I’ll admit this straight up, this is not an effortless way to make money. You need to be a straight up hustler, by every definition of the word. You need to be happy to undercut and overprice at every possible corner. Your edge comes from underpaying and being overpaid. If you are not comfortable negotiating or selling, then this is not for you.
The selling part is not so difficult, once you figure out how to make a nice ad, that part is easy. But, your margin comes from underpaying for everything possible, that’s your edge. Not trying to say this is dodgy, but you must be unafraid of ASKING.
Some people, for one reason or another, are afraid to negotiate in our culture. It seems to be a deeply ingrained social effect. We are afraid of offending, or not paying a fair price, or being impolite. The fact is that the PRICE of an item is based on what a buyer and seller agree on. Where supply and demand meet. If the seller does not agree to your price, then it is unfair. If they DO agree on your price, then it is a fair price!
The beauty of hustling these classified ad sites is that there are always listings. There is always a chance to make money, the popular ones have new postings listed every SECOND in your local area. So, for those with an eye for opportunity, you can easily clear $100 a day.
The crux of the idea has been summarised above, to put it simply:
You are going to find items on Craigslist, you are going to bed for less than you can sell them for. Then you are going to turn around and sell them for more.
For example, if you see an ad for a mobile phone asking to sell for $400, you offer $300. If they accept, you sell for $400. Once you buy it, you turn around and sell it for $400. Keeping the profit of $100.
If they don’t accept your price, you might move up to $350 or so. And if they still don’t, then move on. Check the ad back a day or two later, they may be more motivated to sell them.
Your buying price needs to have room for a margin of your profit.
This is only a quick guide as there’s not much more to it. Learn what the prices things in your city go for. Most settle around a certain average price point, i.e. iPhone goes for $600 on average, so any you find at $500 you should jump on.
Bear in mind there are plenty of other sites out there that post classified ads in your local community. You probably already know which is biggest in your city, so focus on that. The rest are worth checking, but one typically dominates any local market. For example, most of the US used Craigslist, but most of Australia uses Gumtree.
How I Would Do It
As above, but here are some tricks to help you out. First of all, I’d start with as much capital as I can spare. Not all deals close fast, especially the good deals you might get lucky with. So much of your capital will be tied up until you sell. That being said, you need to always have cash ready for opportunities when they appear. You’ll never kick yourself harder when you miss out on a golden opportunity.
Start by selling everything you don’t need in your own house. Or even in your parents’ house. Most parents have a lot of old junk laying around that they won’t mind giving you. Win-win, because it cleans up their house and gives you some starting capital.
Begin browsing your area for products you know will sell and that you know the average price of. Mobile phones are good but saturated. Everyone is doing that.
Next, put in a bid 30% below the advertised price. Be willing to go to 15% below if they live fairly close.
Always keep in mind your distance from the deal. If they live on the other side of town, it takes an hour to get there and is going to cost money for fuel, tolls, etc. then it isn’t worth it (unless there is a BIG margin).
For an extra edge, always negotiate further when you are face to face and USE CASH.
Having cash in front of you allows you to close a deal there and then. It is very powerful.
Don’t be dodgy, but if you got them to drop the price already, there’s a 50/50 chance they can go lower. If it’s a hard no, just pay them and collect your product.
Always be sure to inspect the product before handing over the cash.
Learn to take good pictures, it’s the difference between sale and no sale
Invest in a light box, can often get them for under $50, great for small items
You don’t need to sell on the same site you bought from. There’s plenty of ways to sell what you buy on Amazon or eBay, or whatever else is popular in your country. Just try and keep in mind your shipping costs.
Combine this with possibly importing products from overseas
Or white labelling products
Or affiliate marketing
Or refurbishing and selling antique free/cheap furniture
And start hitting up garage sales and thrift shops. According to Gary Vee – that’s the highest ROI play out there! A terrific way to get your starting capital up.
Consider scripts or scrapers that can help find opportunities quickly if you are serious! You can set it up to get notifications when certain types of ads are listed, or that have certain keywords (e.g. MUST GO TODAY!) Worth it if you are turning this into a full-time thing.
$100 A Day Math
Really hard to say, as you may make a $1000 in a single day from a single flip. Or you may not sell any of your merchandise for days.
But, your path to $100 a day should be easy to understand. Reaching it is harder but do-able!
Scalability – Can It Become A Million Dollar Business?
No. Put this in the category of growing your capital to invest in your core business.
MAYBE if you turn it into a large-scale niche with huge profit margins (cars or boats, maybe?) But that is a whole other level. 6 figures are attainable though.