Amazon Support can be almost as bad.

------
throwaway427
For some reason our office manager will only order stuff off Amazon which
leads to funny scenarios where we'll get 12 pack of soda that was ordered from
Amazon but was shipped from Costco with the Amazon sellers name on the billing
but our office as the shipping. Down at the local Kroger the 12 pack was
probably 15% cheaper...

~~~
s09dfhks
This happened to me with eBay once. Ordered a set of socket wrenches. When the
box arrived at my house it had a Sears online recipet inside with my shipping
address

------
ryanmercer
This is what /r/flipping is about 'buy low, sell high'. There's nothing new or
novel about this, some people make livings doing this sort of thing using FBA
and eBay.

Similarly there is /r/churning where you use credit cards and line of credit
to extract profit by strategically exploiting promotional offers.

~~~
wtracy
Heh, r/flipping _hates_ it when people talk about retail arbitrage
opportunities like this. "You're giving away our secrets!"

~~~
jerf
Should I patent, trademark, or copyright "buy low, sell high"? ... decisions,
decisions....

------
giarc
I love this part of the video
([https://youtu.be/FknkqT5tHK8?t=57](https://youtu.be/FknkqT5tHK8?t=57)).
"Traffic is hades" points camera to traffic moving along nicely. I'd love to
live in a place where traffic like that is "bad".

~~~
surge
It's the secret of living in places like Alabama. I know people who work in
tech remote and live in these places making large salaries.

~~~
giarc
I'd think if you work remote, traffic isn't a big concern :)

I worked out of Toronto for about 2 years as a food safety inspector, which
meant driving around all day. It was horrible. Traffic is so draining to your
moral.

------
lakeeffect
Wouldn't it be more effective to become a retailer and buy wholesale? As
opposed to wholesale retail retail

~~~
scrabble
In this case Monopoly for Millenials is a Walmart exclusive item. So the money
is made from people going to Amazon to buy it.

~~~
ryanmercer
I actually made money off of an exclusive back in the GameCube day. They did
The Legend of Zelda: Collector's Edition for the GameCube that had both games
released for the NES and Nintendo 64, with the former including revised texts
fixing the original mistranslations, a demo of The Wind Waker, and various
promotional videos.

It was going for 50-100$ on eBay. The only way to get it was to get a
subscription to Nintendo Power during the promotion so... yeah.... I was
getting a few dozen Nintendo Power magazines in the mail every month for a
year and pocketing 20-70$ per subscription after the sub price and eBay/PayPal
fees.

Funny thing was, if people messaged me and just asked how I got the copies I
flat out told them "just go get a Nintendo Power subscription".

~~~
AdmiralAsshat
I can't remember how I got a copy of the Collector's Edition, because I don't
think I had an NP subscription. Was it a pre-order bonus for Wind Waker as
well?

In any case, I found it endlessly amusing when I would go to Gamestop and see
used copies of the Collector's Edition marked for sale at $50 or so.
Particularly with the giant "NOT FOR RESALE" text on the cover:

[http://static4.wikia.nocookie.net/__cb20110103022630/zelda/i...](http://static4.wikia.nocookie.net/__cb20110103022630/zelda/images/1/14/The_Legend_of_Zelda_-
_Collector%27s_Edition_%28North_America%29.png)

~~~
ryanmercer
Apparently there were other ways to get it but I only knew of the NP one

[https://zelda.gamepedia.com/The_Legend_of_Zelda:_Collector%2...](https://zelda.gamepedia.com/The_Legend_of_Zelda:_Collector%27s_Edition)

>In the United Kingdom, the Collector's Edition was available to GameCube
owners who mailed Nintendo proof of purchase of one of several selected
GameCube games, including The Wind Waker, F-Zero GX, Mario Kart: Double
Dash!!, 1080° Avalanche, Mario Party 5, and Eternal Darkness: Sanity's
Requiem. Consumers could also send proof of purchase of two titles from the
Player's Choice range to receive the game

------
paulcole
I used to do support and marketing for a retail arbitrage app called Profit
Bandit.

I used to invite local users out to Grocery Outlet in Portland (bargain
grocery store), give them all $50 and see who found the best/most profitable
stuff.

Once when testing the app at a Goodwill down the street from the office I
found a book we ended up selling for around $100 (paid $3 for it).

------
virmundi
I got stuck in line at a K-mart during its close out sale with a man that did
something similar with Magic cards. He buys the yearly packs, when they’re on
sale. He removes the valuable cards. Sells them independently for $10+
dollars. Due to sales and extreme sales like the close out, he makes a few
grand a year. Nice work if you can get it.

------
ape4
Too lazy to watch the video, is that $2500 profit? There is shipping costs,
time spent, gas for car, car wear and tear.

~~~
influx
Yes, this is after he deducted gas, Amazon fees, shipping fees.

~~~
hunter2_
Folks should really use something like the IRS Standard Mileage Rate
(Business) rather than gas, unless they're about to sell the car and it
doesn't need anything before they do. In this case, 700 miles is $381.50.
Still not bad, considering the order of magnitude difference between such
expenses and his profit.

[0] [https://www.irs.gov/tax-professionals/standard-mileage-
rates](https://www.irs.gov/tax-professionals/standard-mileage-rates)

------
partiallypro
I wonder how he knew there would be a market for this that would buy it for so
much over retail.

~~~
GuB-42
Two possibilities:

Maybe he didn't and it is just luck, classic survivor bias.

Maybe what you see is just the highlight of what is essentially a full time
job. I have a friend who exploited arbitrage opportunities, and made a few
thousands like this. While it is easy to see the surface, there is a lot going
on behind the scenes. He sometimes spent the entire day packaging stuff, most
of his travels included visits to potentially interesting shops, he has to
deal with shipping problems and dishonest customers, and he had a very good
knowledge of the market. And while big wins sometimes happened, most of the
money were made through a large number of smaller gains. He enjoyed it when he
did that, a bit less now, and he makes more through his day job (nurse), so he
stopped doing it.

------
megablast
I am surprised Walmart don't limit how many you can buy. This seems like it is
priced to bring people into the store, not make a huge profit for Walmart on
its own.

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dec0dedab0de
I met a band from Australia that bought new equipment in the usa for their
tour, shipped it back home, and sold it for a profit when they got back.

------
awinder
Slickdeals.net apparently has a huge untapped market to go advertise to...

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mattmurdog
A scalper's gonna scalpe

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Upvoter33
Only one thing comes to mind when I see this video: Roll Damn Tide.

~~~
bluto
RTR ... beat them dawgs tomorrow

------
jnettome
Aviãozinho

