With all of their stores closing, Toys R Us will be starting their liquidation sales tomorrow, Thursday - March 22, 2018. Toys R Us has been in business since 1957 and went public in 1978. They were later a part of a leveraged buyout in 2005 to avoid bankruptcy.
The breaking news hit last week when Toys R Us announced that they would be going out of business and would be liquidating their operations in North America.
This news is great for those looking to source some products quickly. Toys R Us will be forced to sell items for pennies on the dollar! So if you can see the opportunity within this, then you can and will likely bring in some serious money during the entire death of Toys R Us retail stores across the United States.
This article will show you exactly what you can do to while equipping you with tools and strategies you’d need to take action today.
Let’s recap the main reasons Toys R Us is having to close their doors. The biggest reason being, debt. The company was held as collateral as it continued to pay down a 6 Billion dollar loan. Needless to say they were unable to meet their payments efficiently.
Other reasons they may be closing their doors also have a lot to do with video games, Netflix, YouTube, and free apps available via smart phone and tablets. Entertainment has changed in many ways even just in the last 10 years. Kids are playing with electronic devices with so many free apps available. There’s no doubt that YouTube and the free app market took a massive chunk of kid’s/children’s overall play and entertainment today.
Walmart and Amazon also played a part in taking the Toys R Us business down. Walmart introduced a similar ease to buyers while making it easy to buy toys in a grocery store setting. Amazon makes purchasing simple while sending the orders straight to the front door.
The possible final cause for this huge shut down may have a lot to do with the crash of Disney’s Star Wars Merchandise. Many Star Wars items are not selling nearly as well due to Disney acquiring Lucas Films. So in a nutshell - Toys R Us spent hundreds of millions on toys for a franchise that didn’t hit their sales projections.
The concept of flipping product isn’t new. This is also called arbitrage: the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset.
When Sports Authority went out of business, arbitrage sellers made a killing by buying products at a crazy discount price, then items on Amazon. Amazon buyers generally don’t mind paying the full retail price as long as they get their product quickly, with no hassle.
Don’t let this opportunity pass you by! A store closing like this is Arbitrage heaven, with so many items available to resell full price!
Before you get started know that the east coast stores will be shutting down first. So it’s important to call the local Toys R Us and ask to speak to a manager. Speak to the manager to see when prices will be reduced at their location. If the manager isn’t there be sure to call back and speak with the manager to know for sure. Most stores on the West Coast are still marked with full price. So be sure to call before you go!
*Moving forward find discount websites to use for Toys R Us. Toys R Us will only be accepting gift cards for the next 30 days at limited locations. Be sure ensure this information as well when you call to check on pricing.*
Use CardPool.com to increase your profit margins by finding savings. Generally you can find about 21% in savings up front. Another side that is good to check for gift cards in GiftCard Granny. It doesn’t hurt to get several options up front. Get the gift cards before their gone and before the store stops accepting them.
Get Retail Arbitrage Scanning apps to use at Toys R Us. Here’s the scoop - best to worst.
Profit Bandit is the first pick is simple and effective with unlimited scans for $9.99 per month. The app can also check on multiple marketplaces. The app searches on different platforms to help you calculate profit with over 15 factors including weight, Amazon fees, your cost of goods, shipping rates, and more.
Scoutify is also an option and a competitor to Profit Bandit. Scoutify offers more robust scanning service that does much more for your business ultimately. They offer a 30 day free trial but afterwards it is $49.99/month. It’s a great tool but perhaps it is too expensive for someone just starting arbitrage on a budget.
The Amazon Seller App is the next best option. This app can only be used to sell on Amazon. It won’t show prices on other selling platforms. If you’re open to only selling on Amazon and not wanting to pay for the other services, this is like the best app for you! Great new is… Its Free!
Product Criteria for Toy R Us Sourcing:
What makes a good arbitrage product?
High Profit Per Unit: $7 min. per unit
High Profit Margin: Stay between 3-5x your cost, but 2x your cost is the absolute min.
Low Best Seller Rank: Lower best seller rank = lower your risk + faster it will sell (a very low BSR might indicate you should buy higher quantity of that product).
Average Size/Weight: Small, light, and simple to ship.
Great Condition: You want products that don’t have damage and are in good condition.
Classic Brands: Focus on toys that are widely recognized and bound to sell.
Most arbitrage products will not necessarily have all of the qualities. The more your product meets this checklist, the better the opportunity is for you.
Probably best to pass on fidget spinners, what you’re looking for are widely recognized toys that will never go out of style.
My Little Pony
There are many more even not mentioned, but I’m sure you can think of a few from your childhood too!
Products to Avoid:
While scanning items to sell specifically on Amazon, avoid items with no Best Seller Rank (BSR). This can indicate lack of sales history. Make decisions based on your selling abilities as well. You can always sell goods through Ebay, Craiglist, or elsewhere. Avoid products that are heavy, bulky, and expensive to ship especially to reduce costs to send products into Amazon FBA. Also be sure to stay far far away from the Star Wars merchandise fall. Unless you’re able to find characters from the original trilogy, these should be a safer bet.
You don’t necessarily need to remember brands to avoid selling. Any of the scanning apps will tell you if a product you’re scanning is restricted from the Amazon platform.
These restricted brands only apply to Amazon. Amazon protects a bunch of big brands to keep their site more safe from counterfeiters. Those products can still be sold on Ebay, or on the Facebook Marketplace with zero restrictions. Though amazon may have the largest marketplace online, there are definitely other options to sell aside from Amazon.
Strategies and the Best Online Marketplaces to Sell Quickly with Retail Arbitrage:
Toys that don’t sell immediately can be held and sold in the months leading up to Christmas. The majority of online retail sales are made in the last few months of the year. Sell what you can of your inventory up front but don’t stress if some items aren’t sold right away. These items can be held and sold throughout the year as well.
There are many platforms you can sell product on so be sure not to put all your eggs in one basket. Have your products available on every site you can.
Top Selling Platforms:
Amazon is the best platform because generally products sell higher on Amazon. There is a limit on brands so leverage other sides to maximize your profits. The fees involved with Amazon are as follow:
Amazon Costs: Sign up fee: $39.99
Baby Products (not including apparel) - 15%
Electronics Accessories - 15% for items under $100
Toys - 15%
Videos, DVDs, and Blu-Rays - 15% (Requires Gated Approval)
Video Games - 15%
Video Game Consoles - 8%
Don’t get overwhelmed whether your product is profitable, all of the 3 applications mentioned above will calculate profitability for you.
Ebay is a great option and it’s free for anybody to open an Ebay account to buy/sell.
When we’re sourcing for products we’re looking for a 50% profit margin. As long as you’re sourcing high margin items, then fees won’t take so much of your final profit.
FaceBook Marketplace is still fairly new and limits your sales to a local area. However with so many people in your network it makes sense to utilize this option as well. There is no loss to sell things on FaceBook Marketplace with 1.3 Billion active users. There is zero cost, making this another free choice option.
To tie it all together after so much info, the process is actually quite simple:
Call the local Toys R Us , find out when they’re beginning their markdowns and how long they will be accepting gift cards.
Get yourself a scanning app and more info on Retail Arbitrage.
Do the work and purchase awesome inventory.
Resell immediately or hold until the Holiday season.
Take action now on this sweet opportunity before products start to disappear off shelves and the margins may shrink too thin!
You can visit https://www.primeglobalsource.com/request-call to get more info on what Prime Global Source workshops can offer you as you progress in your journey through arbitrage, wholesale, and private label.
Though reselling on Amazon can be an uphill battle, there are many other sites that you can sell products on. There's peace of mind to know that there will always be price differences in different markets so reselling will always continue to be a common practice.
With Toys R Us closing this is a great chance to cash in on a store-wide liquidation that will eventually expire. All you need to do is show up to purchase the product.
Quickly get in touch with the Prime Global Source teams at: https://www.primeglobalsource.com/request-call to ensure your experience is successful. Their services cover these processes from A-Z with local workshops around the globe, taught by educated trainers that have proven success with their eCommerce efforts while showing that they definitely know how to play this game well.
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