I blame Gary Vaynerchuk for this latest money making venture.
He’s one my favourite marketing vloggers on YouTube, sharing wisdom on everything from wine to self-awareness.
His latest series of videos revolved around visits to local ‘yard sales’ near New York, where he would buy other people’s junk with the goal of flipping it for profit on eBay. Top seller from this entrepreneurial venture was mugs; bought for cents each and then sold again online for tens of dollars. He coined the phrase #muglife following this discovery.
A typical morning of driving between yard sales would see Vaynerchuk making a thousand dollars or more in profit. He was having a lot of fun in the process too.
Vaynerchuck is the owner of a multi-million dollar advertising agency. He’s working towards a lifelong ambition of owning of the New York Jets. He’s not short of a bob or two. So why on earth would he waste his valuable time sorting through second-hand junk before listing it on eBay?
One man’s trash is another man’s treasure.
It is of course a great way to demonstrate that anyone who needs to make a few extra quid has all of the tools already at their disposal. After all, one man’s trash is another man’s treasure. The rise of the side hustle phenomenon suggests many of us could benefit from generating some extra income each month.
All of this led me to my own experiment in LEGO arbitrage.
Shortly after Christmas I spotted some red sticker discounted toys on the shelf in our local supermarket. Usually I would walk right past – unless of course the kids were with me, in which case I would fight with them for a few minutes before dragging them reluctantly past.
But on this occasion I was shopping solo and, suitably inspired by a recently watched Gary Vaynerchuk video, I filled my basket.
After snapping a few photos with my digital camera, it was all listed for sale on eBay. And then the waiting game began.
Before taking a basket full of LEGO to the checkout, I scanned the barcodes using the eBay app on my phone, sorting results by sold items. This is an important step to check there’s enough of a gap between the discounted price in the supermarket and what people are actually buying the same toys for online.
I forked out around £80 that evening, on 10 sets of three different LEGO toys. After snapping a few photos with my digital camera, it was all listed for sale on eBay. And then the waiting game began.
All three items of one of the LEGO sets, a Harry Potter themed kit, sold out within a few days. There’s something particularly satisfying about getting PayPal notifications on your phone as each item sells.
I’ve had a bit of interest in the other two sets, but no sales to date. Thankfully I started by setting the price higher than I needed to sell at a profit, so there’s some room for price cutting to ensure I’m not left with a shelf full of toys that didn’t ever sell.
Because the Harry Potter sets sold so quickly, turning me a healthy profit of £32.80 after eBay fees and postage costs, I went straight back to the supermarket to snap up the rest of the same toy off the shelves. Re-listing something you’ve already sold is a simple 30 second task on eBay.
I’ve got a couple of factors working in my favour as I set about with this LEGO arbitrage experiment.
I’ve already got an eBay account in place, which I’ve used from time-to-time for more than a decade, with lots of positive reviews as a buyer and seller. I’ve got a decent digital camera and photography is a fairly serious hobby of mine, so I can snap attractive looking product photos. And my office, which has plenty of storage space for impulsive shopping trips like this, is right next door to the Post Office.
Sharing details of my experience on Twitter, I’ve heard stories about people who are making a few hundred to a few thousand pounds a month by buying discounted goods on the High Street and then flipping them for profit online. With the continued decline of physical retailers, it seems likely there will be more opportunities for snapping up cheap stock in the future.
LEGO sets offered a better investment return than equities or bonds between 1987 and 2015.
On friend told me about a colleague who has made a fortune through his LEGO arbitrage side hustle, with half a million dollars worth of stock sitting at home. He’s an executive at a large multinational company, so there’s no desperate financial need to make money online this way.
It comes as no surprise that LEGO is the brand of choice when it comes to this side hustle. A recent study by Victoria Dobrynskaya, an assistant professor at Russia’s Higher School of Economics, found that LEGO sets offered a better investment return than equities or bonds between 1987 and 2015. In fact, LEGO outperformed these mainstream investment assets by a whopping 11% a year.
Past performance is of course no guide to future returns, but given my son’s enthusiasm for LEGO, it feels like a good bet that there will be a decent market out there. I did however take umbrage to one friend describing what I’ve been doing as becoming the Viagogo of the Lego world. It’s not exactly the image I was going for.
For anyone with an eye for a bargain who needs to boost their household income, sharpening their sales skills in the process, flipping goods from High Street to online could be a lucrative option to consider.