Tuesday, December 29, 2015

Turnover Tuesdays - Sometimes You Need to Stop, Refocus and Reprice...

For those who are not familiar, I started a series a while back called Turnover Tuesdays. Every Tuesday I like to highlight one item that I have resold. This will include profitable and non profitable sales. I hope that there is always something to learn.

The Item - Apple Watch

I've sold many Apple Watches.  In fact I did a previous Turnover Tuesdays on Apple Watches.  I noted then that I sold Black 42mm Apple Watches for between $447-467 a watch.  Those were the days, sigh!

The retail prices on the same watch was $400 from apple.com  - That's right, people were paying more than 10% above retail for the privilege of buying on Amazon.  I didn't even get any returns that made it back to Amazon without being resold as new.

Back in Mid November, we saw our first non eBay Sale on Apple Watches.  Best Buy was discounting Apple Watches by $50.  42mm was $350 and 38mm was $300.  Prices were similar on Amazon as previously.  It was great!

I hit the sale hard and I mean hard.  50+ watches.

I was not looking for a quick sale, I wanted to get great profits here.

Everything started off great - On December 2nd, I sold 2 green 38mm watches (good luck finding green - gold mines!) for $445 each!  They cost me $300 + tax ($321).  I was very happy.  I thought if I was patient I would get good profits on all my sales.

That same day I sold a total of 10 watches.  The rest were mostly rose gold 42mms at $443.  Not bad for something that cost $350+ tax.  Not like the green but still very solid.  I didn't expect such high prices from the other colors.

I sold another 2 the next day at the same price.  2 the next day and 3 the following day and 1 more on December 7th.  All Rose Gold 42mm and all around $443.

The other colors however, were not selling.  It was December 10th and I hadn't sold a watch in 3 days, prices were plummeting and I wasn't changing my prices purposefully.

What Happened?

What happened?  Target had lowered their price by $100! (Kind of - $100 gift card with the purchase of an Apple Watch).  Then Best Buy lowered their price to match Target.  $250 for a 38mm and $300 for 42mm.

I knew about both of those sales and I bought at both of those sales as well but I was being patient.  I wanted good profits, not a quick sale.

A friend of mine made me realize that this is likely not a short term price drop.  These sales might be the first of many for apple watches.  More inventory is on the way.  It was time for a fire sale and to just get out!  At those prices I might break even and/or lose money on some sales but is it worth it to keep so much inventory available to sell at some unknown future?  Tough decision.

I lowered my prices across the board.  I sold over 40 watches between December 10th and December 13th.

Here are the price ranges I sold it for:  All in various colors

38mm 347.86- 409.99
42mm - 391- 412.99

Was it the right thing to do?  Check out the prices now.  Most of the 42mm have a buy box of about $350.  Most of the 38mm ones have a buy box from $300-$330.

Will prices recover?  Maybe.  Check out Best Buy though, the sale is still going.  It's been weeks!  Target is also now down to $100 off (no more fake sale with gift cards).  I don't recommend anyone buy more at this point (unless you can find green - 42mm buy box is $490, 38mm buy box is about $450 - they aren't even listed for sale on Best Buy and Target's websites).  There is probably even more inventory on the way to Amazon and no holiday rush to eat it up.

I got messed over (I still have some in stock) because I focused on how much I paid.  It doesn't matter anymore.  That's a sunk cost.

What matters is what you can sell it for.  You might have paid $100 for the watch from your friend who was going to throw it out.  The buyer doesn't care, only your wallet does.  Obviously, you should have a goal of selling for a certain price and try to stick to that.  Usually you will get it if you are patient and it is reasonable.  However, sometimes there is a reason prices are falling and you need to react to that.  You may "only" be making 5-10% if you sell now but that might be a lot better than breaking even or selling for a loss 2 weeks later.