Proven Online Sourcing Strategies. Online Arbitrage Week 1 Arbitrage, Source Types, Budget

Transcription

1 Proven Online Sourcing Strategies Online Arbitrage Week 1 Arbitrage, Source Types, Budget 0:00:01 Speaker 1: The broadcast is now starting. All attendees are in listen-only mode. 0:00:05 Speaker 2: Hey, everybody, welcome to the greatest online arbitrage training that has ever been put on. This training is going to blow you away. The opportunity is limitless and we've got the best in the business to teach us. I've got one of our premier coaches, Gary Baird, and probably one of my top mentors and people that I recommend to other people out there, Chris Green. Hey, guys, how's it going? 0:00:38 Speaker 3: Going great. How are you, Nathan? 0:00:39 S2: Good, guys. I'm excited. How about you, Chris? You ready to do this? 0:00:44 Speaker 4: I am hyped, I am ready to go, I am in such a good mood to bring the best of online arbitrage sourcing. Nate, I appreciate the compliment, it means a lot. We've worked together on a lot of projects, it's been great. And I wrote a book on this stuff and I am thrilled to help everybody who's listening to this coaching get better at online arbitrage. 0:01:07 S2: Yeah, but you guys are the best at this. I can attest to that. I know everybody out there that talks about the subject of buying inventory online for reselling on Amazon and there is nobody out there in the world better in this, so listen, let's cut the small talk, let's teach these people how to do this. 0:01:27 S4: Let's do it. 0:01:28 S3: Alright. Let's get rolling. Alright. So first slide we're gonna talk about, if I can get this to move to the next... No, little hyperactive there. Alright. So the first thing we wanted to touch on was, what in the world is online arbitrage? Or online sourcing? Online arbitrage is kind of a coin that, I don't know if Chris you coined that or somebody else did but... 0:01:52 S4: I actually did. I invented... Well, I didn't invent the model, but I definitely put a name to it with "retail arbitrage" and "online arbitrage". But, yeah, this has been around a long time, guys. 0:02:02 S3: Sure. So we just want to define it first and kind of give you a base to start from. The Merriam-Webster dictionary definition says it's "The practice of buying something in one place and selling it almost immediately in another place where it is worth more." And that's probably a little 09/03/15 Page 1 of 25

2 bit aggressive, the "immediately" part. So our definition... Revised definition for FBA is a simpler definition: "Finding products online that can be sold on Amazon for a profit". 0:02:34 S4: Yeah, let's keep it simple. You'll hear the term "retail arbitrage" and "online arbitrage". This teaching, this course, is all about online arbitrage. So when you hear that term, the way I try to describe it is, this is stuff where you can sit on your butt on your couch with a laptop, some kind of computer, and you can find inventory that you can turn around and sell for a profit. That's gonna come straight to your house, and be delivered to your door, maybe you're gonna use a prep company or a prep and ship service, we got some information on that in the other segments, but you're sourcing online instead of going to a retail store and scanning barcodes. That's why it's called online arbitrage. And one of the coolest things about this is, this isn't like wholesale, right, there's wholesale coaching if you guys wanna get into that. This is you're just buying from a website, which means you can buy as little or as much as you want and you can do whatever you want with is. You're not doing minimum purchase quantities, you're don't have to adhere to minimum advertised price, or MAP pricing you may have heard about, you can do whatever you want with it. You don't need to have a business license, you don't need to spend a ton of money, you don't need a line of credit. Anybody can step into this business, learn the tips and tricks that we're gonna teach you, and buy inventory that you're gonna resell for a profit. It's really that easy. 0:03:52 S2: Absolutely, yeah. It's a great model that's easy, and we're actually gonna talk about some of the pros right now. Oh actually, I'm sorry, we'll talk about the Amazon buyer mindset, then we'll get into the pros and a few of the cons as well of online sourcing. Amazon buyer mindset, Chris, I hear this all the time. I hear people say, "Why would a customer pay so much? I would never pay that. They can just go to the store and website and buy it cheaper, why would they buy it from you?" So what's your explanation for why people pay what they pay on Amazon, why we're able to charge what we charge for products and get away with it, in some people's minds. 0:04:30 S4: [chuckle] Well, it's not really getting away with it, it's just the market, right? 0:04:34 S2: Right. 0:04:35 S4: This is one of the most common questions that we had when FBA first started getting big. I'd get calls all day, "Why does this work? What do you mean, people are paying more? What's this Prime thing going on?" And people need to realize... And I didn't realize this, right? So guys, if you think everybody's a price buyer, meaning price is the number one thing that they're using to make a decision about what they're gonna buy, you just need to believe me that it's not. Really, if you break it down, nobody's a priced buyer, because nobody drives around in the cheapest car and wears the cheapest shirt and they're sure not going to the cheapest brain surgeon, alright? So it's one thing to say you can get it cheaper somewhere else, but I've bought boxes at Lowe's and next door's a Staples and I see people walking out of Staples with boxes that cost 10 times what they cost at Lowe's right next door, right? If there's price discrepancies, there's an inefficient market, there's arbitrage opportunities out there. And when it comes to the Amazon buyer mindset, a lot of them are paying for convenience, 'cause it's really easy to say, "Why would they pay so much? I can go to the store and buy it for cheaper." Yeah, well you can't get a Prime two-day shipping. I got something today that took eight days to get here, and I was like "You've gotta be kidding? Eight days?" 0:05:46 S2: Not from Amazon. 09/03/15 Page 2 of 25

3 0:05:47 S4: I'm so used to two-day shipping, and if I can't get it in two days, I really don't want it. But you just have to believe the Amazon buyer does pay more. And if you have trouble believing that, it's okay, you can test the market, you can send in one or two, or list a few merchants [0:06:02] affiliate and see if they sell. That's what finally got me to switch over. I was an EBay seller. I was trying to undercut. I was thinking price was the only thing that mattered. Why would I bother listing on Amazon where the prices are higher? I finally tried it because there was no fees, and the items sold like crazy, and that's what it took. For me it took empirical evidence to change my mind. Now, you guys can use our empirical evidence, our experience in doing this for decades now, and just believe that the Amazon buyer pays more. So everything that we go through here, when we show the Amazon price, that's the market price on Amazon. And yes, they could go do a different website and buy it for cheaper, buy it for a lower price, they could. And whenever I get questions like that I tell those buyers, "Then go do it." Because they're sending us questions through Amazon saying, "Hey, I can go to Kohl's and buy this for cheaper." I'm like, "Then go do it." And I encourage... [chuckle] 0:06:54 S2: Why are you ing me? 0:06:56 S4: Yeah, tell me where the product is, I'll go buy some more. I don't try to be mean to them. I throw it a little back at them and say "Hey look, if you can get it at that price, then I encourage you to buy it and sell it on Amazon, because on Amazon it's 60 bucks. You can get it for 20, good for you and " You don't want to be smart with them about it. You will get questions from customers about... But I use that as sourcing material. Some customer s me and says, "Hey I can get this and Toys"R"Us for 12 bucks," I'm like "Sweet! Thanks, dude. I'm on my way." 0:07:27 S2: Yeah, there are people with too much... More time on their hands then they should have, and they will do that just to kinda try to get under your skin I think sometimes. You just answer them kindly and nicely and be polite and move on and sell it for whatever price the market has... 0:07:41 S4: But the flip side of that is the people who don't have time. They don't have time and when you don't have time you're willing to pay a little more. 0:07:49 S4: Yeah, these are the reasons. When I'm coaching clients I tell them there's, I always said five and I came up with another one based on our conversations, and that's the loyal one. But I always say people are either busy, too busy to worry about taking time to shop, comparison shop, go to stores or whatever. They're rich. They've got more money or they have more money than they know what to do with or they just have enough money where they don't need to worry about how much they're spending on something. They're lazy. They just don't want to spend the energy to go run around and do stuff. They're really rural and can't get to stores and even if they can buy it off the website, they want it fast so they're going to get it from Amazon, because they can get it faster from Amazon than some other website. They're impatient. Two day shipping, one day shipping, same day shipping in some cases from Amazon. And then the last one that I've added recently, is loyal. They just are loyal to Amazon's brand. They get great customer service. You can return products even past the due date, to the chagrin of many buyers unfortunately sometimes. But they are very customer driven and some people are loyal to that because they know they're going to get a great customer experience on the Amazon platform, and they're willing to pay for that. 09/03/15 Page 3 of 25

4 0:09:02 S4: Alright. And I'd add one more. You had five, now we have six, I'd almost add seven and we're talking about the Amazon buyer mindset. And there's going to be times when an item is being sold over retail. Meaning a higher price then the MSRP, is probably because it's hard to find. You may look at that, and that's a $20 Elsa doll, why are people paying $70? Because it's sold out everywhere, and if you want it today you can pay $70 or you cannot. It's Capitalism, it's a free market, you don't have to buy it. But that's the market price. And price is set on the third party marketplace by only two things: Supply and demand. That's it. This isn't economics 101, but really supply and demand set the price. Nobody's buying, the price is going to come down. If things are out of whack, the price is gonna go way up. And Amazon is gonna come in and out of stock of some items. 0:09:49 S4: But when they're out of stock, the price is what it is. And even if it's at a high price where you would say, "I'd never pay that." "Hey, I would never pay that either, but I'm not selling to me. I'm selling to the customer who's got a child's birthday coming up, and they've been begging for this Elsa doll forever, and hey that's the market price." This isn't price gauging, this isn't taking advantage of, this is the market. You can wait until they come back in stock at a lower price or hey, stuff's hard to find the price goes up. And that goes up on everything, not just collectible toys. It goes up on Corvette Convertibles when there's more buyers than sellers. The demand is exceeding supply, then the price goes up. [0:10:31] don't even negotiate. 0:10:32 S3: It goes up on stuff like appliances that get outdated. They came out with a Keurig 2.0. It wasn't as popular. It had tons of terrible reviews. People were paying a premium if you could provide them the original version of the Keurig machines. It's true for all different types of products. Toys is a great example because parents are well known to be over spenders on their kids, but its true for all kinds of products, not just toys absolutely. 0:10:58 S4: Sure. And there is the collectible stuff as well. We won't get into all that, but once something becomes collectible, think Star Wars, think someone who wants to fill out their collection, there's not much supply and there's still a lot of demand 'cause its a strong brand, price is gonna go up. 0:11:14 S2: Alright. It's time to move on to the next slide here. Talk about online sourcing a little bit more, I call this 'online sourcing extended.' We talked about this. Chris and I have talked about this a lot. Online sourcing is not just about the products you find online to buy right then. It's about so much more. You can learn a ton of information just by going though the process of research. You might not find anything on a site that day, but you learn something about that brand, or that line, or that store. You might be able to track a product that you found that's a great seller on Amazon but its not quite a great buy yet and we're going to talk a lot more about tracking later on in this course, but there are tons of good bits of information you can get from sourcing things online and one of those things that you can get, if you are able to find stuff in store... Sometimes you can find stuff that's not available online and it's actually a benefit to you because it's only available locally in store. 0:12:25 S2: Most people are gonna be lazy and not take advantage of that and if you do look at the in-store quantities available in your area and go take advantage of that, buy them in store, you know they're there, you're not wasting a trip to the store to go get them, you get in your car, drive over there, pick them up, and sometimes you can buy them at four or five stores in your area. Just set up a little route on your planner and your GPS or whatever and set your trip and head out and get all 09/03/15 Page 4 of 25

5 your products in those stores while you're there as well. So you get some in-store buying opportunities, you can also find wholesale opportunities. 0:13:00 S3: So, yeah, you can find some great online finds to buy, but when you find a great product that sells that you found online, check out who makes it, look at the back of the package when it comes to you. Who's the supplier? Can you find it at a wholesale price, cheaper at the same price that you've been buying it online, unlimited quantities, get them case packed and sent to your door? And then there's the private label opportunities. I have a coaching client right now who is private labeling something that he bought from a store online, they stopped producing it, stopped selling it, so now he is filling that gap by going to China, having them make this product and him branding it himself. And he did that just because of an online sourcing opportunity that became a private label opportunity because they stopped carrying it. It happens all the time. They stop producing products, people still want them and there's a chance to fill that void for you if you can find something that's a really good selling product. I'll leave that last one... [overlapping conversation] 0:14:01 S3: I'll leave that one to you 'cause this kinda came from you in our discussions. We kinda came to this together, but this was your quote, so I'll let you take this one. 0:14:10 S2: Everything you do has value and I understand when people say, "Why do you spend an hour working on three different sites? I didn't find anything." Well, you learn something, right? You just said you learn about different sites, you can learn about different products, you learn about new lines that are coming out. And the tracking stuff, guys, wait till you see all the tracking stuff we're gonna show you in the later modules in this course. You're able to track items on a website 'cause when you're with computers, right? This is is... It's very different from retail versus online arbitrage. It's easy to say, "Oh, they're just different sources." Well, yeah, but they're very different strategies as well. It's a computer. It's a website. I can set up little widgets and scripts and all these things to monitor prices and monitor in-stock alerts and quantities and release dates and all these things 'cause it's computer. 0:14:55 S4: Right. I can check it all the time. It's a store. I gotta go to the store and check are the on the shelf today, are they on the shelf today? Are they on the shelf today? You gotta keep going back. Let the computer do it. Your computer can do it every five minutes if you want because you made them see something to say, "You know what, I think that's gonna be a great product that I can make money on, but my acquisition cost, the price on the website is too high and the sell price, the market price on Amazon is too low." Now if one of those changes or, hey, both of them change, even better. If your cost goes down all of a sudden, "Hey, I can make money on it. I'm interested." Or the price on the Amazon goes up, "Hey, now I can make money. I'm interested." This isn't like a game of, "Oh, I can make this make money." It either makes money or it doesn't. And as soon as you can make money with it, you pull the trigger. 0:15:41 S4: So there are lots of tools out there that will track prices both on Amazon and source websites, in-stock alerts on Amazon and source websites. And when an item becomes popular or profitable, you get a text message or you get an or you get a tweet, however you have it set up. So you can gain so much information. And I love these in-store buying opportunities. This is a little bit of a segway, but I want everybody to think big when they're doing this. You might find an item and you're gonna buy it out on the website, but you know they're in the stores and you don't 09/03/15 Page 5 of 25

6 live near any stores. This is the value of having a network. You're probably in the MST Facebook group where you can network with other sellers and say, "Hey, guys, I found this awesome product and I know there's some stock in these zip codes," and you share that information with them, guess what, that value is gonna come back to you tenfold and it's just that easy. 0:16:35 S4: You're sitting there in front of a computer and you know the stock levels, it's valuable information that you can't do anything with 'cause you don't live in that zip code. So how do you extract information from that? Well, one of two ways. You either sell the deal straight up for cash or you use it... I don't wanna say it's leverage in a nefarious way but, hey, you're gonna build some relationships by sharing this information. That is valuable. Relationships have value. It's hard to put a dollar value on them, but man, mastermind groups and networking, the people who are in them, they'll tell you, [0:17:06] the most valuable part of their business. 0:17:09 S3: Yeah. And when Chris says, "sell the deal," to just briefly expound on that, everyone of us who sells online will gladly pay for information that makes us money. So if you find something that, one, you can't access because you don't live in that area or, two, maybe you are just starting out and don't have enough money to buy all of the available quantity online. If you can provide good information on a product that's a great deal to somebody, they will gladly pay you something for that information. I have local sourcers here who source me, I pay them 10% of whatever they spend. So if you wanna use that as a guide for what you're gonna charge for that, that's fine, or you can come up with your own price, but there's a definite market out there for information that's gonna make people money in this business. And I'll add one more even to what Chris was saying for these in-store buying opportunities. 0:18:02 S3: If you don't want to share these deals for some reason and you want to take advantage of them yourself, look, I have parent... My parents live in New York, upstate New York, so whenever I'm sourcing stuff online I always check 12078, upstate New York, and see if there's any quantity there. And sometimes there is and I have my mom or my sisters, they go grab it for me, slap it in a box, send it to Amazon. Amazon preps it and labels it for me so I don't have to mess with that and they're more than happy to do that. So if you have friends or family around the country, check in those zip codes as well and let them help you out. Give 'em something for it and make a little extra money for products that you would have never been able to source on your own. 0:18:43 S4: Yeah, you're sitting at your command center on your couch and you've got people running around picking up products in retail stores and sending them to your Amazon account. Is that technically online arbitrage, I'd say it is. 0:18:58 S2: Sure. It's an extension of it, that's why we call this 'online sourcing extended.' But yeah, to reiterate at the bottom, everything you do has value. Learn from what you do. Track the products that you are finding, even if you buy them or not. I'll track stuff... I buy stuff full price sometimes online. I was just talking to a client today, we just started a deal's list. Greg Purdy and I just started a deal's list that we're putting out and we had some products on there today, and they were full price, selling on Amazon for two and a half times what they were full price on that website. So of course I'm gonna track that 'cause I wanna know when it drops in price, 'cause when it drops in price it's probably gonna be selling for three or four times on Amazon what it's selling for on that website. So track everything and then expand. When you find products, expand your search. Go to other sites and look for that same product. Maybe it's cheaper somewhere else. Research that brand. We're gonna talk a little bit about learning a brand and learning a niche later on. 09/03/15 Page 6 of 25

7 0:20:01 S2: And before you move on, I'll add one more thing to this, Gary, on the track and learn part. Guys, if you're starting out, maybe you don't have a big sourcing budget, keep track of the stuff that you just find "interesting or potential or man, if I had the money, that would be something I would buy," and keep track of your acquisition costs, keep track of how many you could purchase. Maybe it has a large limit, maybe it only has a few left in stock. Keep track of the sales rank on Amazon and the market price. Right now, a little later we can get into identifying the market price versus the listed price on Amazon. What items are actually selling for and keep track of that. See, what was it selling for today? A month later, what's it selling for now? So you can say, "Hey, if I had bought that, would I have won or would I have lost?" 0:20:46 S?: Right. 0:20:46 S4: 'Cause nobody wins 10 out of 10 so don't try to go on perfection. Don't beat yourself up if you make a bad buy. We'll get into some buying strategies of keeping your acquisition costs, your buy price low, 'cause the lower your buy price the more protected you are. You're kind of insulated because of the amount of margin you have in your product. But if you keep track of all this stuff, you're gonna see, "Hey, you know what, I was right, eight out of 10 times", and that's good. And then, when you do have a sourcing budget then you already have that confidence. Business is really not that difficult or analyzing numbers or making decisions based on a ton of information that, man, if you were doing this business in the 90's or early 2000's you did not have access to the information that we have today. 0:21:32 S4: So you have all this information, you can make really good buying decisions with a little experience. And you can gain that experience without spending a dollar. You can sit there and track, three months, four months down the road, "Was I right, was I wrong? Hey, I was wrong. Why was I wrong? Was there a red flag that I should have caught? Oh, I should have known, oh, okay." And you learn so much without spending a dime. So if that's the way you guys wanna get started I really encourage you to do so. 0:22:02 S2: Yeah, and if you are tracking and you realize, "Hey, I was wrong on this." Maybe you don't know why you were wrong on it, maybe you don't know what happened and what you missed. Reach out to people in the MST community, the My Silent Team Facebook group online is a great resource. People are extremely helpful there and more than willing to help you understand things when you're starting out. 0:22:20 S4: Yeah, please ask for help. Ask questions. Really, people love to answer questions, they really do. They love to see their name on Facebook with their picture answering a question. There's a little vanity that goes to it. So don't be afraid to ask because people really do wanna help. 0:22:35 S3: Alright. Let's talk a little bit about the advantages or the reasons why we love online sourcing. So the first one... This is my favorite because I'm cheap, is free boxes and packing supplies. Those packing supplies are expensive, man. Those air pockets. 0:22:52 S4: Oh yeah. 0:22:53 S3: Air pocket machine, which is ridiculously expensive where you buy them yourself or buy a ton of bubble wrap and that stuff gets expensive. So free boxes and free packing supplies. 09/03/15 Page 7 of 25

8 Online shoppers... Or online shippers are notorious for packing one square foot of, or one cubic foot of products in a 10 cubic foot box and putting nine cubic feet of packing materials in there. We get stuff all the time. We got two WWE wrestling belts in a box that could have fit me in it, almost, the other day, and it had tons and tons of packing supplies. So that's one of the benefits is it saves you money, it cuts down on your costs. If you're buying in store, you've gotta buy that stuff yourself. And we do that too but it just decreases the amount of materials that you need to buy for your business. I don't think we bought boxes... After Christmas, we bought so much stuff for the Christmas season, I don't think we have bought any new boxes from the UP... Well no, we buy them from U-Haul, but we hadn't bought any boxes until June, middle of June. We had so many free boxes and packing materials that we didn't need to buy anything. 0:24:04 S3: The second thing, Chris has already touched on this a little bit, items are delivered to your door or, if you choose to use a prep company... The prep company's door. There are companies out there that will receive your online orders, prep them, ship them to Amazon for you, and you never even have to see them or touch them. So, if you want to have them delivered to your door, and not use them... There is a cost, obviously, to using a prep company so if you want to keep your cost down and do it yourself, that's fine. But, they come to your door. They get delivered there and you don't have to run around town, waste gas if you're in a big city. 0:24:36 S3: I've driven in big cities and it's not fun. So, if you don't want to do that and you just want to have boxes show up at your door for you, and then have the UPS truck come and pick them up, and never have to leave your house, then that's a possibility with online arbitrage. Often, you can order in larger quantities. Online orders, you're not limited like you are in a store. Stores only have so much shelf space for those backpacks for back to school. But you know what? You go to Kohl.com, and there's a whole bunch of backpacks there that you can buy. You can buy a 100 at a time, if you want, usually. 0:25:13 S3: It's a much nicer, quicker, way to buy large amounts of inventory than having to run from store to store to store. I might have to run to six Kohl's or seven Kohl's to buy the same number of backpacks that I wanted to buy online. So, that's another advantage. Often, speaking of backpacks, they often bag the stuff that you need to bag anyway to send into Amazon. So, that's not only done for you, but it's another expense you don't have to incur because you don't have to use a poly bag for that. And they almost always come with the suffocation warning on them because that's a law and they have to ship them to you just like we have to ship them to our customers with that warning on there. 0:25:54 S3: Alright. And the other... The next few are... The next two are about saving money. Online, you can often use discount codes and we're gonna talk more about this more later. But, discount codes. You can go to sites like RetailMeNot. There's tons of these, DealsPlus. And you can find discount coupon codes that you can use online. Often times, they're advertised right on the main page of the site and you don't even have to go searching for them. But, sometimes, the ones advertised on the site aren't the best ones. Sometimes, if you go to these deal sites, you can find better codes than are advertised on the site. In addition to the discount codes, you've got cash back sites. So you've got sites like Ebates.com and Upromise, Mr. Rebates. There are tons of these cash back sites that offer you money just for clicking through to those sites from their site. They get a kickback from the store and they give you part of that kickback in return. You can earn thousands of dollars of rebates doing that. 09/03/15 Page 8 of 25

9 0:26:53 S3: The next thing is case packs. Sometimes there are stores that aren't always the most careful with packing products; Disney's one of them. When you order their little packs of action figures in these plastic cases that they send, if you don't order them in case packs, you're likely to get some damaged units that you're gonna have to either re-order or return. So, if you can figure out how they come, you can order in case packs and then it's just simple to label those, take 'em out of the pack, label 'em, stick 'em back in the pack, and you've got a box that's a perfect fit for those, and just send 'em into Amazon that way. So, it's a time saver as well. The other thing is, and this is one of the reasons people love to shop on Amazon, easier returns. If you get a damaged item, or you get something that you get to your house and you realize, "Hmm, I might've missed the mark on this one and this might not be such a great deal after all," or Amazon just came in on this product and they have two million of them in stock, you don't want to keep that item and sell it so you just return it and it's a pretty simple process. 0:27:51 S3: Most boxes come with a return label inside, or you can contact the company; go to the website and print off an easy return label. And the last one is probably the best one, for me, you can source anywhere, anytime, and in anything you want, meaning any outfit you want. You wanna source in your pajamas, or swimsuit by the pool, you're free to do that. This is a business you can truly view from anywhere, especially if you use one of those prep companies. You can be in the middle of the Bahamas sourcing, having stuff shipped to Amazon, and work in a few hours a day. 0:28:25 S4: It's a very common question that I was getting, it's from international people. They are buying my book... 0:28:31 S3: Right. 0:28:31 S4: They're finding information online. And they're like, "I'm in Australia," "I'm in Japan," "I'm in Germany, can I still do this?" And it's like, "Yes, you totally can." And the prep companies... I'm callin' it right now. 2015, I'm callin' it. The prep companies, if you don't start using them, you're gonna be kind of facing an uphill battle because the bottle neck of prepping and shipping your items is removed from the sellers who are using the prep companies. And the international sellers are gonna be using prep companies and I really encourage everybody take a look at the existing prep and ship companies and see if they work for your business especially if you're doing a large percentage of online arbitrage. It's really a no brainer decision when you run the numbers on it. So, definitely do that. I love the fact you get these case packs shipped to your door. You put some stickers on 'em, or an Amazon label, and flip 'em around and send 'em out the door. In the introduction we kind of talked about some of the advantages of online arbitrage. You can order small or large quantities. There is no requirements. You don't have a business license to do any of this stuff. It really is that easy. And, you can see Gary's pulling up a list of all the available... There will be more. Guys, there will be more... 0:29:44 S3: These are the ones we know about, right here. 0:29:46 S4: Yeah. There will be more than what you see right here because this is such a big opportunity. Sellers have figured out this is... Fulfillment removed one bottle neck. Now prep and ship companies are removing the next bottle neck of this business. Where you seriously go to website sourced product, have it shipped to these guys, it's gonna end up in your Amazon account. You're gonna have a repricer set the prices for you and you're going to get paid money. 09/03/15 Page 9 of 25

10 0:30:09 S3: Right. 0:30:09 S4: That's really as simple as this business is. Gary, I think we should add one more thing to your advantages, 'cause we normally compare online arbitrage to retail arbitrage and it's like a little compare and contrast that we use, but man, I never really thought about this one before, how about the checkout? The fast checkout that you get online versus standing in line. I know sellers who pay helpers to stand in line and check out. They [0:30:36] load up eight carts. They stick someone in the line and then they pay $10 an hour and say, "You stay here. I'm going to the next store," because they know that checkout could take 45 minutes and it's not worth their time. 10 bucks an hour, have someone else stand in line for you. With online arbitrage... Guys, you're gonna see some videos of Gary checking out and buying some stuff, and hey, like he's done. Hey, all the coupon codes were applied in five seconds. Hey, it only took us this long to get all the cash backs. Like, it's done. It's gonna kill you guys to stand in line to checkout after doing some online arbitrage. 0:31:11 S3: Yeah, it does. It hurts me. Every time I do it, it's like, "Okay, I need to go home and do some online shopping." 0:31:16 S4: We do some online [0:31:17] in the line right? On your phone and your ipad? 0:31:19 S3: Yeah, oh yeah, I definitely, yeah. You're definitely shopping on the 6 plus in store, on my phone, but talk about waiting and one of the benefits was quick returns and easy returns, tried going to Walmart to return some stuff [0:31:35]. Talk about waiting in a line, but yeah, that's absolutely one I need to add to that list. 0:31:40 S3: That's a great point. One point I want to make, Chris was talking about those prep companies and how important they are, this is our website selleressentials.com. It's just a seller resource page where we offer a variety of resources, selling about Amazon. We're gonna offer some information about ebay here soon, book selling, and things like that. We've got a great video. I made this video about how to choose a prep company for your business, so if you are interested, this is a great page to go to, and we can link to it in the course, but you can see this video and see if maybe one fits your needs. And you can come to this site and get all that information and check out every single one of these if you want to click on every one of these and go and see what their pricing structure is and what kind of services they offer, this is a place you can do that. So I just wanted to show you that quickly, and we talked about the coupon codes. 0:32:28 S3: RetailMeNot 's a very easy site to use. This is one if you wanted to shop at Kohls, for example, you just go to RetailMeNot, type in Kohl's, and up pop all the coupon codes. They tell you what the success rate is for each of these codes so you know whether or not it's a legit code or not. As the percentages get lower it's probably pretty restricted, maybe on what kinds of products you can use, but this one it looks like it's a pretty generic code. Right now on their site, I know they're offering a code that's only good for 15% off if you're a Kohl's card holder, or credit card holder, but this code here, I know, works for anybody, not just the credit cardholders. So, it pays to check these discount code sites, and this is just one example. Ebates is one of the sites I mentioned. You can see here, 15% off $100. This is the coupon code that we just saw on RetailMeNot. Plus 6% cash back and you can see, right now they run promotions, double cash back at these stores. Kohl's usually it's 3%, now their 6%. EBags, this was one of the products we had on our list today, on our deal's list, was an ebags' product, and it was 12% cash back on top of the profit you were gonna make from 09/03/15 Page 10 of 25

11 selling it. So these are great sites to link to to check out and save money and add some cash back to your bottom line. 0:33:49 S3: Alright, unfortunately there are a few disadvantages to online sourcing, and we'd be remiss if we didn't mention those. So the one thing that we want to touch on is, buying tax-exempt in a store is super simple. You get a tax-exempt certificate. You've gotta get an EIN from the federal government. Then you get a tax-exempt certificate from your state, and you just bring that. Sometimes they'll give you a card. In my state, we just have to print out a paper and fill it out, bring it to the store, and they take the tax off. Except at Target which just banned that... Banned resellers from getting tax-exempt sales. But, it's pretty simple. Online it's a little bit harder. It's not impossible. It's just a little bit time consuming. You have to contact the stores normally after you make a purchase and let them know, "Hey, I made this purchase," so it's kind of a tedious thing. If you make seven purchases online, you've gotta write seven s. Not a big deal, but it's just a little bit harder. It's an extra step and you've got to wait to get it reimbursed sometimes so it's just a little more cumbersome. 0:34:49 S3: Some stores have restricted resellers with huge orders. That's an issue we want to make clear to you guys. Kohl's is one of them. I've placed large orders up to a couple thousand dollars on Kohl's, but I know other sellers who make much larger orders and they've had issues with being restricted. There are some issues with that, so be aware of that and take that information and use it wisely. So place multiple smaller orders if that's something you're concerned about. For many people starting out, placing really big orders is not gonna be a big deal or a big issue for awhile. It's slower than retail sourcing in this way, retail sourcing can be slow in the check out process like Chris said and in making returns like I talked about, but it's also very fast in that I can go to the store today, buy stuff and ship it the same day, or the next day. And with online arbitrage, obviously, you have to wait for that stuff to get to you, so you're looking at least a day or two for that product to get to you if it's shipped super quickly. And usually more like six to eight days before that product gets to your door and then it can be prepped and then shipped out. So, it's a little bit slower than retail sourcing but there are, like we talked about, many, many other advantages that kind of offset these. Anything to add there Chris? 0:36:12 S4: My biggest disadvantage is when stores, like you said, they start restricting the quantity, and you get to see a lot of that on Amazon.com. Especially, as products become popular, then Amazon often puts in a buy limit where maybe you can only buy two or three units and you can only place an order for two or three units once a week. There is no real set rules on that at this point. Also if you get in early on an item before it's gone up in the sales rank and is popular, they don't have buy limits and you can buy 95 or something, or 180 or something if you want to. 0:36:47 S4: So that is frustrating to a point we're like, "Oh, check out this sick deal. Man, I can only get three." But what it is what it is. I am not a big fan of like fussing over things that you can't change. I'm trying to find "Hey, how can we optimize this?" And if I find a deal I can buy three of them on Amazon, make 50 bucks at each one and put $150 in my pocket. Guess what? I'm telling all my friends. Because if it's popular, if it's got a limit of three and I can only turn around and buy and sell three, I wanna buy and sell stuff that is selling. Not that like, "Oh, my three units when I send them back to the Amazon warehouse is gonna effect the supply so much." That it's just crazy talk. 0:37:28 S4: So, maybe you share with a lot of people and maybe you only share it with five or six 09/03/15 Page 11 of 25

12 people. But sharing that information, by giving value to other people it's gonna to help you form those relationships that we talk about now and up further in the coaching. Guys, that's gonna be very, very valuable, because think about it from just a simple mathematics. If you got six people in a mastermind group and everybody submits one, you're submitting one deal. And there's six people including you, you're getting five back. You're getting five times the amount of information back by sharing one piece of information. And you guys are gonna see how easy it is to find information that will make you money. Whether you're executing on it in a limited sense with a buy limit or just something you can't execute on at all and you're still able to contribute to your group. 0:38:16 S4: So I'm not trying to be like a half glass full or a silver lining on the cloud kind of thing. But for every disadvantage there is an advantage. There's some way that you could still extract value, and so now you got to look kind of hard but I guarantee it's always there. 0:38:32 S3: Yeah. There's none of these disadvantages of online arbitrage that make it unappealing to me. It's still one of my favorite way of sourcing and we just thought it'd be, we wanted to disclose everything. It's not all roses and sunshine but there are definitely a few little disadvantages and you just work around those like Chris said. There's limits, there's limits. So you move on. You look for them in store, maybe if you can get to a store look for them, see if you can buy them in a store. They don't put limits typically in store. There are occasions where there's a really hot toy where they will do that as well, but very rarely do I get limited on products in store. So, alright... 0:39:10 S2: You know what I like about disadvantage, and Gary, before we move on? 0:39:13 S?: Yeah. 0:39:13 S2: Is how quickly other sellers will quit when there's a disadvantage. Like, "It's so hard to get a tax exempt, so I never buy." I'm like "Good, no competition from you." And I want people to think about this for their, 'cause I feel it too. When something is a little harder, when it's harder that it needs to be, where there's a little bit of a roadblock, I get frustrated and that little hint comes in my mind that "Hey, I should, I'm gonna quit. I'm not gonna do this. I'm not gonna complete this purchase. I'm not gonna follow up and see if they have anymore quantity." And whenever I feel that I kick my self and I say, "No, don't." And I get it. Everybody feels it. And I want people to know I feel it too. I get that feeling. But I know that feeling because I've felt it so many times and I've not followed through and I've lived to regret it. Where like, "Oh, there's probably not any deals in there." And there were, and I missed out because I didn't do the work, I didn't put my self in the position to win. So guys when you feel that, push through it. And I say this, "There is nobody, Gary included, who has talked to more sellers in the past seven years then I have." And I can tell you that most sellers out there are lazy. They're looking for any excuse not to pull the trigger. 0:40:27 S1: Don't be lazy. 0:40:28 S2: And knowing that, you guys have got to say, "Hey, I know that lazy people are out there. I'm not gonna be lazy, I'm going to pull the trigger, I'm gonna do the work. I'm gonna stay up another half hour and keep sourcing. I'm gonna get up early because that's where the price changes are gonna hit these sites." You do that and you're gonna win. If you take the lazy route, sorry, you're gonna loose. 0:40:49 S3: Yeah, that brings to mind when I was getting approved to sell in the UK, and there 09/03/15 Page 12 of 25

13 were roadblock after roadblock. I applied wrong the first time, got one number and then I applied again and I end up getting two separate numbers and I was using the one number that was the wrong number. It was a pain. But every step of the way I'm thinking, "Everybody else is gonna give up at these roadblocks. I'm not going to and I'm gonna reap the benefits of it." And that's the perfect mindset to have when you hit roadblocks is "Most people are gonna give up here but I'm not, and I'm gonna reap the rewards when I push on." 0:41:25 S4: No, that's a great example for Amazon. Applying and getting approved for international. Getting approved and [0:41:31] getting categories. It's almost like a litmus test. Alright, if someone's not willing to do that, they need to check themselves. 0:41:37 S3: Yeah, it may not be the business for you. 0:41:40 S4: Yeah. 0:41:42 S3: Alright. The other thing that I want to mention here, one last thing, buying tax exempt. There's a couple of options you have with, if you don't want to mess with getting the tax exemption on these websites. You can talk to a CPA obviously, but some of the options are that you can add the item to your cost of goods sold. Instead of saying you paid $10 plus 7% tax, you just make the cost of goods $10.70 when you record your cost. Or, some states actually allow you to count the taxes that you paid on purchases against your other taxes, so, you can actually deduct... Ours is not one of them in Indiana, but, check with your CPA for your options there and see what's the best one for you. 0:42:27 S4: And don't get hung up on doing tax exempt, either, right? Sometimes just pay the tax. Sometimes it's not worth the hassle on the smaller purchase to be like, "Yeah I gotta get my $3.40 credit back." Be discerning here guys, and be like, "You know what, that one's not worth it." And not just online, bonus retail tip, if it's gonna take you so much longer to check out because whoever is running the cashier has no idea what tax exempt is because it's their first day, hey, maybe you just pay the tax, and get out of there because you got some hot deal on the other side of town, and the more minutes you sit there, the larger the chance that someone else is gonna find that deal. So, always be discerning with your time. People forget about that so many times. Your time is valuable, so be efficient, and sometimes, it pays to pay money and pay tax to get your time back. 0:43:19 S3: Absolutely. All right. Let's talk about sourcing options. We're gonna talk way more about where to find products and all that stuff later on in the course, but, we just wanted to touch on it here a little bit. There are the main-stream sites that everybody knows about, right. WalMart, Toy's 'R' Us, Target, etcetera. Those are the sites that are easy to find which means that, what? The competition is higher, because everybody is able to find them, and knows about them, and shops there, so, not that you can't get great deals there. We shop at every single one of these stores except K Mart, which I've sworn off, because they drive me insane, saying stuff's in stock and then you get to the cart and it's not. But that's a whole other story. There are certain stores that you're gonna like shopping in-store, and there are certain stores that you're gonna like shopping online, and stick with the ones you like, but, don't be afraid to branch out. 0:44:11 S3: So, one of the things we like to do is focus on niche or secondary sites. And here are some of the sites that we've shopped on before. That you probably haven't heard of or you may not realize that they had a website where they sold products. HomerunMonkey, so, a lot of baseball 09/03/15 Page 13 of 25

14 stuff. WeGotSoccer. Like it sounds they sell soccer gear. Oneida, a lot of cooking supplies, glassware, things like that. MattyCollector it's a site for Mattel collector type products. It's the higher end toys that collectors will buy. Speedo, Vera Bradley. If you want swim gear, look up Speedo. You can go to WalMart and look up swimsuits, or Target and look up swim gear. But you can go to Speedo and get the name brand, high end Speedo gear, here we go Vera Bradley. There are so many of these niche sites and I just wanted to show you quickly a couple of them. WalMart obviously has the Savings Center right here, if you go to Walmart.com. It's pretty easy to sort. You got Savings Center and just start sifting through the products. Then you've got the site WeGotSoccer. 0:45:28 S3: This is one of the sites that we were able to... We shopped from a list one time and they had some shin guards on there. We actually went to the site and followed the rabbit trail and found some other Shin Guards that nobody else was selling on Amazon. They were listed but nobody else was selling em at a great rank, and we were able to buy a ton of them. And we went to RetailMeNot, and believe it or not and a niche site as small a site like We Got Soccer has coupon codes on RetailMeNot. And quite a few of them actually. Some of them are for very specific product, but some of them are just general, like, this one. 10 bucks off of $150, 10 bucks off of $100. Now it has a low success rate, so, it may be on a specific type of products. But you can look at the comments frequently and see what people had success with and what people didn't have success with. So, this site happened to have a 25% off all sale products that day day that we came here, so we got lucky and we got an extra 25% of all those products. 0:46:24 S3: So, and this is a site I actually came across today. Who knew Curious George has his own website, and they sell products. I found a blanket online that I was looking at trying to find a good price and it was a Curious George and I came across this Curious George blanket. They've got toys, DVDs, and clothing. It's just amazing how many niche sites... I've been doing this for four years, and I still come across sites that I didn't know about before. This takes you to TV's Toy box when you click on that. But there were products on the site when I was there today. So there are tons of niche sites there are always new sites that you are gonna discover and one way you can do that... We had these pulled up earlier. One way you can discover niche sites is by going to a site like ebates and looking at their departments and just picking one. 0:47:16 S3: You wanna find sporting and outdoors suppliers? You wanna sell in that niche? Well, click on the sports and outdoors and look what pops up. A list of tons and tons of sites that you've probably... Ever heard of Dazadi? Danskin you've probably heard of. Crocs, a site that you might not have realized was available online to shop, great brand. There are a lot of sites here that you've never heard of. Edwin Watts Golf, I'm guessing most people haven't heard of. EmpireCovers. Some of these are gonna be so niche that they're gonna be really specific products for a very specific clientele and they're probably not gonna be Amazon type products, but, a lot of these are gonna be sites that you've never thought to source and it's gonna get you an advantage over your competition, who's only sourcing those mainstream sites. 0:48:09 S4: Yeah, I completely agree the way you're comparing and contrasting the main sites and the secondary sites. One thing I like with the mainstream sites, they're often so big that a price mistake might go through or a promotion that really wasn't set up properly and is checking out where you're getting a ridiculous discount on a product, those will often go through on the mainstream sites. Cause they don't catch 'em or cause they don't care, or because they ship so fast that they can't do anything about it. And I love those types of deals, right? Or they'll get real 09/03/15 Page 14 of 25