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Interestingly enough it seems that public mentions of this don't destroy business. Here is a Planet Money podcast from 2015 http://www.npr.org/sections/money/2017/07/26/539552579/episo... . I thought at this time the days for arbitrage like this would be counted. Apparently not.
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I will occasionally search Amazon for things whose prices I know, like Trader Joe's items or something I bought at a local store. Sometimes Amazon sells it themselves, in which case the prices are reasonable. But often, somebody random will be selling it at a large markup. My theory is that plenty of people are not particularly price sensitive and just want the thing to appear. I'm stubborn enough (or cheap enough) t…
I have a similar feeling when I look at houses to buy online. If I see the house was bought for 40%+ less just a few years ago, I refuse to give an offer. Even if the price seemed reasonable and it interests me. I refuse to reward people who bought low and want to flip it for much higher (if it increased reasonably, fine)
Comparable sales prices for recently sold similar homes would seem a better measure.
I am surprised that there is so much margin. Is this because: 1. Amazon product delivery is so convenient that users don't mind paying little extra or 2. Walmart discounts products valuing their warehouse space more. Thus not realizing there was demand for the product elsewhere or at a different time. Seems like it would be simple for Walmart to figure out this arbitrage and shelve products for longer time. Any thoug…
Exactly both - this is a temporary sort of arbitrage but is great for both these entrepreneurs and the end consumer in the short term. I will be surprised if they survive in the long term, since most of their business model is designed around the lack of Walmart and Amazon talking to each other. I think it would take a relatively simple collaboration between the two (though that might never happen) to completely dest…
Wouldn't this fall foul to some kind of anti-collusion laws?
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I have a similar feeling when I look at houses to buy online. If I see the house was bought for 40%+ less just a few years ago, I refuse to give an offer. Even if the price seemed reasonable and it interests me. I refuse to reward people who bought low and want to flip it for much higher (if it increased reasonably, fine)
Certainly those increases in price are because the person put significant time and money into improving the property. It's not any more of a "reward" than your salary is "reward".
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Maybe the older ones keep their ideas to themselves?
Haha yes, that could also be true. It doesn't seem like a great idea to share your formula and encourage lots of other people to start doing it.
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You're confusing the salary he pays himself with the success of the business.
There's this: "Grant says the business is on track to top $8 million in total sales by the end of this year" But, the actual net margin is unclear. At least $150k, since he paid himself that. But it's not clear that it's millions.
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It seems he is already moving on by entering the self help/motivational speaker industry. > As his business is increasingly run by his team, Grant has reduced his salary down to $60,000 a year and now dedicates much of his time to getting that message out. He consults and teaches e-commerce classes through the same blog he has been using to track his performance.
In other words, his business isn't working out very well and he has a lot of inventory risk. So he's "pivoting" to self-help.
Very hard to believe, you'd have to be very naive to reveal your arbitrage like this.
I think the opportunity is probably too small and time consuming for big business to come in and destroy the opportunity. Similar to how small eBay sellers are able to import stuff straight off alibaba and make a profit.
Eventually Amazon banned me for selling currency instruments, but it least 10 months.
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There's this: "Grant says the business is on track to top $8 million in total sales by the end of this year" But, the actual net margin is unclear. At least $150k, since he paid himself that. But it's not clear that it's millions.
the article says "his business is making seven-figure profits"
Edit: He contradicts himself..."four years later, we're a team of 11 and we're doing well over $200,000 in sales per month"
$200k/month isn't even close to $8M/year. And you aren't netting 7 figures with $200k/month and 11 employees. Now I'm thinking this is just a puff piece for his get-rich-quick lecture series. Too bad, as it's probably still a decent story with the actual figures. Just not a rags to riches one.
I'm also having trouble visualizing 11 people buying $8M (retail) worth of stuff from WalMart in shopping carts. That's $2k per day, per employee, every day.