If you're going to sell physical products, what do you need?

The answer is you need physical stuff to sell. In other words... inventory.

So where do I get inventory to sell? I'm glad you asked.

In my book “Beyond Arbitrage” that I co-authored with John Bullard I introduced what I call the “Pyramid of Inventory Sourcing”

Here it is:

The pyramid represents the different methods of finding inventory for your business.

Here is what each level means:

Selling items from around your house – That closet full of items you won't ever use can be turned into cash.

Consignment – Your family and friends may have closets full of items that they don't know what to do with. You can sell those items for them and split the profits.

Thrift Stores & Garage Sales - This is the first level of the pyramid where it requires an investment of cash. It's below all the other levels that require cash because it's by far the least expensive inventory you'll come across. It's not unheard of to buy an item for $2 and $3 and sell it for $20, $30, $40, or even $50. I've heard about sellers buying rare books at thrift stores and selling them for hundreds of dollars.

Retail Arbitrage – With the use of an app on your phone, you can walk into about any retail store and find items that are selling for less than they are online – so much less, in fact, that you can make a decent profit.

Online Arbitrage – If you'd rather source inventory from the comfort of your home, then this level will interest you.

Every day there are online deals for inventory that you can purchase and have shipped to your home or even to a prep center that will receive the inventory, prep it, and send it off to Amazon for you.

Wholesale – This is where the barrier to entry gets higher which means less competition. You can buy directly from wholesalers and I'll teach you how to do it.

Exclusives – Imagine being the only seller on Amazon of a popular brand. There are major benefits to you and to your clients by entering into exclusive agreements.

Private Label – In my opinion private label is the top dog of all inventory sources. You can have your own brand of an item and thus have full control over that product.

The pyramid is a typical picture of an online selling business in that most people start at the bottom and work their way up the different levels in somewhat the order represented here. It's okay if your business doesn't progress this way. The important thing is that you get to where YOU want to go.

Where I want to go with my business may be completely different than where you want to go.

You may want to get to the top of the pyramid (Private Label) and completely stop any of the lower levels of inventory sourcing. However, you may absolutely love going to garage sales and would never want to give that up. Both are completely fine. Remember, your business is your business.

What level are you currently at? (Point A)

What level do you want to get to? (Point B)

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