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Project: Free

DSCF6517I’ve always had the story of Willow Tufano and the red paperclip in the back of my mind whenever I do a trade, sale, or bargain. I came by Willow’s story through Ellen and I don’t recall how I learned about the red paperclip, but it always fascinated me how they got something from almost nothing. Willow ended up buying a house and continues to do so with her investments while the red paperclip led Kyle MacDonald to the little town of Kipling Saskatchewan who also offered him a home there.

I’m not looking for a new home (for the moment at least), but I am an avid deal seeker, and like all deal seekers know, the best deals are when you can get it for free – no strings attached. I love all the new products coming to market and I want to buy every one of them, but unfortunately I don’t possess the fortune to do so. So I’ve decided to start my own series of trades and bargains – my main platform of sales will be through Kijiji and I’ll utilize resources such as the RedFlagDeals (RFD) community to inform me of great bargains.

The Idea Is Simple

I will have one target product I want to purchase in mind, then I will have to buy and sell other products, whether they be brand new or second-hand, and collect enough profit to purchase my target product. I will chronicle every purchase and sale throughout the journey and document all my sources, share my experiences, and provide my tips and tricks to get you the best deal. Don’t expect this process to be quick by any means, it will take a lot of patience and rejected offers, but It’ll definitely be fun.

How To Chase A Deal

On Friday, September 12th, 2014, alloy posted on RFD about a one day sale on the Canon EF 40mm f/2.8 for $99.99 at The Source. That’s an amazing price for, what has been reviewed as, a sharp and compact lens, which used to retail for >$200, but now can be found for $139.99 (Future Shop and Henry’s currently have this price). So $99.99 is a steal, but like any electronics deal, my first instinct is to check if Future Shop or Best Buy carry the item, because their price beat policy is the best (though not great to deal with) you can find (from my knowledge). They will match the price of the competitor and give you an additional 10% off the difference. So in the case of the Canon EF 40mm f/2.8, it was on sale for $139.99 at Future Shop, that’s a $40 difference, giving me an additional $4 off, making it $94.99, and totalling  $108.47. There are rules to the price beat policy though, which excludes one day sales, being what The Source had, but the key is that the product page didn’t show it that way – it just looked like a normal sale item that was on it’s last day of a regular sale.

Red Flag Deals Screenshot

What To Consider In Each Sale

So for anyone still following, I’ve now paid $108.47 for an asset that can be bought regularly for $139.99 ($158.19 after taxes), that’s about $50 in savings. Of course, when purchasing anything, it’s not as simple as looking at how much you’re saving, here’s a few basic things to consider:

  • What is the retail value?
  • What is the market value?
  • What is the demand?

There are other factors, such as how safe it is to buy, competition, price history, or product forecast, but for this example, we’ll discuss those three.

Retail Value

Though Future Shop and Henry’s lists it for $139.99, Amazon.ca has it for $199.99, which is a much better retail value – I would have gotten it for about 50% off! Unfortunately, I only consider the cheapest cost you can get it at during your own sale period. Keep in mind that even though it used to cost a lot more, that’s not important to potential buyers – what’s important is the current and future value, which in this case is $139.99.

Market Value

Market value just makes everything go to shits because it’ll depend on people, not retailers. There are 2 prices you can compare it to – brand new or used. In this case, it’ll be brand new. For the most part I use Kijiji to check market value, as that’s where I’ll be doing my sales and where potential buyers will be comparing other sales. There’s one for sale at $125, which has been lightly used, and another for $140, who claims it’s never been used. It would make sense that I match the $140 as well, but knowing the retail value is $158.19 at the moment, it’ll be a hard sell to convince someone to only save $18.19 for the risk of buying it second hand, even if it is brand new and never used – I doubt they’ll get many responses at that price. So to be on the safe side and still make the sale worth my time, I’ll post it up for $135.

Demand

Now you might think, “that’s only a $5 difference!” Which is correct, but that’s enough to have sellers consider you over another. This still keeps me in the higher range but one step ahead of the competition. Unfortunately, posting $135, optimistically I’ll expect to receive $135, but I will mostly receive low-balls (people who offer an absurdly low price in comparison to what I’m asking for). So then you have to contemplate what you’re okay with selling it at, and in this case, it’s $130. Now, someone may offer $120 and I can negotiate an offer down to $130, giving the illusion of saving more on their end.

All-in-all, given I sell it for $130, that’s $21.53 in profit.

Deals For Days

So that was a lengthy breakdown of some of the thought process into deal seeking. It’s my way and it will change over time with experience. As you can tell, profits will be slow, but I’m in it mostly for the thrill of finding a great deal. I can afford to buy the products I really want, but what’s the fun in that? There’s only one rule, that any asset I own now counts towards any profit I make from it – meaning, if I own an iPad and sell that now, I can use that money towards my target product.

The first target product for this project: Livescribe 3 Smartpen Pro Edition, which comes up to $234.78 at the moment.

Let the deals begin.

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