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A.B.T. Always Be Tragin'

 

Back in June Nessa and I traveled to NYC for a much needed reunion with family and friends. See, we moved to San Diego back in 2012 and Hurricane Sandy sadly made it very difficult for us to say farewell to many friends and family. (Our heart goes out to everyone affected by that storm.)

Excited as heck to get back to NYC, and with only 8 days to see “everyone”, we decided to put the brakes on our Retail Arbitraging. Well, that’s easier said than done. Because after a nice lunch with my godparents at Jackson Hole on the UES, we were walking down 5th Ave and from a distance a glaring orange sign caught my eye.

And it was none other than a Home Depot on 5th Ave. Seriously? With all the chaos of the City, who would figure that a huge hardware store like Home Depot would be located there? So, of course it took a bit of convincing but I got Nessa to come join me on a little Home Depot NYC recon.

Before I jump into our experience, let me cover some of the objections one may have to Tragin’ on the road.

The Objections & Rebuttals

Objections For A.B.T.

  • We are traveling. JUST enjoy the travel.
  • We don’t have the hardware to Trag’. (Car, printer, etc.)
  • It’s NYC! It’s so busy and will be overwhelming.

Rebuttal For A.B.T. Objections

  1. We just ate a nice meal. Let’s walk it off a bit, while Tragin’. Plus, NYC is EXPENSIVE, so let’s offset the financial capitulation a bit.
  2. Hardware-shmardware. There are UPS stores on every other corner of the street. We don’t need to walk very far to drop off our shipment. Not to mention the fact that cabs are a viable option. And printing off shipping labels isn’t an issue because you can send shipping labels to be printed at the UPS store through the UPS app. Lastly, packaging all of this stuff is easy. We’re hitting a Home Depot which has the essential boxes and packing tape. Contingent that we find something.
  3. People say if you can be successful in NYC, than you can be successful anywhere. Hmm, hmmm…What do you have to say about that? Did I mention that NYC is bleeding us dry of cash? Good, so let’s make some of that cash back.

Walking The Store

Once these objections were overcome, we ran into the store like it was FAO Schwartz or something. (R.I.P.) Making our way around this spectacle of a store, we checked out the showroom on the middle floor and made our way to the ground floor. And that’s where all the merchandise was.

Honestly, it kind of felt like we were in an Ace Hardware and not so much a Home Depot. After scouring the aisles and not really finding anything, we struck the clearance jackpot. Or so we thought. Because this one little nook was where the store kept all of its clearance product. We did our initial scan looking for products that we have already bought in the past and we didn’t find anything. Then, we turned to price labels with 50% off and up.

And voila, we found a filter jackpot! Yes, there were about 20 water filters on clearance, all selling for about $10 and had been selling around $30-$40 before going on clearance. After scanning the products we quickly realized that not only did these products have really great ranks but they were selling for even more than the normal retail price at Home Depot.

So, we bought every filter that was in new condition, made our way to the storage aisle to buy a small heavy duty box and a roll of packing tape.

And like that, we had what we would call an ideal NYC arbitrage run.

Getting the Products Prepped and Shipped to Amazon FBA

You may think that this process was difficult, considering we were in NYC and didn’t have a car or anything. But, filters are really small and light. So we easily put all of the filters in one small box and carried them back home without breaking a sweat. (Well, Nessa didn’t break a sweat because I was carrying the box.)

After our store run, we stopped back at the AirBNB spot that we were renting, logged into the Wi-Fi, prepared the shipment and sent the shipping label to the local UPS store using our UPS account. Once we walked over to the UPS store, we printed off the shipping label, taped it to the box and got our shipping receipt.

Easy, peasy, lemon-squeezy. In only a couple of hours we had made our first NYC arbitrage run and we didn’t have any of the comforts of home. That should go to show you that Retail Arbitrage isn’t really such a difficult way to make a fun living.

The Results Are In

What fun would this article be if we didn’t share the profitability of our NYC arbitrage run?

Exactly! That’s why I’m going to share with you how much each unit cost, how many units of each we bought, what we sold, the selling price and profitability.

But first, let me give you a little time line.

6/21/2015:  Made our arbitrage run, prepared the shipment and dropped off at the UPS store
6/23/2015: Product was checked in to Amazon FBA warehouse in Pennsylvania
7/14/2015:  Wrote this blog and checked the sales

Now that you know where we are at, let’s take a look at the breakdown.

 

Units Bought  Price Per Unit*   Units Sold  Sales Price Revenue Per Unit** Profit Per Unit***
Filter 1    

8

$10.88 8 $55.95 $44.89 $34.01
Filter 2

4

$13.05

2

$45.95 $36.39

$23.34

Filter 3 6 $10.88 0 $29.50 $21.44

$10.56

*Price Per Unit = Clearance Price + Sales Tax
** Revenue Per Unit = Sales Price – FBA Fees
***Profit Per Unit = Revenue Per Unit – Price Per Unit

Looks pretty good for only a few weeks on Amazon, huh? We think so.

One thing that should be pointed out is that there are an abundance of water filters out there and it always seems like Retail Arbitragers find these products and really low ball prices. (Not all of them of course, just some of the less serious sellers.)

For us, we stand firm on our price. So, items like Filter 3, which haven’t sold any units yet, are bound to sell once the other sellers with the lower prices wipe out their inventory. Remember, these items are on clearance. So how many could the other sellers really have? More often than not, Retail Arbitrage sellers have under 10 units of any one product, so we are happy waiting. (Check this article out about PATIENCE!)

Diving into the numbers

Pulling some of the numbers from the chart above, let’s look at the big picture.

Total Spent $216.67 = Product $204.52 + Supplies (Box&Tape) $7.57 + Cost of Shipping $4.58

Current Profitability $306.61 = Profit on Goods Sold $318.76 – Supplies $7.57 – Cost of Shipping $4.58

Potential Profitability* $416.65 = $428.8 Profit on Goods Sold – Supplies $7.57 – Cost of Shipping $4.58

(*Assuming all units sold at current price)

The proof is in the numbers.

As it stands, our ROI is 94%.

And once all units are sold, our ROI will be 209%!!!

Now you know what we mean when we say A.B.T., Always Be Tragin’! You know, because whether you have some time to kill, a meal to walk off, or a burning desire to Arbitrage, you can make money ANYWHERE, ANYTIME. 😉