One of the big challenges that smaller online merchants have is tapping into suppliers for super-hot, name-brand, in-demand, in-season inventory.
There’s not a week that goes by that I don’t received emails from people asking how they can get access to supplier names for the latest gadgets, in-season fashions, designer shoes and handbags or the latest and greatest hot toy .
But the issue is not in getting the supplier names. That’s the easy part! The issue is that many big name brand suppliers (i.e. Apple, Nike, Microsoft, UGG ) won’t sell directly to you.
Case in point… this week’s launch of the Missoni for Target product line launch. A launch with a shopping frenzy so intense, it brought the Target.com website to its knees (Who says people aren’t shopping?) and set the perfect stage for eBay sellers to make a tidy profit!
As an independent online merchant, there’s no way you can get your hands on these products directly from the supplier. It’s a Target exclusive. But that doesn’t mean that you can’t sell and profit from this uber-hot product line! In fact, many online sellers have!
How you ask?
By tracking trends and using arbitrage sourcing.
Tracking Trends and Arbitrage Sourcing
Savvy online sellers who kept tabs on the fashion industry knew that the highly anticipated Missoni for Target line was scheduled to launch on September 13th. This limited edition line, that features the Missoni “zig-zag” design has been well-publicized and will only be available in Target stores and online through October 22, 2011.
By tracking trends, you’d be able to forecast that this kind of limited edition product line with a high pre-launch demand was likely to sell out. A key indicator that it’s ripe for some arbitrage sourcing!
And the trend trackers did just that! They made sure they were first in line on Tuesday to arbitrage source this in-demand merchandise.
And it paid off.
- Missoni candles that sell for $12.99 at Target sold for $99.99 on eBay
- The Zig-Zag Spinner Upright Luggage Suitcase that retailers for $169 at Target sold for up to $305
- $44 Missoni sweaters are selling on eBay for $120
An easy $299 profit (less fees) for a simple arbitrage sourcing trip to Target! (or Target.com)
And the list goes on!
A Missoni Bike just sold for $1500 on Craigslist – 4 times it’s original Target price!
All together, Missoni and Target plan to release 400 items over the next 30 or so days, which are projected to sell out.
But that’s just one example of the profitable combination of trend tracking and arbitrage sourcing.
You can use this process with any product, in any niche. And you don’t even have to arbitrage source super-hot, name-brand products!
Recently I picked up some discontinued Lego sets that were marked down 70% at Target. Once Lego discontinues a set and supply diminishes, they go up in value.
At 70% off, my cost of goods was much less than anything I could have sourced from Lego (if they would even sell directly to me, which they won’t!)
Now I’ll pack them up, ship them to Amazon FBA and let Amazon do the rest!
This blog post is not about how to capitalize on the Missoni/Target partnership.
The purpose of this post is to show you how the process of tracking trends and arbitrage sourcing works.
… And how profitable it can be.
The key in knowing what to buy is in keeping an eye on the trends. In your niche, product category, product line. Without tracking the trends before-hand, you’ll end up being a “me-too” seller, trying to to sell products off a hotlist.
By tracking the trends in a niche, you know that certain models, styles, products are hot and/or which are in limited supply (or being discontinued).
You stay ahead of the curve. You’ll know when you see a good deal. And that knowledge is where the money is made.
How about you? Do you track trends? Have you tried arbitrage sourcing?
Tell me below!
-Lisa
I love reading your blog Lisa. I don’t have time to be first in line at Target due to my day job responsibilities, but I sure use the arbitrage method of sourcing products other places. Example – I bought a vintage charm I knew was in demand on eBay for $79 and sold it for $110 less than 5 minutes after I listed it. Next time I’ll list for a higher price.
Hey Wanda!
Great example! And you can use arbitrage sourcing anywhere – buying from websites, marketplaces, daily deal sites. It’s the keen eye for the deal that will work no matter what venue you are sourcing in. And eBay has some great arbitrage sourcing opportunities!
Yes, the fact that it sold so fast at that price means you could have listed it at a higher price!
That’s awesome though!
Lisa
Would you explain the process of arbitrage sourcing
Being a member of your biz-growth group for sometime now i know all too well your lessons on trending and arbitrage. But there is a part of that i only recently picked up the ball on. I sourced a bunch of top selling books from a going out of business sale at a Local Borders Books store, a national chain that is liquidating. Using methods you taught on how to see whats hot on amazon i should be able to sell these at 4 times what i paid by selling on amazon. I think i will be paying more than the usual attention to going out of business news.
Great article, Lisa. I started selling on Amazon through FBA over the summer and love the experience – so much so, that I’ve started to look into arbitrage at local stores. I’ve also been looking on Amazon and have found some items that are not currently being sold by any FBA sellers, so I will try to get my hands on a small quantity to sell, esp with the holidays coming up. I’ve also started looking at niches I have particular knowledge about and track on a regular basis (as a consumer) to see if I can find a profitable item that is not currently being sold by Amazon or FBA. I’ve already found several potential brands and am looking at attending a trade show early next year to see what new items are coming out.
Thanks again for offering the Power of 10 Product Sourcing course. I learned so much from you that would really benefit my Amazon business :0)
I have a question about arbitrage sourcing.
What should you look at as far as trending info., when you find a product that’s hot. It’s most likely a short term fad. A Few Ebay sellers have started to source the item, and as they tend to do, start driving the price into the dirt! As low as $39.99 BIN
2 Weeks ago the item (normal retail price $49.99 amazon) was selling 2 for $150.00 on Ebay, and up to $100 each, retail in malls. Sell through rate was 89%. for a 60 day period.
Currently hoovering around 66-71% for a 7 Day period , 28 listings, Avg Price: $60.00
I’m able to discern from what I’ve read that supply from the source will be up and down, even getting an answer Re: wholesale distributorship will take weeks due to demand. Do I buy a few when the sellers who have stocked up start to panic and let them go cheap, and try to hold on to them until around X-mas and see what happens!
I’m having terapeak send me weekly trend reports on this item via email.
Any tips ?
Hi Lisa,
I have been a follower of your for years, taken your product sourcing class and read and listening to everything I can that you publish. It has been so helpful. I have quit a job as a registered nurse to follow my LOVE of online selling! I sell mainly designer handbags, women’s accessories and clothing that I get from arbitrage sourcing. I love it! I get PAID to SHOP!! Last month alone I profited over $9K. I am far exceeding any money I would ever make as a nurse and only working a few hours a day. My question is this: You seem to have shifted your focus over the years from eBay to Amazon (which I understand why, eBay=frustration these days). The problem is is that there does not seem to be a place for seller like me on Amazon. From what I understand they have not taken on any new clothing, shoes or accessories sellers since 1997. What advice to do have for us in that category? Where can we go to grow our business? With all the focus on Amazon I finding it hard to get new ideas from you! What are your thoughts?