Rob & Melissa Stephenson from Flea Market Flipper talk about what to do if an item that you've sourced doesn't work.
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What If It Doesn't Work?
Rob: What's up, pro flippers? On today's episode, we are talking about what if you buy something and expectations that it works, but then it doesn't.
Rob: All right guys, so today we are talking about what happens if you get something to resell and you think it works and the buyer, sorry, the seller tells you it works and then you get it home, you test it and it does not work.
What do you do?
Melissa: This is a question or a comment. We actually get a lot too, you know, well, I hope it works. Or what if it doesn't work? What do you do? And we get this because we do sell a lot of appliances, so, that's kind of where we've shifted a little bit because there's so much money to be made in them.
And so we do tend to pick a lot of them up. And a big question is, okay, when you go to buy it, you're just trusting the seller's word. And do they work? And what happens if they don't work? What do you do? So.
Rob: Great question, and I'm glad we are hitting on it today. The, the easy answer is usually nine out of 10 times if a seller tells you that it works, it typically works. We do a lot of appliances and to where people are out, what do they call updating their kitchens or getting rid of stuff that they had, they know that it works. So they're just updating their kitchens and trying to get rid of the old appliances.
If something doesn't work, typically they'll tell you, hey, one burner doesn't work on this cooktop, or, you know, it's missing a knob or something like that, so you know ahead of time. But the majority of the time, I would say nine out of 10 times when you're buying from a homeowner that is getting rid of the item because they're upgrading their kitchen, they know exactly what's going on with that item.
And it does work. Yeah. But there is that1% of getting an item and that it doesn't work. So what do you do when that happens?
Melissa: And we actually had something just recently, one of our picks as you guys, if you've been, following our road trip on Instagram, we went across, we went across the country a lot.
We went a little bit, from one into all over the country, California to Maine. It, it was kind of crazy, but we picked up one dishwasher. Was it? Yeah. It was a commercial dishwasher. Yeah. That you were super excited about. I was. And the guy actually, he didn't own it. He had bought out a restaurant or something.
Yes. And then was that was the last piece to go. Everything else he was working when it was, right when it was?
Rob: Well, that's what he told me.
Melissa: He, he thought was working.
Rob: So when he bought the whole lot of stuff, he sold everything except for the dishwasher. Could not sell the dishwasher. It was a big, it's a big dishwasher that has a.
A conveyor that goes through it with racks that actually run dishes through it made to do a lot of dishes. So it's a bigger dishwasher. And he told me when I got there, I asked him if it worked. He told me everything else that I got from this auction that I bought, all this equipment from, everything else worked.
I sold other stuff. None of it came back. Nobody came back and said nothing worked. So I'm assuming that this item does work. When I got it, we actually got it to Michigan, and this is a three phase, so it's a bigger, takes a bigger power source to test this. It's not easy to test those for usually. No, you can't do this on a normal residential home.
It's not something you can do. You have to actually have a warehouse, something that's a commercial industrial property. Melissa's uncle, in Michigan has an industrial warehouse. He knows how to do this stuff, so I asked him if I could bring it over there when we were up there, have him test it.
We pulled the top of it off and it is missing two of the main components, two of the main boards, which were very, very expensive. So I don't think this guy purposely misled me, but at the same time, it didn't work. Yeah, exactly. So it did not work because those boards were not in there. And then I went to look up those boards and they were very, very expensive.
Melissa: If they were not gonna be expensive, you're just gonna order them and then sell it. It's a, we got it for $500 and you said it's a $10,000 machine?
Rob: No, $35,000 to $40,000 in resale value. Resale value we were hoping to get $10,000. I'm pretty confident we could have got seven to $10,000 if it was working.
Melissa: Okay. But now we gotta sell it for parts, right?
Rob: Sell it for parts or sell the parts off. Okay. So these are some of the options that you have when you are buying an appliance or anything. You want to make sure the number one rule is you wanna make sure that you are getting such a great deal on this thing. That if something does go south, if something doesn't work, that you do have an out, you have a way to make your money back, at least, if not, still make money by parting pieces of it out.
Melissa: And most of the time you really, you never should lose money on any of your buys. Even if you do have to part it out. Like you, you can find this stuff fairly cheap, in the local market cuz people are getting rid of them all the time. So as long as you're not investing, I guess for an example, like you wouldn't wanna pay $200 for a 500 an item that you can sell for $500.
Like you should be paying $50 for, for that item that you can sell for $500. So then even if you had to part it out and sell the parts or sell it for parts, cause people still buy the whole unit for parts. They might be a repair person and they know how to fix it or they just need it for parts. So. Yep.
So yeah, just making sure that you're not spending too much.
Rob: Absolutely. Always be thinking outside the box. Even small knobs, on cooktops, on washers, dryers, on appliances, on small knobs sometimes will sell for $20, $30, upwards of $50, $80, a hundred dollars. Depending on what the appliance is, somebody will pay that much money just for some small parts on it.
Now, this dishwasher that we got, it's a Hobart dishwasher. You can imagine if it's a 35 to $40,000 dishwasher new there's some expensive parts on the dishwasher, thank goodness melissa's uncle knew how to test the major components without having the motherboard in there, so we hooked power up to it.
He actually bypassed the motherboard and he was able to activate the most expensive pumps, the heaters, heating elements that were in there. So now I know these items actually work and I can sell them for a lot of money. So we still will make at least $10,000 on this just off of the parts.
Melissa: So you think it will still part out for that much?
Rob: Absolutely. Absolutely. If you are getting an item that is 35 to $40,000, you know the components alone, like the one of the motors alone is like $5,000. So I can sell some of these parts for a couple thousand dollars. And I know that they work because we were able to test them with the power, I was able to test it to see what it is. The cool thing about this is there's not very many parts on eBay right now for this exact dishwasher, which means when somebody's goes bad, they're gonna jump on eBay. Jump onto Google and look for these exact parts that I have. The, the, the part numbers will come up.
They'll be able to see it, and then they will buy it because we will sell it for probably half of what retail is. And I know that the, the major components are actually working because we were able to test it. So what if you're unable to test something? What if you're unable, you buy something, you're unable to test it.
Can you still sell that for parts? Yeah. And the answer is absolutely, you totally can. You cannot sell it for as much as a used. Say, I bought a cooktop and I was unable to test it. This is how we used to sell cooktops, to be honest with you.
Melissa: You could always sell them untested or, yeah.
Rob: A gas cooktop. I would buy it and I would say, hey, I'm, I'm able to, unable to test it, but, the, the seller that I bought it from told me they just upgraded their kitchen.
I give 'em the story of whatever the seller told me about it. I give it to the story, on eBay that I would sell it. I can't sell it for as much as one that somebody's guaranteeing that's working, but I can still get quite a bit of money for that just by saying I was unable to test it, but who I got it from told me that it was working and that is how I'm selling this item.
So you still can't sell it for top dollar, but you can still sell it probably 80% of what you could get, top dollar for that item.
Melissa: Yeah.
I also was just thinking of back to the parts, selling stuff, something as parts. Some people make their whole business off of that. Like, one of our members, Adam, he used to sell like the full appliances and then he started breaking things down, was making more money on the parts and they're easier to ship.
So he's built his whole business. We interviewed him not that long ago. Yeah. We'll have to put the link in the notes, but, and that's his whole business model is parts, and that's great for our group too. So when everybody needs that part, they ask him, hey, do you have this part? Absolutely. So it's, it's a cool, way to shift your business too, or, or make more money even. We did those sleep number beds and we were selling them as the whole bed plus the, chamber, like the whole setup that you need for a Sleep Number Bed. We would sell them for about $500 to $600. And then after we sold, probably 30 of them we're like, wow, we should have been parting these out. Cause we can make about a thousand dollars per bed if, but with just the part.
So sometimes you can make even more than the whole unit, so. Absolutely. So anyways.
Rob: That was such a great point and I'll, I'll double on what you said about this dishwasher that we got is big. It is a big dishwasher. You can move, it probably weighs, I would say, 500 pounds. I can move it by putting it on furniture dollies, picking it up, putting it on a furniture dolly and move it around that way. But it's a big unit to be able to ship. Now, when I'm taking these components off, we're talking about motors that are probably about this big that will easily go into a box, won't go onto a pallet. So in some cases it will be easier to part these items out and ship them out, versus actually throwing the whole thing on a pallet.
Me personally, I'd rather sell the whole unit because it's one and done. I made my money and that's it. Versus pulling maybe 50 pieces off of this different components that I can sell for just more time. Yeah, anywhere from a couple hundred dollars up into, you know, three, four, $5,000 per unit. I'll be able to sell multiple items, like that.
So, like I said, it's more time invested, but I'll take it on this because we're pretty much making lemonade from the lemon that we got, we had no idea that it was not working. I was under the assumption that it was, but now we'll still, we're not gonna lose money. We'll still make really, really good money on this.
Melissa: Yeah. So basically to answer the question, you know, how do you know it works? Or what do you do if it doesn't work? Most of the time they do work. So we, and we do test them now. Before we would just sell them untested and you can sell 'em for parts. You can sell them untested. And then another thing to add, If you do something for parts or repair, if somebody were to come back and tell you on eBay that it doesn't work and then you sold it for parts or repair, you're covered with by eBay, like it doesn't work because it's for parts or repair.
So you're covered a little bit more with eBay, the category. Absolutely. Yeah. So, so yeah, that's.
Rob: Which is a good, it's a really good thing to have. Nobody can come back to you with a eBay has a 30 money, a 30 day money back guarantee. If it is for parts or repair, somebody can't come back and say it wasn't working.
That's how you listed it. That's how you listed it. Yeah. So absolutely a great feature being able to sell parts just like that, which is really, really cool as well.
Melissa: Yeah. And then the last thing to remember, like what, what we said was always make sure you're purchasing the item at the right price because, so you don't lose any money. Our whole goal is to make money in this business, not lose money. And just, yeah, get your items at the lowest cost possible so that you can at least make your money back if it doesn't work.
Rob: Absolutely. Such a huge, huge point is buy it at the right price. And Melissa said it earlier, if you're buying something that you can sell for $500, you don't want to spend two or $300 on that.
You want to spend $50. Our goal is to be able to 10 x whatever we are investing in. If we're buying a cooktop for $50, we want to be able to sell it for at least $500 and sometimes more than that. So definitely try to use that rule when you're trying to, judge if I should be buying this item to resell it.
Melissa: Yeah, because otherwise your time is not like you have a lot of time invested. You have all this stuff invested. It's not worth it, in the long run for that amount of profit. So absolutely.
Awesome.
Rob: You guys rock. Have a great day and we will see you on the next episode.