Retail Arbitrage Goes Mainstream

Trevor on Tagging Miles, Big Habitat, and I were in a discussion about this article that was featured in the Wall Street Journal: Retail Arbitrage. It’s something that Tim has done who writes on Traveltage.

Industry insiders call the practice retail arbitrage. It’s more art than science, because prices are often lower online. Tricks of the trade include scoping bargain racks, shopping on senior discount day, buying unusual sizes and anticipating high demand. Software developers offer price-checking applications that help calculate potential profit, after shipping costs and online commissions.

All three of the aforementioned folks do the resale game for the miles and points. While I don’t do it, because I’m afraid of the risk, I find reselling fascinating. I have learned plenty from Trevor and Big Habitat as well as the book that Tim hooked me up, it took me a while to finish reading not because it was lengthy, I just had a lot going on (took me over a year). Coincidentally, I finished reading the book about last week.

There are tools listed in Tim’s book and tools like CamelCamelCamel that Big Habitat originally introduced me to that make retail arbitrage easier. In the article, there were an additional two programs one that I had not heard of (ScanPower was discussed in Tim’s ebook):

Such experiences led him to create ScanPower, a price-checking app for which he says thousands of people pay at least $40 a month. To improve speed on his own shopping trips, Mr. Green uses a scanner embedded in a glove.

Another app, from ASellerTool Inc., plays a “Booyah” sound when it calculates that a scanned item can be resold for a profit.

My Thoughts On Retail Arbitrage

I think the best manufactured spending technique is reselling. Credit card companies and banks don’t have to worry as much about your activities compared to money orders and the like because of the high risk cash business from money laundering. Perk abuse? Highly doubt it. SAR? Unlikely. Not saying either is a guarantee, but the risks are lower for either one.

One of these days, I’m going to give another try at it and see if I can make some serious cash like the folks described in the article. Based off of what I’ve read, I feel like they are missing an opportunity that Trevor, Big Habitat, or Tim are not missing, the use of a credit card. Maybe except Sam Cohen since he has a $10 MM revenue business.

If you’re like me, skittish about reselling and want to network with people learning from the pros or newbies, Trevor is organizing a #ResellingDO.

8 comments… add one
  • Hey,

    It’s Tim from Traveltage.com.

    Retail Arbitrage definitely has its pros and cons. It’s not for everybody, although anyone can do it.

    With a little experience, and leveraging a few tools, most (but not all) of the risk can be mitigated.

    You can start with tiny sums, and increase gradually as you learn the ropes.

    I’ll probably be presenting at Trevor’s DO, and will be available to chat.

    Looking forward to meeting everyone in July!

    • Thanks for the comment (sorry had to edit my name out). Sounds like the #DO will be awesome!

  • So, I tried using one of the tools mentioned in the article, and went to stores today (Saturday) just to give it a try. Let me just say: That is quite the commitment. I think I’m going to stick to my armchair style of reselling… Besides, MSing in one’s pajamas is infinitely more comfortable, whether they’re Lufthansa, Thai, Qatar, or American PJs!

    • Trevor,

      Was it the tool that was too pricey, or the items you were considering for resale?

      I’ve had good success using Profit Bandit which is $9.99/month. Another good option is the Amazon Shopping App, which can be used for free, but isn’t quite as feature-filled.

      Doing arbitrage online is a great method!

      • @Tim – so the tool offers a 30 day trial, but, testing it out, it seems to me, to require a significant amount of “customization” – e.g., it was telling me that a product was a “Buy” yet it wouldn’t have made me any money.

        I haven’t tried Profit Bandit. Does that also do scanning? I have to admit, I felt weird scanning products in store with my phone.

        • Yes, Profit Bandit does it all, and is my preferred solution. It will require some customization, too, but it’s relatively straightforward. It’s not too expensive and will save you from making expensive mistakes. They also have a trial period. You might give it a try.

          • I definitely will — I assume it has a scanning capability too?

          • Sure does.

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