Amazon, Groupon, Money Maker, Retail Arbitrage

Online Arbitrage Money Maker: Onkyo TX-NR545 Network Receiver

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Update: Groupon now has these discounted even more! They are now listed for $289 so this is even better than the 10% off promo code because it applies to all 5 units.

Groupon ($REFERRAL LINK$) has Onkyo TX-NR545 Network Receivers for sale for $299. With a little work and some cleverness, this is a good money making opportunity for retail arbitrage as they are selling on Amazon here with the lowest FBA seller price at $369, especially if you have the Discover IT card.

Purchase Price: $299 + Tax (~$21) = $321.00
Amazon FBA Min Sales Price: ~ $369.80, Net $323.29
Amazon Best Sellers Rank: #3,081 in Electronics. Per FBA Toolkit that means approximately 5 per day are selling.
Onkyo Keepa ChartCash Return: $323.29 – $321.00 = $2.29
Portal: Discover 10% through Discover Deals (x2 if this is your first year with the Discover IT Card)
Portal Return: 10% x $300 = $30 (x2 = $60)
Credit Card: 1% Cashback with Discover IT (x2 if this is your first year with the Discover IT Card)
Credit Card Return: 1% x $300 = $3.00 (x2 = $6.00)
Promo Code: Sale3 (Exp. 5/19), 10% off 1 item up to $50 = $30 off.
Shipping Cost: These things aren’t exactly lightweight or small so shipping is an important consideration. I shipped 15 of them that I bought from Staples a couple weeks ago and it cost $103 total. Assuming that is standard, that means about $103/15 = $6.86 per unit. I used the boxes Staples shipped them to me in so there was no additional cost there.
Net Profit: [$323.29 + $30.00 ($60.00) + $3.00 ($6.00) ] – [$321.00 – $30.00 ] – $6.86 = $58.43 ($91.43) 

Scaling: You can purchase up to 5 per Groupon Account however the $30 promo code will only work once per order so that reduces the per unit profit to $28.43 ($61.43).
Points Earning: No points would be earned on this since you are using a cashback card and cashback portal. However, there are several airline portals including American and United that give 3x at Groupon. If you were to buy 5 units, it would total about $1,587.54 in cost with tax and the promo applied. Assuming you used a card earning you 1x points, you could earn 4x total points or 6,351 points in any number of programs. Your cash return would be $1,616.45 – $1,587.54 = $28.91. Depending on where you live that may not even over the cost of shipping. In my opinion this deal isn’t worth doing for points.

Risk Mitigation:

  • Estimate shipping costs prior to purchasing by preparing an Amazon FBA shipment now.  Each unit weighs approximately 23 lbs each.
  • Groupon has a return policy of 14 days. If you are buying more than one and want to minimize risk, only ship one to see how fast they move. 14 days is a short return window so you’d need to have these shipped out ASAP when you get them and even then with Amazon’s internal transfers, that may miss that window.
  • If you live in one of the 5 states with no sales tax (DE, NH, OR, AK, and MT) your profit goes up even more by eliminating sales tax.

My Strategy: As I said above I had purchased 15 of these from Staples a few weeks ago when they were also selling them for $300. I have a re-sellers tax exempt permit from Staples so with no sales tax they were more for the point earning (5x with my Chase Ink plus 2x through AA’s portal) than the cash (5% back in Staples Rewards and about $15 to $20 profit per unit). I’m confident in my assessment of the sales tax and reading the keepa chart that they will sell so I sent all 15 to Amazon’s FBA warehouse. They just arrived yesterday and are being processed. Assuming they aren’t transferred that means they should be live within a day or two.

So how does this relate to the Groupon sale above? I’m going to go very very big on the Groupon units. I’ll buy as many as I can using the Discover IT cards at I have at my disposal to average about $91.43 per unit. The reason I’m willing to go this big on this is because I have the Staples units going live any day. I’ll be able to get real life data on whether these are selling like I think they are. If they do, then I’ll ship more units off. If they don’t, I’ll return them all and get a 100% refund.

Other Considerations: Whenever I’m making purchases like these and I see sales across different stores like in this case (Staples, Groupon, and Amazon) it makes me speculate as to why this is happening. Is a new model coming out so the manufacturer stopped making this? Would that affect the price? If the new model is out will this older model see a price dip? If the new models aren’t out yet will the price go up since big retailers aren’t selling them anymore?

Notice any flaws in my math, logic, spelling. Let me know!

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