Online and Retail Arbitrage 101

Online and Retail Arbitrage 101

What is it exactly? 

Online/Retail Arbitrage is typically the “beginners” route to selling on Amazon (and there is absolutely nothing wrong with that).  It entails purchasing pre-existing brands at discounted rates and then selling them at full price on Amazon. The best part – you can start very small vs Private label where you are purchasing in larger quantities. There is no minimum to sell on Amazon and this opens up the opportunity to grow a very small business into something very large and successful!

How does it work?

Buy at a discounted rate and then sell it at full price – simple as that!

To gain the most profit on your RA products you want to source products that you can purchase as close to 1/2 the price they are selling on Amazon. After Amazon fees and prep fees your margin gets smaller but there is still plenty of money to be made.

Wholesale is another route that people go down to do a similar business model. Although it doesn’t technically qualify as Online Arbitrage, essentially it is the same concept.

Turn the up the volume!

The idea is to continue investing back into your RA selling. Take your profits and re-invest into more inventory and so on… Essentially you will hone your purchasing skills and knowledge on which products to buy and where to look. We have found that most RA sellers are purchasing thru channels such as Walmart and Amazon (yep! purchasing on Amazon only to be resold on Amazon – funny right?).

When you go down the Private Label route you have a lot of room to profit greatly but this is usually down the road for most RA sellers as a “phase 2” of growing your business into higher profit margins.

Do your research: 

It is crucial to find products that don’t have a lot of reviews and are selling consistently. This is a good way to test products and then act fast so you can become the #1 vendor of this particular product (then you’re really cranking away). It isn’t easy but its very doable.

‘Tis the season!

The holiday season is a great time to start as companies such as Walmart and Target are selling discounted items. However, seasonal in general is always something to keep in mind when purchasing. There are a lot of great summertime as well as back to school deals in the fall.

Good luck sellers, and remember, you can always contact your friends here at AMZ Transit for detailed information or general inquiries regarding selling and prep. 

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