He shouldn't share this arbitrage strategy because if others do it, its profitability will decrease -- like all arbitrage strategies.
28-year-old makes millions buying from Walmart, selling on Amazon
51–60 of 203 posts
Re: 28-year-old makes millions buying from Walmart, selling on Amazon
#52Good for him, but I really wish for a better class of business journalism. He's been doing this 4 years, and never made more than $150k/year. So he definitely isn't somebody who "makes millions".
The article might be exaggerating but it did state that he had 'millions in profits' at first paragraph. Salary is a different matter, CEOs of new companies dont earn from annual revenue but more from stock sales and gains. Paying 150k is also before taxing and profits and is an expense in wages. Taking a quick guess and say that this person has 1 million in profits, but most likely 1 million to 2 million in gross pr…
Revenue is revenue. Profits are profits. In this case, I'm guessing, it was revenue over $1m.
Re: 28-year-old makes millions buying from Walmart, selling on Amazon
#53I 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…
Or Walmart could just dump the stuff back into their own fulfillment system.
I doubt it amounts to enough merchandise for them to care about though, regardless of the margin. They make money on low costs and volume.
Re: 28-year-old makes millions buying from Walmart, selling on Amazon
#54I 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…
Or they just dont care. Walmart sets a price to move X amount of merchandise. This guy sells to a small fraction in comparison. Lets say 1% (as an example). If Walmart increases the price, they could easily lose more than 1% of their other customers by attempting to capture this guys profits.
The margins can be big! I've compared Walmart or Target products on Amazon vs. in the store. Sometimes they are 200% higher, however it tends to be on low priced products.
A bottle of vitamins on Amazon might be $9, but you can order them right now and get them delivered to your door. In the store it's $5. A LOT of people are willing to buy from Amazon evening knowing it's more.
Re: 28-year-old makes millions buying from Walmart, selling on Amazon
#55Interestingly 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.
I think the reason is that it's a local arbitrage, and it's limited in sypply. He is buying from his local stores, who probably have limited amount of such products on sale. So there's probably room for more doing the same strategy.
Re: 28-year-old makes millions buying from Walmart, selling on Amazon
#56Earlier quoted context omitted.
the article says "his business is making seven-figure profits"
Hmm. Seems unlikely given the manual nature of shopping at WalMart, shipping costs, returns, etc, on an $8M revenue base. 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-qui…
This "company" may be doing something else, additionally to these flipping schemes. Seminars are mentioned. Consulting may be something else. Or some other form of ecommerce.
Re: 28-year-old makes millions buying from Walmart, selling on Amazon
#57Earlier quoted context omitted.
the article says "his business is making seven-figure profits"
Hmm. Seems unlikely given the manual nature of shopping at WalMart, shipping costs, returns, etc, on an $8M revenue base. 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-qui…
This is exactly spot on.
The article is just content marketing for him to sell his "get rich with an FBA business" course.
Re: 28-year-old makes millions buying from Walmart, selling on Amazon
#58"What's your religion? Arbitrage."
Re: 28-year-old makes millions buying from Walmart, selling on Amazon
#59Interestingly 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.
The exploitation of the strategy can be limited by two factors: "labor" and "capital". It sounds like labor is the more limiting factor, though.
Also, some of these prices aren't set at maximum profit per item, but there are other factors involved. For example clearing warehouses or attracting customers.
In many cases, I suppose Walmart should be coming up with a way to sell direct to Amazon, but that may not be what they want, strategically speaking.
Re: 28-year-old makes millions buying from Walmart, selling on Amazon
#60I recently bought something from eBay (didn't search on amazon for some odd reason), and I received it from Amazon. Turns out the seller has an Amazon prime account, and all he does is provide the ebay-buyer's address on checkout. He netted $2 on a $12 product, and I found it amusing.
That’s a common thing, but amazon soon cancels the prime account for TOS violations. (Google “amazon to eBay arbitrage”)