This is what the retail business is.
He's not just "driving around".
That's like saying "Property owners just sit around and collect rents, so they shouldn't make any money." It totally misses the point of using capital to invest in and maintain real estate, which is not "sitting around" at all - it only becomes easy after you've done a significant amount of work to make it so.
I can watch videos/read blogs about how to duplicate a specific win, but by that point so has everyone else and margins drop.
A few people who find the deal early can make a ton, and they get paid well for knowing what to look for in a good deal. Even then, I'm sure pretty much everyone who does well with this has plenty of stories where they lost big, and they only win on average. It's the same as stock picking; investors don't get paid well to watch their investments tick up, they get paid well for finding the bargains, and sometimes an investment opportunity is too good to be true.
They also get to look at all that sweet data and if any one product or group of products starts to look too good for those small 3rd party sellers, they aren't afraid to just drop right in on top of everyone and push their own product to the buy box everytime.
After which they will drive away most of the 3rd party sellers before starting to creep the price upward.
It’s not the driving that he is making money on. It’s the risc of being able to buy the stuff and the know-how of what to buy.
Not advocating a race to the bottom, but...
(Go ahead, you can fill in the rest.)
To say he makes 200k driving around all day is like saying senior developers make 200k playing with computers all day.
> Your margin is my opportunity.
I don't your brother's business to last forever. While I'm happy for his accomplishments, I hope he's thinking about the competition from above.
Talking about gross profit without including fees is effectively meaningless.
My rule of thumb for a successful wholesale business is 50% cogs, 30% Amazon fees, 20% margin. There are companies that do a lot worse, and I'm sure some that do better but it's extremely difficult to beat 30% margins at any kind of scale without doing liquidation, getting some lucrative exclusives, or otherwise find a very uncompetitive niche.
Source: have done several million in sales across hundreds of thousands of units on Amazon in the last few years.
Not really. https://www.amazon.com/Polyhedral-Dungeons-Dragons-Pathfinde... is selling for $10.98 the same thing you can buy wholesale for $1.50. Of course, you can get it from https://www.krakendice.com/faux-stone-green-jade-dice-set-fo... for the bargain price of $8.95.
https://www.krakendice.com/dice-by-collection/pearl-dice/ is selling sets for $5.95 when the wholesale price is $0.49.
Even after accounting for the cost of shipping, I'm pretty sure these are margins of over 100%.
Retail at prices around $10 is all about psychology.
In general the products that sell well will have a very competitive wholesale market and you'll be lucky to squeeze out 20% margin. It's certainly possible to get large margins in closeouts if you buy items that aren't popular, but it's difficult to scale that. And that's arguably liquidation anyway.
I don't know what you mean by "unbranded generic version". For reselling purposes, you can order a little card with a design of your choice on it (1 design total, 1 card per set of dice) from hengdadice.com, and both merchants I mentioned do that. That increases the wholesale price by a few cents.
The dice themselves are unbranded in all cases.
You can't sell on that listing legally, unless the goods were authorized by the brand owner.
Wholesale would be buying directly from the brand owner, in this case which would be "Shenzhen Lichen Trade Co.,Ltd.".
I don't know if they'd even sell you but if they did they'd definitely charge more than that.
You can't buy directly from the factory without the brand's permission. That's counterfeiting.
From your link: "this same doctrine enables reselling of trademarked products after the trademark holder put the products on the market."
In other words, it must have been owned by the trademark holder at one point, and sold by them into the market.
The brand owner is a trading company, and buys from factories, but is not a factory itself.
HDDais is living the exact dream mentioned upthread, in which his business consists solely of buying things wholesale and shipping them to Amazon.
What is the difference you're seeing?
The primary difference is that you need to spend to promote the listing because nobody has heard of you.
This is why some items on AliExpress either won't let you order more than quantity 1, or switch to FedEx only shipping if you increase the quantity.
Even the sources of auctions are a constant whack a mole. Any consistent auction source soon gets overrun with a constant supply of newbie buyers that overpay for anything and everything just to try and make their trip worth it.
I used to frequent postal auctions for products to resell. Then the droves of bloggers and wantrepreneurs started moving in.
I stopped going when people started bidding up the price of MacBooks of unknown provenance to higher than retail.
You keep thinking, well these guys are going to lose their shirts and never come back. They don't come back. But 4 more will take their place the next month.
I love using eBay; it puts a bit of excitement back into e-commerce when you get packages from overseas -- the stamps, the names, the exotic goods. This year I ordered from 4 different countries things that weren't available in the US. But most products on eBay are shipped domestically, and they won't slow-roll your shipping for a week because you didn't pay for Prime.
My ebay thought process, which makes searching a chore..
- Returns will probably be a hassle so I really better want it. - Is it buy it now or do I have to bid? - Exorbitant shipping price or it's "freight" with no price - Shipping may require signature and I have to be at home - Checking seller reputation - Checking seller location
It's a completely different experience.
Since then I've really re-awoken to ebay and tried to get in the habit of looking there and not just on Amazon. So I would second the parent's comment. I could even see there being an ebay revival.
Because Amazon pads the price of everything by about that much to cover the super fast prime shipping.
This line needs to stop - it's flat wrong.
It's not monkey level work - and it's exactly how the entire manufacturer-distributor-wholesaler-retailer relationship has always existed, and it brings obvious significant value to the entire chain, all the way down to you, the customer.
The only difference is the end customer is now more aware, or thinks they're aware, of the chain. Nothing has changed - and it's not going to change. There's too many things and doodads out there in the world that people want to buy for any single company to procure and manage them all.
Same products, pricing, conditions, number of listings - similar effort per platform.
Amazon outperformed eBay by more than two orders of magnitude, so after 12 months she discontinued eBay sales, because daily Amazon sales started exceeding annual eBay sales.
But it gets even worse. They will send you a spreadsheet and ask you to fill it out… with all the information Amazon needs so that it's easier for them to upload into Seller Central.
And in the event of damage or customer service? They tell the customer to reach out to the manufacturer.
90% of Amazon sellers are just leeches. You can pretty easily make money doing it though. A lot of manufacturers still aren't savvy to the game. I had a company that literally had "Arbitrage" in their name reach out to me the other day.
Basically, third party sellers find a way to get a wholesale discount and then sell it through Amazon for a bit more. So the price on Amazon is artificially low. Say you have a $10 item. Maybe your wholesale price is $5. The third party seller puts it on Amazon for $7. Amazon sees this. Now Amazon only agrees to pay you $4, because to them the $10 price is irrelevant. $4 is too low, so you don’t accept and Amazon doesn’t buy from you.
Now, you can sell yourself on Amazon, but then existing retail partners get mad because suddenly you are selling the item for $5 to compete with the arbitragers. I’ve even found some relatively large retailers selling on Amazon under dummy companies to hide their name, but still be able to profit off their high wholesale discount.
Things are changing. But it can be a slow and painful process for small manufacturers.
They can't compete with their customers. Many manufacturers have started selling direct as well, but they usually sell at a bit of a premium to avoid undercutting their own customers.
It's just bad form to do that. And large retailers like Walmart will usually stipulate that you can't sell it cheaper direct.
...for what? It's a miserable place to look for stuff, miserable to pay for, miserable to remediate conflict. If you're lucky you'll get what you pay for with no hassle. I can't imagine ever buying a commodity on ebay that I could get from another online retailer.
I can't imagine being out here expecting large internet stores to give a shit about my problems. That ship sailed a long time ago--buy local or accept the shittiness.
Well, then I've been "lucky" thousands of times over!