Trader Joe's Arbitrage—The Ultimate Side Hustle?
Plus! Matt puts on his pants!! The deal with that $247 fee!!!
Hello everyone,
Welcome to Issue #151 of CAFÉ ANNE!
So last week’s feature about decision coach Nell Wulfhart prompted many readers to share their own decision-making strategies in the comments. But the topic that generated the most discussion was Ms. Wulfhart’s rate.
“How did she decide on a fee of $247?” wondered David R. on the Upper East Side. “I thought it was fair, but unusual for not being a round number.”
“Why not round up to $250?” asked CK Steefel.
“It made me want to start a rival service priced at $246,” wrote Rob W. in New Orleans.
So what’s the deal?
“I picked $247 rather than $250 because of some—possibly debunked—marketing idea that it seems less intimidating than $250,” Ms. Wulfhart replied when I posed the question in an email. “No idea if that's true or not, and now this is making me think that it might feel a little scammy to do that. Maybe I'll change it to $250 and your commenters can take credit!”
“I LOVED the comments!!” she added. “What a funny and interesting group of readers you have!!”
TRUE.
In other news, huge extra-50¢-for-a-bodega-egg-and-cheese shoutouts to this week’s new paid subscribers Jim K., Betsy C. and Howard L. That’s enough $$$ for 27 breakfast sandwiches!
I am very excited for this week’s issue, of course. We’ve got a check-in with Matt Casper about his work-at-home experiment (which includes fresh underwear first thing in the morning!) and a look at how much $$$ you can earn reselling Trader Joe’s merch on eBay. Please enjoy.
Regards!
Anne
CEO, Pitney Bowes
PS It’s true!! I haven’t written anything about NYC in a while. WHY?
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STYLE CHECK
Matt Gets Dressed For Work!
I recently wrote a feature looking at what we wear to work at home when no one is looking. As I noted, I always dress for the office—including stockings and heels—before I sit down at the desk in my living room. But one person I interviewed, marketing consultant Matt Casper, told me he typically works in the teeshirt and underwear he slept in the night before.
Matt said he doesn’t shower and change his clothes until late afternoon, when his wife comes home from her office job. When he has a Zoom call with his tech clients, he'll don the red-checkered dress shirt he keeps on-hand (which, he noted, he hadn’t washed in several years).
I was surprised when, at the end of our chat, Matt offered to experiment with showering and dressing before his workday starts—even if no one will see him. "I'm going to do it next week, all week!" he vowed.
I checked in last Tuesday morning to hear how it went. And boy, was I surprised. Even though the week-long experiment was over, Matt showed up for our second Zoom call in a handsome argyle sweater!
"I'm wearing pants, too!" He stood to show me.
So how did the experiment go?
"I haven't changed everything, but I've made sure not to sit down and do any work until I have taken a shower and cleaned up," said Matt. "This is not Saul becoming Paul on the road to Damascus, but it does do something for one's frame of mind. Like, ‘I am cleaned up, I am dressed for work.’ If the client walked in my house right now, I'd be prepared."
He’d even washed the red-checkered dress shirt. "Upon closer inspection, there was definitely a need,” he said.
Matt said he felt a little more productive thanks to the change of routine. And there'd been a cascade effect. Working in his pajamas had produced a weekend mentality which led to further indulgences—like eating two pounds of pasta for breakfast. "And then finding excuses to procrastinate," he said. “It was, ‘You shouldn't work after eating that, you should walk it off.’”
"So I think this has put me in a position where I am up, I am dressed for work, and so I’d better get to work. That's kind of where I'm at," he reported.
One downside: Matt does the majority of the cleaning in his household, but dressed in his office clothes, not so much. "I don't want to get all dirty," he said. "I went out and bought a new mop bucket, and I haven't used it once. It's just sitting there.”
And then he told me something very interesting.
"I think it's just coincidence," he said. "But I got very busy last week. I landed a new client, and one of my clients tripled my workbook. So boom, all of a sudden I went to having to work twice as much. So the timing was fortuitous, because I needed to be more on the ball each day."
“I know it sounds ridiculous," I said, "but I'm going to say it's because."
"Okay, so by taking a shower, I somehow manifested this?" said Matt.
"Yes."
"Yes, all right," said Matt. "Well, yeah, let me check my horoscope."
"You know," I said, “that's actually how reality works, I'm sorry."
Matt did not look convinced.
"But the results overall are positive, encouraging, and enough to get me to stick with this in some form," he said. "I am confident that for the rest of my working life I will be dressed for work—two thirds of the time!"
DEPT. OF VERY SMALL BUSINESS
Trader Joe’s Arbitrage—The Ultimate Side Hustle?
I recently stumbled across an intriguing retail phenomenon. There are dozens of small businesses on Amazon and eBay that specialize in reselling private label products from my favorite grocery chain, Trader Joe's.
While Trader Joe’s has no online retail site of its own, you can hit the web to buy the chain’s fantastic Coconut Body Butter or Dark Chocolate Roasted Pistachio Toffee—along with hundreds of other popular items—as long as you're willing to pay the bonkers price charged by a third-party seller.
I had to wonder—were these operators simply going to their local Trader Joe's, buying the chain's private label groceries and then reselling them online? Could I earn some easy money doing the same thing? After all, there are only 593 Trader Joe's in the US, and a third of those are in California, so there's a huge population of folks who live far from the store but still crave its Everything But the Bagel crackers and Chili & Lime tortilla chips.
I contacted one such business, TraderSQR, which operates on eBay. The owner, Craig, was happy to chat. This is a new side hustle for him, it turns out. He's a freelance video producer who has been at it for just over a month, offering a selection of 80 Trader Joe's private-label items including some of my personal favorites like the Dark Chocolate Star Cookies and the Crunchy Chili Onion Sauce.
Craig, who lives in Sarasota, Florida (and asked me to leave out his last name), said he got started by looking at what Trader Joe’s products other eBay sellers were offering, and what sold the most. Then he listed the same items on his own page. No need to reinvent the wheel!
Like most of his competitors, Craig focuses on items like soap and candy that are easy to ship. He also targets items offered by the store for a limited time—like the rose-scented Valentine candles—along with favorites that are always in high demand, like the Spacaloos Cookie Butter.
“I'm kind of obsessed with it. I'm always on there, looking and tweaking and adding new products,” Craig said of his eBay store.
As Craig answered my questions, it became clear that this may be the world's very best and very worst idea ever for an online side hustle.
On the one hand, there's no upfront investment, and zero overhead. Craig typically buys inventory from the local store a half mile away after he gets an order from a customer. "The store is my warehouse," he said.
The downside? The profit margins are terrible!
You wouldn't think so looking at the prices charged by Craig and his online brethren. I compared a basket of a dozen items sold on his page with the prices charged at my local Trader Joe's on Court Street in Brooklyn.
Craig's prices—which include shipping—are, on average, 2.5 times higher than you’d pay at the store. He charges $24.99 for a two-pack of those dark chocolate star cookies, for example, which cost $4.99 a box at Trader Joe’s. His price for the Tea Tree Tingle Shampoo, which costs $3.99 at the store, is $17.99. You’d think he’d be making a mint.
But then Craig walked me through his expenses. There's no way to buy wholesale from Trader Joe's, so he pays the same retail price as everybody else. Next, eBay takes a 13.25% cut of the sale. The biggest expense? Shipping. When all's said and done, Craig said he typically earns just $1-$3 per order.
"I'm always surprised what people will pay, but nobody's gouging or making a ton of money off of this," he said.
Craig declined to provide an exact cost breakdown for any particular item, but it was easy enough to calculate this myself.
Take that Crunchy Chili Onion Sauce, which comes in a six-oz jar. It costs $4.49 at the store. Craig sells a pack of three for $33.49—a 148% markup. That's $20.02 in Craig's pocket.
But out of that, he has to pay eBay's 13.25% commission, which works out to $4.43. That leaves $15.59.
For shipping, Craig uses USPS Advantage. The cheapest available option for shipping packages, it guarantees delivery in 1-5 days. Rates for this service start at $5.25 for a 4-oz package. (UPS Ground rates are more than twice as high). His cost for shipping an 18-oz box of chili sauce to a nearby city would be $9.45, leaving him a $5.39 profit. Still not bad!
But shipping costs can be much higher depending on distance. If that same order was placed by a customer on the west coast, the shipping could cost as much as $16.65, and Craig would lose $1.80 on the transaction.
And that’s not even factoring in the time. "You have to list the item, take the order, buy it at the store, carry it home, pack it up, walk to the post office and ship it," I said. "To me, it doesn't sound worth it to earn a dollar or two."
"Well, I've only started this a month ago and I'm seeing how it goes. It's really just my time, and things are slow for me," said Craig, who runs his operation from his kitchen table. "What I'm trying to do is go into Trader Joe's at the most once a day, and to the post office once a day."
I'm always looking for a fun side hustle (and yes, Craig said his venture has been a lot of fun for him, as he's fascinated with online retail). So after we spoke, I calculated how much I'd have to sell using this strategy to make a significant side-hustle income—say, $500 a week—and how much time that might take.
Given the lines at my local post office (always at least 20 minutes at the Cadman Plaza location) and nearby Trader Joe's (insane!), plus the time spent transporting roughly 300 grocery items a week, and packing, and creating listings, and dealing with customers, it maths out to about $20 an hour. Which is about what I currently earn writing this newsletter. Hmmmm!!!!
I were clever, I could probably do better. Surely there are certain Trader Joe's products that could command a much higher markup than the standard 150%. I'd just need to figure out what those are and sell a boatload before my eBay competitors caught on and undercut me.
Craig, meanwhile, is experimenting with the store's Indian pouch meals (a personal favorite that no one else sells online) and says he'll give his fledgling business a year. "I think by then I'll have a pretty good idea of the volume and that kind of thing," he said. "But as long as it's fun and it doesn't interfere with anything else I'm doing, then I'm good!"
QUOTE OF THE WEEK
“My texture
Is the best fur—
Chinchilla!”
—Jay Z
CAFÉ ANNE is a free weekly newsletter created by Brooklyn journalist Anne Kadet. Subscribe to get the latest issue every Monday.
I'm sorry, are we NOT supposed to be eating 2 lbs of pasta for breakfast?!
My first thought was Matt needs to direct sell to repeat buyers, cut out Ebay. He could request an email address with each order or put a coupon in the shipped order offering a small discount on a direct bulk sale. Of course Ebay may have rules around this but if not, thats possibly one way to reduce overhead.