5 Reasons Why Retail Arbitrage Doesn't Work (Buying from Clearance Sections & Outlets)
Posted by Big Brand Wholesale.com on 22nd Aug 2020
This is a video I made in 2017 but even though the video is old, the information is still the same! Check it out, then after the video I will give you some facts:
To see a genuine example of why buying from Outlets and Clearance Sections do not work, watch our 30-second ad below that explains the price difference between outlets, clearance sections and buying from a legitimate liquidation company:
IN CLOSING
Can you find some good deals? YES! You absolutely can! Nobody is doubting that you can indeed find good deals... BUT once you factor in time, energy, gas and wear & tear on your vehicle, you are driving up the cost without realizing it.
Can you find some GREAT deals? YES! But you also have days where you find literally NOTHING (or maybe a couple tiny things with very little profit). Again, once you factor in your actual expenses, you're not truly making anything, you're actually LOSING without realizing it. Let me give you a mega quick example:
1. If you drive only 5 miles to Store #1 then 4 miles from this store to store #2, then, lastly, you drive only 8 miles to store #3 before driving home, you have driven 17 miles between stores plus an additional 10-or-so miles home = 27+ miles. Let's say you're a speed demon and traffic is perfect so you accomplish driving to all 3 stores and back home in only 35 minutes.
2. You're a lightning-fast walker, and not only do you score a great parking space but you haul ass to get in (and out) of each store. Let's say things go so smoothly that you find your spot and get in-then-out in only 2 minutes per store = 6 minutes total.
3. You have spent time browsing. Let's say you're super-super, record-settingly-fast-shopper and you only browse for 5 minutes per store = 15 total minutes
4. You have spent time standing in line and paying. Pretend there's virtually no lines and you're paying in exact change: 4 minutes per store = 12 minutes.
5. You have spent time loading your vehicle and unloading your vehicle at home. If you found a lot of stuff loading and unloading will take longer than if you leave each store with a lip gloss. Let's just estimate 3 minutes total for loading and unloading per store = 9 minutes
So, just based on those very basic, necessary tasks, all done at lightning-speed with no issues (there's no lady in-line in front of you asking for a price check then paying with a literal check. There no traffic jams or car accidents. There's plenty of cashiers ready to ring you up, etc) , you still will have spent.... *drum roll*...
77 MINUTES = 1.3 HOURS
If you value your time at only $10 an hour, you have already invested over $13 in *hopefully* "finding" stuff to sell. BUT WAIT, you also have to add on gasoline cost. I don't know how much gas is in your state, or how many miles-per-gallon your vehicle gets, but gas here in Michigan is currently about $3 a gallon. My SUV gets about 19 MPG. With that being said, if I was to drive 27 miles around the city in one day, my gasoline cost would be around $4.30.
If we add my gasoline cost to my 1.3 hours of work, my total expenses are $17.30.
BUT, this is just for one day of looking for inventory (AKA: "Hunting and Gathering"). This is going to royally blow your mind:
2 Days a Week of "Hunting and Gathering" = $34.60
3 Days a Week = $51.90
Now check this out because it will shock you even more:
If I Hunt and Gather only 2 days a week, in ONE YEAR, I am spending $1,868.40 and also need an oil change to cover my mileage. Let's say I go to a dirt cheap place and get it done (+new filter too!) for only $32 = $1,900 PER YEAR. Now I don't know about you, but I can buy a LOT of inventory with $1,900!
BUT If I Hunt and Gather 3 days a week, in ONE YEAR, I will have spent almost $3,000!!!
Now reality is that you're not always going to get the front row spot, browse for 5 minutes, have a cashier ready to wait on you, never deal with bad traffic, etc. You're not only driving to 3 super-close-stores that are less than 8 miles from your home. So you need to honestly increase those amounts. If the stores you are driving to are 15 minutes, a half hour, or more away you need to probably double those amounts.
AND, even after you invest all of that time and do all of that work, liquidators like BigBrandWholesale.com still get the identical item for less than you paid when it is taken off store shelves. See why I am trying to tell you that Retail Arbitrage "doesn't actually make Sen$e"?
Now it's time to shop our amazing designer wholesale lots!
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