#13 Digital Dumpster Diving
Today we talk about how to do the equivalent of garage sale flipping by 100% online.
I’m back with another blog post and this one is about something I’ve been doing for fun over the last few months. Before we do that, a big welcome to all the new subscribers! It’s crazy that I’ve been so inconsistent with posting but the subscribers keep going up.
I would love to hear from you! Feel free to reply to this email with any questions or things you’d love to learn from me. I’ll make content around this.
Okay so let’s talk about garage sale flipping. The basic premise is going to a garage sale, finding something for $2 and selling it online for $10. (If you’re unfamiliar - have a look at GaryVee’s Trash Talk Series)
Let’s deconstruct what is actually going on here.
What we’re doing is a form of arbitrage. Arbitrage is a financial term for when you simultaneously purchase and sell the same asset in different markets. (Ideally to make a profit on the price differences) For example, if an asset was $6 in Australia and $6.01 in the USA, you could theoretically immediately buy and sell in both countries to make $0.01 on every unit of that asset you buy.
Whilst it’s not simultaneous, it’s a similar concept.
Seller wants to sell a teddy bear for $5
You happen to be local to the seller
Seller does not want to go to the effort of listing online and posting the product
There is strong buyer demand from other locations who are willing to pay up to $15
You can net this profit by doing the extra work of listing and posting
Now, the tough part is, with lockdowns in Sydney and in other parts of the world, it’s hard to find a garage sale.
However, it got me thinking earlier this year - what other similar opportunities are there? How could we do this digitally?
Dropshipping is the premise of selling a product, then ordering it from a wholesaler direct website and putting in the customer’s address instead of yours - allowing them to fulfil the order. You net the difference in prices. (Read More)
In the past, retailers and manufacturers in China weren’t great at marketing to an international audience. So we had dropshipping alleviate that friction point with nicer websites, better marketing material which allowed savvy marketers to net a profit. In my opinion, the opportunity for this has reduced quite a bit as Chinese manufacturers become better at marketing their products and newer, easier services like Wish and Aliexpress.
Whilst, it’s harder to be a dropshipper in 2021, it’s still possible and what’s more important here is this line of thinking.
The specific opportunity I found was that during 2020 and 2021, there was a rising demand for Japanese products from an international market, especially in the niches of anime, trading cards and other collectibles.
There were several friction points:
High shipping costs for smaller/cheaper items such as a card that costs $5 or a booster box that costs $80 but then has a $40 shipping fee. 50%+ mark up from shipping alone!
The language barrier made it difficult for many Japanese stores and sellers to sell to an international market. This was especially true for collectibles that weren’t retail items anymore where it was sold on peer to peer marketplaces like Yahoo Japan or Mecari.
Where there is friction, there is opportunity. It then just becomes an issue of researching the products that have the most demand and where the prices are the highest.
We also don’t need to overcomplicate the distribution channels either. You could set up a full e-commerce store via Shopify and try to do ads. It’s possible but you should test in a more basic way. I used eBay, Facebook marketplace and buy/sell groups online. You need to build some reputation but eventually, it becomes easier and easier. Through this method, I was making about $2-3k a month in sales. Once you have validation, build a bit of a reputation you can think about scaling it. (Though I was more so doing this to make my hobby a little more affordable rather than trying to scale this.)
However, you can scale this premise really well. A new company called PokeNE was able to do this effectively and scale it such that they are doing $90k+ per month in sales. All they do is import Japanese products and sell them to a US audience. The founder started off by just buying off Japanese auction sites and reselling them in the US.
Another possible idea
Another interesting niche I found was in the display cases for trading cards and collectibles. These cases themselves cost $50+ in some cases and are simple acrylic cutouts. After exploring creating them here in Australia, I found a supplier via Alibaba where I can get wholesale pricing on these boxes with a fairly low minimum order quantity. If anyone wants to try this, I would just order a few and try it out.
That’s all I have to share. Hopefully, this gives you some ideas on how to make some cash whilst in lockdown or just staying at home in general. There are always interesting opportunities if you know where to dig. As a final note, please forward this to anyone who needs to stretch their business brain a little bit over the next few months. I’m sure many of you will try to copy EXACTLY what I’m doing - I can’t stop that. However, I think you should try to find a new opportunity and niche that people aren’t looking into.
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