Retail Arbitrage Strategies
Is the old discount retailing model dying out in the face of today’s eBay and Walmart? Perhaps, but there are certain strategies that may be viable for some retailers.
There is no more one-size-fits-all way to do business in this country. Some retailers make do with a system that works for them, but others will tell you that they like to explore all of their options and still try to be different. We live in a society where everyone has an opinion and almost no one is willing to listen to someone who is different from them.
Retailers may have higher overhead than some of their competitors because they buy their inventory from the manufacturers at wholesale prices. They also pay their employees well and have access to a warehouse full of merchandise management systems. Other retailers work without the benefit of such systems. In fact, many new retailers either operate on an as-is basis or rely on the already established retailers.
A retailer that does have a good deal of overhead and relies on the system to get them in and out of stores with little overhead will be well-advised to look at eBay and Walmart. eBay is the giant online auction site that specializes in consumer goods. A lot of the top sellers are auctioning products from other companies that have gone out of business.
Walmart is the giant discount retailing site that has a huge selection of merchandise. The drawback to buying directly from the retail chain is that it is hard to find the cheapest prices unless you know what you’re looking for. The other factor is that retail auctions are largely populated by middle-class shoppers and “gentlemen” who may not be ready to part with their merchandise right away.
Retail arbitrage involves buying items that are sold at wholesale prices at full retail price and then reselling them at a markup. This is basically the retail store’s business model. The good thing about being able to buy and sell items at wholesale prices is that you can pass savings onto your customers.
eBay is also a great way to get your own merchandise into the front of a wide variety of customers. You may not have the money to spend on marketing costs. This way, you can have your very own real-time auction.
Selling wholesale prices also means that you don’t have to pay the overhead of having a physical location. One of the biggest expenses associated with running a retail business is leasing or buying a location. That’s why it is good to get your merchandise into a retail environment without having to lease or buy a store.
It may be a bit more challenging to get into a business if you have never operated in this kind of atmosphere before. If you do find a market that is ripe for growth, you need to know how to run it. Do your homework and study the competition. Be sure that you will be able to provide good service to your customers.
Walmart is moving into a niche market that is generally considered to be a necessity for today’s modern family. A lot of small and large businesses have gone out of business in the last few years, but the small retailer is still thriving. It’s simply a matter of finding a home for your business in a part of the marketplace that is in short supply. For example, a Target-type retail store may not be the best business to start.
If you do have the product, eBay or Walmart is a good place to start. It will take some trial and error, but you will learn what works for you and what doesn’t. through experience.
Retail arbitrage strategies are many, including eBay and Walmart. Just be sure that you know what you’re doing before you open your business.
