I can’t count the number of times that I have been asked “What do you look for in an item to buy for resell?”
I honestly can say: It depends. You will find that this is a motto of mine that I learned from my economics courses. It all depends on the situation and the information at hand. There are no dead set guidelines that are going to allow you to always make a perfect buying decision. There are external factors that you cannot control (such as the economy, weather, etc) and there are factors you can control such as prepping time and acceptable profit level. This post is going to layout my general rules I use when sourcing products (note that I said general – These rules do change from time to time).
1. I always like my items to be in great condition. I try not to purchase items that have damaged packaging and/or defects. These lead to high return rates and in turn higher risk.
2. I then check to see if I am ungated in that category (I am ungated in all categories, but it is still something I advise you to look at).
3. Now to the numbers:
- I like my rank to be under 150,000 in all categories. I do make exceptions in the Baby and Book categories – I like baby to be under 50,000 and books to be under 1,000,000.
- I then take a look at the total cost of the item. I like to sell higher price items because it takes less time to prep and ship than a bunch of lower priced items. For example: One camera that make $100 is easier to prep than 100 toys that make $1.
- I like to keep my profit margin around 60% or higher. I would love to make 1000% on every item, but that is just not feasible. I feel as if I am making a smart investment if I can get 60% back on an item.
- I look at the sales rank history. I want to make sure that this price isn’t too high and that is has a history of selling. I do this on CamelCamelCamel or Keepa.
- If it meets those criteria, I buy.
It’s really that simple. I tell people this and they are just dumbfounded. They think I have some special formula to make money, but I really just follow these basic rules.
Until Next Time,