In this video I will go over everything there is to now about Amazon retail arbitrage.Come join me as I show you how to source stores for Retail Arbitrage giving beginning and advanced tips to get started with selling retail arbitrage on Amazon.
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The Complete Guide To Retail Arbitrage On Amazon - Audio file
The Complete Guide To Retail Arbitrage On Amazon - Video transcript
Hey guys and welcome back to my channel. In todays video I would like to talk about making money with Amazon retail arbitrage , so be sure to watch all the way through so you don't miss any of the important details as we do have a lot to cover.
Now, before I hop into this video, if you are new to this channel you're going to want to subscribe as I talk about the best ways to make a full time income with Amazon FBA and always get straight to the point.
So please consider subscribing and turning on your post notifications if you like channels that don’t waste your valuable time, with that said let's get right into this video.
Many ecommerce entrepreneurs have dreamed about running a super successful online business, and Amazon is one of the top ecommerce platforms chosen to fulfil those dreams.
The trouble is, running a successful online business can appear straightforward on paper, but most who take this route end up throwing in the towel because they simply underestimate the amount of effort and commitment required.
There’s product research to be done, there’s sourcing, then negotiating, listings to be created, customers to take care of and of course the fulfilment process.
Commonly, it’s the sourcing part of the process that sorts the wheat from the chaff! Because finding and dealing with suppliers, often internationally, can be challenging and frustrating.
This is not intended to deter you from starting an ecommerce business of any type. Sourcing stock from wholesale suppliers at low prices and then reselling for a profit is a fantastic opportunity for you to build a really profitable online business. But, you don’t necessarily have to build that business in the traditional way.
Now, wouldn’t it be great if there were an easier way to buy products to resell for a profit, without the need to deal with international suppliers or negotiate rock-bottom unit prices? Well, there is! And it’s called retail arbitrage.
Retail arbitrage is simply the method of buying low and selling high. But instead of buying your stock from specific wholesalers or trade suppliers, stock is purchased from actual brick and mortar retail stores.
At stores such as Target or Walmart, sellers can source great products on offer or at clearance prices. You then sell those goods online, typically on eBay or Amazon, at a higher price and pocket the profit!
Sounds a bit cheeky, doesn’t it? Well, it is pretty brazen, but it’s all perfectly legal. In fact, it has been known for those in the retail arbitrage game to purchase products from retail stores at full price and then sell them for over the odds on Amazon!
But why would buyers purchase a product for more than its retail price? The main reason is that online shoppers are often impatient. They want their goods right now, and so it’s easy for them to order online and get products delivered the next day rather than having to go to the shops.
What’s more, impatient buyers will pay extra for this convenience. So, it’s an opportunity to make some money by reselling products that are already retailing well in stores.
If you are new to retail arbitrage, it’s best to start with Amazon as your selling platform. Later on, when you become well practiced at spotting opportunities, and your inventory grows, you can also incorporate your retail arbitrage strategy with Amazon’s fulfilment service, FBA.
So how does retail arbitrage work on Amazon? The best way to explain is with an example. Imagine you visit your local Target store, and you see they have watches on clearance for $25. You would research that exact product to see if it’s listed on Amazon and how much it’s listed for.
So, let’s imagine the very same watch is selling for $65 on Amazon. You would purchase from Target at $25 and then immediately list it on Amazon for $65.
Once sold, the difference minus your selling fees is yours. That’s your profit. So, you could quite easily make a $20 profit on your initial investment. And that’s with just one item. You could have a whole line of products in your inventory.
You’ll need to carefully compare prices before you purchase any product that you intend to resell using the retail arbitrage strategy. You can do this by logging in to Amazon while you are in store and comparing prices.
Alternatively, to see exactly how much profit you’ll make after shipping and selling fees, Amazon has a brilliant free app which will give you all this information. It’s called Amazon Seller and is available to download from the app store.
The app lets you scan products to see prices, fees, profits and other useful information including the number of sellers selling the product, it’s best seller rank and which category it’s placed in. All of these bits of information are vital for you so that you’re not relying on guesswork.
You might be thinking that this all sounds a little bit too easy and so surely everyone is at it? Actually, they are not because, like anything, it all sounds fabulous in theory, but in practice, the majority of people who want to try, don’t.
The main reason for this is that just like any online business, you will need to put in some effort travelling around to uncover the right products. You’ll need to visit stores and check prices, but don’t forget, this totally cuts out the need to deal with suppliers, something that you might be nervous or worried about.
Of course, you will also be able to start your Amazon retail arbitrage business with a smaller investment rather than needing hundreds of pounds to purchase wholesale quantities of products. It’s easy to test one or two products initially to get into the swing of it and expand later. The products are all out there, but the right strategy and to some extent, the right mindset is required.
Now, you may be wondering why retail stores don’t sell their clearance products online rather than running the risk of retail arbitragers making money off the back of their products.
The reason retail stores sell off their stock is to make room for more stock which is to be sold at full price! So, with limited space, retail stores place higher importance on getting new stock in that has the potential to make more profit than the sale of their clearance stock.
Remember, retailers would still need to store the clearance stock as well as the new stock if they decided to sell it online. Most just don’t have the room for extra inventory, nor want it hanging around.
So, while it might seem to be a strange strategy for retailers as they are knowingly missing out on revenue, the fact is they will actually be making more money from their new stock. And this is good news for you and your retail arbitrage business.
Now, if you want to give retail arbitrage a go here’s how to get started with retail arbitrage on Amazon. First, register for a seller account on Amazon. This is super simple and will take you about 10 minutes to complete the basics.
Next, download the Amazon Seller App from the app store or use the Jungle Scout chrome extension. You must have an Amazon account set up to be able to access the app, so make sure you have completed step one before moving on.
Third is to make a list of potential retail stores to visit. If you spot a clearance section while you’re out and about, always head on over and nose around as you never know what you might find. Look for yellow stickered deals in supermarkets. These are products that might have damaged packaging or broken seals and are perfect retail arbitrage items.
You can also use a website called Brickseek to check in store deals as well as the stock available at stores in your area.
Number 4 is to head over to the clearance section. This is where you should start your retail arbitrage product search. Don’t forget that some stores won’t have specific clearance sections and you may have to look a little harder for the best deals throughout the store.
Get to know the clearance routine in each store. Most stores will discount once and then cut further. Other stores will always mark their clearance products up at a particular time or on a specific day. If you learn the schedule, you will have an immediate advantage and can swoop on deals immediately.
While you could go into a store or look around online for products that might be profitable to resell on Amazon, you could also do some research and think ahead for certain types of products you’d like to find.
One thing to consider is seasonality. Try to figure out what products are currently or soon-to-be trending or products that sell more during a certain time of year.
For example, toys during the holiday season or inflatable pools or floats during the summer are extremely popular and profitable. Since the demand is so high during those times, supply tends to diminish very quickly in retail stores, which translates into an increased selling price online.
Recently, you could purchase an inflatable pool at Walmart for $20 and resell it on Amazon for $80.
If you stay on top of trends and current events like these, you will be on your way to having a profitable Amazon reselling business.
Has there ever been a product that you absolutely loved but then for whatever reason, the brand decided to discontinue it? We’ve all been there, and we know we’d pay a premium to get those products back. Some consumers are willing to pay extraordinary amounts of money for products that are seemingly impossible to find.
You may be thinking, if a product is discontinued, then how can I still find it in store? Some discontinued products are still circulating in the market and will randomly pop up in retail stores, discount stores, grocery stores, etc. It is just up to you to be in the right place at the right time.
Now, the next step is to use your Amazon Seller App to scan any potential products. Doing this will ensure you make an informed decision, and you’ll be able to work out, in advance, what your profit will be. All you need to do is scan the product barcode and then check two crucial details on the app.
The first is to check you are eligible to sell the product on Amazon which is very important. The second is to check the sales rank of the product as this will tell you the popularity of the item. If the number is low, it’s a fast seller.
You must pay attention to the sales rank as this is your most significant indication as to whether a product is suitable for retail arbitrage on Amazon or not. Bear in mind that a sales rank depends on the number of products in the category overall, so if you have a category with a high number of products listed, while the sales rank may appear low, the product may still be viable.
Also, check the profitability of the potential product using the Seller App. All you need to do is enter the price of the product, and a rough shipping cost and then the app will calculate the profit.
Make sure the net profit shown is higher than your minimum profit threshold of 5 to $10. If you are a newbie to Amazon retail arbitrage, don’t purchase more than five of any product to start with to keep your risk low. You can buy more as you become well practiced with the strategy.
Step number 7 is to list your products for sale on Amazon. This is the exciting part of the process! When you list your products, you’ll want to make sure they sell, so you must make sure your title contains all the relevant keywords. Bullet points within your product description are also critical so think carefully about the information you will add to your Amazon listing.
You will also need to ship the products to your customers. You can do this yourself although once you have increased your inventory, you should consider utilizing Amazon’s fulfilment service, FBA.
Now, before we move on. If you are new to Amazon FBA I suggest investing your time in a great free training that can guide you through this process.
I recommend this training because this is the best FBA training on the market and one that I have personally gone through. They walk you through every aspect of what it takes to start, grow and scale your Amazon business.
This training will build off of what I talk about inside my videos so I left a link for you in the description and if you're serious about selling on Amazon I encourage you to check it out!
Now, there is no perfect product that will work for retail arbitrage over another product. It’s critical though that you don’t limit yourself to one specific type of item or category as you never know what kinds of products may be available or become viable.
The key to success in a reselling business is to constantly be hustling and looking for new products. If you enjoy the hustle and going from store to store, then retail arbitrage may be the right business model for you.
Thanks for watching and please make sure to watch the next videos with more Amazon FBA tips that will show up right about now.