- Hi guys, Neil Waterhouse.
Now, we've been talking a lot about
how to find products for drop shipping,
but this week, I want to quickly talk
about a really valuable lesson,
which is another methodology to continually
find products to sell on eBay and Amazon.
Back in the 90's, I created a drink
vending company called National Vending Corporation.
The business grew to having just
over 100 drink vending machines.
We treat place and businesses around Sydney.
This business taught me a valuable lesson
about how to buy a soft drink at deep discounts.
You can use this exact same lesson
to purchase items cheap to resell on eBay and Amazon.
I'll share this lesson with you now.
The machines I used were imported from Japan,
and I had different sizes ranging
from holding 16 different varieties of drinks
to holding over 30 drink varieties.
I put these machines in businesses,
as well as schools and universities,
scattered around Sydney.
At the time, it was a pretty good business,
as our main competitors were Pepsi and Coca-Cola,
and they only had a limited variety of flavors,
whereas we didn't have the restraints of Coke and Pepsi,
so we had up to 36 varieties in one machine.
Now, as I had over 100 of these machines
scattered around Sydney,
we used to purchase quite a bit
of soft drink and juices from places
like Coca-Cola, Schweppes, Red Bull,
Viti Berry, Unilever, and others.
As the business grew,
we purchased all the drinks on pallet,
so you'd think purchasing direct
from a place like Coca-Cola and by the pallet,
that you'd be getting a really good price.
At least, that's what I thought.
At the time, we're selling a 375 mL can of Coke for $1.20.
The best price we could get from Coca-Cola direct
was around 70 cents per can on the pallet.
Now, one day I walked into Kmart
and discovered they were selling
a 24 pack of Coke for $10.98.
That's less than 50 cents per can.
I merely rang up our sales rep and you know,
that's 50 cents a can,
and we're paying around 70 cents from Coke.
Obviously, 20 cents per can cheaper from Kmart, why?
That's just if you walk in the door.
To get back to the story,
I rang up our Coke rep and I asked him what's going on.
He advised me they'd done a special deal with Kmart.
It was only for one week.
It's just a short term.
Then several weeks later, I discovered the same deal
at Big W, then IGA, then Wooly's, and several others.
To cut a long story short,
we discovered these promotions kept
going around and around and around
to each of the retailers.
Almost every week, there was a promotion somewhere
where we could purchase these cans for less than 50 cents.
In fact, sometimes we could get them
for less than 40 cents,
but never from the distributors,
always from the retailers.
Over time, we figured out how to purchase in bulk
from some of these retailers.
Most retailers, of course, would not
allow us to pick up from the docks.
They wanted all the inventory to go out the front door,
but obviously, filling up shopping trolleys
was not a good option even though we did do that
many, many times when me and Jalee needed more stock.
The lesson here is manufacturers
and distributors do short term deals with retailers.
These deals are deeply discounted
well below normal wholesale prices.
In fact, these prices were so low on these deals
that retailers like Kmart, Big W, etcetera,
were selling Coke, Pepsi, and others
for less money than the normal wholesale cost price.
Now, once I learned that lesson,
I started reading the junk mail in the letter box,
which in the past I was just throwing out.
This junk mail continually showed specials
from many retailers like Kohl's, Wooly's,
IGA, Kmart, etcetera.
I also continually monitored the local newspapers,
checking for special.
Of course, this is back in the 90's
and these days of course,
it's a lot easier with the internet.
You can simply join the mailing list
for any of these retailers,
and they'll continually let you know when they have a sale.
In the industry, these deeply discounted items
are sometimes referred to as loss leaders.
That is, items that are supposedly sold
below cost price to get people in the door.
Now, here's how you can use the same lesson
for other items aside soft drink.
This works especially well if you're
passionate about a certain product,
or passionate about a certain niche.
Now, you can do this with normal, physical products,
and you can also do it with food and drink.
Now, let's start with food and drink as an example.
Let's say you're Australian and you want to
supply Australian food products
to China or the USA, or whatever,
using Alibaba, Amazon, or whatever, or both.
Let's say one of your products is Vegemite.
Now, normally, using the same example
as the drink vending company,
the only way most people would think
they would get a good price for Vegemite
is to set up an account with the distributor of Vegemite,
which in this case is Bega Cheese.
Like soft drink, it's often not the case.
Like many of the products,
the owner of Vegemite being Bega Cheese,
they regularly do deep discount specials with the retailers.
Now, if this is a strategy which interests you,
you simply monitor the specials
at a place like Kohl's, Wooly's, IGA, etcetera,
to see if any of the specials meet your requirements.
As I mentioned a second ago,
this strategy works best if you're
passionate about a certain product or a niche.
For example, if you're passionate about tools,
make sure you're on the mailing list
for your favorite tool shop.
Your Bining's in Australia,
or Home Depot in the U.S. or wherever you are.
If your kids have, say Barbie dolls,
and in turn they have made you a bit of an expert,
you often know where you can get,
or when you see a good price for
a Barbie character or a Barbie accessory.
If you've got kids, what else have they
made you a bit of an expert on?
Or, what are your hobbies?
What are you passionate about?
If this strategy interests you,
don't try to be an expert on too many items,
just start with a couple of items.
This can be another great way
to get started with eBay, Amazon,
or supplying, to places like China
using Alibaba, Temoil, etcetera.
That's all for this week.
Remember when you're watching this,
please scroll down, leave me a comment below.
Until next week, list more, sell more.
This is Neil Waterhouse.