The power of small increments to grow your resale business with little capital

The power of small increments to grow your resale business with little capital

People underestimate the small numbers and overestimate the large ones. If I remember correctly, this is from a book by Kahnemann that I read a long time ago and which you can apply in your everyday life.

I am a big fan of low prices. In fact, I noticed that on Amazon of our flagship brand, 70 to 80% of sales are around 20 euros. This is the optimal point to sell something on Amazon because it seems that if the cost of acquisition does not exceed psychologically, it will take less time to pay.

Why I prefer to buy products at low prices

At Lego, I already mentioned that I prefer low-cost sets. In fact, I buy many sets with a suggested retail price of less than 8 euros because even without EOL there are short term opportunities to make a profit through arbitrage.

In Pokémon, it’s the same. I buy cards that I find attractive by various factors for 2-3 euros if I see upside potential. I think from a specific letter I bought more than 50 at a time. I have achieved a very basic thing but it seems that many ignore it.

The vast majority of people prefer a mark-up of 100 to 200 euros to 1 to 2 euros. As a percentage in both cases, we are increasing our capital by 100% compared to what we started. We understand that in this case, the large numbers are more important for two reasons:

  1. The absolute increase is much higher: 100 euros against 1 euro.
  2. The transaction cost is lower: with a purchase of 100 euros and a sale of 200 euros I am already making money.

Now good. Right in this perceived advantage is the opportunity and I explain why.

  1. It is much easier and / or more likely for something to increase in value from a low cost of acquisition than from a high cost. In the case of Pokémon cards, it is very likely that the same cards instead of 2-3 euros, are worth 4-6 euros. From the outside it will look like they barely moved but in reality they had a 100% increase.
  2. Less competition at supplier level. The vast majority focus on Pokémon cards which are already expensive today. They think that if he went from 10 to 100 euros, he will continue in this way. The same goes for Lego themes. Large sets attract much more attention, although they are less likely to see an increase as high on average as small sets.

My unfair advantage that you have to make up for with more work

I don’t care about selling 100 units or selling 3 to make the same profit. Amazon does a lot of work. For someone starting from scratch, setting up an Amazon account is not impossible, but the obstacles are many. Then you also have drawbacks if you don’t register as a pan-European seller directly. This implies starting an annual cost of 3,000 to 4,000 euros for the advice and tax management part. You already need to charge somewhat relevant amounts so that you don’t eat away at all the profits or even lose money.

If you have little capital, it’s a good idea to focus on Lego sets under $ 10 and / or Pokémon cards that you can buy for $ 1 at auction. You have more work to sell and generate that profit. Ultimately, you have to choose. You want to increase your available capital or spend more time on the couch watching Netflix. In the end my unfair advantage is not so much because it took me 6 years to get there when everyone told me I was wasting my time with Amazon so I also deserve it a bit … ;)

Stay tuned.


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