Sunday, January 10, 2010

Recirculation Specialist (aka Flipping): An Unappreciated Business Model

Flipping as a business model
A recirculation specialist is someone who buys something at a low price, then turns around and sells it at a higher price (Recirculation specialist also sounds really cool).  It can be anything. Sometimes you have to make minor adjustments to it in order to sell it. Other times you can literally just turn around and sell it for more than you originally paid. You usually hear about house flipping. House flipping is time consuming and can be very risky because you are dealing with hundreds of thousands of dollars, but it can also be highly profitable for the same reason.
However, you can recirculate/flip almost anything. Lots of people will sell used household items on Craigslist for a low price. Craigslist operates locally, so the pool of buyers is small. That means that demand will be low, and that means that the price will be low. If you see a good deal on a used item on Craigslist, chances are you will be able to sell it for more on Ebay, because Ebay has a much wider pool of potential buyers. In fact, Craigslist offers a whole category of "free" things. That means that if you can find someone who is willing to pay just one dollar for it, then you've made a profit. Flipping can have very high profit margins, but it involves constantly buying and selling things, and can be very time consuming. Additionally, you have to be very good at finding low prices and knowing how much an item is actually worth. However, this is a decent way to make a living, and I know (and have heard of) several people who make over one hundred thousand per year being a recirculation specialist using Ebay and Craigslist to sell things they find.

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