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How To Profit From Product Launches and Big Sales

By Jesse Michelsen

You heard it folks, Apple broke off its exclusivity with AT&T and released the iPhone to Verizon customers in early February 2011. With such a product release, big lines are sure to follow.

Apple isn’t the only company capable of creating such a buzz, however. The newest products and innovations from Microsoft, Sony, Nintendo and various other merchants have caused crowds to line up for what seems like miles.

There are always those early adopters who want to be the first to have the next big thing; lines can start as early as a few days before the product is even in stores! While I don’t blame them for waiting in line, I can’t help but realize there’s a good opportunity for others to make some money as a result of all the consumer demand.

Here are a few ways you can profit from product launches and big sales.

Position Scalping

1. Target a New Product Release
When new products are released to the public, the manufacturer only supplies each distributor with a limited amount of goods in order to create a high demand. That demand creates the lines we see because products are available on a first come, first serve basis.

2. Arrive Early and Claim Your Spot
At a product launch, grab a spot at the front of the line and when the line grows behind you, offer your spot up for a small fee. People are usually more than willing to pay for the guarantee of getting the product.

3. Reap the Benefits of Your Labor
While it sounds easy to be the first in line, the first spots are prized. It takes dedication and usually a free or highly flexible schedule to wait in a line for a few days. The rewards have been reported to be as high as $500 for a front spot (i.e. XBox 360). If a high payoff is worth it to you, grab your tent and set up camp.

Sale Arbitrage

1. Map Out a Local Sale
Product launches aren’t the only things to look for in these situations. Big sales can also cause quite a stir. For instance, when a new product is released, the older products are marked down so they can be cleared out to make room for newer items. Black Friday is another occasion known for huge sales and crazy markdowns. These sales provide another opportunity for you to make a little cash, instead of spending it.

2. Choose Your Big Ticket Item
Big sales are usually kept quiet until the very last minute, but this doesn’t stop lines from forming. The big ticket items will have short supply and are limited to a certain number per person. Plan ahead, pick one big ticket item (e.g. video game consoles, plasma or LCD TVs, or large appliances), and buy as many as you can. If you plan on camping in line overnight, don’t forget to bring warm clothes and supplies.

3. Immediately Put Your Purchases on the Market
Back at home, list your purchases eBay or Amazon, or even Craigslist to earn a little profit. While eBay is mostly known as an auction market, it offers many options that resemble an e-commerce retail store, with very consistent prices and products. On the site, there’s a good chance you’ll be able to find the exact product you’re selling. Use the other products’ price points to gauge at what price you should sell your items. The best strategy is to price your items a hair lower than what others are selling their items for, but make sure to price it high enough that you’ll make a profit.

4. Team Up for Better Results
In order to maximize sale arbitrage, shop at a chain offering the sale at more than one location. Team up with a buddy so that each of you can shop at a different store at the same time and buy more than the allotted store limit. Pick the same item if possible, as this will make listing items for resale easier. In addition, try to do some research on eBay beforehand so that you can calculate your profit potential, and in turn, have a better idea of what your time is worth.

There is a catch with this method, and that is that you have to have some initial investment cash to be able to purchase the products outright.  However, if done correctly, the money spent will have been a good investment and you’ll recoup your costs when you sell the products online.

Final Word

William James once said, “He who refuses to embrace a unique opportunity loses the prize as surely as if he had failed.” These opportunities are unique, but recurring. Instead of waiting in lines to hand someone else your money, why not wait in line so others can hand their money to you?

Have you ever camped out a product launch or big sale?  Has the financial payoff been worth it to you?  Share your story in the comments below.

(photo credit: leo.prie.to)

Jesse Michelsen
Jesse Michelsen is a 23 year freelance writer with a passion for personal finance. Without any formal education in finance, he writes about his own experiences in managing money, budgeting and investing with the goal of retirement at 40 always in mind. He resides in Utah with his wife, 2 girls, and baby boy on the way.

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Comments

  • http://www.squirrelers.com Squirrelers

    This is a street smart mindset which can be profitable to have. Some early adopters can be so crazed when it comes to getting a new product, that rational thought can escape. They just MUST have the newest gadget the DAY it comes out.

    I’m not like that, so I can appreciate the perspective of trying to capitalize on this phenomenon. Might as well set up your own secondary market of sorts where you can sell them what they want: a chance to get something asap. I like the ideas like selling one’s place in line, that’s a fun example. Maybe you could drop 20 spots in line, collect $50 for the transaction, then buy an item you might want anyway….or put it up on craigslist right away.

    Lots of ways exist to make an opportunistic buck here and there, while having some fun doing it.

    • Jesse Michelsen

      I have friends that attend these launches just for the buzz and the crowd (weirdos :) they really do have fun and enjoy. Why not make a little money on the side as well.

      Thanks for your comment Ray!

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