Yesterday, I turned 27p into £3.80, a whopping 1407.41%

Yesterday... yesterday was a Massive day for me and my participation in my challenge; I turned 27p into £3.80, a whopping 1407.41 %

So my currently seed money is running at £4.53, which means, as long as I don't loose it, I have achieved the month 1 and 2 goals of £2 and £4, for October and November; Incredible!

I was looking for a cake mix in Tesco's, but unfortunately they were too expensive, but I found something that surprised me shortbread biscuits (10 fingers to a pack) for 9p from Tesco's 'Value' range, less than 1p per finger! And to top it off they taste great!

Why have I never found these before? Normally I wouldn't have been looking for cheap confectionary, or rarely very carefully looked at prices when shopping, so hadn't noticed them???

I was thinking about making a cake from the cake mix and cutting it up into 6 slices and selling them at work, but when I saw these, the same feeling came over me when I saw the 20p book at the charity stall, that feeling in my gut screaming at me to notice that this was undervalued - significantly, in a different market.

I had to get rid of the Tesco Value image, so discarded the packaging and grabbed a load of 'free' kitchen tissues from the office kitchen, and stacked all 30 fingers up and used the tissues to hand them out.

I work in a large office in Central London, UK. You literally can't buy anything for less than 40p, and that's from a vending machine, even in there; general prices range from 40p - £1, you have to love the vending machine business model! Like, I expect, many other large offices, there is also a Starbucks and internal restaurant in the basement of the building, their general prices ranging from ~50p - ~£6 per item, I did spot 2 shortbread were being sold there for 75p after I had completed my challenge; incredible (see image; right). So, I choose a pricing model that would significantly undercut the competition and still make me a hansom profit. So 2 fingers for 20p should do the trick, to sell the 3 packs worth, I would have to make 15 individual sales.

I then composed an email to a load of people I know at work, maybe around 40-50 people, that I was selling shortbread and asking them to help me on my challenge. And to come quick while stocks last! have to pay attention to sales copy, calls to action and all that - should probably learn more about the subject.

Within 3 hours I had sold the lot! A strange thing happened, people overpaid! "I'll have a pounds worth", then as I was counting out ten fingers, they said that's enough, and once they were all gone someone came up and gave me 20p even though I explained there was none left??? I wasn't expecting that, but think it's valid to count those amounts to the challenge. Someone asked if it was for charity, I said no, I'm honestly no sure what I would do with 4k if I get there, maybe charity would be a good way to go, but they did say if it was they would have bought more.

If people asked about the challenge I explained what I was doing, if people asked if I had made the shortbread, I simple said I couldn't say if I had or had not. Also when they were all gone I had 4 enquiries about if there were anymore available, which is a great sign!

Makes you wonder what the profit margins are for both Tesco's -do Tesco's actually make a profit on this? or is this a loss leader for them? and for Starbucks; how much of a mark up are they achieving?
I hope people enjoyed the biscuits and don't feel that I have ripped them off! I don't think I have I think the 'market' here is a rip off; which is what I am actually taking advantage of.

Challenge Day 7 - We are off the blocks

It looks as though a number of the participants have made transaction over the weekend; there has been a hive of activity at boot fairs, flea markets and eBay. Also a potentially controversial lucky street find of £5.

Please make sure you record all transactions buying and selling with the form created for the challenge, see Record a Transaction

Team Ganapathiraman and Ramesh are off and have got this on eBay, see 1999 US State Quater - PENNSYLVANIA

Stew and Thomas have both sourced products and also either have got listings or are planning to put up listings in the near future, happy to link to the items from here.

I had very little time over the weekend, but did manage two attempts to source some items,

1.      A shopping trip to Tesco’s where I was keeping an eye out for low cost items, I was previously thinking about a child’s cake or cookie mix, but unfortunately most of these are more than the initial £1 stake, cookie mix ~£1.29, and most cake mixes £1.79 to £1.99. Though I did spot 2 items that caught my eye – more to follow shortly.

2.      A trip to a Cancer Research Charity shop in Bromley, they seemed to be a lot more clued up around the pricing of items; than the fun day 20p books stall, with only Videos at £1 – I suspect very difficult to sell, most items were above £1, tapes £1.50, DVD’s £3 - £4. So no real options there and no moral dilemma.

It’s interesting to see how people are approaching the challenge some using part of the £1 seed, others going 100% of the seed on 1 item. I wonder if people would use the split/approach if the seed was larger; would you buy a single item at 2k to make 4k, maybe that is a very reasonable thing to do.

I think I am going to play it safe, spending around 30p on some Tesco’s items to be repackaged and sold at a different marketplace, and maybe around 50p betting on English premiership football matches, 10p bets on favourites, I expect to make the first target with the 30p items.

So I have formed 2 risk categories.

·         “Sure thing” or trade risk.

·         “High” or gambling risk.

It’s interesting how people are naturally finding inefficient markets to source products, and taking the products to a different market to realise a better value (market of choice appears to be eBay), maybe that’s going to have to be a common theme.

Also, most people seem to be trading there way to profit. Trade - as in buy low, sell high. Rather than using any other strategy, which may change as the seed amount increases and other options become more viable.