Make Money Buying and Reselling Things You Know About!

The following is a guest post from FMF reader Nate Bredeweg.

I wanted to share some powerful insights with you today about how you can make serious money buying and reselling almost anything for an exceptional profit!  How in the world is that possible you ask?  It’s actually quite a simple transaction that takes a good bit of patience and practice to master.  Once you have learned how to do it, you can make some extra money to pay down debt, save, give or buy something else you really want!

What does it take?

I have been buying and reselling products for a profit nearly my whole life starting with candy bars in my neighborhood.  I learned that I could buy 5 Nestle Butterfingers® for a $1 at my local grocery store on sale and flip each for $.75 apiece to my neighbors who were more than willing to help a young entrepreneur out ;-)  One of the most important attributes you must possess in order to buy and resell a product for a great profit is a strong knowledge of what the product is worth (its market value).  Why does that matter so much? Because when you know what the product is worth, you know when it is being sold for less than it is worth.  Then you can buy it – and sell it for more (and in many cases MUCH MORE) than you paid for it.

Now I know some of you are thinking to yourself, “DUH Nate! I mean come on dude – everyone knows when something is being sold for less than it is worth”…  On the contrary my friend; in my experience, most people have no idea what 90% of what they buy is actually worth.  I mean they might know approximately what it is worth -- “it’s worth like $20, bro”.  So is it really worth $20?  Or is it worth $10 -- $15 or maybe even $30?  Let me give you an example to drive the point home:

You see the gorgeous compilation of high quality leather and classic design below?

 

I believe this might be called a purse or something to that affect (forgive my man mind)…

I can tell you with absolute certainty that if I came across this purse at a steep discount from its true value, it wouldn’t matter. I would have NO idea what it was worth.  Not a clue.  I know it is pretty, and most every female in my family would love to own it. If I had to make a guess – I would say it is worth $150 or something like that.  I actually just checked and this puppy sells for $6950. It is highly unlikely that I could ever buy this or any purse for that matter and resell it for a profit, because I don’t possess a strong knowledge of what it is worth.

I can hear even the purse fanatic saying, “Oh my gosh Nate – that is a horrible example.  Most people are not going to know what a purse like that is worth.  I don’t even know anyone that could afford that”. SHAME ON YOU!  Why don’t you know what it is worth?  I mean if I were you, I would make sure I knew what a purse like this is worth, so that when I came across one being sold by and ignorant man at an estate sale I could buy it for like $100 and make a profit equal to what you made working your entire first year in college…

So why don’t I become a price expert for high end purses, so when I come across a bargain I can make some good money?  I will tell you it is because I don’t have a passion for fashion!  You see, I don’t have the time or the interest to have a very intimate knowledge of what high end purses are worth.  Maybe you do? It is my (strongly held) opinion that many people have, or could readily develop, the knowledge and passion for a certain product that they could monetize (make money) through buying and reselling.

Show Me How It Works

I love fast cars.  My freshman year of college, I purchased a brand new Ford Mustang.  I paid WAY too much for it (cars do in fact go DOWN in value over time). However, after realizing how much I overpaid for the Mustang, I began learning how to determine what cars were worth so I wouldn’t get burned again in the future. I set out to learn the market value of various years, makes and models cars.  I spent significant time researching car values via the internet, books, magazines, and talking to mechanics and other car enthusiasts. 

At some point I realized that I had a very strong knowledge of what a given car was worth.  I could walk into parking lot and look at a given car and predict its market value with serious accuracy (which I would verify by running the KBB on it among other car valuation tools).  Note: I can’t fix a car (although I surround myself with qualified people who can).  I simply know how much they are worth.

I was reading the classifieds in the paper one day and saw a SUPER FAST 1989 Ford Mustang for sale.
 
I knew that if the car was in good shape it would be worth close to $1600 in my area of the country.  So I drove out and met the guy selling the car.  I negotiated the price, and bought the car for $900. My brother-in-law and I made a few small repairs ($200.00) and cleaned it up.  I had a blast driving it around town for a couple months and then I sold it for $1600 even.

I made a $500 profit simply because I was acutely aware that the car I came across was being sold for less than it was worth.

Sometime after that I bought an old model JMC Jimmy for $600 that was sitting in a neighbor’s yard with a for sale sign on it.

I knew that it was likely worth a couple hundred dollars more than the asking price.  Stephanie and I used it to haul trash to the dump and our gear to play tennis down the road from our house.  I sold it a couple months later within 24 hours, in exactly the same condition I found it, for $900.

Again – I made a $300 profit simply because I knew the product I was looking at was undervalued.

I also have a strong knowledge of how to price many consumer electronics.  I once bought a computer ($5) and LCD monitor ($25) at separate garage sales and resold them together for $300.

I found a fabulous Lexus LS400 (my current daily driver) for several THOUSAND dollars below market value from a car auction. I purchased this car with cash; much of which was from my profits buying and reselling undervalued cars, electronics, stereo equipment etc.

Maybe you have no interest in what a car is worth (well you should at least get a good deal on the one you plan on driving every day!).  However, you could become a price expert for ANY product that you have an interest or passion for.   I talked to a woman the other day that makes $15,000 a year (net) buying and reselling baby clothes online. 

On the extreme scale, I have a coworker who buys (cash) real estate and sells it for a profit after reconditioning and holding and the property for 1-2 years.   He only has a strong knowledge of the value of property within his city limits.  He doesn’t try to buy property in markets he doesn’t know or understand. 

A few final notes:

Once you have learned the market value of a product you wish to buy and resell, be patient and wait for the right opportunity.  You assuredly aren’t going to have deals jumping in your lap every day, but with a keen eye constantly on the lookout, an opportunity will come your way!

Have you ever bought or sold something for a profit?  Tell us the story!!!

Comments

[Don Current]

Excellent advice. One of the keys to making money at anything is PASSION. If it's something you are passionate about you will know about it and be able to talk about it. People sense and appreciate passion and sometimes will actually pay more for it even.

[Nate Bredeweg]

Don – that is a fantastic observation: “People sense and appreciate passion and sometimes will actually pay more for it even.”

Wow! You really got me thinking with that statement. I wonder why people are willing to pay more for passion. Do you think it’s because of perceived expertise and knowledge (or maybe just social conditioning)? That is fascinating.

[Old Limey]

I have a daughter that became a stay at home Mom at age 50 after adopting two newborn baby girls (one blonde, one brunette now aged 2 and 3). She does have a steady job with an attorney (with good benefits) that she performs by tele-commuting but a few years ago she also started selling on eBay. I tell you, this woman instantly knows all the brands and bargains when she sees then. She is a powerseller on eBay and gets most of her merchandise for next to nothing at thrift stores. It amazes me that many of the younger generation give away their clothes, accessories, and athletic equipment for nothing when they still have a very high resale value. My daughter is now the breadwinner since her husband was a custom home builder and that business has gone kaput for a while! Fortunately they have a nice custom home, no debt, and she has a $1.52M SEP-IRA and a six figure trust account that I have managed for her since she first started working as a paralegal, and now her husband is wrapping up his father's estate which will also give them a nice inheritance.

[C]

I once made quite a bit of money selling something I bought at Costco for $100 that was selling everywhere else for $189. I bought 5 or so per week, and sold on ebay. After taking into consideration all the ebay and shipping fees, I ended up making a few hundred bucks in about a month. Best part was that if I couldn't sell at a profit, I could have just returned them for a full refund.

[Nate Bredeweg]

C - I love that! And it was pretty easy FOR YOU - because you knew what the market value of that $100 item was. Kinda cool that you had no risk either, because you could just return the item haha.

[Bill]

I have been able to make money by watching ads at Staples, Office Max, etc and using coupons to buy electronic gear at great prices. I then turn these over on ebay at their normal price. As Nate says, you have to be patient however.

[DJ]

I recently make a $160 profit off of a Stihl chainsaw. I found an ad on Craigslist for a pressure washer that i was interested in. Met the guy in his garage, and I noticed he had a Stihgl Chainsaw sitting in the corner. I casually asked if he had anything else for sale and he mentioned he would sell the chainsaw for $30, he had no use for it anymore.

I knew what they were worth and didn't haggle on the price. I took the saw home, fired it up, cleaned it up a bit, and sold it the next day on Craigslist for $190. The man I bought it from was happy, the guy I sold it to was happy, and I was pretty darn happy myself.

Not a bad 24 hour turn around.

[LotharBot]

This is surprisingly common. My wife used to work in a thrift store. One day a week they had "99 cent day" where they just tried to clear out inventory that had been in the store for a while.

There was a group of regular resellers who would show up just before open and pick up a large amount of merchandise. Some of them were eBay or Craigslist pros, while others had bookstores or other retail space. The key was that they all knew enough about their areas to spot the stuff they could get a lot more money for, and they knew when the thrift store would drop the price on that stuff if it hadn't sold yet.

[[email protected]]

We bought Magic: The Gathering cards in bulk on Ebay and resold them in repacks and made $2-$3 net per pack...after 2 years I got bored though. We broke even overall and still have 75,000 Magic cards in our office, lol.

[Terry]

Great post! I like to sell DVD's and video games on half.com. I find many of them for less than $3 at garage sales & flea markets and the ones I don't keep I sell on half.com for a profit.

[BT]

Great article. Sounds like a good plan to earn some extra income. I might just have to give it a try.

[CB]

A very good post. I want to start a reselling gig of my own. Just listed a bunch of ideas that seem profitable. Thanks! You got me thinking in some new directions.