Profiting on Impatience
Reselling is growing in popularity as a means of making large amounts of NP in weeks or even days. It is also a challenging lifestyle that requires skill, knowledge, and above all, patience. But this method of making NP is also highly volatile. Many inexperienced resellers have earned the wrath of Neopian sellers.
"I don't resell because I find it a somewhat dirty way to earn neopoints." (glynnni)
"I try my best NOT to think of [resellers]." (xxmoonlight)
On the other hand, experienced and fair resellers are respected and even appreciated.
"I think resellers have a big effect on the economy, without them it would be almost impossible to sell certain items." (unicorn5133)
"[True resellers] are honorable, decent, and earn their living without having to offer very low." (restockability)
So what are resellers? How is that they have such a varied reputation among Neopian sellers?
The very definition of reselling is debatable, but in its simplest form, reselling is the act of buying an item from another Neopian with the intent to sell it at a profit, hence the term "resell." However, there are numerous types, styles, and methods of reselling. This article provides an introduction to the world of reselling, as well as direction on which practices to cultivate and which to avoid.
Reselling revolves around the Trading/Auction Neoboards. Buyers, sellers, and resellers congregate to make deals. A buyer is, obviously, someone who wants to buy an item. However, for the purposes of this article, a buyer is a person who wants the item to use it, not to resell it. A seller on the neoboards is anyone selling an item. In this article, sellers are usually restockers or anyone else who wants to sell their items quickly for pure neopoints. When a reseller comes to the neoboards, it is most often to buy discounted items from sellers. Resellers don't usually advertise items they are selling on the neoboards, simply because the whole place is filled with resellers buying at a discount, and strangely enough, most resellers do not SELL at a steep discount.
On the neoboards, resellers will post "Reseller Buying" or just plain "Buying" boards, inviting sellers to post any items they are willing to discount. If the reseller is interested in an item, he will offer. If the seller likes the offer, a sale takes place. Then the reseller has acquired a discounted item and puts it in his shop or on the trading post at close to full trading post price.
At first glance, many Neopians feel that this is an unfair business practice, to buy a cheap item and sell it higher. However, there are two things worth noting.
(1) A reseller should never try to make a seller believe their item is worth less than it actually is. This violates the fair business rules of Neopets.
(2) Many sellers are willing to "quick sell" their items at a discount so as to get pure NP faster than it would take to sell it at full price. This is how the majority of resellers make their discounted purchases. So when someone offers a quick sale, they're saying, "If you buy my item quickly, I will give you a discount."
Reselling is a complex craft. So where should a rookie reseller begin? How many neopoints does a reseller have to have?
Zootii, an experienced reseller, recommends that beginners with under 100k NP begin by browsing the 20 newest section of the Trading Post for easy to sell buyable (on the shop wizard) items. "You bid on ETS (Easy To Sell) things like dubloons, petpet paint brushes, map pieces etc. For the things like codestones and dubloons, offer 2-5k under the shop wiz price. For things that cost a little more, like map pieces, offer 5- 20k under the shop wiz price."
Not everyone will accept your offers, but those that want to sell quickly will accept a small discount. One you're up to 150k or so, you can move on to ETS unbuyables, items which can only be purchased on the trading post or auctions. According to Zootii, These include cheap paint brushes and nerkmids, all which should be bought at a 5-20k discount and sold near trading post price.
What is trading post price?
The lowest requested price of an item on the trading post. Say, for example, there are five Normal Golden Nerkmids for sale on the trading post. The sellers' requested prices are 175k, 187k, 189k, 195k, and 185k. Although the average price would be around 185k, the lowest price is 175k. The trading post price, or the TP price, is 175k.
Whitepheonixflames, another experienced reseller, suggests that once you have a couple hundred thousand NP, "Work your way up to the mid-range Paint Brushes that go for 300-600k. Snow, Biscuit, and Orange Paint Brushes can be a bit hard to sell for the full Post price, so people get desperate and sell low. There's a buyer out there for ANY Paint Brush, and if you're patient enough, you can profit nicely. . . . Don't get desperate, because you may lose out."
As you buy and resell different items, you will make profits, and you will also have losses. Consider your first month as a reseller a learning experience. You will get an idea of how much you can sell certain items for, you will develop a preference for certain kinds of items, and you will find what kinds of items you do not like to sell.
You will also irritate the crud out of people.
Sad, but true. Here's why: as you experiment with buying different kinds of items, you will become afraid that you will buy an item and not be able to sell it at a profit. You will at least once have a loss, even a BIG one. You will become very afraid of losing more NP. So, you will start offering very low on an item because you are not sure how much you will be able to sell it for.
Here's the kicker: even if an item's trading post price is 500k, its real value could be only 110k. For example, let's say that you have posted the only "Reselling for Dummies" (not a real item) book on the trading post. You say, "Hey! I'm the only one selling this item, so I can get whatever price I want!" So you say you want 800k for it.
And you wait three weeks without a single offer on it. So you knock it down to 600k. Still no offers. What's wrong? No one wants your book. This is a classic HTS, or Hard To Sell, item.
Then say another person comes along and puts the same book on the trading post for only 150k. How much is the book worth then? In the end, an item is only worth as much as someone is willing to pay for it.
Only experience can teach you the nuances of this lesson. But as you progress into an experienced reseller, you have a choice to make. Will you specialize in ETS reselling, or HTS reselling?
ETS – Easy To Sell item, typically in less than 48 hours.
HTS – Hard To Sell item, typically a collectors-only item, such as TCG, stamps, battledome, and expensive foods and books.
The vast majority of people who claim to be resellers deal in ETS. However, most of the experienced and high-profit resellers deal in HTS. So what is the difference between ETS and HTS reselling?
Sara_for_ever is a reseller known for selling Nerkmids, which are ETS. She says, "I have ETS because I love having a bunch of it. All my trades sell within the day I buy them. Those are instant profits. That and I hate the risk HTS has when the TP price drops or you can't sell. I make about 20k to 200k profit per item. Which is fun. Sometimes more, I'll just have to keep quiet there. =) I sell anywhere from 10 to 30 items a day."
Part of being a successful ETS reseller is not getting a steep discount—it's sheer volume of sales. Sara explains, "Higher profits come from buying and selling mass amounts. Those 20k profits ad up quickly. Five items in a day is 100k. 10, 20, 30? That's where some of the best ETS profits are."
However, it should also be noted that ETS resellers have a difficult task: Buying ETS items at a discount. By their very nature, ETS items can easily be sold at a fairly stable price. So why should a person selling an ETS item accept a discounted offer? The key is to offer only a little below trading post price, around 10-20k. A seller in a hurry won't mind such a small discount—but he will mind if a reseller offers 130k on an item he knows he can sell for 200k!
Most of the experienced, high-profit resellers deal in HTS (Hard To Sell) items, simply because most sellers do not want to wait the weeks or even months it can take to sell HTS items.
Whitephoenixflames explains his HTS reselling methods:
"I personally buy HTS from people who get desperate (you'd be surprised how impatient people get after a couple of hours) and hold out for a collector or, obviously, a decent offer from another reseller. I'm personally the type to hold out for a collector. Sometimes you find people who'll pay exact Post price, and people who know that not everything sells for what the Post suggests, but still offer nicely. As for how much to pay, not to sound arrogant, but I have years of experience under my belt and I know the market very well. . . . Nowadays I mainly deal in HTS worth over a mil, and it takes me anywhere from two days to three weeks to sell something.
"The HTS route involves learning about the market and what things actually sell for [as opposed to the trading post price]. Of course, you can always wait for a collector, but there's always another seller that may get to them first. I personally search for similar items that can be grouped with whatever I'm selling to form a Gallery and see if that particular Gallery is missing whatever I'm selling. If it is, I Neomail the owner offering them a discount. It's how I sell a majority of my items, and the profit's always nice."
In conclusion, whitephoenixflames points out, "There's a lot to know before you start reselling, but in reality, most of it has to come from experience. You'll start out rough . . . make some losses, make some profit. You'll be naive, you'll be called a nubcake, you'll find the deal of a lifetime, and you'll get stuck with something for three weeks that you thought was an overpayment but that no one wants.
"Eventually, you'll learn what's right for you, and maybe even specialize in a market, whether it be collectables, ETS, morphing potions... You'll start profiting every sale, developing an ego, and eventually, of course, you'll become just as arrogant as the rest of us."
So hopefully all of this has given you an idea of what reselling is, and what reselling is not. As you venture around the reselling boards in the Trading/Auctions Neoboards, you will learn new terms and new methods. Indeed, the different reselling practices are too numerous to entirely cover in this article. Some are great business ideas, while others are insulting to the majority of sellers and resellers.
So, before you venture off into the world of reselling, here are some methods you may want to avoid.
Haggling—the deciding of a price—is part of the reselling life. However, many resellers will make an offer followed by "HB" for "haggle back." As whitephoenixflames puts it, haggling back is "basically where someone offers insanely low on an item," such as a "450k, haggle back" on a Baby Paint Brush. "Everyone knows you can quick-sell it for 580k, and that's if you're desperate. Starting so low is completely pointless."
HB is a pointless, irritating, and time-consuming practice. Although some buyers and sellers like to use HB, the vast majority find it either insulting or ridiculous.
A similar "method" is referred to as "lowest." Say, for example, someone is asking 500k for a Morphing Potion. A reseller comes along and asks, "lowest?" Or, "What is the lowest you will accept?"
First of all, many sellers are not willing to state their lowest because they are hoping to get MORE than the lowest they are willing to accept. Second, stated "lowest" prices are often not accurate or are not respected.
For example, I was once selling a Zafara Double Agent Stamp. Its trading post price was 1.2 million NP, and I was advertising it for 900k. I got a neomail from a person asking my lowest price.
I said: "750k."
Person: "Take 600k?"
Me: "No thanks."
Me: "No, my lowest really is 750k."
I went through about three rounds of neomails with this person, trying to convince them that I really was not going to take anything less than 750k. What went wrong?
The person was used to "lowest" prices not being real, but rather a starting point for haggling. If you are going to ask for and give lowest prices, be honest about it or decline to give a lowest price. It makes everything much simpler.
As you wander the neoboards, you will quickly find that resellers have a very bad reputation, because many resellers are not resellers at all, but rather people hoping for a steep discount where there is no reason to get one.
Much of what you read in this article may not make sense yet, but as you learn the reselling ropes, you can reference this article. The only way to really learn about reselling is to jump in and try to swim. Just consider this article a safety float.
If you have any questions about reselling, feel free to neomail me, or just pop into the Trading/Auctions boards.