My friend Chasing the Points shared a Wall Street Journal article with me yesterday that jumped out. The article: The Web’s Most Maniacal Bargain Hunters talks about folks who do this reselling for different reasons than I do. These folks are going purely for cash, and there’s nothing wrong with that. In fact, I love the fact that people can do stuff like that – the entrepreneurial flame is one that should be stoked, after all.
But the thing that stuck out for me the most, and, in fact, resonated with something I have heard Hans Mast speak of a few times, is being able to “time the market.” Now, if I said that in the context of the stock market, you’d laugh at me, and you’d be right to do so. But, no, I am talking about timing the consumer market. The example from the Wall Street Journal’s article should give you an idea of what I mean:
Ms. Zarraonandia once sold $2 canned pumpkin from Safeway for $13 each ahead of Thanksgiving, when a supplier fell behind on production. – Wall Street Journal
When you look at that example, its completely logical, right? Canned pumpkin is kind’ve important around Thanksgiving, it’s not terribly surprising that some folks will pay 6x+ for it in order to make a pumpkin pie for the family. The thing is, though, in order to have your canned pumpkin in place in time to ship it, requires pure speculation. As I’ve read in What I Learned Losing a Million Dollars there is some research you can do – such as Jim Price attempted to do with soybean oil. But, that’s if you’re talking big dollars.
There are times of the year that certain things work for reselling. Some of the easy guesses include holidays. We can get a lot of data from what moves when around the big holiday, aka Christmas. That’s a big time of year, in fact, if you plan ahead, it can make or break your year. The problem I ran into this past year, was that aside from some November portal bonuses, there wasn’t a whole lot of excitement. In hindsight, I should’ve started earlier, like, months earlier, and you should too.
Another time of the year, is the perennial Apple iPhone or iPad release dates. Last year I bought a few iPhones, and sat on them for a few days until Amazon FBA would allow me to ship the phones to an FBA center. I probably could’ve made more than the 25% margin I made on the regular model – I mean, just look at this chart.
I suppose you could say the same for other electronics — did anyone get in on the Apple Watch? (Fair warning: I think Watches need to be ungated to sell on Amazon).
It goes without saying (but I’ll say it anyway), that the Wall Street Journal article is well worth reading for resellers. There’s some discussion of tools which are more useful for folks walking the aisles (and I’ll probably try some out like ASellerTool just because), but there’s also insight into how folks identify deals. The key though, is that you need to plan early, in order to time the market – that means ungating the category for example.
My biggest takeaway though, is to start looking at the expiration dates for canned pumpkin and figuring out whether I need to get ungated now.