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My pawnshop-eBay arbitrage technique

Discussion in 'Ebay' started by thejake, Apr 24, 2012.

  1. thejake

    thejake Jr. VIP Jr. VIP Premium Member

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    This isn't offered as something to duplicate exactly, it's more some food for thought and a general approach that might work out for you and I'm not going to be over-specific as I'm still watching for opportunities and maintaining the relationships that made it work.

    I went to some pawnshops some time ago looking at guitars, mainly for a cheap but decent full-size acoustic and crossing my fingers for a variax. At one of the shops I went to they had 5 identical acoustics that are widely regarded as one of the best full-size student guitars for the money. They were all in equally excellent shape and correctly set up. I negotiated the price down and bought one. The negotiation was recorded on a onesheet that had the brand, model, serial number and a color picture of the guitar that the saleman had printed. When we agreed on a price, he took the sheet to his manager for her to initial. I walked out with the sheet, receipt, and the guitar.

    When I got home I looked what I had bought up on ebay, found they were a fairly hot item at the right price and estimated I could get about double what I paid plus shipping without much trouble - smart beginner guitar buyers like when they're already set up, because when you buy an axe online if you don't have basic luthiery skils you'll often spend $50+ having it strung and setup so the action will be right and it'll take and hold a tuning, like a playability tax. Anyway I scanned the picture, posted the auction at what I paid with no reserve, and it closed for about what I guessed it would. I bought another of the same guitar for the same price at the pawn shop, walked it next door to the UPS store where I netted out positive for a cardboard coffin, packing and insured ground shipping.

    The part that excited me was how pure the arbitrage was. I just posted a picture, got paid via paypal, used my paypal debit card to pay for the thing, and shipped it to my customer from the same shopping plaza, and pocketed profits with no direct outlay and about 30 minutes of effort.

    I have other business interests and prefer web development to spending time in pawnshops but it was very interesting and entertaining to take advantage of an impedance mismatch between a local market and an online market. I'm sure there's lots of opportunities similar to what I found if you're familiar with certain products and good at negotiation.
     
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  2. zedd32

    zedd32 Registered Member

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    I like where you are going with this. If you can make a good profit, it's a smart idea. I dislike the pawnshop where I live....they charge a lot for their items.
     
  3. browndog84

    browndog84 Newbie

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    Congrats! That's some great arbitrage. My local pawnshop is nothing but college kid leftovers, things that weren't worth the price they originally paid for. =(
     
  4. Jatan

    Jatan Newbie

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    People hit retailers for their loss leaders to resell pretty often. I've had mixed results even with wholesale pricing; usually after a few online sales, competitors pop up even on niche items.

    In the realm of unrepeatables, my best score was a wax printer I got for $40 at a garage sale and sold for $500. I really dislike chasing estate and garage sales though, and pawn shops here don't have anything that even appears reasonable at the price on their tags.
     
  5. toptips44

    toptips44 Regular Member

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    You can also do it the opposite way. Buy cheap stuff on ebay and resell elsewhere (markets, pawn shops, gumtree).
    The trick is to buy good quality items at insanely cheap prices which is very possible to do with the no reserve auctions on ebay. I usually buy things worth at least $20 new for around the $1-$2 price range. You need to watch the postage costs though as they can kill you so its always good to look for pickup items in your area.
     
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  6. DrEvil123

    DrEvil123 Junior Member

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    I was buying ex-rental DVDs at video stores and reselling on eBay for profit. But this was probably almost 10 years ago now before all DVD prices completely dropped.

    Nice for spare change at the time though.
     
  7. thejake

    thejake Jr. VIP Jr. VIP Premium Member

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    I think the huge win would be the jewelry and watches as they represent the smallest loans for the highest-value items, but I don't know enough about either to make it work. To me it looks like a Cartier Santos I see used at a jewelers for $4000 is identical to the one at the pawnshop for $1500 and closing on ebay for $3000 so if I were trying to make a living of the technique I'd want to learn the high-ticket stuff.
     
  8. verial

    verial Junior Member

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    You can also go the Craigslist -> eBay route. Craigslist ads are usually negotiable (even if they say they are not).
     
  9. suntzu

    suntzu Newbie

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    Thats a nice technique to earn some fast cash, though im a little concerned at 2 things..
    first.. the availability of things to resell fast enough to be worthwhile effort.
    second... my ability to identify things that could/would have decent margins to consider the effort worthwhile.

    always good to be reminded that if you think smart then theres always a dollar to be made somewhere :)
     
  10. hawgbert

    hawgbert Jr. VIP Jr. VIP Premium Member

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    Congrats on your score! I live in an area where the pawn shop owners check auction sites regularly, so there isn't much opportunity. It's a great idea for some markets.
     
  11. LeMerovigian

    LeMerovigian BANNED BANNED

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    Those pawnshop guys are born troll-eys
     
  12. alex1944

    alex1944 Newbie

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    I won't be out visiting my local Pawn Shops but I will definitely keep this in mind. It does have to necessarily have to apply to Pawn Shops, but Yard and Garage sales as well. You're right: 'Food for Thought'.