At the time you might feel a like a little bit like a villain; You will be making money when others are suffering.
What exactly am I talking about? Mid to late January. Financially, it’s one of the most challenging times of the year for the Western World, but stay tuned for my simple strategy that allows you to make it a profitable season for yourself.
Throughout December, everyone has spent up on food, gifts, travel and parties and at the end of January, the credit card bills from December are due. People panic at the amount they owe and react by listing items on eBay and other marketplaces.
In desperation, they list some of their most prized possessions online, at low reserve prices, in the hope of getting some quick cash and settling their debts. This creates a huge opportunity for you to make some quick and easy cash. Done right, you can really cash in and make even more money than the infamous retail holidays, Cyber Monday and Black Friday.
For a few years now, I've used this time of year to source products at very low prices and then resell them for impressive profits. Here's one story:
It was mid January. Living in New Zealand, I was in the heat of the summer, so it's usually a month spent at the beach or standing around the BBQ. I was counting profits from a successful retail season leading up to Christmas when I decided to treat myself to a new laptop. I searched Trademe.co.nz (the New Zealand equivalent of eBay) and found a lot of options... and they were all going cheap. To cut a long story short, I bought a brand new laptop that was worth $1800 in stores for less than $300. I was ecstatic. No one else even bid on it. While shopping for that laptop, I noticed many others also selling for very low prices. The product listings were amateur and the product descriptions were thin. The product photos were generic ones taken from Google Images. These are rules that you and I know can't be broken if you want to maximise profits on eBay and other marketplaces. Instantly, I knew what was going on: People were clearing out luxury items and unwanted gifts in order to get through a tough month in personal finance.
So I bought more laptops. All with the firm intention of remarketing them and reselling them for a better profit. And I did just that. I bought around $1500 worth of laptops and I resold them for $4500. Plus, I kept one of the laptops for myself. Easy.
Last year was one of the first years in a while that I haven't used this technique because I was too busy. This year, I'll be honeymooning in Vanuatu during the best time to utilize this technique, so in order to make sure opportunities don't get wasted, I'm sharing a few tips to help you cash in.
Why this has worked so well for me in the past:
- If you have played your cards right, you would have profited from the big Christmas spend and you will have some money to invest. But even if you don't have a lot of money to invest in product sourcing, this technique can still work for you, just scale it to suit your budget.
- Unlike you, who profits from Christmas, most people feel the pinch after Christmas. Therefore, when it comes time to buy items to resell you’ll have less competition when auctions are ending which means you can buy low and sell high!
- You are buying from inexperienced sellers. They don’t write good product descriptions or take good photos of their items. This makes their items less appealing to the masses and makes it easier for you to score a bargain.
- People don't just sell items because they are broke and need the cash: There are also a TON of unwanted gifts that get listed online at very low prices shortly after Christmas which provides even more opportunities.
Tool to help
Many of the best bargains will be sold at auction which often means you can pick up exceptional bargains but it can also be labor intensive to sit around and wait for auctions to end. Sniper tools such as Action Sniper, which offers a free 30 day trial will do the bidding for you and will stick to a budget that you set.
What to buy (to resell for profits!)
If you know a product market well, then by all means, stick to what you are good at. Otherwise, I recommend sticking to more generic, highly sought after items such as laptops, other electronics, handbags, and perfume. These are the items I've been most successful with, but other markets could work too. Markets I personally avoid are clothing and shoes. This is mostly because there is a smaller market of people who will fit each of the clothing items or pairs of shoes. This narrows my potential buyer market, obviously, which can mean it will take longer to resell the items.
Don't get me wrong, I'm normally all for selling clothing and shoes, but for me personally, I like to get rid of my stock quickly, so I avoid these markets for this particular strategy.
The only other market I would be cautious with, but can be very lucrative, is seasonal equipment. For those of you in the US and the northern hemisphere, that's equipment like skis, and other winter-related items. For those of us who are Down Under, it means BBQs, kites, water sports equipment, etc. You can narrow your window of opportunity here, but you could also do very well. It's up to you whether you go for it.
Tips for when it comes time to resell the items
- Hold off listing your items until February or March when the financial pressure of Christmas has eased a little. Or, immediately list items with a desirable fixed price (Buy It Now) and keep the listing live until it sells at the price you want. Attempting to resell your items right after you buy them won't get you the maximum profits possible for each item.
- Use all your experience as a seller to make your listing stand out. This is an important part of this product sourcing strategy. As I mentioned earlier, you will be buying items from inexperienced sellers who do not understand the importance of taking good product photos and writing good descriptions. When you come to resell the items, make sure you use all your skills and really showcase the item to maximize your profits.
- Use a simple photo editor to make your item pop! A little editing goes a long way on eBay so make the most of free image editing software such as Gimp to remove unnecessary background clutter and improve lighting. Remember: Don't airbrush away defects as this could cause disputes later when your customer receives an item that is in worse condition than your listing images led on.
- I need to reiterate this: Don't skimp on your efforts for creating good quality listings! Use your experience and all the listing tips on SaleHoo to help you craft enticing listings.
- Lastly, as with everything in business, don't spend more (on product sourcing) than you can afford to lose.
So SaleHoo members, this January, get ready to invest some of your hard-end Christmas profits into some more inventory that will make you some serious cash in 2013. Are you going to try this technique? Let me know by leaving a comment.
I'm so pleased that I've got you excited about this strategy! Really, it's nothing new and it's something you can do all year round, but in January, the whole process is so much EASIER and the profits and HIGHER. We like that :)
Ben, thank you for your valuable tips, I've never thought about contacting buyers about items that didn't sell, but that's a fantastic idea. It never hurts to ask ( even if your offer is a little cheeky). The worse they can say is no.
I should add: Boxing Day and New Year sales are also a breeding ground for bargains and if you get in early, you can really get some great stock to resell. Often buyers from rural areas or places that don't have big stores like Target and Walmart will buy these items from you.