Amazon and eBay sellers:
If you purchase any inventory from online or brick-and-mortar stores, this post is for you.
See, with your competition increasing (Amazon and eBay sellers buying the exact same deals as you, online and in-stores), the 'immediate reflex' is for all those sellers (including you) to drop prices. Follow suit and you'll cut into your profits. So IF you have to drop your prices, why not have an advantage that many of them don't have?
By 'advantage', I mean make your inventory costs LOWER than theirs (this leaves you with a higher profit margin, you dig?), so you can be more competitive if/when you lower your selling prices.
So this post shows you how I achieve just that. Why would you want to know?
Well, when you 'stack' a few of the tactics below for a single purchase (meaning you implement them for each purchase of products you make), or even if you just implement ONE tactic, you can realize up to a 30% (or even more) reduction in your Cost of Goods Sold (COGS). (I'm not talking about Amazon/eBay seller fees here, I'm talking about what you're paying for your inventory.)
The tactics below with a '*' can also work for you when you're buying your business supplies (office materials, computers, smartphone, printers, furniture, phones, etc.) for your own use, too.
1. Buying off-season merchandise
This is by far my FAVORITE tactic, and I do it online and in stores. I do this right after major holidays (e.g. Christmas, Easter) and major retail seasons (e.g. gardening products sold during spring/summer). See, retailers go absolutely bonkers liquidating their leftover merchandise. The reason is simple: consumers don't want the stuff - they've completely lost interest. More importantly, the bulk of resellers like you and me don't want to spend the money and store the merch for 9 months until the same season or holiday rolls around again. So that virtually eliminates my competition! I remedy the storage problem by using a 1 or 2 closets and rooms in my house as well as pre-fulfillment centers who can take and store my merchandise - and then send it to Amazon for me at the right time 'next year'. An example: both online and in stores you'll find major name brand string lights at (say) 50 to 90% right after Christmas (or even the days leading up to it). Christmas lights are an Amazon staple that buyers buy in droves. For you online arbitrage folks, use my free list of online stores and check their clearance pages right around every major holiday: Christmas, Easter Halloween, Valentine's Day, etc.
You’d be insane not to take advantage of this tactic. See, many consumers trade in their unwanted store gift cards for cash. The sites that take their gift cards turn around and sell them at a profit (but the purchase price, for you, is still significantly below the retail value of the card). Yes, there are websites that have the singular purpose of selling you gift cards at reduced rates. The sites are free to use and many of them offer free shipping (or instant delivery for 'online only' gift cards).
As an example, you can buy a Macy's gift card in the amount of $200 for $180.40, or a Lowes.com gift card in the amount of $75.48 for $67.18
See this screen shot for another gift card example: screencast.com/t/wIDqcJtpBG
Depending on availability, you can get in-store cards, online-only cards, and cards that are valid for both online and in-store. I've seen gift card discounts as low as 2% off, and as high as 20% off, their face value).
The most reliable websites that do this for their viewers
(I'm partial to Raise.com).
If you want to use this tactic, I highly suggest you buy your cards long before any major 'shopping seasons'. That's because available discounts can sharply decrease as (say) certain shopping seasons draw near. For instance, the ripe time to buy ToysRus gift cards would NOT be September through December (that's when everyone wants discounted gift cards for Christmas, to buy toys). Another example: the ripe time to buy (say) HomeDepot or Lowes cards would NOT be April through August (That's when everyone wants discounted gift cards to buy lawn/home maintenance and repair supplies).
Remember, signing up to gift card sites is free (you're only paying for the gift card(s) when you buy them.) Online gift cards are usually delivered automatically, physical gift cards are mailed to you, of course.
A helpful hint with Raise.com – If a certain gift card is out of stock on Raise.com, Raise will give you the option of receiving an alert when the card(s) are back in stock, by entering your email. I highly suggest you do that AND when you receive the email alert, click through to check out the deal because the first-movers can grab the cards with the highest discount.
3. Buying from store closings (get alerts)
The retail apocalypse is here for 2017. Major chain stores (and even independents) are closing left and right, particularly Sears, Kmart, JCPenney and Macy's stores. This means huge opportunities to grab great merchandise for big discounts. Unsure what stores near you are closing? First do a google search for (say) "Sears store closings" to find a list of stores possibly near you. Also: You can get an email alert when news stories are posted about store closings in your state. Simply follow this tutorial. When you're doing Step #2 in the tutorial, use "store closing NY" for the topic. (Remove the quotes when you type it. Also, I used NY as an example. Use the abbreviation for your state instead of NY). Then (still following Step 3) , choose "News" for the 'Source' section, and select your country for the 'region' section. It's not perfect, but Google will send you an email any time there's a news story regarding a store closing in your state.
4. Buying Gift Cards From Your Friends*
Post a message on Facebook for all your friends to see, asking them if they have gift cards they would like to exchange for cash. For instance, if one of your friends has downsized their home, they may no longer need the IKEA gift card they have in a drawer. Alternately, parents whose kids recently entered Kindergarten may no longer need their 'BabiesRUs' gift cards.
5. Rewards Programs*
Rewards programs are free cash, just waiting to hop into your pocket, and a lot of stores have them! The rewards go up exponentially – spend more, get even more. Rewards vary from gift cards, to discounts, to free products, and more.
Here are a couple of my favorite rewards programs:
- Very frequently, Kohl's will give you $10 in Kohl's Cash (credit towards your online or in-store Kohl's purchase) for every $50 you spend. No membership sign-up or credit card required. More info on Kohl's cash is here: bit.ly/kohlscash . When I was shopping for back-to-school merchandise to resell, I would use my earned Kohl's cash to buy more inventory (e.g., clearance toys or more back-to-school products), which effectively brought all my inventory purchases prices down an extra 15% or so. To find out when Kohl's cash promotions occur (they're quite frequent), check here: bit.ly/kcpromodates.
Here's an example of how just using Kohl's Cash cut my inventory price by at least 40%: screencast.com/t/WxCn557za
In addition, Kohl's now offers FREE 'Yes2You' rewards, which (when you buy products from Kohls) lets you accumulate points and credit and and receive additional savings. More info: bit.ly/yes2you
- I'm a fan of Kmart's Shop Your Way rewards (also applies to Sears) because you can rack up some significant 'points' that apply to future purchases (or get 'surprise' points via their email alerts). Your purchases can also enter you in sweepstakes (obviously your chances of winning are low but hey, you never know). Full details here: bit.ly/sywrewards
- ToysRus recently improved its rewards program. When you sign up (it's free), you get $5 in ToysRus rewards (=$5 for a ToysRus purchase) for every $125 you spend. I know that this doesn't sound like a huge discount, but when you combine it with (say) a ToysRus gift card you bought at a discount (see Tactic #1), the savings are more impressive. There are other perks for ToysRus Rewards members, too. Full details here: bit.ly/trurewards
Bonus Tip: Are you always forgetting, losing, or fumbling with your various store loyalty cards? Download the FREE Key Ring app keyringapp.com for your smart phone. The app keeps all your card info for your rewards programs, and even gives notifications when special offers arrive!
6. Store Email Lists*
I've signed up for email lists at any store or online retailer that I normally source from, and then wait for the deals to roll in. This is a HUGE help with DisneyStore items. When DisneyStore.com items go on sale, they'll send out an email early morning (generally around 6A to 9A EST New York Time).
Most retailers with email lists make offers that can’t be found outside of those emails, so this one’s important for anyone serious about their online arbitrage.
Just go to your favorite store's online sites and poke around for their email signup. My favorites are: DisneyStore.com, Boscovs.com, Bonton.com, ToysRus.com, Kmart.com, and BabiesRus.com
There are websites that offer cash back to you on the shopping you do. All you have to do is sign up for free on their websites, log-in, and start searching for your desired store there. When you see your desired store and their accompanying cash-back offer, all you have to do is click on the link to the store. Then you're shopping like you normally do, as you are on the store's regular site. (Your visits are harmlessly tracked because you entered the store site through the free cash-back website).
These are an online arbitrage seller’s dream come true. You can source your products the same way you normally would, but get straight-up cash, usually paid to you once every 3 months or so (usually via Paypal or a check paid to you).
My favorite 'Discount portal' is eBates
Look at the cash back I've been receiving from eBates: screencast.com/t/nTDc4wQlS . Again, at first blush this doesn't seem like a lot of savings, but 'stack' this effort with (say) Tactic #3 above, and the savings are quite substantial.
8. Store-specific Fan/Alert sites*
There are free web sites designed to track great deals for you in specific stores. This can be critical for you if you want to snap up highly-discounted merchandise. Be sure you sign up for their free email or text alerts while you're checking on the sites, as well as downloading their free smartphone apps (if they offer it).
My favorites are:
- IheartTheMart.com – This guy tracks Walmart in-store deals (a lot of them are 'consumables' like shampoo, razors, food, etc.) and alerts you to the double coupons available, e.g. 1 walmart-issued coupon, and 1 sunday paper coupon, for the same product.
- allthingstarget.com - This site alerts you to available Target.com and in-store deals, as well as coupon-match-ups and a mark-down calendar.
This may sound obvious to you, but there are several folks who forget this. As a business, you can - when it complies with a store's policy - avoid paying sales tax (or getting reimbursed for the sales tax you pay) when you buy products online and in-stores for reselling. These purchases are called 'Tax-Exempt"
The procedures and laws for buying inventory tax-exempt vary state by state, but generally if you're a business, you can get a certificate from your state that verifies your eligibility to be tax exempt (more on that in a moment). In many cases, you can get that certificate online instantly, provided you're have a true 'business' (corporation or LLC, et. al.) in the state.
Let's use New York state-based reseller businesses as an example. New York State ales tax for most merchandise is around 8.75%. So if a NY seller buys $500 in toys from (say) Walmart.com, they would pay over $42 in sales tax. Yipes! But as a business, that seller can get a refund of that entire sales tax charge. Here's how:
In stores: When that NY seller is in a Walmart store (or other stores within NY, provided they allow tax-exempt purchasers by resellers) and buys products, he/she avoids paying sales tax right there, on the spot, by presenting them with a ST-142 form (this form is specific for NY State businesses only): bit.ly/nystexempt
Online: Sellers can get reimbursed the sales tax amount for online purchases, but you have to apply for sales tax exempt status online. See: walmart.com/taxexempt/
Not all online/retail stores accept tax-exempt purchases for resellers. Kohl's, for example, does not, nor does Target. That does not mean those stores will not let you buy multiple quantities. It just means they won't let you make your purchase tax-exempt. A year or two ago some Amazon sellers were spreading horror stories how they got stopped at checkout and were accused of being resellers. That problem has largely disappeared.
Your procedure for getting authorized to not pay sales tax will vary from state to state. To get info on what you can do, go to Google.com and type (without the quotes): “sales tax exemption procedure [enter your state's name here]”. For example, if you're in Ohio, type (without the quotes): “sales tax exemption procedure Ohio”.
For the fastest way to figure out how to get your paid sales tax refunded from various online stores (like my Walmart example above), I recommend this guide: jordanmalik.com/nosalestax
Sales tax adds up, so your refunds/savings are substantial. I buy at least $15,000 worth of inventory in retail stores in 1 year. Thus, the sales tax I would otherwise pay at the register would be over $1200! See how that adds up quick?
It used to be you had to stop everything you were doing at checkout, open up a new browser window, and do a google search to see if there were coupon codes available to possibly get further discounts on your purchase. Now it takes just seconds, thanks to the free 'Honey' app. While you're shopping it goes out and grabs available coupon codes and even automatically 'tries' them for you at checkout. Huge time saver and a nice extra discount 'surprise' while you're shopping. See my full video review here. (You can get honey free here: jordanmalik.com/honey)
I TRULY hope this post helps you. Please post a comment below, and good luck!