As competition from online retailers increases and minimum wage pressures bite, Wal-Mart Stores, Inc. (NYSE:WMT) resorted to shutting down 150 stores in January. As a result, the biggest retailer is providing a good opportunity for resellers to make a killing.
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The methodology is called retail arbitrage as a number of resellers clean the store shelves with the objective of scoring quick profits. Such purchases would be placed for sale through an online platform.
System Of Operation
The closure Wal-Mart stores in some regions have attracted shoppers. For instance, a shopper told the press that he was buying $12,000 of merchandise in Hartland, Michigan. The objective is to resell the discounted items through Amazon.com, Inc. (NASDAQ:AMZN) for a profit. Smartphone growth has allowed buyers to depend on mobile apps for calculating profits. Some have entire staffs that look for store closures for reselling online.
Other retailers such as Macy’s, Inc. (NYSE:M) and Gap Inc (NYSE:GPS) are also retrenching and closing down some of their stores, making this an ideal time for resellers.
Prices Slashed 50%
Wal-Mart has slashed prices by 50% earlier this month to clear the shelves of smaller Express and Supercenter stores. Later, the company increased the discount to 75%.
It appears that there was no alternative for Wal-Mart to close these stores as they announced 10,000 job cuts to reduce expenses. Retail sales also witnessed slower growth in 2015 at 2.1%. Even during the holiday season, retail sales were lower than expected by the National Retail Federation. In 2014, retail sales saw 3.9% growth. Last year’s retail sales showed the weakest growth since 2009.