A lot of this may seem obvious to you, but believe it or not there was a time when I was completely oblivious to the practice. I generally don’t condone reselling, because it has affected my ability to buy deal items in the past.
I learned about reselling when I went to a store to buy (1) of an item I saw was on sale in-store only at a great price, only to find that “we had 10 but some guy just bought all of them.”
This year’s Home Depot Black Friday tool deal was a Dewalt 20V Max 9-piece cordless power tool combo kit, for $499.
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Now, that same tool kit is a special buy for $699, which is discounted from the “was” price of $899.
Over at Amazon, the same tool kit is currently priced at $1,099 with free Fulfilled by Amazon shipping.
It seems to be that one can make a mighty good profit buying a couple of these kits from Home Depot and selling them on Amazon. That’s why Home Depot often has quantity limits on their tool deals.
I believe I have seen limits of 3 per customer on some tool, and today’s Ryobi nailer deal of the day has a limit of 5 per order.
Over at Amazon, the product description appears to be copy and pasted from Home Depot’s page. It’s the same copy, but there’s a lack of formatting, leading to a long run-on sentence where lines were taken from Home Depot’s list.
If any of these kits are selling at $1,099, that’s a $600 difference. An ambitious reseller could easily get around Home Depot’s quantity limit and buy many multiple kits.
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By my estimate, it should cost the seller around $188 or thereabouts in Amazon fulfillment and commission fees to sell this $1100 cordless tool combo kit. If the reseller bought the kits at $499 and sells them at $1099, the bottom-line profit would be a little more than $400.
There are a bunch of ebay and Craigslist listings for the same DCK940D2 combo kit.
This was just one example. You can be that scores of resellers took advantage of Home Depot’s holiday cordless combo kit savings, which is still going on by the way, to buy up some of the most popular cordless kits at deep savings.
The Milwaukee M18 Fuel combo deal is still going on, although the minimum add-on tool price has been bumped up to $59. There are a number of $59, $69, and $79 add-on options for that combo. With the $59 add-on (an M12 vac), the price of the M18 combo and add-on is $399 + $59 – $150 = $308.
Some will go so far to return the add-on, (a practice we don’t condone). The $150 discount is split among both items, which means that $59 item is returnable for around $40. This means a final cost of $268 for the M18 Fuel combo.
I’m sure there are plenty of resellers who can make a good profit by buying a couple of kits at $268 and selling them for between that price and the $400 regular retail price.
Accessories are also being resold by resellers, such as this 8pc Bosch Daredevil set that’s $18 on Amazon. These sets were sold for $10 during the holiday season, and you can still find them for the same price at Home Depot.
You’ll see lots of other accessory sets, such as this Dewalt 135 pc assortment, which is now $39 at Amazon.
Resellers buy up these kits from Home Depot and other resellers in bulk, with coupons or other discounts, and then ship them off to Amazon for reselling.
For reselling to work, a seller often needs higher quantities of product, and that could impact the availability of a deal for everyday customers like you and I.
Resellers minimize their costs, but to maximize profits, they’re not just going to sell 1 of an item, they’re going to buy and try to sell as many as they can.
Resellers have made it impossible for me to find certain deals within a 50+ mile radius, and the same is true elsewhere.
I’m guilty of buying more than my fair share of deal items before (a few years ago I bought several Rayovac camo flashlights to give to friends and family), but I try to be conscious about not overdoing it.
For the next couple of months, resellers will be offloading a lot of their hauls on Amazon, ebay, Craigslist, and elsewhere.
Some tools will be sold at prices higher than you would have paid during the holiday season, others will be sold at lower prices than currently available.
If you spot an appealing deal at any online marketplace, take 5 seconds to see if you can buy the same thing from the direct source for less.
Michael Quinlan
There was a time (3-4 years, 10-ish years ago) when I was a reseller – on eBay. Early on I would buy cordless combo kits (often at a 20% discount + a free tool around Christmas time) and break them up – selling individual tools, batteries and chargers separately. This was before it was common for manufacturers to sell bare tools or multi-battery packs like they do now. Not only did this put a little extra money in my pocket, but it helped me build my tool collection – if I could sell part of the kit for what I paid for the whole thing, I would sometimes keep the free tool or a battery. When I eventually stopped, I had over 350 eBay ratings as a seller, and probably over 500 actual sales.
I don’t feel bad for having done it, because it was only viable for me because manufacturers refused to offer what users wanted. Only once or twice did I buy out a store’s inventory, and that was always with single-tool kits. With changes in eBay policies, and those Amazon fees (OMG!), I don’t see it being worth it, but apparently it is for some.
Regarding returning the accessory purchased with Home Depot’s $150 off promo, it’s only possible because of the way they have their system programmed. If it’s really a problem for them, they should program their system so that partial returns negate the discount. I took advantage of this deal twice this time around – once I kept the $30 accessory (M12 power adapter), and once I returned the combo kit and kept the (now $85) bare M18 right angle impact driver. The latter was just too convenient – the bare driver shipped to my house, while the kit was listed as available for in-store pickup, so all I had to do was call the store and cancel the pickup (I think I got the idea from a comment on your post about the promo).
Until retailers find a way to stop it, people will always be abusing these deals, to the detriment of others. But sites like ToolGuyd at least help some of us get in on the deal before the abusers jump in and wipe out the stock.
Thanks Stuart!
Stuart
I don’t loath all reselling.
Breaking apart combo kits, or selling off unneeded parts of a personal combo kit purchase is one thing.
Buying out as many of an item as possible and eliminating availability for end-user customers is what I find negative about resellers and reselling.
With Home Depot’s cordless combo deal and the discount loophole, their system might just not allow for items to be returned together. The discount is spread proportionally among items so that someone doesn’t return the add-on to keep a $150 discount on just the cordless combo kit.
Adam
Best Buy’s system will automatically re-figure totals if you return part of packaged price deal, so are essentially charged not-package pricing for the item kept.
I too have bought tools at HD to only keep the part I wanted. I bought the M12 drill & hackzall kit for $55 last week, and sold it all minus the hackzall I wanted for $60. Don’t plan on repeating, but if I can add a useful tool to mix for free (well a little time input), why not?
I also bought 2 of the flood lights with free 5.0AH battery’s last week. I plan on keeping one, and have someone in mind for the other, but will be selling the extra batteries’ to bring down the lights cost. I’m sure I could sell & make money, but my only goal is to obtain MY tools for the absolute lowest cost possible, which might involve a little reselling, but the hassle of doing that all the time for a living doesn’t seem worth it in the end.
Jason
People are actually going to pay over a grand for that Dewalt kit? I think the guy is being optimistic with his pricing.
Andrew L
Agreed, doubt he gets it.
John
I’m not so sure I agree with the practice of breaking up “factory kits” (not talking about bundled purchases) as a practice. It’s one thing if it’s your personal “factory kit” and you break it up to sell I’d be alright with. However as a practice for resale, i.e. buying a bunch of kits and breaking them up and selling individually as sort of business or source of income kinda bothers me. That’s probably why warranties get affected and they want a proof of purchase instead of just serial number which should be enough. As well as mentioned this affects the manufacturer offering these kits in the future. Just sharing my personal opinion, I’m not going to fault or say this is wrong or people shouldn’t do this. Just saying the practice kinda rubs me wrong.
Stuart
He said:
This was before it was common for manufacturers to sell bare tools or multi-battery packs like they do now.
If someone buys a 5-piece tool kit and doesn’t need the reciprocating saw, why not sell it off on Craigslist or elsewhere?
Canon has a lot of dSLR camera deals, where you’ll get a hefty rebate when you buy a kit with a printer. Lots of people sell their printers for a little more than their bottom-line cost.
Some companies, maybe some individuals also, sometimes buy camera kits and then break them up to sell the camera and lens separately. That’s where “white box” lenses come from.
John
Like I mentioned, if its your own, or a one time thing thats not something I have a problem with. Its doing this as a means to get money by getting more than one and doing this as some kind of revenue source. By all means if this is your own purchase do what you want, but after one and as a revenue stream its a little shady unless you’re an authorized reseller/vendor.
julian
Shady? How so? I’m a contractor and always have 10-15 ads up on CL just getting rid of excess tools or selling the results of upgrading or even estate sale finds.
Currently, have many spare combo pcs. for sale from buying a few combo kits, all represent a pretty good deal for someone as they’re priced at levels you cannot find them for new at any retailer. Bare impacts, flashlights, new batteries…
Not sure what’s shady about it aside from folks MAYBE assuming that I must have somehow stolen or bought stolen goods and that’s why I am selling the items I am selling.
And I cannot wrap my head around this site’s offense at returning brand new items to HD for the exact amount that HD is happy to refund said items for. Their system takes into account the discount ratio’s and lists the return amounts accordingly. So how is returning an item somehow shady or not to be condoned?
I ran into a great deal on Makita batteries last month – one of the online retailers was, like all of them offering two free 4.0 batts with the purchase of any three bare tools. But I found one retailer who was actually counting their $28 LED flashlights as eligible for the rebate. Paid $83 shipped for three flashlights and two brand new batteries. I thought that was a pretty amazing deal and actually wrote Stuart an email alerting him to the opportunity in case he wanted to share it with his readers. Alas – now I’m thinking he probably didn’t condone that either….
Julian
fred
I’m not sure that I’m in a position to offer an informed opinion – much less use words like accept, condone etc.
I’ve neither sold nor bought anything on Craig’s list and use eBay only when I can’t find an item elsewhere. It might be that some of the tools that have walked off or evaporated from some of our jobsites over the years – did find their way onto some of these sorts of online “stores” – but theft is not what we’re talking about here. I’m sure that manufacturers have their druthers about how they would prefer to see their tools sold (some like Festool use anti-competitive tactics) – but unless their unbelievably naïve – they must know that kits get broken up – batteries get sold off etc. If it is worth you while to do this sort of second-party marketing – and you the seller – and your buyer are both happy – then why not.? When I was buying tools for a business – sometimes up to $100k per year on non-capital items – it never occurred to me – to undertake this – but maybe I should have done some calculations about what the cost/benefit might have been. Probably would not have changed my focus “sticking to my knitting of running a business – so to speak” – but it might have been interesting.
Benjamen
No I think you are missing the point. What is shady is when Home Depot or some other company has a to good to be true deal (like BF deals) and somebody goes and buys out the entire stock sometimes in all the area stores, then later turns around and sells them for a profit on ebay or Craigslist. What that person is doing is preventing other people from taking advantage of the deal…for their own profit.
It is scalping tools. There are laws preventing scalping in many states because they find the practice unethical. Unfortunately it only applies to ticket sales (I think).
I can’t comment on buying combos and splitting them up. Maybe you’re providing a service, maybe not. It’s not as clear cut. And buying a combo and selling the pieces you don’t want is probably ethical too.
>>And I cannot wrap my head around this site’s offense at returning brand new items to HD for the exact amount that HD is happy to refund said items for. Their system takes into account the discount ratio’s and lists the return amounts accordingly. So how is returning an item somehow shady or not to be condoned?
If you are returning a group of products you bought at a combined discount for more than you paid for it (I think that’s what you are talking about) That is dishonest and unethical.
It’s like saying stealing is okay because the store takes that into account when it prices its inventory.
Stuart
Exactly what Ben said.
I don’t care if you buy 2 tools to get a discount and then return 1 of them, but I won’t condone it. It’s an exploitation, and one that might prompt Home Depot to change the types of promos they offer.
Selling off spare combo kit pieces is one thing. But if you bought a dozen of the 9pc combo kits for resale or specifically for parting out and reselling, that’s a little different – that would make you a reseller.
Some resellers are fine. It’s the ones that get in the way of my ability to buy something for personal use that I can’t stand.
If you bought a few used tools you think you could flip for a profit? Okay, great. If you buy out every estate sale in a 100 mile radius all the time, that’s pretty crappy for everyone else.
RX9
Splitting up combos can be beneficial, as it provides a way of providing a lower priced alternative to the “bare tool only” prices from direct retail.
fred
I can see the point. Never having knowingly bought from these sorts of resellers – or bought tickets from a scalper – I may have had my head in the sand on this issue. My Marketing 101 sense suggests that retailers (like Home Depot) and manufacturers offer these deals (e.g. at holidays) to promote good feeling among their loyal customer base , introduce their brand to new customers, increase store traffic and secondary sales etc. I’m guessing that they don’t expect or want resellers gobbling up all of the stock. Maybe there a legal restrictions, or its just too much of a hassle for them 0r maybe they figure a sale is a sale – but in this age of computerized checkouts – you would think they could place some checks (like Amazon Lightning deals) on this sort of practice if they wanted to do so.
Jerry
Just curious about warranty coverage. I know HD can be picky on their warranty coverage and wonder if this may be partly why. The few things I ever warranted required an original receipt. I always have them e mail my receipt as I can bring it up on my phone as proof of purchase. I’ve got nothing against rese!long but beware the warranty. DeWalt or Milwaukee products will probably be fine but HD will not honor the Ridgid lifetime or Ryobi exchange warranty (to my knowledge) unless you are the original purchaser.
Adam
I’ve always offered a receipt with my sales of extra tools (figure it should add resale value), but have never been asked for it when the sale actually happens. For Milwaukee, you will at least be covered for 5 years from manufacturing date.
Ridgid however, yeah, you need to be documented like an IRS audit. No experience with Ryobi or Dewalt
RX9
It seems pretty absurd to me that a reseller would actually be able to sell with such an insanely high markup as the one you described. First, the reseller is moving the product online, which means that any potential buyer could easily compare the prices with a variety of reputable competitors at the touch of a button. Honestly, how hard is it for someone to find out that Home Depot and CPO are both selling the same DCK940D2 combo kit for $400 less? Even if a reseller can offer a better deal than Amazon/CPO/Home Depot/Lowe’s/Sears/whoever simultaneously, when you add in the possibility of either the manufacturer or a single large retailer further lowering prices, coupled with the need for the reseller to absorb listing/shipping costs, it becomes very hard to turn a profit.
Moreover, no small time seller really has the resources to corner the entire market on a given deal, especially when the complication of quantity limits is added into the equation. Obviously, the seller of the example DCK940D2 hasn’t cornered anything, because several cheaper sellers with available stock exist.
Cases of ridiculously overpriced tools are likely not the act of some greedy tool scalper. I think what is actually happening in these cases could be traced to a few different possibilities:
1. There is a reseller whose automatic pricing algorithm got out of whack, and the price got accidentally kicked into the stratosphere. Barring the possibility of idiots who would buy at such a price, the product will remain unsold until the pricing error is corrected.
2. In rare cases, there may be a reseller so stubborn, they refuse to accept market value for their wares…for now.
3. Money laundering.
Stuart
There’s little chance that the inflated pricing is accidental.
The same is done with lots of other things, such as LEGO sets when new sets first come out for the season or certain sets are officially retired.
It’s surprising to more savvy online shoppers, but some people don’t shop around for a better price.
I’ve seen lots of shadiness online.
I think I frown most when I come across Craigslist, Amazon, eBay, and other marketplace listings where someone is selling Harbor Freight tools at HIGHER prices. When the sellers make a sale, they go and buy the tool, tool cabinet, or other item with a coupon and then sell it at a big profit. I’m sure that sometimes all they do is place an order online with the customer’s info as the shipping address.
RX9
I will concede that while resellers can’t corner a market, they can
hog a deal away from enthusiasts and end users, and that is a shame.
However, the most potent defense against this kind of behavior consists of broadcasting news of good deals to the people who actually want the tools, and this is precisely the kind of service you provide the enthusiast/end user community through your blog.
In other words, if you want to nip tool scalping/deal snatching in the bud, Stuart, keep up with the good job you’ve been doing (especially the DealGuyd posts)!
Toolfreak
As someone who sells plenty of my tools for profit, I have to say I find the practice of buying mass quantities of expensive tools at Black Friday/Holiday prices with the intent to flip them pretty stupid.
It may SEEM that these people are making money, but I have done the math over and over, and with the fees for selling, plus the costs of postage, you generally don’t make enough to cover the days of your life you spend buying them and then packing the up and shipping them.
This kind of stuff also ties up thousands of not tens of thousands of dollars you could actually be investing and making a much larger profit.
Then you have the scammers – the buyers who claim they didn’t receive the correct item, the buyers who return boxes of used, broken tools instead of the new ones that were sent. There’s a whole host of issues that can wipe out all the profit you were going to make. The risk just isn’t worth it AT ALL.
Now, I *DO* buy one-of-a-kind items at yard sales, estate sales, and on clearance. That’s the way to actually make money worth the time you spend doing it. Typcially I can buy stuff for myself, and buy stuff to re-sell, making my personal purchases essentially free, plus the profit. This also has the benefit of not being shady since I am actually offering items for sale that potential buyers couldn’t have bought unless they were in the area and at the place of the sale. People who pay for these sort of things seem to be well aware of the costs involved and more than willing to pay a premium for the time and effort involved, because they really want that item they have been looking for and can’t find anywhere else.
You have to be pretty dumb to buy a DeWalt tool set off craigslist or ebay/amazon for more than you could have bought it on Black Friday. Hell, this year, the Black Friday tool items were still selling at the Black Friday prices the whole weekend and sometimes into the next few weeks in December.
Andrew L.
I agree with you. The margin for resellers ends up very small and typically not worth the time. Item cost + tax + listing fees + shipping…. there is just a lot more cost than most realize if they sit and do the math. I think when a sale item does sell out fast, many minds jump to the fact that it must be a “reseller” that is the evil culprit… while the majority of the time it is just a good sale and many people jumped on a limited quantity of items.
julian
Bought a new Makita cordless multi-tool + a brushless combo kit from HD in Dec, total price for both $315 out the door. Regular price on the combo was $399, multi tool $119. (combo was being clearanced for $329 at the time)
Sold off:
my non quick-release multi tool for $65
my 5yr old makita LXT hammerdrill for $45
the new brushless impact from the combo for $65
the 5.0 battery for $90
the charger for $35
So for $15, I upgraded to the lastest multi-tool, the very latest brushless hammer drill and got a new 5.0amp battery. I’ll probably off the 2nd 5.0 battery for $80 or so to further the profit on the deal.
That’s the kind of deal I do on a regular basis. Lot’s of upgrading at little to no cost.
JT
julian
I should add that it’s all CL, so no fees, no packaging, no shipping.
JT
contractorbert
Finding lots of Milwaukee M18 tool deals on Offerup local-only sales and Craiglist sites with no fees or shipping costs. How do you differentiate between the guy selling an extra charger, battery, or bare tool from kits vs the resellers buying up all the kits to resells or worse the stolen tool sellers? I don’t begrudge the guy buying one tool kit and selling what he already has or doesn’t need and would prefer to buy from them but it’s hard to tell apart from the guy buying out big orange or the guy fencing stolen tools. Though the biggest problem was fakes now you have to watch out for stolen tools too!
I have the charger, a few batteries and don’t need the kits but the tool only prices at big orange are a terrible value vs the prices in kits. Buying a kit and selling what I don’t need is a hassle but I’d like to avoid buying from the resellers and criminals.
Jim
There’s nothing wrong about it, simply supply and demand. Most of you are complaining, because you either didn’t think about it or don’t have the financial means to buy the amount needed. It’s like athletes or entertainers salaries, if you and enough others quit paying all the money , ( tickets, jerseys , etc) prices and salaries would come down.
Stuart
It’s not “simply supply and demand” when resellers artificially create the low-supply situation by clearing inventory off store shelves.
It’s like laying out tacks on the floor and then charging any passerby for bandages.