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Comment by acollins1331 | Hacker News Reader

9 hours a day of driving pays every other job about 1/5th what your brother makes. Not advocating a race to the bottom, but expecting to clear 200k a year by driving around to auctions all day is still insane relative to what other people make doing similar work.

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Are you serious? He's not being paid to drive around. He's being paid to go to auctions, analyze the price of things being sold in large quantities, and decide if there is a business opportunity to sell products in a different market. He then ends up with a large inventory that he must sell, otherwise he is stuck with unsold inventory (risk). He also has no guarantee that the aunction will be selling the same products the week after, so it seems like there is a scarcity risk as well (not having a homerun product to sell constantly)

This is what the retail business is.

He's not just "driving around".

Yeah, this whole thread is based on a false assumption, that the work he does is "easy and equivalent to driving around." It's not easy or trivial to start a business, plus he assumed risk up front.

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.

Real estate is a very poor example considering countless cases of landlords neglecting repairs and maintenance. In some states in the US, there's little or no accountability for this.

Sounds like confirmation bias.

I've watched some YouTube videos about various arbitrage schemes, including refurbishing. It rarely makes sense at a small scale, but if you can get enough product, you can eliminate the waste by scaling up.

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.

I find it interesting to see this similar kind of behavior in video game economies like with Path of Exile. There are people who spend all day looking for good deals or opportunities, and essentially buying and reselling, maybe with some minor tweaks. These people tend to be the wealthiest in the game, with far more in-game currency than people actually playing the game.

I think a big part of that is because most people don’t care at all about economics in a video game. When you’re mostly competing with children and people who just want to game and don’t care about being rich, putting any sort of organized effort toward getting rich becomes substantially easier. EVE is like this too. These people are also often derided as “not actually playing” the game.

Exactly, he gets the risk premium. One of the most straightforward ways of making money in markets is being compensated for bearing risk. This is a systemic factor and will exist no matter how many people are doing it. That’s not to say it will always be so lucrative, but in general he will always get compensated more than someone who is merely dropshipping.

Yeah, but his brother has also taken up a lot of risk. There's a much greater chance he could be out of business with absolutely nothing, or worse, he may buy batch of items that gets destroyed, and worst, doesnt sell. The additional income is to compensate for the risk.

This is why Amazon handles the logistics for so many third-party sellers rather than simply buying their merchandise and reselling it. They get the little guy to assume all of the risk. Unsold products? Your problem. Some kind of defect? Your problem. All Amazon is on the hook for is shipping (and warehousing, although the cost there is a bit more abstract).

And when they are handling the logistics, they also get the benefit of just giving a full refund for whatever reason they like. It's nothing out of their pocket, and it makes them look good to the consumer. So, why not?

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.

Sounds like his brother doesn’t expect anything, but rather, understands hustle.

To say he makes 200k driving around all day is like saying senior developers make 200k playing with computers all day.

All you do is type a few words on a keyboard!

What a load of success-envy!

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.

Nine hours a day of staring at a computer screen and typing something from time to time pays every other job about 1/10th what programmers make.

Not advocating a race to the bottom, but...

(Go ahead, you can fill in the rest.)

It shouldn't be surprising it's more profitable though because it's not just transport that their brother is doing it's transport in service of the real business which is essentially retail supply.

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