The early days of our online arbitrage experiment here at The Penny Stupid Project have been filled with success and failure.
Some of the failures are my fault. Other problems were not foreseeable.
Here is a rundown of current lessons learned. These are getting painful, but each is educational.
Current Penny Stupid Rating
It is too early to declare success or failure with online arbitrage testing.
More time is needed to get past the learning phase.
Testing progress is being made.
Package Lost in Transit
I found an excellent product to buy and flip using the Source Mogul software, which I love and hate simultaneously.
This was a bandsaw blade I could purchase for $34.95 and sell for $177.95.
It seems like a fantastic find, right?
I ordered the bandsaw blade, received it, and shipped it to UPS using the Amazon UPS label.
The package was dropped off at a UPS drop point, pickup by UPS and then went poof.
This is my first lost shipment, so I’ve got to navigate the refund or claim process between Amazon and UPS. It’s started.
Purchase for Approval to Sell on Amazon – Denied
This is probably a rookie mistake, but here it is.
I found an excellent offer to flip on Amazon FBA. I could purchase gamer headsets and send them to Amazon for sale. However, I had to be approved to sell them by providing receipts showing I purchased ten units and then supplying that information to Amazon.
When applying to sell an item Amazon requires you to provide “At least 1 purchase invoice for products from a manufacturer or distributor.”
I mistakenly assumed the HP store selling the gaming headsets was classified as a distributor. I mean, it’s from HP, for goodness sake. And one of the headsets was purchased directly from HyperX. You would think that would qualify. Nope.
I purchased the units, had the receipts, and submitted my application.
My application was rejected, and now I have ten gaming headsets I have to unload someplace else. Hello eBay.
The Amazon rejection email said, “Thank you for your application to sell brand HyperX products. We have reviewed the documentation you provided and determined that it does not meet our requirements for the following reasons:
– You have provided an invoice that has not been fulfilled by the supplier. Please work with your supplier to obtain an invoice that has been fulfilled
-We are unable to accept retail receipts, online order confirmations, packing slips, sales orders, pro-forma invoices, or sales quotes for approval. Provide an invoice from a manufacturer, distributor, or your supplier reflecting the itemized list of goods purchased.”
The lesson is a retailer does not qualify as a supplier or distributor.
The Other Application to Sell Issue
Thinking I had learned my lesson about getting approved to sell an item before committing to buy it. I found a book I was going to purchase, went to the Amazon website, and had to apply to sell that item. So I applied and was instantly approved to sell it.
Woohoo. I then purchased the book and went to Amazon to list it. Amazon said, hold up, buckaroo. We approved you to sell it, but now we are not accepting this book for sale.
So now I’ve got a textbook and must find another way to unload it.
The lesson learned is that even if you are approved to sell an item on Amazon, don’t purchase it until you create the listing first. Unfortunately, these lessons are getting costly.
The Kmart / Sears Website Sucks
One source location that often has low prices for items is the Kmart and Sears websites. They appear to be intertwined.
I had nothing but problems with the third-party vendors on those sites. For example, customer service by Sears and Kmart on their websites is non-existent. My favorite experience so far was when the website said how significant my problems were, leading me to a 404 error page. Yea, screw you too.
So far, the initial items I purchased were either not the item I ordered, not shipped, can’t be canceled, or not returnable. Any issues from this point forward if I gamble and purchase something off the Kmart or Sears site will be my damn fault.
Purchasing the Wrong Item
The fine print on items is killing me. More than once, I purchased an item to flip, only to find some tiny variation that made the purchased item incompatible with selling it on Amazon.
For example, I found what appeared to be an excellent opportunity to flip. On Amazon, they were sold in boxes of six. But I purchased them in single packets. The pictures on the two listings looked similar.
I can’t blame anyone but myself.
The lesson here is if you are not organized or have tremendous attention to detail, be prepared to make mistakes. Some of them will be costly.
This is a Test and Learning Opportunity
I’ve learned some great lessons here the hard way. Some were not foreseeable, like the lost UPS package. Others were process issues, like the selling approvals, and some were just my damn fault.
The entire purpose of The Penny Stupid Project is to help people figure out of a particular side hustle is something worth pursuing to help generate extra money to help make ends meet.
My selling on Amazon testing with retail arbitrage and online arbitrage has been a glorious and humbling success in learning. But, of course, I’m making all the newbie mistakes, so you don’t have to.
While online arbitrage and retail arbitrage are hyped as easy and gloriously triumphant, it’s not easy. But then again, what in life is.
If you’ve read this far and want to follow along on the adventure, click here for updates. There is no telling what idiot, newbie, bonehead move I’ll pull next.
But there have been successful sales along the way. Those will be for an upcoming post.
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