Whole Foods Retail Arbitrage

Weird retail arbitrage stories on scanning products to resell on Amazon in the most unlikely of places (i.e. aisle 11 of Whole Foods)

Part I: Scanning products to resell on Amazon at Whole Foods

The hidden benefits of “compulsive scanning syndrome”

I scan everything compulsively. It doesn’t matter where I am, or even if an item is for sale. I’m always scanning products to resell on Amazon. I’ll scan barcodes on friend’s bookshelves, private label coffee at the local cafe, even the box of jellies at the Holiday Inn continental breakfast. A psychotherapist could probably have a great time dissecting my “compulsive scanning” disorder. The explanation I give myself is: Even if I know something can’t be bought-low-and-sold-high on Amazon, every time you scan an item, you learn just a little something.

It was this compulsion that brought me to scan a DVD in aisle 11 at Whole Foods.

I was there to buy food, but I stopped to check out the DVD section for no real reason. I picked up a documentary and (again, compulsively) scanned it. My scanning app said “No Amazon Seller Listing.” Interesting.

So I pulled up the Amazon app, and was quickly satisfied that the DVD was in fact not for sale on Amazon. A little more research revealed the documentary had been released two weeks ago.

The Amazon opportunity formula

I did the quick math: A brand new film big enough to be carried in Whole Foods certainly had demand. And as I covered before, most product searches don’t begin on Google anymore, they begin on Amazon.

Untold people were almost certainly looking for this DVD on Amazon, and weren’t finding it. Perhaps the filmmaker had some sort of distribution exclusivity contract with Whole Foods. I didn’t know (and didn’t really care), I just knew this was an opportunity.

I also knew the filmmakers were likely to start selling it on Amazon themselves any minute, so I had to act fast.

Seizing the opportunity

I bought a copy of the DVD for $20.

Then I created an Amazon product page, and set the price at $99.99. That is my standard price for any media item for which I am the only seller on Amazon. I will price even higher if I think the item absolutely cannot be replaced by any other item on Amazon (i.e. on a subject so esoteric, it is the only book/documentary/etc in the world on that topic), AND can command and exceptional price (this part is intuitive). For this DVD, I went the standard $99.99.

And one week later, it sold. Factoring in costs and Amazon’s commission, I pocketed about $60.

So I went back and bought another copy. Two weeks later, that one sold.

The third copy sat a little longer, but a month later it sold on Amazon as well.

After the third copy, the filmmakers finally got on board, set up their own Amazon product page, and priced new copies at $19.99. So I lost about $10 on my 4th copy.

But before they ruined my racket, I put $180 in my pocket with almost no effort (I’m in Whole Foods 5 times a week anyway).

Part II: Scanning products to resell on Amazon at Staples

Recently I was in Staples (yes, dropping off FBA shipments) and spotted a giant shopping cart of miscellany with a sign: “50-cents each.” Inside the cart were, obviously, tons of office supplies.

I didn’t have my scanner on me, but at 50 cents, I could safely assume there was Amazon profit in just about anything new, so I was prepared to take some chances. I got a basket and started filling up. I threw in watch batteries, packs of neon green Post It notes, cell chargers, Avery labels, and tons more.

The highlight was a dozen or so Moleskine journals, some of which had fallen out of print. Moleskines have a rabid fan base, and are considered the most esteemed writing journals – to the point that many collect them. This made it no surprise when I scanned them later and found that the out of print ones were listed on Amazon at $50.

All the Moleskine’s and most of the rest of it sold over the next six weeks. This quick case of “accidental sourcing” bought me several hundred dollars in profit.

The takeaway

These are small examples of what can happen if you keep your eyes open. I certainly don’t encourage scanning products to resell on Amazon everywhere. But if you do, occasionally it pays off…

-Peter Valley