Data Science Based
Second-Hand Wholesale
Sourcing
BidStriker buys branded second-hand products at the bottom 10th percentile of eBay prices in 27 countries, using data science and predictive analytics, for wholesale buyers and business partners.
What to do nextAbout us
Ben Racz is the original author of the intellectual property involved in the data science based sourcing project. He is the founder of JVBroker.com and worked with stars like Brian Tracy, Kevin Harrington, Jack Canfield and Robert G. Allen. He is also a quantitative trading expert, and the founder of research company Algorithmic Sciences.
Ruta Racz has a background in Physics and Mathematics, and has worked as a Purchasing Manager for the laser manufacturer company Altechna before joining the project where her role is leading the team of analysts and niche experts as Director of Purchasing.
The Opportunity
- The business was started in 2008 and successfully operated until 2012.
- The business is based on intellectual property that gives us the capability to buy any product at the bottom 10th percentile of the second hand markets of eBay in 27 countries.
- That means: 90% of the products on the second hand markets will be sold at a higher price than we can acquire it.
- The software is based on data science and predictive analytics that identify mispricings on the market with a 99.97% accuracy.
- There are tens of thousands of original, branded products we can access at the bottom of their second hand values.
- The model is proven: between 2009 and 2011 we have used this IP to buy about 5000 gaming consoles and sell them at a high profit in a different country.
Products
This includes but is not limited to:
- Gaming consoles
- HiFi systems
- Computer parts
- Cameras
- Mobile phones
- Luxury clothing and bags
- Jewelry
- Watches
- Car parts
- Industrial tools and equipment
- …thousands of others.
Characteristics of Supply
- Due to the characteristics of the second hand market, the supply is extremely reliable and consistent, but also limited: there is only a specific amount of the one product that is being sold in a specific amount of time.
- That means we have reverse economies of scale in this market (the more we need to buy in a given moment, the more expensive it gets). But we can buy the same amount in the next period for the same price!
- We can predict the supply and amount of product we can get at a specific price range very accurately - so with stable marketing channels the income generated from it can be very consistent.
- All orders are protected by eBay Buyer Protection. Faulty items can be returned to the sellers in 30 days.
One Product & Pricing Example
Playstation 4 Phat 500GB (UK & DE):
- 160 pcs / mo < 130€ / pcs (for Business Partners)
- 320 pcs / mo < 152€ / pcs (for Business Partners)
- Second hand retail price in Spain/France: about 220€-250€
- Margins are similar for Playstation 4 Slim, 1TB, Pro
- Margins are larger for Playstation 3 (older product – larger margin)
- Margins are smaller for Playstation 5 (newer product – smaller margin)
- The “larger margin” is provided by a larger price variance / larger standard deviation from the mean price (we call these markets “looser markets”)
- The smaller the variance and the standard deviation, the “tighter” the market is (Apple products, gold jewelry, newer products)
How can you profit from this?
There are 3 main ways of having access to our sources. If you have more ideas, let us know.
| Retail Buyer | Wholesale Buyer | Business Partner | |
|---|---|---|---|
| Owning & funding eBay account & Payments to sellers | BidStriker’s responsibility | Partner makes a deposit to BidStriker & specifies warehouse location. eBay account is BidStriker’s. Remaining amount due on partial delivery. | Funding is shared between BidStriker and Partner, account is shared, but managed by BidStriker’s buyers |
| Managing warehousing, customs, VAT, logistics | BidStriker’s responsibility | Partner’s responsibility | Partner’s responsibility |
| Managing product testing & QA procedures | BidStriker’s responsibility | Partner’s responsibility | Partner’s responsibility |
| Managing sales & marketing | Partner’s responsibility | Partner’s responsibility | Partner’s responsibility with BidStriker’s support |
| Sourcing operations & analysis & eBay management | BidStriker’s responsibility | BidStriker’s responsibility | BidStriker’s responsibility |
| MOQ | 10 items / mo, fixed price (retail -5-8%). Partner specifies retail price, BidStriker responds with how much margin we can provide. | 50 items / mo, fixed price (retail -10-20%). Partner specifies retail price, BidStriker responds with how much margin we can provide. | No MOQ. Depending on funding shares partners share profits. All extra profits are shared between partners. |
| Profit margin on one order | Partner’s ROI/order: 5-10% | Partner’s ROI/order: 10-25% | Partner’s ROI/order: 33-180% |
What are we looking for?
- Partner can specify any niche & retail price in the target country. BidStriker will confirm the retail price and investigate whether a cooperation is possible in that niche.
- At the moment we are looking for Wholesale Buyers and Business Partners.
- Partner’s team is expected to receive, inspect (clean, test & repackage), store, market and sell the inventory in the Delivery country or other countries.
- In case of international transportation, Partner’s team is expected to manage customs, VAT, taxes.
- BidStriker’s internal team of analysts & buyers will manage the buying process and have products delivered to the warehouse managed by Partner’s team.
- Delivery country can be freely chosen between UK, Germany and USA. Other countries with major eBay markets can be investigated.
What to do next?
1. Specify a product. Make it as specific as possible…
- Good example: “Sony Playstation 4 phat 500 GB console”.
- Good example: “Canon EOS 5D Mark III”.
- Bad example: “Omega watches” (not specific enough),
- Bad example: “ASUS motherboard” (not specific enough).
Consider that in order for us to be able to deliver a meaningful amount of supply, you need to choose products that are popular on the second hand markets.
2. Specify a retail price. Make it as high as possible…
- Check classified advertisements, and other selling channels you can use in order to identify a good average retail price you can sell for.
- A good practice is to create marketing (advertise on a website, post a classified advertisement, etc.) to make sure you have enough buyers.
- If your retail price is high enough, we will come back to you with an offer that will be below that retail price to allow you to make a profit.