The Best Wealth Lifehacking Tips: How to Stockpile, and Resell
From Lewis the Lifehacker’s Tips and Courses for The Low-Cost Lifestyle
Tips for Intentional living, retirees, lifehackers, game theorists, and preppers or simple and intentional living enthusiasts
To begin, a life hack is an old concept refitted with a new name – it is a strategy or technique adopted in order to manage one’s time and daily activities in a more efficient way. When you get really skilled at it life hacking becomes a merging of systematic thrift, frugality merged, and futurism with time management, priority planning, and problem-solving.
It is my experience that there are certain qualities that define virtually all human behavior. One of these qualities is to strategize ways to maximize our untapped potential, efficiency, effectiveness, precision, accuracy, and meaningfulness, and do so at the lowest possible physical, emotional and economic cost, especially when interacting with other people.
“Stockpiling, and Reselling” is a term we use in our Life Hackers Life Strategy Playbook Mentoring Method to describe the collection and storage of goods and/or services at one price value and as demand and the price of these goods and/or services increases, selling them at a profit.
When selling tickets for entertainment events, this practice may at times be considered unethical or illegal, and is generally referred to as “scalping”. We will save the discussion concerning scalping for another time and place.
Is Stockpiling and Reselling a Good or Bad Thing?
If you are a Lifehacker it is definitely a good thing!
This morning I came across a great article about a young businessman who has been able to survive and prosper in these difficult times by stockpiling and reselling video games, Specifically Playstation https://www.bbc.com/news/technology-60709207
Stockpiling, and reselling is a basic business concept. The idea is for the skilled lifehacker to gather lots of any good or service, then sell it, usually legally, but often outside of normal retail channels, at a higher price due to demand for that good or service.
For the skilled lifehacker, laissez-faire economics views this as being a good thing for market efficiency. The correct value of anything (likely over a range of prices as the date of expiration approaches) is determined by what the market would bear. Often the reason that ethical stockpiling resellers are able to prosper is that the wholesalers and retailers simply failed to price their goods and services correctly, to begin with.
Stockpiling resellers are more flexible in pricing than a formal retailer might be. For instance, a stockpile will legally purchase a good or service. If a normal retailer (a supermarket selling cheese for instance) runs out of the product the price may go up if the demand is strong enough. Here the profit made from the sale of this product (cheese) by an outside vendor or agent (the stockpiling resellers) goes to this outside vendor rather than the original wholesaler, or retailer from whom it was bought by the stockpiling reseller.
Of course, there is no guarantee of profit for the stockpiling reseller, for they may often be required to take a loss if the value of the item they are stockpiling and selling drops.
Often a wholesaler or retailer may be willing to take a loss on some of their inventory, by deliberately marking up the value out of reach of the average buyer. That results in higher prices for all and lower sales because not everyone could afford the higher price. I live in a neighborhood where the price of food in local markets is 30% – 50% higher than less “elite” neighborhoods. It is for this reason I take public transportation, to a place with lower rentals and many more food markets that compete against each other, partly on price.
Price gouging occurs when a stockpiling reselling increases the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair. Usually, this event occurs after a demand or supply shock. Common examples include price increases of basic necessities after natural disasters.
Price gouging is a crime and is exploitive, immoral, and unethical, plain and simple!
There are various legal definitions for price gouging in less precise usage, it can refer either to prices obtained by practices inconsistent with a competitive free market or to windfall profits. Price gouging may be considered exploitative and unethical. Price gouging became highly prevalent in news media in the wake of the COVID-19 pandemic when state price gouging regulations went into effect due to the national emergency. The rise in public discourse was associated with increased shortages related to the COVID-19 pandemic.
The term price gouging is similar to profiteering but can be distinguished by being short-term and localized and by being restricted to essentials such as food, clothing, shelter, medicine, and equipment needed to preserve life and property. In jurisdictions where there is no such crime, the term may still be used to pressure firms to refrain from such behavior. The term is used directly in laws and regulations in the United States and Canada, but legislation exists internationally with similar regulatory purposes under existing competition laws.
The term is not in widespread use in mainstream economic theory, but it is sometimes used to refer to practices of a coercive monopoly that raises prices above the market rate that would otherwise prevail in a competitive environment. Alternatively, it may refer to suppliers’ benefiting to excess from a short-term change in the demand curve.
The thing to always keep in mind is that for the most part stockpiling resellers are primary retailers, but are secondary retailers, meaning they sell goods and services that were already purchased by someone else, and they either purchase them from that person or allow that person to price the good or service as they wish and they get a % of that price.
One problem in buying from a reseller is that once the product or service leaves the original retailer there is no way to check if the product or service being sold are legitimate, so any product or service sold could potentially be bogus, and may not work as effectively as the actual product or service. Usually, here, you cannot get a refund if you get ripped off.
Of course, the most skilled, and ethical stockpiling resellers have their own systems for verifying the authenticity of a product or service and do offer refunds to customers when appropriate.
Many stockpiling resellers stockpile levels of goods and services they are technically brokers. Brokers are the ones who put down big chunks of cash for large blocks or goods and services. This requires a lot of upfront capital because they often need to pay for these goods and services months before they will even hit the general marketplace.
Let’s use baseball tickets as an example of how stockpiling reseller brokers work. Doing some simple math based on New York Yankee bleacher seats, which lets’ say cost $1,700 each, if you have a large quantity, like 50, you’re investing $85K in January (or perhaps spread over a few months on a team payment plan). The advantages of buying season tickets includes…
- better pricing than single game tickets,
- no “convenience” fees.
- …and access to all games,
The economics of this strategy for the stockpiling reseller brokers is that over the course of the season, they hope to recover as much money as they can for the “crappy” games, minimizing the loss, while raking in the profits on the more desirable or “hot” games. The big potential payout comes if the team makes the playoffs where secondary market prices go well above face value. Additionally, over time stockpiling reseller brokers will forge relationships with season ticket holders with good seats, who don’t care to manage the resale process for games they don’t plan to attend, and they’ll take a percentage of the sale price.
It is the Stockpiling Reseller Brokers that Actually Determine the Value of a Good or Service.
Stockpiling Reseller Brokers are not even the ones that may be selling to the public when there is a shortage. There is another level down before the public can get to a product or service which is in short supply.
Those selling to the public are often called hustlers, and usually, they are legal and ethical business people. I will use the baseball metaphor to explain what Hustlers do.
Hustlers are the people you see outside the event venue. They are the market makers. They’re buying at the right (below market) price and selling generally based on the market price, but trying to get as much as they think you’re willing to pay. Usually, the hustlers typically show up to the venue with no product (tickets) or services in hand.
Ultimately a hustler provides a service to fans or brokers who don’t want to stand outside until someone looking for tickets wanders up. In return, the hustler takes on the financial risk of a highly perishable item, they buy the product at a “distressed” price, or in the case of a sold-out event, get lucky and find a fan that just wants their money back and doesn’t realize how much above face-value tickets are selling for. Of course, then the goal is to sell at market price, which changes quickly as the event begins.
Of course, there are many flaws to the process I have just described in terms of applied game theory strategies. For one, there is an assumption that hustlers will decrease the price of a ticket, according to the “Law of Demand” in order to make sure it sells. The actual science of behavioral economics (http://en.wikipedia.org/wiki/Behavioral_economics) would disagree.
People who buy from ‘hustlers’ do so for one primary reason: the tickets are at a price they’re willing to pay, by definition. They wouldn’t be buying it otherwise.
The real question is, why are people paying ‘hustlers’ more than the face value? Here are a few theoretical value-adds that a ‘scalper’ provides:
- Timing: This applies to the stock market, cryptos, commodities, and a tie-clip on Ebay. Prices and value change. Your ability to predict based on pattern language and predictive analytics will affect the price of something you buy from a hustler or a Stockpiling Reseller
- Aggregation: There are usually dozens of different possible places to buy a specific good or service. The problem is they’re all exclusive. Stockpiling Resellers aggregate these sources and provide a single easy-to-access source. Airline price models would eliminate the need for Stockpiling Resellers, or hustlers. Airlines have no need to sell-out on day one. Just want to make sure all the seats are filled hours before the event.
Let’s go Deeper into the Fundamental Economics of Stockpiling and Reselling
Let’s review: Stockpiling and Reselling involves purchasing a product or service, and then re-selling either for a higher price, or lower. Depending on the demand for the said product or service, (how popular it is/how quickly the product or service, were sold out) inherently fluctuates the supply. The Law of Demand states that with a decrease in price, comes an increase in demand. This means that a stockpiling reseller (let’s call them A), is selling the product or service just to make some money off of the retail price of the product or service, and he doesn’t need to sell it at face value (because something came up) so he decreases the price of the product or service significantly. According to the L of D, people are more likely to come and buy this product or service outside the retail location, or buy one online that offers them the same product or service, but for a higher price. As far as the Law of Supply goes, the lower the price of the product or service goes, the fewer Stockpiling Resellers there will be there to sell. It’s all part of a capitalist economy, where private owners hold the power. In the end, if a product or service is easy to access at a reasonable price the less likely you are to buy it from a stockpiling reseller.
Is this practice legal, and ethical? It depends on who is asking.
In most cases, excluding price gouging, Stockpiling reselling is completely legal. Once you buy goods or services, they are yours to own. If you want to sell them to your friend, or whoever, it is your right.
Of course, The Legal Line on Stockpiling and Reselling Can Get Pretty Thin
One person’s ticket scalper may be another person’s legitimate stockpiling reseller. Take the example of TicketMaster. They somehow legally manage to sell out 40,000 tickets in less than two (2) minutes after they are available online. These tickets then show up only minutes later, sometimes marked up 100 times and now charged in USD on reseller sites, some of them owned by TICKETMASTER.
So Ultimately is this Lifehack a good or bad thing?
- It seems, that the more socialist you are in your economic and political leanings, the more likely you are to think Stockpiling, and Reselling is abad thing.
- The more you see human relations as an exchange of goods, services, for something of value, between individuals, businesses, or other entities, the more likely you are to think of stockpiling, and reselling within ethical boundaries as a good thing.
The Best Way to Become a Stockpiling Reseller.
There are many ways to do this. I am skilled at bartering by using different non-cash resources such as time, space, information, and influence to bulk buy various goods and services. I actually wrote a book about this called Wealthhacks.
I have a large network of clients I social media but here are other places you can stockpile and re-sell. Of course, each platform has its own requirements, rules, and regulation for doing this.
- For Barter to Barter Trading –The International Barter Alliance http://ibabiz.com/Alibaba.
- Walmart – Through direct retail and Walmart.com.
- Living Social
It is easy to get started, or if you need help let’s schedule a 15-minute interview to determine how I can help you create a customized and personalized program for creating your best life. Email me at LewisCoaches@gmail.com
Author: Lewis Harrison is a life hacker, prepper, and futurist. He is the author of 3 books on life hacking and created the ultimate life hacker training The Life Strategies Playbook and Mentoring Method.
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Author: Lewis is a writer, teacher, and master results-oriented life coach. He is the author of over twenty books, numerous self-improvement, and personal development courses, and is the former host of a talk show on NPR Affiliated WIOX91.3 FM. He can be contacted at LewisCoaches@gmail.com
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