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Make Money with the Pending Xmas Toy ‘Price Wars’

I knew this was coming.store photo

The word in Retail is that Walmart, Target, ToysRus,  eBay and Amazon are all going to be fighting like the dickens to 'win the sale' this upcoming Christmas, and that means HUGE price cutting on toys. (This article provides more info, and yes I realize the article is about the U.K. market).

Anyway, the #1 strategy for many major retailers will be 'price matching' (because many of them don't know how to compete via anything else except price). That means all the competing retailers are going to race to the bottom, trying to outdo each other with discounts, for a lot of merchandise.

I LOVE it when they do that because the purchase prices end up being artificially low (=WAY below retail). When things 'normalize' (they always do), the prices go back up.

When you combine that rise of prices WITH 'what's in demand' (more on that in a minute), you can make some very big profits during the 2 to 3 weeks leading up to Xmas '13 (yeah I know this sounds too early but hey, this is retail).

How can you profit?

First: Start now buy buying 'name brand' and 'major character' toys that are priced at least 70% below retail. That means clearance-priced: Barbie, Disney (Cars, Planes, Princess, Fairies, Mickey Mouse, Pirates of the Carribbean), sell collectible toys on amazoznMarvel (Spiderman, Captain America, Avengers, etc.), DC (Batman, Superman, etc.), Fisher Price (Imaginext, etc.), Lego, Little Tikes, Vtech, Step2, Nerf. You can find these on clearance shelves/clearance-marked aisles at major stores (Target, Walmart, etc.), as well as online (ToysRus.com, Target.com, eBay.com, etc., and/or via a FindSpotter VIP membership

Also: Buy used toys of the aforementioned character/brand themes, for even lower prices. Check your local craigslist and also inquire with your friends on Facebook to see if they want to unload any unwanted (but complete and clean) toys. Yes, you can sell used games/toys on Amazon, as long as they're clean, working as intended, and 100% complete (with or without original instructions, with or without original exterior packaging).

Then: Program yourself to avoid the 'fads'. Many of us got lucky with the Zhu Zhu pets a few years ago, but that was a gamble and a shortage of production boosted the prices. Don't gamble, most gamblers will lose. So don't try to predict any of the fads.

Right before the holiday shopping season: Look for retailers to cut prices on the newly-released aforementioned character/brand toys, as they try to get a jump start on sales. Buy those toys when they are priced at least 60% below retail, and get ready to re-sell them on eBay/Amazon (see the next paragraph).

During the holiday shopping season: Price your stuff at 4x what you paid for it, or at least full retail price (whichever is greater). As prices normalize/demand picks up in the 2 to 4 weeks leading up to Xmas, buyers become less and less price-sensitive (meaning they're more apt to pay full retail - or higher - to get those major-brand major-character toys I mentioned earlier.)

Stay tuned to this blog (subscribe via the form on the right hand side) and as we lead up to Christmas, I'll be giving you more free tips and info.

-Jordan

Photo by The Library of Congress

Photo by The Library of Congress

{ 20 comments… add one }
  • George Nieves June 1, 2013, 12:46 am

    Hi Jordan,

    Thanks for the reminder about getting ready for Christmas. I’ve been kind of late getting started in the past, but will def. start keeping my eye out for the good deals out there right now!

  • Nan June 12, 2013, 7:32 pm

    I thought used toys were not allowed on Amazon FBA?

    • Jordan Malik June 12, 2013, 7:44 pm

      Used toys ARE allowed but amazon calls them ‘collectible’. Amazon’s definition of collectible (toys):
      http://bit.ly/amz-condition (scroll down to ‘Toys & Games — Collectible’)

  • Genia June 12, 2013, 9:24 pm

    Already getting ready. Just need to start looking for those toys. Thanks for the reminder

  • Clayton Hay June 13, 2013, 1:12 am

    Been stocking up for Christmas and still hit Halloween and maybe Thanksgiving. Thanks for the tips. They are always helpful.

  • S. Smith October 11, 2013, 5:10 pm

    Great Idea! One that I am going to put into action. Thanks.

  • Clayton Hay October 11, 2013, 11:48 pm

    I can’t believe it was June when I last read this. I’m printing it out so it will be in front of me. Thanks for the reminder Jordan.

  • Candace October 12, 2013, 12:15 am

    As always you provide invaluable information. Thank you.

  • James LePore October 12, 2013, 3:12 am

    Always, always, always practical and useful information. Thank you, Jordan.

  • jean peters October 13, 2013, 2:13 am

    Hi Jordan
    Where are you buying toys for 70% off? My target, walmart, toys r us, etc have no clearance sales–or any sales as of yet. Walmart’s “clearance” is a joke.

    Are these companies having these sales in your area?

    • Jordan Malik October 13, 2013, 4:06 pm

      If you can’t find 70%+ off in the big retail stores, keep checking back.

      And/or: Check your local Big Lots-like stores or grocery stores with toy aisles.

      And/or: Check your local thrift stores because they can sometimes have still-in-package toys, (and used (Amazon calls them ‘collectible’) toys still do extremely well during The Holidays).

      And/or: Buy new in package/used toys at your local yard sales and estate sales.

      And/or: find clearance-priced items on store-specific clearance website sections (e.g., Mattel.com and Kohls.com

      There are Lots of ways (including some more mentioned in the original post above) to find new/used merchandise (not just toys) to resell during the holiday.

      -Jordan

  • Lois October 13, 2013, 11:25 am

    WOW! This priceless information to flip for BIG BUCKS is absolutely brilliant thank you Jodan for sharing your secrets.

  • jean peters October 13, 2013, 9:43 pm

    Hi Jordan

    I did find toys r us 70% off toys today. My questions is there are already 46 sellers, including amz that are selling this particular toy today There will be quite a few more sellers that will be listing this toy. This is my 1st Christmas selling season so I don’t know if this is too much competition. Plz advise

    I do source from all the places you suggested above.

    Thanks for your help

    • Jordan Malik October 13, 2013, 9:51 pm

      The successful sales/profit of that toy will vary according to a number of criteria that are out of your control (consumer demand, pricing, competitors’ pricing, etc.). The key to making a sizeable profit this Xmas is to ensure you’re continuously sourcing a variety of toys, ‘collectible’ and new, and other items (new baby items, new/used household items, CDs, DVDs, books etc.) at the lowest cost you can for the greatest profit potential.

      -Jordan

  • Debra Conrad October 17, 2013, 4:43 pm

    Jordan,

    Excellent advice as always. Finding toys at 70% off has always been a challenge for me (except at thrift stores and yard sales). It takes dedication and commitment to shopping the big box retailers often. My best toy shopping score at Walmart was the day I happened to walk in when they were offering 50% off all clearance. (My van was filled to overflowing!)

    My first year selling toys, I DID follow the fads and didn’t have good luck with those toys. I had a very hard time sticking to your advice, LOL. (caught up in all the excitement)
    I learned a ton with that experience and the good thing is that I didn’t loose any money that year on toys. I didn’t make huge profits, but still – it paid for my education (What Not To Do).

    I avoided most toys last season (and did well with other categories). This year I am stepping back into the toy category with a much better understanding.

    I have formulated a strategy and am sticking to it (trying to avoid my past mistakes).

    Thank you so much for all you do and share. You ROCK!

    Debra

    • Jordan Malik October 17, 2013, 5:06 pm

      Thanks for writing Debra (although I’ve probably learned more from you than you have from me!). What is interesting re: ‘hot toy’ lists is that in the future, we’ll see hot toy lists truly follow consumer’s wants (as opposed to Toy retailers simply releasing lists based on their revenue desires/ego/relationships with manufacturers). For instance, Amazon ‘hot toy’ list was actually derived from consumers’ actual demand (see this article). So now, ‘retail flippers’ *may* be able to have better insight into what’s actually going to be in demand. if they can source those toys at good discounts, they can be sure to be a home run come Xmas time.

  • Raul Soto September 8, 2014, 5:53 pm

    Jordan,

    One thing i’ve noticed a lot is that when I find good clearance deals on popular items, Amazon is usually matching the clearance price within a week if they sell the item. When they do this, is the strategy to just hold the inventory until Amazon sells out or return it to the store if it’s not too late? This will be my first Q4 and i’m just wondering if when Amazon matches clearance price on a produce, does this mark their exit on selling this particular product and that they will sell out fast leading up to Dec 25th? Or am I just jumping into shark infested waters by going all in on some of these great deals?

    • Jordan Malik September 8, 2014, 6:05 pm

      Hi Raul:

      The answer to that is going to vary among a number of criteria, including sales rank, your acquisition price, competing sellers’ prices, and the sales rank.

      My general rule of thumb is to wait for Amazon.com to sell out, and keep my prices at least 3x of what I’ve paid. I generally don’t start lowering prices on my items until at least 3 months have gone by since they’ve been stocked at Amazon.

  • Boris October 19, 2014, 10:54 am

    Hi Jordan. I am not familiar with US Christmas shopping season. What is the timeline for period before shopping season when retailers cut prices to jump start on sales that you suggest to take advantage of to buy items at least for 60% off and price them at 4x retail price?

    Thanks

    • Jordan Malik October 19, 2014, 11:03 am

      I never said 4x retail price, I said price it at least full retail, or 4x what you paid for it. Also there is no definitive timeline. Deals are everywhere, all the time. This (and the free info I have throughout this blog (like this) is the most help I can offer you on Christmas selling.

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