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Whole Foods arbitrage: Amazon sourcing in aisle 11

By Peter Valley 15 Comments

Two stories on finding profitable media in the most unlikely of places (i.e. the bulk foods section).

Part I: Whole Foods arbitrage

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. I’ll scan 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 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 something 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. The app said “No Amazon Seller Listing.” Interesting.

So I pulled up the Amazon Price Checker 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

https://i0.wp.com/centralcoastfoodie.com/wp-content/uploads/2011/12/NAFO_bookshelf.jpg?resize=375%2C500

I did the quick math here: 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 for $20. 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 one, 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 5x a week anyway).

Part II: Staples arbitrage

Recently I was in Staples (yes, dropping off Amazon 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 everything everywhere. But if you do, occasionally it pays off…

Also, claim your free book:

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Filed Under: Amazon Sourcing Stories

Comments

  1. Karen says

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    That’s done it! Next week I’m set to send my first shipments to FBA – I’ve been doing self-fulfilled for years and I can hardly move in my work room for books etc!

    I’ve always aimed at the second hand market, but now you’ve opened so many new (store) doors I doubt if I’m ever going to sleep again!

    Your posts have been a great encouragement. I HATE my job and plan to be OUT ASAP.

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    • Peter Valley says

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      To me, not having to work a real job is the among the greatest measures of success.

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  2. Jordan Malik says

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    When I see words like ‘Seizing the Opportunity’ and ‘Accidental Sourcing’, I know that you are making revenue magically appear. Like a Boss. Great inspiration here (as usual).

    -Jordan

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    • Peter Valley says

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      There’s your next book man: “Amazon Alchemy,” by Jordan the Wizard.

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      • Rich says

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        I’ve been on the fence on grabbing Amazon Autopilot. All I needed to see was the appearance of Jordan Malik paying props. Purchase incoming. Cheers!

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        • Peter Valley says

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          And that is the power of (unpaid) celebrity endorsements…

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          • Peter Valley says

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            (PS: You can head over to his site and purchase through his affiliate link)

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  3. Lisa Frase says

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    I’ve learned to scan the unexpected. Great thoughts here!

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  4. Lois says

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    Thanks for another great read with sourcing tips!

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  5. Rob says

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    I found a bunch of DVDs that are going for good prices on Amazon at a book sales.

    I later found out my account is unable to create listing in DVD / Blu-Ray disks category thus I am unable to sell all the DVDs I have. Do you or anybody here know if this is new rule? (Just found this out few days ago, on 11-22-2014 to be exact).

    I take a look the requirements to be “qualify” to become DVD / Blu-Ray sellers, the qualifications are quite high and ridiculous even..

    Appreciate any input.

    Thanks

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    • Peter Valley says

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      This question has been coming up a lot. It’s a major issue for a lot of sellers right now. Check out all the discussion on the Seller Central forum for some perspectives:

      https://www.google.com/search?q=amazon+dvd+restrictions&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&channel=sb#q=amazon+dvd+restrictions+site:sellercentral.amazon.com&rls=org.mozilla:en-US:official&channel=sb

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  6. Brock says

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    Hey Peter I love your articles. Quick question: I’ve been selling books on Amazon for about 5 years. But I still am not buy box eligible for used books. I have 117 lifetime feedback. 365 day rating is 100% and Lifetime is 98%. If I list a new book its always buy box eligible — but never with used ones. I do pretty well even without being buy box eligible but I know i could do so much better. Any ideas why I’m not buy box eligible for used books and what I can do?

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    • Peter Valley says

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      Good question. I think its a simple matter of getting your feedback score up higher. No one knows the exact formula, but it may be that your sales volume / turnover rate is too low (who knows if that’s a factor). Amazon won’t reveal anything. I’ll be posting an article soon on how to artificially inflate your feedback score, so look for that!

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  7. Linda says

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    Hi Peter, I was going to send in a lot more single unit items to FBA, however, I put on brakes when I got the email below talking about the change in long-term storage fees.

    Notice from Amazon:

    “In the past, one unit of each ASIN in storage has been exempt from the twice-annual Long-Term Storage Fee. Effective with the February 15, 2017, Long-Term Storage Fee assessment, this exemption will end. A Long-Term Storage Fee will be assessed on all inventory that has been in a U.S. fulfillment center for six months or more.”

    I have about 600 items in inventory at Amazon right now, but not all of it is over six-months. Do you think the fees will be significant enough for me not to send in items that are ranked over 1 million or does it depend?

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  8. Matthew Haws says

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    Peter, what do you use or recommend for a scanning app?

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