Whether you are starting out casually or going to try and do it full time, you have to start buying with what you know. The more you know about the items you are trying to buy and sell, the more profit you will make. Whatever you start buying and selling, master it. If it’s video games, know how much all the systems sell for new, how much they sell used at video games stores, on ebay, and on Craigslist. Know what the demand is for everything. Is a new system about to be released? As times goes by it will become more apparent to you how much money there is to be made in that area.Meanwhile, as you are buying and selling what you know, identify and research other categories you would like to get into and learn everything there is to know about these other areas. Tip: The more expensive the item is new, the greater the possibility to profit off the resale. There isn’t much profit in small kitchen appliances, even if you get them for free. For some that’s fine, while others of you will have to deal in bigger priced items.
To illustrate my points above, I want to share with you the story of the one and only time I’ve lost money on a purchase this past year. (Some of you might say if I’ve only lost money once that I’m not being aggressive enough. That may be true and I’m wrestling with that. When I started, I had $200 to my name. I couldn’t afford to make mistakes. I’ll share more about how it all began in another post.)
My only loss
I was scanning Craigslist one day when someone posted an ad for a pile of 100 old baseball cards, $150. No picture, no details. I called the guy right up and started getting details. I asked him what year the cards were and told him where to look. He said they were 1968 Topps baseball cards. Sweet! I pulled up a online pricing guide and had him read off the names of all the cards on the phone. About half way through I had made up my mind I was going to go get the cards. The pile was going to be worth a lot! So I left my computer and drove out to meet the kid. When I started looking through the cards my heart sank. They were all from 1974. I had not a clue what any cards from 1974 were worth. I went back and forth and ended up talking him down to $100 for the cards. I went home and looked them up on eBay and my heart sank. The entire set, which I had like 1/10th of was selling for a few hundred bucks. I took the cards back and after haggling with the kid for deceiving me over the phone I traded the cards back for an Ipod nano and a mini SD card. The damage had been done, the streak was over, I ended up losing $30 on the deal. Humbled, I learned a valuable lesson. Buy what you know. Doing three minutes of research before you go out to buy your next item can be a dangerous thing. In general, it’s not a good idea, though there will be exceptions. Once I made $225 on a 28 drawer craftsman tool chest by pulling up the Sears website before I raced across town to pick the thing up for $25. Be careful.