Selling Lemonade – lessons learned from Reselling

I had a great reminder today of the power of Murphy’s Law.  Which, to paraphrase, states that whenever you think all is well with your cunning plan, The Devil himself will ride across your path and plaster it with cowpats from his own Satanic herd.

I’m nowhere near the reseller sophistication of Big Habitat, but I do like to tinker with Staples, and I am a proud recycler of Ink, netting me $40 per month income after shelling out some money to acquire a box of 300 empty cartridges from eBay.  The catch with the Staples ink recycle program is that you must purchase $30 of ink from them every 180 days to keep your rewards active.  Knowing this when I saw a recent campaign to earn a $25 gift card for $100 of ink (and hence qualifying me for my $30/180 quota) I figured it would be a good deal.

I bought Dell ink, that I cannot use, at a loss. It was retailing at $17.99 so I bought 6 cartridges for $107.94 and listed them for sale at $15 each on eBay.   Of course, I would pay shipping too ($5.60), so each cartridge sold was earning $13.50  (after eBays cut) at a basis of $23.59, or a net loss of $10.09 per cartridge. The $25 giftcard offset some of the loss, bringing me down from $60.54 to $35.54 loss.

That was further reduced by rebates and rewards from the quadruple dipping of Ink Bold 6%, Upromise Shopping 5%, Staples Rewards 5% and Plink. Without Plink, we are looking at 16% rebates on $107.94 for $17.27.

All told, a net loss of $14.27, but there is also value to be had in increasing your spend at Staples up to $500 per year allowing the full $40 of Ink Rebates per month.

Running a loss is never ideal, but the reality is that if you want to benefit from Staples Ink Recycling you need to buy $30 of Ink every 180 days, and I just don’t print out that much at home, so I didn’t need any more.  The best case scenario would be if you were using that much yourself, and therefore you are only losing out on the differential between buying it at Staples vs anywhere that might be cheaper.

Fixed Price Selling on eBay

Since I had several items to sell, I opted to list as ‘more than one available’ in doing so I opted for a fixed price approach to sales, in the hope that people would buy more than one at a time, and for the simplicity of listing.  I did actually sell a person 2 cartridges, though only once, and the rest sold as singles.  In hindsight I should have upped the price to say $29 for 2 Carts and sold in pairs for everyone.

Annoyingly, even fixed price listings expire, so after about a month I had sold 3 and had 3 cartridges remaining.  At this point I was pretty much ready to be rid of them as they were just annoying me, and I knew that shipping them would incur a fee, but I thought to hell with it and relisted using the one click option.  Somehow, it listed as having 4 for sale not 3 remaining.  I guess perhaps I edited the listing mid month when I was at ‘4 remaining’ and then when it relisted it took that number.

I saw the error, thought I fixed it, but eBay, like Paypal, is a pain in the backside when it comes to ‘confirming and reconfirming changes’ and it didn’t update.  In strides Murphy on his Satanic cow and sells 1 cartridge on day 1, 2 (a pair, yay cheap shipping!) on day 2 and then another on day 2! So I have gone from these gathering dust to selling more than I actually have in 48hrs.

Dilemma Time: Burn, or Pre-Order?

The first 3 cartridges were an easy decision to sell, but number 4 (that I don’t actually own) more difficult.  I could open a case with eBay and explain to the buyer that I messed up, maybe they would forgive me, but also, I would be damaging my reputation, either explicitly, by risking getting a negative review somehow, or just on principle that I am a good seller that stands by what he says.

I decided that the 4th buyer had bought in good faith, so I would go to Staples, buy another Dell cartridge for $17.99, and ship it at a loss.  Luckily the fates agreed with my ethical decision to eat the loss, and that exact cartridge was offering $2 extra in Staples Rewards, which certainly took the sting off things.  Whilst I was there I bought one more cartridge, that fits my own ‘Brother’ printer, that I didn’t really need either, but it got me over $30 and reset my 180 clock for buying more ink.

The Lesson

Firstly, Murphy and his silly law is just waiting for you to slip up when reselling, but beyond this perhaps my error could be used as an intentional Ink strategy for someone who, like me, doesn’t need the Ink and plans to resell.  Instead of buying the ink and having it sit on your desk for a month waiting for a bid, why not find one of the more popular brands and models and list something for sale, reduced from MRRP, without owning it?  You would have to keep an eye to make sure that Staples lists it still, but if you take this approach, offer it for less than Staples as an intentional loss leader and when someone orders it from you then you go buy the ink?

I have been burned in the past trying exactly this, with a Laptop dropship experiment, but I think that with Ink it is much less likely to sell off the shelves like hot cakes, so it could be a much more stable approach.

From a pricing perspective you need to find something that would cost more than $30 in a single transaction, and could be sold on for slightly less, with free shipping, so either two cheaper cartridges, sold as a ‘twin pack’ on eBay or one more expensive one.  I think this could be a good solution to the need to buy Ink you don’t need, avoiding having to hold it at home until a buyer comes along, and still meeting your spend requirements so that you can keep on making massive savings on really great products.  If you were to try this, timing would matter too, since you need to buy towards the end of the 180 window, so if you were waiting for a sale that didn’t happen at some point you would have to go back to the original plan and buy then sell.

What would you have done? Explain to the buyer that you made an error, or bought at a loss?  How do you deal with the need to buy Ink when perhaps you don’t really need it?