Here’s How One Couple Turns Clearance Shelves Into Extra Cash
What if I told you that your bargain finds could earn you serious cash with a side hustle called retail arbitrage?
What the Heck is Retail Arbitrage?
Retail arbitrage, also known as clearancing, simply means buying clearance items at retail stores then and reselling them for a higher price.
Some people resell items on eBay or Facebook Marketplace and ship directly to the buyer, others use third-party services like Fulfillment by Amazon to pick, pack and ship orders for a small fee.
How Retail Arbitrage Works
Penny Hoarder Assistant Editor Justin Cupler began clearancing with his wife about six years ago.
“My wife’s couponing and clearance hunting began innocently enough as a way for us to get cheap stuff,” says Cupler. “But it eventually got to a point where we had no room for things. We saw people would sell these items online and profit doing it, so we dipped our toes into those waters and have steadily grown our operation over the years.”
Cupler notes people who do this full time could potentially clear six figures.
Startup costs to get their business off the ground basically amounted to the money the Cuplers spent buying their initial stock.
Some people also purchase shelving units, storage tubs or small sheds to house stock.
But those additional expenses aren’t necessary if your home already has sufficient built-in storage space like unused closets or cupboards.
To keep everyday overhead costs low, the Cuplers pack and ship every order themselves.
Cupler estimates he and his wife shop store aisles together about 70% of the time, splitting up when clearance sections are scattered throughout different parts of the store.
When it comes to deciding what items to buy, the Cuplers consult the Amazon Seller and eBay apps on their mobile phones to determine an item’s market value and figure out a base selling price. (These apps are also available through Google Play.)
Who makes the final call on whether an item is worth buying to resell?
“I generally make the decision on anything we buy to sell on eBay or Amazon, whereas my wife makes the decision on things we sell locally on Facebook Marketplace or yard sale,” says Cupler.
What to Know About Retail Arbitrage
Ready to give retail arbitrage a try? Here are Cupler’s top four tips for success.
1. Get to Know Your Market
Hot ticket items vary by season and even by geographic location.
“For example, grills and other outdoor items’ prices fall more dramatically in the northern U.S. than in the south,” says Cupler. “This is because of the dramatic temperature shifts from summer to fall and fall to winter up north.”
2. All Clearance Prices Are Not Created Equal
“Just because a 4K TV is on clearance at a Target in Tallahassee, Florida, doesn’t mean it’s also on clearance in St. Petersburg,” says Cupler.
“You can use other areas as a rough guide, but never go nuts trying to find that item just because it was on clearance hundreds (or thousands) of miles away.”
3. Price Check Items Before You Decide
“Make sure to check [clearance item] prices either via the store’s price-checking machines or the store’s app,” Cupler recommends.”Sometimes you can find amazing 90% off deals on an item with a clearance sticker that only says it’s 50% off.”
4. Learn Your Store’s Routine
“Most retail stores have a routine for clearance markdowns, so get to know when your store marks items down and how much it normally knocks them down. This will help keep you from running to the store every day just to check prices,” says Cupler.
Lisa McGreevy is a staff writer at The Penny Hoarder. She plans to take a closer look at her favorite store’s clearance aisles from now on.
The Penny Hoarder Promise: We provide accurate, reliable information. Here’s why you can trust us and how we make money.