246 - Costco's Big Secret: How to Buy Everything 90% Off with Shannon Jean

22:18Well, you're not Costco, so you're not going to sell for$125. But can you sell for half a Costco? I would argue you could probably sell for more than that, probably about 70 % of the Costco price. Not everybody even has a Costco near them. Right. So$335? $335 is what this sold for. That's insane. So the average price at Costco was$67.97. They just kind of average it, divide it by. It sold for$5.88 per unit. Okay. Holy crap. So let's go to another one. Yeah, let's go to another one. So this is two pallets, indoor games, and musical instruments, right? So this is, if you click on this, this picks, these are, there's air hockey.

22:59I think there's a couple of them. And there's a Roland piano thing. Okay. This is the actual pictures. Another great thing with Costco is they're going to show you the actual pictures of the pallets. So you see things in boxes. Always a good sign. Okay. We want to see things if they're protected, they're in a box. We're looking for things that are going to de-risk our investment. Yeah. We're not gambling. We're taking calculated risk. This is not gambling. We're not in Las Vegas, dude. You know, okay. So again, this is a small deal. You're not going to make millions of dollars. There's only five, six items.

23:36There's four hockey, air hockey games that are 300 bucks pop. There's this Roland digital thing. That's 1300 bucks and another Roland thing. That's$700. Okay. So$3 ,200 is the, is the Costco price and it sold for$326. dollars. So you can find these deals every day over and over and over. Why did it sell for that cheap? Was it because it was truly, that's kind of just the average of what people pay for it? Or was it a certain time of day or like just from your opinion? All of those things. Yeah. So it closed on the 15th. So it closed yesterday at two o 'clock. There was only three bids. You see up here in a little hammer?

24:16Yeah. Yeah. So it's all who does the most research. That's the person that always wins because somebody says, okay, well, I know I could sell these things. They're not worth 3 ,200 bucks. It's just not, but it's, I would have a hard time thinking it's not worth 1 ,500 bucks, maybe even$2 ,000 and you're going to pay. The last two that we looked at the purchase price or whatever, the winning bid versus the MSRP, let's call it. It was about 10, 10%. Is that normal? Like what is a typical, is there a rule of thumb where it's like, Hey, stay under 50%. There isn't a rule of thumb, but for Costco, if you can get them landed to you at 20 % of the Costco price, that's including the freight, the shipping, you're very well protected.

25:03Right. Every deal is different. I could have said like, I need a piano. Right. And come on here. It's a great, well, yeah, you got to have your resale permit, but to your point, buying something that you could use when you first start is a great way to start. right? Because you're like, well, you know, I got, I got two buddies. I can give them an air hockey for their basement. And my kid needs a piano in case they don't sell. Cause you want to get your spouse on board with this too. That's really important. So it's a good way to do it. If you're not a seasoned entrepreneur, you won't understand that, but it's really important.

25:39So there have to be people who have like done this, not gotten their spouse on board. And then all of a sudden their spouse comes home and it's like, why do we have a semi dropping in the garage? I hear it all the time. I hear it all the time. Okay. One last, like really like no brainer. This is seasonal arbitrage, right? We're getting, it's, it's October 16th today. When we're recording this, we're getting into fall in the fall. And I always say the best time to buy Christmas trees is in January. It's the same with this stuff. The best time to buy standup paddle boards and, you know, outdoor games and blow up water things is in the winter because they don't sell for anything.

26:17right? So this is, let's sort this stuff by the highest. This is cave adventure, 400 bucks. These are standup paddle boards,$400,$400. The first like 10, 12 items are$200 or more. So the Costco price was$6 ,000 and it sold for$975. It just sold on the 14th. And so these are just like Three examples of entry-level deals that anybody could make money on. And if you're a company, if you're just patient, you could buy really cool swag for your employees. Yeah. That you already do on a yearly basis from these auctions. That's true. It's exciting, dude. It's very freaking exciting. Yeah. So here's something not to buy.

27:03Everybody gets excited about consumer electronics. And I'll tell you, I was in that business for 20 plus years, and it was great. And I made a lot of money, but it's brutal. And the first thing you notice is like, wow, okay, this auction ends in six minutes. Okay. We're watching it live right here. The first problem is you have 24 bidders, right? 24 bids. There's 1 ,661 people watching this auction, which is not a good thing. And the Costco price was 7 ,600 bucks. I'm sorry. Costco price was about$10 ,000. The bid is at$7 ,600 right now. So that's just not good. You shouldn't buy this product.

27:43Yes, you can sell it often if you have credibility in the marketplace. If you are in this business already, you can probably sell it for more than Costco did because Costco discounts it, right? But stay away from consumer electronics. It's just you're not going to have a great experience, no matter how many I tell people. It's just typical market dynamics, right? The more buyers that you have, the harder it is going to be for you to make money because it's going to work its way down to basically break even. That's right. You're right. So stay away from that stuff. I also don't like vacuums, even though Dyson is totally cool.

28:18Don't buy vacuums. It's a problem. They're just not going to be in good shape and you're going to have a hard time. I don't like exercise equipment, but there are people in our mastermind that do really well with exercise equipment, especially with January. Now is the time to buy exercise equipment so you can sell them in January. Because that's when all of us think that we need a new treadmill or a rowing machine or whatever. And you can buy massive amount. You can buy exercise equipment for next to nothing. I mean, it's very, very inexpensive. If we go to Costco, see if I can pop in real quick.

28:48We'll do a little. While you're looking for that, the nice thing about the marketing industrial complex is that there's always another holiday. If we miss Christmas, then we've got Valentine's Day. And then we've got Easter or actually St. Paddy's Day and then Easter. And then, you know, whatever. Yep. So like, just, just a quick example, like here's$5 ,100 worth of exercise equipment. It closes in 43 minutes and the bids at 150 bucks. What the, how many people are watching it? Three. Oh my gosh. So it's not like, oh, whoa. Yeah. Here's, here's$7 ,600 worth of exercise equipment, six pallets. It's going to close in 21 hours, but the bid is at 50 bucks.

29:30because it's hard to deal with this stuff, right? Yeah. It's heavy. It's bulky. It's kludgy. Some stuff's going to be broken, but people make good money on it. Well, what I find is people buy it because it's cheap and then they go, yeah, I made money on it, but I'm not going to buy it anymore. Right? Because it's a lot. It's a lot. Because it's a lot of work. It's a lot of work. Yeah. It's a lot. So let's go away from Costco for a minute and talk about Foot Locker. So Dick's Sporting Goods, they bought Foot Locker and Dick is cleaning house. So whenever that's one thing to take advantage, to keep an eye on acquisitions in the retail space is anytime a company buys another company, they're going to go through and be like, okay, we got to get rid of all this excess inventory.

30:12And what do we do with it? Well, they liquidate. They auctioned off. So, you know, this stuff is, it's, these auctions are not closing for three days, but they're sitting, they typically start them at about 10 % of the retail price. Remember, the retail price is a lie. So I like to just cut it in half. So like on this first auction or second auction years, the Foot Locker price is about$20 ,000. So I cut it in half. Say, okay, let's say it's worth 10 grand. Starting bids at 2 ,100 bucks. Could you sell it for 10 grand? Maybe. So you have to do your research and then you could bid and say, okay, well, if the shipping's a thousand bucks and the bids at$3 ,500, okay, so the max, or I can bid 35, 45, would I be happy making$3 ,500 profit?

30:56If you're happy making that, you go enter that bid and walk away. Don't sit there and watch it. I would think that shoes would be hard. Like just because there'd be so many. Yeah. And the way you sell shoes is live selling. It's way better. You use Whatnot, Poshmark Live Selling, eBay Live Selling. So you don't have to handle every single item and like take photos and create listings. We have a whatnot seller in our mastermind that they sell about a pair of shoes every 60 seconds. And so he'll do a two-hour show and blow through 120 pairs of shoes. Well, and this might be one of those things where you're like, hey, if you know you don't like being on camera and that's not something that you enjoy doing, don't ever buy shoes.

31:38Yeah. Stay away from things that sell really well in those environments. Correct. Or reach out to companies that sell shoes, other resellers, and say, okay, what would you pay? Here's the manifest. I have access to this product. I'm a liquidator. If you're interested, let me know your price and work the deal backwards. You could do this with anything, apparel, flooring. I mean, anything, anything at all. This is Kohler. It's one of my favorite. They don't have any live auctions, but these just recently closed. And the reason why I really like them is because everybody needs a showerhead. Every house has sinks.

32:11Every house has faucets. It's super boring, but boring products can make you rich. No doubt about it. And I'm guessing they don't go out of style really quickly. So even if you don't move it today, like shoes potentially change styles. Yeah. Shoes are style. Yeah. Style thing. But like this is stuff they sell at Home Depot or, you know, people come in, I need a faucet. I need this. But another reason I like it is because it sells, you know, really cheap. Here's 72 ,000 worth of shower heads and hand showers that sold for$3 ,600. So you have a lot of room to make mistakes and you will make mistakes, but mistakes are tuition, right?

32:46You're going to start off, and to your point, bullets instead of bombs or whatever you said. Yeah, bullets, cannibals. Yeah. You're going to make small mistakes and you're like, oh, I spent$3 ,600. But are you going to lose money when you have 495 things to sell? I don't think so. Even if you're$8 a piece, you're going to get your money back. So that's what I love about these kind of deals. Let me ask you two questions. Yes. The first question is your newsletter. Is that a personal newsletter? Or do you, do you have a newsletter that's like, Hey guys, just giving updates of this company's buying this company, go check out that liquidation or this holiday is coming up.

33:22Here's something to pay attention to or X, Y, Z happened. Cause I feel like that there's a lot of current events that will just happen that I wouldn't even think might play into this. And you, since you've been doing this for 20 years are like, Oh, here are the downstream effects of how this could work. Do you do any of that stuff? I do that in my newsletter. I talk about all the time. Like when I read about Love Sack closing a bunch of their stores, and I was like, oh, you watch. And sure enough, within, I don't know, maybe not 30 days, 45 days, they were auctioning off tractor-trailer loads full of demonstration Love Sack couches.

33:57And everybody was excited about it. So same kind of thing. You see all the time. And so, yeah, you can get ShannonJean.com slash subscribe. And we've got about 6 ,000 people on that list to get that newsletter once a week. So I want to thank you for showing all those auctions. Yeah. I kind of want to move to talking about what I think is... And this is my theory. I want to get your opinion on it. I think that 95 % of people who launch these types of businesses fail for one reason. And it's because they don't have support. And because it's hard, right? Like you're out there by yourself. Because they don't have support, it's then easy to quit.

34:33If I buy a business and I sign an SBA loan, quitting means I go bankrupt. Accountability built in. Right. But if I buy some stuff off of a pallet, I could give up fairly easily because the downside is low. I think one of the superpowers that you've had is you build community wherever you go. And that's what I enjoy doing as well is there's this built-in mechanism for accountability. You're learning from other people. You see wins. You get motivated, et cetera. I think that like 95 % of people fail because they just don't have a support network in place. Yeah. True or false? Yeah. I don't know what the, I think it's true.

35:11I don't know what the percentage is, but it is a high because, you know, you're right. There's no accountability. I've seen a couple of guys on Twitter. I can't remember his name, but he was like, all right, I'm trying, I'm going to try reselling. And he was like tracking it by month. And this month, their goal was to sell like$2 ,500 worth of stuff. It might've been September. I can't remember. it's Joe Poole that's it that's it yeah and he was like guys it's the 12th and I've already hit my goal like what are we doing here it's like look I'm going to show you this okay you found it just to see the traction and the feedback of oh I love it this actually works yeah holy crap yeah so this is this is Joe Poole this is our this is our mastermind I just want to clarify I'm not a part of this Shannon's not paying me this isn't like a pitch I just think that this is talking about you Yeah.

35:59Yeah. I just think this is really cool. Yeah. Come join. It's five bucks. I know. It's stupid. So, I mean, if you want to learn about it, you don't have to pay five bucks to learn about it. You can just go on X and I talk about it every day, you know, at Shannon Jean. But if you really want to get into it and make some money, but like, you know, here, our goal for September was$1 ,500 and you know, they hit their, that was in September their midway. They hit their, you know, hit their goal and he's sharing his profit. This is the screenshot. Yeah. Yeah. So they did, his goal was like 1500 bucks and they sold$7 ,900 worth and made$4 ,300.

36:33And it's a young family. And they're like, you know what? Yeah. We're, we're doubling down because he wants to quit his job. And he's like, I know how much I have to make. I do this, this kind of thing. It's awesome. And he's like, I hope this helps anyone else out there. And the cool part is he probably, my guess is he won't be a reseller for the rest of his life. Maybe he will be, but he probably won't be entrepreneurship. Boom. That's it. He got into entrepreneurship. He's going to learn. He's going to meet a bunch of people. He's in the game now. And that opportunity is going to come his way that weren't even there before.

37:00All those people on X that he's sharing his story with. And like, if you look at the, it says Reseller Mastermind, the community for entrepreneurs. Reselling is the fun, the crazy, the accessible part of it. But we're teaching them how to be entrepreneurs and how to take calculated risks and how to go through. And, you know. Is this on X? No. What am I looking at? This is on Kajabi. I hosted on Kajabi. Okay. Yeah. Way more robust. I had the first hundred people I did on X, and then I was like, we got to get out of here. But I just couldn't do it. But here's a guy who, he's like, hey, he bought this big red truck on govdeals.com.

37:36Tons of great stuff. And he's like, well, I bought it for like$4 ,000 because it has a$4 ,000 welder that's strapped to the top of the truck. Right? Like, oh, well, that's pretty interesting. And then he drove it home, posted in the mastermind, sold it the next day, made$4 ,000 profit. Dude, the Gov auction one? like fighter jets the other day. I love it. What the freak? Helicopters, Blackhawks. I love it. You can buy anything. It's awesome. If I was in the Taliban, they would have just given away for free to me. But, you know, I got to. This is another one I love. This is so great. This is Mindy.

38:09She got in here and she bought two pallets of books on GovDeals. She bought the two pallets for a dollar. And she made$5 ,000 in sales on eBay with that two pallets of books. it's amazing that's insane right it's like the dopamine trick right it's like hey just just get in every time and now you're hooked and a dollar and you're telling the story you're sitting here like my whole draw in life in store i'm a story guy and i want to sit around the campfire that's why i sent you a campfire i want to sit around the campfire and tell my story when i'm and i get to do it like my kids my son brings his buddies over we're all hanging out talking and I start telling glory day stories, but they're, they're happening right now.

38:52And I can talk about this lady's invested a dollar. Don't tell me you don't have any money. And she made 5 ,000 bucks, you know, over, over the summer. And I love telling these stories, man. And like Mindy's learning, she just bought a bunch of stuff. I wanted to show you. While you're looking for the next one, what do you think is a realistic hit rate? Like not, Hey, I made a hundred percent gross profit, whatever on this deal. Just, I didn't lose my money. That's a first step. If you're just getting started, if you don't lose your money on the first couple of deals, you are a rock star. That's a win.

39:26Huge. Huge win, dude. Even if you lose a little bit of money, you're learning. Maybe you don't like that category. If you're not mechanically inclined, well, I shouldn't say that. We have an accountant that sold over 700 pressure washers. What? This year alone. Yeah. I don't know if I can find it. What the freak? Yeah. If you can just protect your investment when you're getting started, whether you invest$300 or$3 ,000, you're just on the right track. You're figuring it out. You're solving problems. I mentioned this. This is an interesting category. I really love luxury and fashion. I had an experiment where I did handbags and sold about$3.7 million worth of bags over three years.

40:08This, you know, Rent the Runway? Do you know that bank? I'm sure your wife does. They rent high-end clothing, and when they've rented them enough and they start to show little signs of wear and stuff, they auction them off. So Mindy has taken her$5 ,000 that she made by buying two pallets of books for a buck, and now she's buying Rent the Runway product. And she's going to live sell it on whatnot. She's going to have these back. Look at this auction just closed. Now, I'm going to say this number and you're going to remind me of what I said earlier. MSRP,$206 ,240. Okay. What did I say earlier, Nick?

40:51It's a lie. Okay. So let's just say they're lying by half, my number. So that's$103 ,000. Let's go ahead and just say they're really liars. So we'll take another. So let's say it's$55 ,000. Okay? Yeah. Well, it sold for$4 ,200. It's a quarter of what it, yeah. Yeah. Jeez. $7 per dress. When you look at the manifest, look at these dresses. 11. I can't. I'm sorry. I'm yelling. I get a little excited. He's too excited. I just want to reach through the screen. Look at this. You know, these dresses,$1 ,140,$890,$890,$875,$850. Okay. Let's say you can only sell it for 10 % of that. You paid$7.14. This is not gambling.

41:38Okay. And this stuff is perfect. for live selling. Live selling has solved the problem of dealing with massive amounts of stuff that you would like, oh, I got to take a picture of because there is 591 units. The thought of taking 10 photos of 591 units so you could list them for sale, it fills me with dread. But the fact that you could say, okay, I'm going to do an hour sale and it's two minutes per item and I'm going to hold them up and show it and I'm going to do it sold. And it's going to sell for 20 bucks or whatever, 50 bucks. And your cost is$7 and 15 cents. And you, your spouse would think you're a rockstar, you know?

42:16And so that's how you do this business. You start small. Let's say, Hey, I want to get started. Let's say somebody joined your mastermind. How long between joining your mastermind and buying their first deal average? A month. A month. Okay. And then how long between buying that first deal and then buying a deal that's like significant. And by significant, I'll say$10 ,000 or more. Yeah. So we had a guy in that, that this pressure washer example I'll use named Joe Earl. And he started, bought a couple of pallets. I think he spent maybe 1500 bucks in the beginning. This was maybe coming on 11 months ago, maybe a little less than a year.

42:56And he then ramped up, ramped up, and he just bought his first truckload in September, so last month, and he posted in the mastermind, and he posted it on X because I pushed these people to do it publicly, is they were profitable in 36 hours after buying the truckload. Yeah. Cover their cost in 36 hours. How much was the truckload? Maybe it's like 10 grand. So I would say the average buyer is spending about$3 ,000 to$5 ,000 at a time, but they're buying over and over. So you buy and then you're getting, you got your systems in place and then the shipment shows up. And as soon as the shipment shows up, you're selling it and you're buying again.

43:36You constantly having this product come in. There's a company that sells a flat pack furniture. It's called Walker Edison. And they want to be kind of the Ikea of online, you know, flat pack. And you can buy truckloads, their retail price, which is again, analyze like$112 ,000, but you can buy truckloads for like four grand. They sell like all the time. And I was on a call with a young guy and we were talking through it and he bought it. He's like, yeah, I had to ship it to a freight forwarder because I'm a house. You can't get a full truck load to my house. And then I did this, I did that. And it took him about three weeks to sell 300 pieces.

44:15And he still had, he was in the black and he still had about a hundred pieces left to cell. And he was talking about going to his senior year. And I'm like, Oh, what are you going to do after college? And he goes, dude, I'm in high school.

44:31I was like, what? I was like, you're going to be so rich, dude, because your brain is so like, I was, this kid's in high school, a junior in high school, and he's figuring it out. I can't chip it to my house. Got to pay for each forwarder. Then I can send it to my self-storage unit. Then I do this and I do that. So it's crazy. And you know, the bottom line, Nick, it's so fun. It's so fun. You know, if you don't like problem solving, it's not a business for you. Or if you don't like it, then just buy brand new stuff. But if you enjoy puzzles and problems, oh man, this business is, it's glorious chaos.

45:13Let me tell you. It is fantastic. I didn't even get to all the stuff I wanted to talk about. We're already bumping up against an hour. I could talk all day. Let me ask you this. We're now in Q4. If I'm somebody who wanted to get into this, what do you think are the best? What's the best way in this last quarter of the year to just start dipping my toes into the water? I think toys are great, but I would only buy brand new. I could buy some. Outdoor toys are different. You can sell open box stuff or whatever, but there's tons of brand new stuff available. Well, Target is a good site to get into to buy Legos.

45:48There's always Lego auctions. I think that's fantastic. I love Legos. I would want... Ideally, you know more before October 15th because let's say you bought today. You're two weeks out. So you're into November before you get the product. And it's tough. Again, if you're already in business and you have a good eBay store, a good Facebook marketplace reviews... Yeah, different story. Totally different story. But if you're just getting started, I would say you should focus on things that people, what they do after Christmas. And you should save your money because the largest return phase, like January, February, March, are absolutely unbelievable.

46:26It's like a fire hose of returns, right? Because it's after Christmas. You could buy enough in Q1 to carry you through the rest of the year, depending on what you had going on. All right. Can I tell you my takeaways from this? I love these couple of commandments. Buy with math, sell with emotion. I think that's applicable whether you're doing reselling or just anything in business. Buy in a business. You talk about it all the time. Never buy anything unless you know what you can already sell it for. That is just great. I loved the retail is a lie and I don't watch Netflix. I watch auctions. I think those are really cool.

47:02I always feel like I should be in the t-shirt business because I love those phrases. Yeah, I should be on a t-shirt. The other thing that I really like you talk about is, have you ever heard of this book called A Random Walk Down Wall Street? It was by Peter Lynch. No. He's a really famous investor. And he talks about some of the things that if you want to start investing in stocks, this is what you should do. And the first thing he talks about is just buy what you know. Hey, you like Nike? Buy Nike stock. You like General Mills cereal? Buy General Mills stock. That's kind of what you're saying in this reselling game.

47:33It's like, you want to get into it? Buy stuff that you know. Yeah. I love Blackstone grills. I love deals with Blackstones. All my buddies have Blackstones because they got them from me. And you can buy them for like$100 a piece. Why wouldn't you buy them? And I have vacation rentals. And I'm like, well, we need new patio furniture for all these houses. Let's go buy four or five pallets of stuff. And I think I bought$12 ,000 worth of stuff for like$1 ,100. Oh, my gosh. And Costco does, after the holidays, they back up. And sometimes they'll do that. Probably a couple of times a year, they do free shipping, which is unbelievable.

48:10And you can buy a heavy and really load up on that time. So there's always ways to do it. Yeah. There's a woman to this game. There really is. Yeah. There's, there's a woman an hour and a half from me that sold$86 ,000 worth of customer return carpets, rugs, eight by tens, big, big, big money. And you can buy them for nothing because nobody wants to deal with them. So we could just go on and on and on. We should come back. You get your resale permit. Let's do it. We'll buy a deal, bring it in, handle it. You can bitch and moan about everything. Yeah. I can film my wife seeing it for the first time.

48:43What? What are you doing? And then we'll put it on Facebook marketplace or eBay, wherever you want to sell it. And we'll track through the whole thing. It'll be fun. Done. Yeah. It'll be great. I love talking about this stuff, dude. I can't stop. All right. Hopefully you liked that episode. And if you've made it this far, you're either really committed or you're stuck doing yard work and you can't actually skip on your phone. So while I have you, the show is growing, but I have a favor to ask of you. Will you please help me grow the show? I want to reach more people. There's a couple of things that you can do.

49:11Like, and subscribe is the simplest thing. Obviously you want to get notifications for when the next episode is coming out. But if you go the next step, will you leave me a review five star on Spotify or Apple? What that does is it tells the algorithm that, Oh, Hey, this is a high value podcast because more people are leaving reviews for it. and it then pushes it out to more people. So that's why when people are like, will you log and subscribe and put the five-star rating? It's not just to make themselves feel better. It's actually to get more exposure for the show. So if you do that for me, I would greatly appreciate it.

49:43And I'll see you next time.