Tuesday, June 28, 2016

Turnover Tuesdays - Store Closeouts are Your Friend

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.

When stores/brands that are well known go out of business, that is a wonderful opportunistic opportunity.  Often times you can buy products at a steep discount and if the brand is well known, there will still be a market for those items, however small.  Since the items are discontinued, it is unlikely for anyone to have a large stock a few weeks or months or years down the line.  You have the possibility of reaping some really nice profits.  If someone is trying to find something hard to find, they will be searching on eBay and Amazon so they will find it from you.

Here a couple of products from the CHEFS line that went out of business (I didn't even know they were going out of business until after I bought them)

The Product - CHEFS Brand Measuring Spoons and Granny Forks

Back in December I bought CHEFS brand measuring spoons and 12" granny forks from Target.  The Measuring spoons were $19.95 and the granny forks were $9.99.

This is the listing on Amazon for the measuring spoons and this is for the granny forks.

Taxes were 7% and REDcard discount was 5% so the approximate price was $10 and $20

I did not earn any portal points and I didn't use a points/cashback earning credit card for the purchase so this a relatively uncomplicated earning.  It was just the sale.

CHEFS Measuring Spoons Sell Very Fast

I did not know this but apparently there is a solid market for CHEFS measuring spoons.  Who knew!

Within about a period of a week, I sold 9 of them.  All for the same $39.99 price.  If that was now, you better believe that I would have raised the price at some point.

I went to buy more and.... they were all gone!   That was very upsetting.  When you find something that sells fast at a good profit (above 50% margins), you hold onto those.  Obviously impossible to continually reload if the brand is going out of business.

CHEFS Granny Forks Sell Nicely too

While it didn't sell quite as quickly, the granny forks did great too.

It took a couple months to sell all of them but they all sold at greater than 100% margins.  In addition, you can see that in April I raised the price by $5 and I still sold the last two. That's something I wouldn't have done in December.

I raised by $5 and I earned over $4.20 more in profit. My margins went up from 121% to 163%.  That's a big deal!  All for $5 increase on a $10 item.

Your selling price matters a great deal.  Once you get past the break even point, every dollar can have a profound impact on your overall profit numbers.  Obviously, you may not be able to sell it at that increased price or the price may go down in the meantime and you may end up losing more money.  There is clearly a balance, one that I haven't mastered yet but hopefully we get there with time.

If you check out the listing for the measuring spoons you can see that someone is selling them for $31.99 now and has three of them.  The next seller is at my $39.99 price.

I would love to still have stock in the measuring spoons.  Check back in a week, the $31.99 ones will almost definitely be gone.  I would probably be selling for $44.99 and waiting out the $39.99 person but who knows if I have that much patience.  It's not likely for anyone to come in with more stock and someone will eventually buy it.  $50 for measuring spoons?  Maybe no one buys but at least try for $45.

If you check out the listing for the granny forks, there is no one selling them!  I clearly sold for too little.  Hindsight is 20/20, right?

When you have a chance to buy a store that is going out of business, take it seriously, you may find some great products with little competition.

Obviously this will not always work out but sometimes it can work out very nicely in your favor.

Anyone else stalk closeouts?  What stores (from the past)?  What types of margins did you get?