Here at the Penny Stupid Project, Damon and I have been testing side hustles to find opportunities you can pursue to make extra money on the side. One of those efforts is testing retail arbitrage and online arbitrage.
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My Current Mood – Frustrated But Hopeful 😤🕊️
I embark on these side hustle tests knowing I’m starting from scratch. I want to learn all the newbie hurdles and mistakes to share with you, so you don’t have to do the same stupid things.
The good news is I’ve been learning a lot of lessons. The bad news is I’ve been learning a lot of lessons.
Bonehead Move of the Week So Far
Probably the dumbest thing I’ve done so far this week is to aim to order a pack of 24 small chalkboards and apparently managed to select the listing for one.
I made this YouTube short to explain my frustration and keep the lesson in front of me.
This was my mistake, but it is an excellent lesson for you.
Using an online tool, Source Mogul (more on SM shortly), I’m searching for items to purchase and then sell on Amazon for a profit.
Source Mogul found a set of chalkboards selling for $79 on Amazon. They were $84 when I spotted the opportunity.
Using Source Mogul, it found the same item was available on Kmart for $17.11.
Here is Where It Got Screwed Up
I received an invoice from the third-party seller with a coffee cup ring and only one chalkboard. Somewhere an error occurred. I contacted the seller, and rather than filling my correct order of one pack of 24 chalkboards, they refunded me and closed the issue.
Awesome but they still didn’t send me the pack of 24 chalkboards. Fail.
At Kmart there is a second seller of the same item, but they only sell one chalkboard for $15.38. Yes, someone is selling just one for about $15. It’s a mess.
The fine print and details of trying to match products to what is selling on Amazon is an exercise in reading and attention to detail.
Even if the seller I purchased the chalkboards from made a mistake and sent me one board instead of one pack of 24, I still have to catch the error, try to get it fixed, and reach some resolution. At the same time, I’m juggling other incoming items and issues.
If I had a lot of items coming in and going out to Amazon FBA for sales on Amazon, mistakes like this could cost me a lot of money if you magnify them. However, the two items I received this week were wrong and had issues to deal with.
You Must Have a Great Attention to the Details
This wasn’t the only order that had issues this week. Another item I found was received without an invoice. The product in the box was in a bag for another product, which wasn’t even what I ordered. That’s a future story. More 😤.
Not to ruin the surprise, I’m returning that item for a refund. I’m over incompetence already.
So the lesson to be learned here is not to be in a rush to start your online arbitrage side hustle with the expectation everything is going to be smooth and easy.
Thankfully I’ve taken it slow, and for the most part, I’ve only been ordering one of each item I’ve found so I can gain experience and learn affordable lessons.
I’m taking it even slower when ordering resale online arbitrage items on Amazon. I probably now spend as much time studying all the details of the item I’m buying as I do searching for potential items.
Another lesson is the quality of the suppliers and vendors you are dealing with is critical. Just because a piece of software, Source Mogul, in this case, has identified a good deal does not mean it will be good when you factor in vendor aggravation and the time to fix mistakes.
I’ve learned that while the Kmart / Sears (another story as well) website has some good deals, their customer service is non-existent, and I can’t rely on the vendors on their website. My second learned lesson for the week was also a Kmart purchase. Fool me twice, blah, blah, blah.
Speaking of attention to detail, that pack of 24 chalkboards turns out to be something I should never have purchased, to begin with. It wasn’t until researching the chalkboard fiasco that I noticed on Amazon those boards are sold by and shipped by Amazon.
That alone should have been a non-starter. I don’t want to compete in selling against Amazon on their platform.
These Newbie Lessons Are Painful But Necessary
You can purchase every course and class to learn how to sell through Amazon FBA. However, I’m not convinced these early lessons learned can be taught through a video or class. I think these are things you have to learn from experience.
The advantage of failing is it teaches you valuable lessons you will not easily forget.
The key to your early online arbitrage days is to learn those lessons for as little money as possible.
Don’t Give Up Hope
The week wasn’t all bad. An item I previously ordered arrived promptly and is on its way to the Amazon warehouse so it can be sold.
I’ve also sold some of the stover burner covers I have there. I agree that sales are not setting records, but it gives me a chance to learn to price and get my foot in the door while competing against experienced sellers.
More to come. Stay subscribed.