Buy low, sell high. It’s a simple idea that a bored accountant used to create a multi-million dollar business, and one that he says you can replicate as a side-hustle.
Ryan Grant, a 28 year-old former accountant from Minneapolis, Minnesota, started shopping for sales in popular retail stores.
He would beeline for the clearance rack and buy items in bulk. But instead of purchasing what he liked, Grant came armed with a secret weapon: an Amazon seller account and his phone.
Grant would find sale items in Walmart, Target and Toys R Us, then used the Amazon seller app to compare them to online prices.
Soon, Grant learned the basics of business by buying low, listing on Amazon, selling high and repeating. Using this plan, he left his accountant job and started a part-time gig that he says now generates almost $4 million dollars in revenue.
“I was able to get that to about $1,000 a month in profit working about 10 hours a week," said Grant, who documents his shopping endeavors on his website, Onlinesellingexperiment.com.
Amazon has its own marketplace, not unlike eBay, where businesses and individuals can sell almost anything.
The seller app let’s users scan a barcode and see the going rate on Amazon. Grant realized that if the price online was 50 percent higher than the price in store, he could net a profit.
Since this started as a side-hustle for Grant, I wanted to see what the learning curve was and try it myself.
CITY Enter CITY Rucksack Enter BACKPACK MINI
A how-to on buying low, selling high on Amazon.
It takes me a total of five minutes to create an Amazon seller account. It ties into your existing Amazon account, so all you really need to add is your Social Security number and bank information. The seller account I signed up for costs $39 a month.
I download the seller app to my phone and head to a local superstore. I go straight to the clearance rack and fire up the app. I use the built-in barcode scanner to quickly check prices on all the items.
I find a set of Sharpie pens marked down to $10. On Amazon, they are selling for $17.89. I also find a ninja toy marked down to $4 that’s $9.49 online, and a set of snow tire chains on clearance for $25 but selling on Amazon for $59.99.
Calculating my profit is not exactly simple, so let me try to explain: the app does a good job showing you what you will make after Amazon takes a percentage in fees.
My tire chains had a $9 Amazon fee, $1.42 fee on the toy and $2.68 on the pens.
The issue of shipping.
Since I have a short time-frame for this experiment, I choose mail to sellers directly. It's not terribly cost effective and it takes my total profit down to about $35.
Grant, on the other hand, is working at a larger scale--but he says even a part-timer can do this.
Grant buys as many of an item as he can and sends it all to an Amazon warehouse. They do the shipping to individual customers. It’s what that phrase “fulfillment by Amazon” means next to an item. It saves him the hassle of shipping, but he factors 50 cents per pound in cost on every item he has to bulk-mail to the Amazon warehouse.
Individual sellers like me can mail directly to customers, but there’s a lot of postage costs that Amazon can even out at its scale. It’s this fulfillment by Amazon that Grant says makes the business viable in ways it wasn’t in the past by using eBay or Craigslist.
Grant's advice for profiting big.
Grant says he’s on track to gross nearly $4 million in total sales this year. He pays 11 employees including himself, and his salary is $60,000 a year. He says the company nets a profit of about 10 to 15 percent, but he is reinvesting that back into the business to grow it.
When asked if he thinks this is a viable side-hustle, he says, "Yes, but give yourself a few months to learn." Grant also noted that it takes one to two months to figure out a system, understand what sells and find good sale items.
As for his two worst purchases along the learning curve: a Dremel-like dog nail trimmer and life-size Elsa dolls. But for a man who’s figured out how to get paid to bargain hunt, it seems like they are lessons well learned.