January Trading Statement

[Nova Scotian]

The idea about having retailers buy in as investors is interesting, but probably a non-starter as it could cause unequal balance. Eg. One of the box shifters buys in at a larger share than another. Or the larger buy in big time, pushing out access to product for smaller (if they had enough influence on direction from that investment).

However, it got me thinking about about how Hornby could be a bigger part of the "niche runs" scene. Currently a retailer can "cut out the middle man", go direct to the factory with a CAD etc (which costs to develop, obviously). However, they're buying runs at 500 units a go, they may not have the negotiating power of a Hornby/Bachmann. The CAD work seems to go quite well for the independents, it strikes me there are consultants/contractors out there capable of performing the work to a high standard, so maybe that's not a competitive advantage for Hornby.

Long story short - Hornby are the manufacturing aggregator and logistics for the niche 500 unit runs. Say there are ten in a year, that's a 5000 unit order where the negotiating and economies of scale (esp. shipping) can come into play. It's akin to the "special editions" they do at times, but they're actually backing up further by commissioning unique product on behalf of the retailer and their designer. So it's somewhat like EFE/Bachmann who are focused on distribution with some manufacturing, but instead of needing broad distribution channels they're focused more narrowly. There's not much of a space there for them to get elbows out though, I imagine. 

[adb968008]

10 hours ago, Clearwater said:

Hornby's majority investor is a private equity fund.  They will want a clean exit either by a block sale of the shares through a broker to institutional investors or a sale of the stake to another fund.  They will be looking to maximise their sale proceeds which will mean that they want to show strong growth and in their sales memoranda they will seek to explain how that growth can be maintained.  

 

That was where my thoughts first started.

But be realistic, is Hornby the next Mattel ?

 

I think the current team are turning the ship around, but converting a ship into an aircraft and making it fly is a very difficult task, especially without a Mattel size budget or a long queue of investors.

if a ship is a ship, then its only ever going to be a ship, so it will only sail at ship speed. In that circumstance the best thing is to make that ship sail efficiently and earn money.

 

As for the share price, What I see is a bunch of sock-draw investors trading small volumes causing price spikes, whilst the institutional investor forever sailing against the wind and upstream, invests heavily to make slow progress.

 

Would a new institutional investor want to buy into that, at a substantially higher price than is currently traded ?

Similarly many Investors dont seek full portfolio divestment, but seek to reduced stakes at a an increasingly higher return over time, based off the back of growth success.

 

Hence my thought that perhaps small investors are the exit ?

remember sockdraw traders are the ones moving the needle, getting people excited about Hornby stock as they are about a new tooling is how Hornby went public originally.

 

if the ships crew and cargo holders had a stake, there more likely to increase their efforts, a bit like “General Average” insurance...everyones in it together.

 

if being a “financial partner” was a pre-req to being a Trader, you need to make it appeal to Trader.. shifting out the big boys and creating a stable trading environment is a big step towards that, whilst recognising the importance of the high st and getting everyone bought into the brand... that could move the needle and lower the exposure of a major investor, off the back of a ship thats now sailing more efficiently in the wind, backed by a high st team with a stake in it.

 

just my rationale, interested in other scenarios.

 

Edited February 5, 2021 by adb968008

[Jonboy]

8 hours ago, JSpencer said:

 

The question is though will they split UK outline between the two warehouses or just ship UK outline to the UK and EU outline just to the EU? The former could be done, but probably needs firm orders from EU shops to do it (on UK shops on Hornby's international range). Otherwise its guess work on how many UK outline models they will sell in the EU and small numbers hanging around in NL for years on end is not a viable stock holding proposition.

 

Nah if they have any sense they bond the UK warehouse so they don’t pay import taxes on arrival, pick and pack all the EU orders in the UK (including the foreign courier label). 
Then transfer in bulk to the EU subsidiary at cost price, so that the EU import taxes are calculated on cost price and then make the sales from the EU subsidiary to the EU customer....and the NL warehouse is just a cross dock operation for uk outline models....

[Clearwater]

8 hours ago, adb968008 said:

That was where my thoughts first started.

But be realistic, is Hornby the next Mattel ?

 

I think the current team are turning the ship around, but converting a ship into an aircraft and making it fly is a very difficult task, especially without a Mattel size budget or a long queue of investors.

if a ship is a ship, then its only ever going to be a ship, so it will only sail at ship speed. In that circumstance the best thing is to make that ship sail efficiently and earn money.

 

As for the share price, What I see is a bunch of sock-draw investors trading small volumes causing price spikes, whilst the institutional investor forever sailing against the wind and upstream, invests heavily to make slow progress.

 

Would a new institutional investor want to buy into that, at a substantially higher price than is currently traded ?

Similarly many Investors dont seek full portfolio divestment, but seek to reduced stakes at a an increasingly higher return over time, based off the back of growth success.

 

Hence my thought that perhaps small investors are the exit ?

remember sockdraw traders are the ones moving the needle, getting people excited about Hornby stock as they are about a new tooling is how Hornby went public originally.

 

if the ships crew and cargo holders had a stake, there more likely to increase their efforts, a bit like “General Average” insurance...everyones in it together.

 

if being a “financial partner” was a pre-req to being a Trader, you need to make it appeal to Trader.. shifting out the big boys and creating a stable trading environment is a big step towards that, whilst recognising the importance of the high st and getting everyone bought into the brand... that could move the needle and lower the exposure of a major investor, off the back of a ship thats now sailing more efficiently in the wind, backed by a high st team with a stake in it.

 

just my rationale, interested in other scenarios.

 

 

I very much doubt whether Hornby can move out of its niche and near niche.  I don't think Mattel is a good comparator.  If I was their strategist/corporate finance team, I'd look at Games Workshop and how they operate, what their product is, what the similarities are and really delve into what are Hornby's strengths (brand, distribution and commissioning in my view).  However, Hornby have arguably tried different aspects of strategy and not succeeded.  They survive because of some very strong underlying brands.

 

I really don't think you can draw an analogy from Gamestop to Hornby.  I doubt anyone shorts Hornby which is what created the Gamestop bubble.  There simply isn't the money to be made.  To think thousands of "sock draw traders" are going to get excited about Hornby as a stock is magical thinking.  What is the underlying value story???  Games Workshop has sales of c6x Hornby, 

 

Hornby is an extremely small entity by stock market standards.  However,  its market capitalisation is still c£100m.  That's an awful lot of small investors to invest say £10k.  And £10k is a lot to invest against a single stock with a volatile trading and however many consecutive years of losses.... Whether those investors are individuals or individuals who own shops, I just cannot see it happening.  Look at the amounts most crowdfunds are able to raise - typically single digit millions.  How many model shops are there who would be willing to invest £10k, £100k, £250k?  Very. very few I'd wager.  And those that do have capital are happy to disintermediate Hornby and go directly to the factories for stock.  If you have got £250k to invest, feel you understand the model / model train market, why would you put it in Hornby where there is no certainty of return when you can invest the same sum in your own product where you can control and manage the risk and increase your own profit margin through not paying Hornby's overhead?  I'm afraid your suggestion doesn't add up.

 

You touch on investor strategy.  It's simple.  Phoenix exist for one thing and one thing only and that is to make money.  If they think they will make more by dripping their stake into the market, they'll do that (that's the advantage of having a listed stock).  However, there will be a point where the management hassle of a) the mark to market and b) the time required don't add up for them anymore and they will want a full divestment.  There are a lot of other considerations that if I were advising either Hornby or Phoenix I'd go into but are beyond the scope of a forum like this.  

 

Investors can and do buy into stocks at a premium to a trading price.  It happens all the time.  Why?  It's the only way that you're able to assemble a controlling stake in a company.  If I own shares in a stock, I see it at a particular value.  Why would I sell unless someone offers me materially more money than I think it is worth not least as I then have to reinvest the money in something else.  The converse is also true.  if someone offers me 30% over what I think it's worth then why wouldn't I sell?  Analogies such as paintings, vintage cars, houses don't really apply as there is less sentiment to apply. Typically a public to private stock market transaction takes place at a 20-30% premium to the unaffected trading price.  If you do a bit of googling, you'll find the stock market communications for when an investor has approached a listed stock.  

 

David

 

 

 

 

 

 

  

 

[Cor-onGRT4]

23 hours ago, Ravenser said:

It's misleading to suggest that dispatches from a Dutch warehouse to Spain will not be subject to VAT whereas dispatches from the UK will. In both cases VAT will be applied, and after 1/7/21  in both cases it will be Spanish VAT. Similarly the import duty on model railway items is nil, so no savings for anyone there.

I never mentioned VAT, that was the piece of THE Guardian article, so i'm not misleading anyone, but let me explane.

If some one from the EU is ordering from the UK, they have to pay import handling fee , for Dutch post it is between 13,- to 17,50 euro and than 

if the UK supplier not discount the UK VAT an extra VAT, this depents on the country they are living in, every EU state has its own VAT system .

It is between 17% - 27% there are 13 countries that around 20/21% all others different Hongary have the heighest 27%.

So if  i order an item from Hornby cost  50 pounds no  UK VAT free, i have to pay an extra 21% on the 50 pounds and 21% on shipping cost,

say 7 pounds shipping plus the handling fee of 13 euro , so in total i have to pay an extra cost of 13,75 euro VAT and 13,- handling fee is 26,75, this is for the Netherlands, so you can expect much higher in Hongary with 27% VAT.

This is why Hornby want to have a warehouse overhere.

If you sent from here to Hongary, no extra cost for the buyer, free of movement of goods in the EU.

Of corse there will be VAT added, but this will be the Dutch VAT 21%, but that will be for every EU country the same, so no extra cost like custom handling fee or higher VAT per country, free movement of goods in EU [again], so only one time VAT .

And for the market, don't forget Ireland is EU, so i expect there is a large market for UK modelrail based modellers, and don't forget 

the EU market of 500 million people, there is an topic on here buying and selling models to/from Europe, you can read the problems and extra cost many people have with buying  outside or inside the UK.

And for how Hornby is splitting or shipping, they are still considering of setteling here.

Edited February 5, 2021 by Cor-onGRT4

[G-BOAF]

On 04/02/2021 at 01:34, adb968008 said:

Reducing high street, ceasing Hornby trade with 2 large reach customers and competing against retailers online is imho at odds with expanding reach through several channels.. but Hornby does need the high street.

 

Who is the second?

I know Rails have discontinued their relationship with Hornby, but which other large retailer is now not stocking them?

[Mike Storey]

20 hours ago, Clearwater said:

 

Hi Mike

 

When looking at valuation, financiers typically look at cash generation usually taking EBITDA (Earnings before Interest, tax, depreciation and amortisation) as a close proxy.  As EBITDA isn't usually disclosed in accounts, its a bit of an art form to get back to a figure.  As a quick and dirty, you can can statutory operating profit and add back for depreciation.  (not perfect but good enough for a fraction of the effort).  I agree their finance package is expensive but as I mentioned a couple of years ago, they were in the last chance saloon and had little choice but to take such a package.  The implicit assumption in the EBITDA based analysis is that once profit stabilised, the expensive finance package is refinanced back towards a cheaper and more flexible RCF , probably from one of the UK clearers.  Not using the credit lines is a good thing here- suggests that the business is generating enough cash to pay its way.

 

• Taking the most recent financial results for the half-year to 30/9/20, Operating Profit f was £163k which is pre-finance charges.  They generally trade better in H2 for Christmas etc but cautiously lets annualise by doubling to £325k. By comparison, in the year to 2020, approx 42% of the revenue was earned in H1 and a similar proportion of the gross profit.
• Depreciation charge for 12m to 31/3/2020 was £2.1m. 6m to 30/9/2020 was £870k so slightly lower.
• Adding back to give EBITDA shows H1 21 as being £1m so annualised call it £2m, possibly slightly more depending on your view on seasonality (see below).

Cash generation is H1 was reported as £1.7m (p12 of the interims) so roughly the same as my crude calculation above.  Both pre financing and pre capex (arguably a discretionary figure...).

 

As such, I don't think they are far away from achieving £5m EBITDA.  Gross margin in H1 2021 is 2% higher than in 2020 full year (46.6% vs 44.1%)  and  6% better than H1 2020 (40.9%).  On £50m of sales, that alone equates to an extra £1.1-3m of gross profit.  The worry for me is that they plateau at say £5m EBITDA which then suggests a toppy multiple for the type of business they are to their market capitalisation.

 

A full valuation would start with EBITDA, take an assumption based on advice, of an appropriate debt structure, see what capex is required to sustain the revenue line and then discount the remaining free cash flow to get a valuation.  Model would show 5 years and make an assumption on value at the end of year 5 (Terminal Value).  Different ways of calculating that so I'd take a spread of options.  Discount rate for the equity would be pretty high, risk free plus 5-10%.  Again I'd show a spread.

 

Agree there growth rate is volatile.  They need to show sustained profitability for a couple of years without the overhead, capex and financing costs swallowing any cash flow the sales generate.

 

David

 

Indeed, I fully understand all that, and have considered it. What worried me was not the half-year numbers, which looked seriously good, but the more recent statement. This appears to indicate that pre-Christmas growth was small and post-Christmas growth worrying. Lyndon primarily blames Covid production issues in China, with a suggestion that all will be well when that returns to "normal" levels. But that would suggest a reduction in inventory, as orders are not fulfilled, and I am struggling to identify that to any significant degree, from the little that was provided.

 

That is why I think your proposal of a £5m EBITDA is optimistic currently.

 

We shall see, with the full year statement. I hope I am wrong.

 

[Philou]

@Cor-onGRT4 As I understood it, as from the 1st July, 2021 the VAT rules within the EU are changing and that the VAT rate applicable will be that of the country in which the recipient lives - to use the Hungary example, the buyer there will be charged VAT at 27% and not the Nederland rate of 21%. I do stand to be corrected if I misunderstood.

 

There is another thread on RMWeb where it was all set out.

 

Cheers,

 

Philip

[Clearwater]

1 hour ago, Mike Storey said:

 

Indeed, I fully understand all that, and have considered it. What worried me was not the half-year numbers, which looked seriously good, but the more recent statement. This appears to indicate that pre-Christmas growth was small and post-Christmas growth worrying. Lyndon primarily blames Covid production issues in China, with a suggestion that all will be well when that returns to "normal" levels. But that would suggest a reduction in inventory, as orders are not fulfilled, and I am struggling to identify that to any significant degree, from the little that was provided.

 

That is why I think your proposal of a £5m EBITDA is optimistic currently.

 

We shall see, with the full year statement. I hope I am wrong.

 

 

Sorry, to be clear I don’t think they’ll get that this year but they’re not far from it.  I’m also projecting forward to the type of number they need to be showing to be credibly looking at an exit.  If they’ve able to cover capex for, free cash flow, then I think they’re on the right track.  Agreed that cash flow can swing wildly with stock levels. 
 

I’m sceptical over medium term valuation levels.  I see your point that £5m looks a short term challenge but to get to £10m and say a group valuation of £150m + seems very challenging to me.

[The Stationmaster]

On 04/02/2021 at 13:26, Clearwater said:

 

In my view, seeking to get retailers to be investment partners would be an absolute nightmare within the confines of an entity with a rump listed stake.  Bearing in mind the sums involved, even at the current share price would, I expect, be way above what any retailer would wish to invest.  Unless they have 10s of millions.  Which I doubt.  Even if the did have the cash, a shareholder agreement would be required which would be problematic unless you're proposing a sale of listed shares that the retailer could later trade on the open market.  That would be an unusual structure, I'm not sure of any precedents, and would be challenging for all parties to agree a valuation.

 

(snipped)

 

David

 

Don't overlook the fact that retailers are already very much investment partners for Hornby only their investment is in taking and holding stock which gets it off Hornby's hands (assuming the retailers think it is worth ordering in the first place).  With last year's abolition by Hornby of their early payment discount - estimated by some retailers as equating to increasing RRP by 2-3% if they were to maintain. their gross profit levels - the fact is that the retailers are investing but only in terms of holding stocks of  Hornby products.

 

To take their investment any further than that would inevitably be more than any retailer would be prepared to spend/risk their money.   I reckon Hornby wouldn't like it either because it would give an investing retailer a potentially awkward voice at shareholders' meetings.   As for agreeing a valuation I suspect it really would be impossible.   I could just imagine a retailer demanding to know Hornby's future product plans and wanting to know what was lying unsold in the warehouse before applying their own knowledge of the trade to decide whether or not they thought Hornby was sufficiently well managed to take a share in the company.  And don't forget also most retailers are in direct competition with Hornby for retail sales, especially if they sell online, while some are also in competition for a share of what we spend by offering their own commissioned products.

[adb968008]

9 hours ago, G-BOAF said:

 

Who is the second?

I know Rails have discontinued their relationship with Hornby, but which other large retailer is now not stocking them?

There was a well known wholesaler who supplied Hornby to the trade.

 

For at least 3 decades they've supplied Hornby to an array of traders, medium, small and very small.

 

Indeed much of the “swapmeet” circuit in the days before ebay thrived off of them. I used to know several “non-shopwindow” retailers who would literally cash and carry from them on friday and return left overs on Monday... then rinse and repeat the weekend after.

 

on a separate note ive noticed increasingly Amazon is fullfilling Hornby orders, so looks like they are a stockist.. I have had same day delivery, combined with non-Hornby product, which means some stock must be in Amazons croydon warehouse, which is within my “same day” delivery catchment area.

 

Amazon are no fools, if they figure out the discounting strategy used by retailers, and hired someone with nounce on the hobby,  they may affect retail trade. They may just not care, but those algorithms are learning.. note the increasing number of flash discounts... I picked up an 87 for £90 last month.

 

Edited February 5, 2021 by adb968008

[robmcg]

One thing which surprises me is the vast range of retail pricing in the market, including Amazon, me being just a simple on-line shopper.

 

Models which sell from prominent UK retailers for say UKP130 are commonly offered for double that in the NZ market. I know markups are commonly quite high for stock which doesn't move very fast and is expensive to hold, but the prices I have seen until recently on Amazon have usually (not always) been at that high end. 

 

Not really relevant to the thread, my apologies.

[The Stationmaster]

14 hours ago, adb968008 said:

There was a well known wholesaler who supplied Hornby to the trade.

 

For at least 3 decades they've supplied Hornby to an array of traders, medium, small and very small.

 

Indeed much of the “swapmeet” circuit in the days before ebay thrived off of them. I used to know several “non-shopwindow” retailers who would literally cash and carry from them on friday and return left overs on Monday... then rinse and repeat the weekend after.

 

on a separate note ive noticed increasingly Amazon is fullfilling Hornby orders, so looks like they are a stockist.. I have had same day delivery, combined with non-Hornby product, which means some stock must be in Amazons croydon warehouse, which is within my “same day” delivery catchment area.

 

Amazon are no fools, if they figure out the discounting strategy used by retailers, and hired someone with nounce on the hobby,  they may affect retail trade. They may just not care, but those algorithms are learning.. note the increasing number of flash discounts... I picked up an 87 for £90 last month.

 

I wonder how Amazon cope if a model is returned with a problem?

 

Hornby is in any case trying to expand its routes to various, hopefully new or additional, markets.   I sincerely hope that sales via Amazon won't become a threat to surviving traditional retailers as they do an awful lot, either by shop or online/mail order, selling and i can't see Amazon offering - say - Peco or C&L track anytime soon.

[andyman7]

14 hours ago, adb968008 said:

There was a well known wholesaler who supplied Hornby to the trade.

 

For at least 3 decades they've supplied Hornby to an array of traders, medium, small and very small.

 

Indeed much of the “swapmeet” circuit in the days before ebay thrived off of them. I used to know several “non-shopwindow” retailers who would literally cash and carry from them on friday and return left overs on Monday... then rinse and repeat the weekend after.

 

Much to the chagrin of full time retailers with shops and overheads, and contributing to the price discounting that undermines long term retail partnerships, hence why it ended.

 

I don't think Hornby group (so, kits, slots, trains, not just the model railways) can avoid having Amazon and direct selling options - ultimately this is what a significant number of their customers will demand. The key is in having a balance so that the dedicated model shop is not undermined. Hornby's own web outlet sells at full RRP so there is some room for model shops there, and a half decent model shop will always beat Amazon on breadth of range and aftersales/follow on sales.

[Cor-onGRT4]

20 hours ago, Philou said:

@Cor-onGRT4 As I understood it, as from the 1st July, 2021 the VAT rules within the EU are changing and that the VAT rate applicable will be that of the country in which the recipient lives - to use the Hungary example, the buyer there will be charged VAT at 27% and not the Nederland rate of 21%. I do stand to be corrected if I misunderstood.

 

There is another thread on RMWeb where it was all set out.

 

Cheers,

 

Philip

Yes they are change the VAT rules in the EU  per 1 July 2021, it is complicated but will try to explain. 

Now people in the EU can buy outside the EU online for 22,- euro VAT and import duty free, [ shipping cost not counted] but from

first of July this will become 0,- euro ,  so over these 22, euro you pay also VAT and import taxes.

For buisnesses the change will be, now you can sent to all EU countries with a VAT border payment duty different for every country, the VAT you added on the item you pay to the taxoffice in the country you are setteld, unless you sale to one or more countries in the EU you exeed the VAT border of that country, then the buisnuiss must pay the VAT to the country the sale they do is higher than this border.

Say, a buisness setteld here in the Netherlands ad 21% VAT on every item and they do a lot of sales online to Germany, if this sale does not exeed the VAT border of say 12000,- euro than they pay the Dutch taxoffice the added VAT of 21% of the sales, if they do sales to Germany higher than 

these 12000,- euro than they pay the German taxoffice the added 21%.

Now this VAT border for every country is different, but from first of July this VAT border are for all the countries established on 10000,- euro 

and a new system is installed , so not the buisness themself has to do, but the taxoffice do this for them.

The VAT percentage per country stays for every country the same 

 

hope i explained it a bit

Edited February 6, 2021 by Cor-onGRT4

[Philou]

@Cor-onGRT4 Ummm .... no . Nonetheless, I know I shan't be buying €10 000-worth of stock from Hornby (or anyone else)!

 

Cheers,

 

Philip

[Cor-onGRT4]

Neither do I , but Hornby's preorders i have, will be costly , but it 's been worth

[Phil Parker]

15 hours ago, adb968008 said:

There was a well known wholesaler who supplied Hornby to the trade

 

Was, being the operative word. This changed last year. All retailers now have accounts directly with Hornby no matter how small they are. 

 

29 minutes ago, andyman7 said:

and a half decent model shop will always beat Amazon on breadth of range and aftersales/follow on sales.

 

Do many buyers care about after sales support? Judging by posts on all social media, many seem to think this is the manufacturers problem, not the retailer, even though that's who they are supposed to deal with. 

[andyman7]

1 hour ago, Phil Parker said:

Do many buyers care about after sales support? Judging by posts on all social media, many seem to think this is the manufacturers problem, not the retailer, even though that's who they are supposed to deal with. 

Fair point, I was thinking less of faults and more about those who want to add to their set or get more involved in the hobby

[adb968008]

4 hours ago, andyman7 said:

a half decent model shop will always beat Amazon on breadth of range and aftersales/follow on sales.

Agreed, but I cant help but be impressed, that I was able to order accessories like 14.1mm coach wheels at 10am on a sunday morning, and have them rolling under my coach by dinner time.

 

its 630pm here, so too late for today, but I can still get a Jouef TGV before noon tomorrow (sunday), amongst many many other models.

 

That said, I ordered transfers from precision yesterday at 5.15pm, he must have been sitting awaiting my order as they arrived this morning.

 

A good website and expeditious delivery is a good substitute, when your nearest shop is at least a 90-120 minute travel duration.

Edited February 6, 2021 by adb968008

[robmcg]

Interesting responses regarding retailers like Amazon.

I suspect that if you receive a faulty model from Amazon you will receive a refund upon return with usual caveats. How that would work with overseas buyers I do not know, Amazon simply won't supply Hornby engines to NZ  or at least wouldn't a week or two ago when I last looked at a Google list of sellers.

 

I agree a good retailer can match or better Amazon.

 

To my relatively uninformed eyes the best thing Hornby has done is to level the playing field for wholesale trade  terms and conditions, if that is what they have actually done.

 

As to trading generally, I get the feeling that Hornby are playing to their strengths on getting models and kits and toys of various kinds to market more quickly than competitors, combined with simple no-favourites wholesaling, and quite brutal speed in some cases.

[Legend]

Remember that Amazon  have affiliates which may well be a model shop .  I order lots of things from Amazon and it’s great service . Curiously I’ve never ordered model railways from it though . I’ve never found huge bargains . Usually better prices on Rails/ Hattons . I don’t have a local model shop . 

[maico]

On 06/02/2021 at 14:04, The Stationmaster said:

I wonder how Amazon cope if a model is returned with a problem?

 

 

 

The model goes into the Amazon Returns Pallet sale. See the numerous youtube videos of people buying large boxes of returned items unseen. Sometimes they hit the motherload sometimes not, but over the long term it's possible to make a living doing it.

 

If it's just a damaged box or minor cosmetic issue it will be listed on Amazon as an amazon return with a price reduction.

 

The original buyer will be given a refund.

Edited February 7, 2021 by maico