Don’t kid yourself. Return on Investment (ROI) is THE most important aspect of healthy cash flow for your business.
When Nessa and I first started, we only looked at the dollar amount of profit that an item netted. But, when we began focusing on the percentage of profit on each unit, that was a game changer. And it made us more “aggressive” in boosting our ROI.
To do that, we didn’t concoct any master plan or anything. We simply followed 5 strategies that helped to significantly get us way more return, hence way more profit, giving us the financial freedom to quit our jobs. Let’s dive in and talk about what that entails.
Before you do anything, especially Retail Arbitrage (RA), you need to prepare. While you’re probably super antsy to get into stores, and you definitely will be by the end of this article, it is important to take the time to make a plan of action.
You should map out what stores you want to hit, in what order and what it is you intend to look for. That will not only save you a ton of time and gas, but it will allow you to find coupons and gift cards before you leave your house.
We always start by looking for discounted gift cards, which can easily be found on www.GiftCardGranny.com. This site will populate all of the gift cards available on the various gift card sites. That said, our favorite and most trustworthy gift card site is www.Raise.com (Get $5 Bonus by signing up with this link!).
The beauty of gift cards is that these sites sell them at a discount. So, you could buy a $200 gift card for $180. That means when you hit your store you already have a 10% discount on anything that you’re buying. And the gift card savings can be even more than 10%, especially at stores like Marshalls, Ross & TJ Maxx.
Just make sure that when you’re buying gift cards, you identify whether it is in-store only, online only or both. It would suck to get into a store, only to find out that the gift card only works online.
With gift cards in hand, it’s time to look for any coupons that are available too. Again, www.GiftCardGranny.com is a great starting point. And another site that seldom lets us down is www.RetailMeNot.com. Between these two sites, you are sure to find out about any coupons or promotions going on in stores. Find your coupon, print it off and boost your ROI!
Don’t fret, if you found a coupon after you’ve already made your RA run because it’s never too late to use a coupon. In fact, just the other day we were doing some RA as a part of our trip to visit my parents in South Carolina and we ended up dropping almost $900 at just one Lowe’s store in Florence. But, we didn’t have a Lowe’s coupon. 🙁
However, when we got home we found a 10% movers coupon that we bought for about $2. Then, we went back to the Lowe’s with our receipt and coupon and asked that the discount be applied. And like that, we easily shaved off roughly $90 on our total purchase!
See, it’s never too late. But if you can be prepared for your trip into the stores, it will save you precious time.
Discount Double Check?
Have you ever worked in Retail? If so, you would know that the task of constantly updating price labels is daunting. Just keeping up with all the regular priced items is enough to keep you busy all day. Then factor in those clearance prices and things are bound to get out of control.
That’s why it’s important for us Retail Arbitragers to make sure that the price is accurate when we are vetting products in store. And you can do this by finding a in-aisle scanner at stores like Target and Walmart, scanning them at self checkout, or you could just ask an associate. (Just make sure you cover your ears when using Walmart’s in-aisle scanner. The beep noise it makes are a sure way to lose your hearing.)
Now, I’m not saying that you need to scan every single clearance item to ensure it’s pricing is accurate. However, sometimes you may have a good feeling about a product but it’s ROI is just not quite high enough for your standards. Well, it’s probably worth giving a scan.
We’ve found many products that were significantly discounted from the previously marked clearance tag, just by following this strategy.
Something that will make it even easier to find these pricing SNAFUs, is by looking closer at the price label. At Walmart and Home Depot, for example, it will show a date on the label, like 10/29/2015. At Depot, this means that the item went on clearance on that date. However, at Walmart, the date will imply that the last price label update was made on the date shown.
Regardless, if it is in fact 10/29/2015 and you see a date that shows 06/01/2015 on the label, it would warrant a price check. You might just be in for a nice surprise!
It’s pretty likely that when you’re persistently doing RA that you’ll find more than one of a particular product. And depending on your negotiation skills and the store you are in, it might be worth asking to speak with a store manager about getting a discount.
Now, we’ve had varying experiences with this, so it’s definitely your call if it’s worth bringing attention to yourself.
The first time we asked for a bulk discount was at Walmart. They had almost 20 of these Razer Gaming Mouses that sold for $34. I asked an associate about bulk discounts and he immediately stated that they don’t do that. I knew he would say that, but asking an associate is kind of a formality to get to the store manager. I then met with the assistant store manager who agreed to sell them to me for $30 each. Now, that’s not the biggest discount in the world, but when you factor that over 20 units, you are looking at another $80 in your pocket. Not bad.
The most recent example of us asking for a bulk discount was at Target. There were these mini fridges on clearance and they had over 10 in stock. We decided to only buy 2 and test the waters. Within the first week of them being listed they sold out.
So, of course, we went back to Target and intended to buy them out and ask for a bulk discount. Not so fast. After getting in touch with the Customer Service Team Leader, she not only stated that they do not offer bulk discounts, but they have limits on clearance items. When I asked what the limit was, she made up a number in her head and said 1-2. Yes, Target hates on Resellers.
Now, instead of walking out with 9 fridges, we walked out with 4. And even getting 4 was a challenge because she interrogated Nessa about us living in the same household, even though we were buying them separately, on different credit cards, in different lines.
Like I said, negotiating can definitely work, but you need to know when and where to do it. Needless to say, I would just keep a low profile at Target.
Don’t assume that because a price is X at the Walmart on Main St that it will be X at the Walmart on Easy St. That just isn’t the case. Stores will have different pricing, whether it is on clearance or regularly priced item.
On top of that, different retailers sell the same items and they will also have different prices on products.
Again, we’re back to “negotiating.” But, this one is a lot easier than the last negotiating strategy. Pretty much all retailers have a policy about price matching and they take pride in offering the lowest price. Heck, places like Lowe’s will even take the competitors lowest price and knock 10% off.
Still, it’s important to keep this all in mind when you are hitting different stores and don’t just concede to the price listed on the shelf. Remember, have a word track, be polite, and speak to a manager if necessary. You’ll be taken care of and your ROI will be a happy camper.
Don’t Check Out At Checkout
Sick! It’s almost time to pack the car full of ROI. But don’t lose your focus just yet or else you could lose some of that well deserved ROI.
At checkout, make sure that you are watching each item go across the scanner and ensure that it is coming up at the price that you saw on the shelf. If you have a waning memory or just have too much in your cart to remember everything, you could take notes on your phone or photos of the price labels, especially the ones that looked too good to be true.
We’ve even had associates scan the barcode and the price came up higher than the price that was posted on the clearance tag on the box. At stores like Target, they can just scan the clearance tag on the box to override that. But, if you’re already thinking the job is done you might miss out on those opportunities.
And, unfortunately, it has happened to us before with some Vornado Air Conditioners, which turned out to be the difference between a solid ROI and just breaking even. So take heed to our advice. It happens!
With all these extra ways to get the buy price down, you are sure to boost your ROI and increase your cash flow. Never forget, this is your business and you do this so you can life the lifestyle that you desire. So if you’re feeling timid to speak with an associate or don’t feel like you have the time to prepare for a store run, remind yourself that this is the fastest way to grow your business so you can live the lifestyle of your dreams!