Many young e-commerce entrepreneurs have dreamed of running a successful online business, and Amazon is one of the best e-commerce platforms chosen to make those dreams come true. The problem is, running a successful online business may seem easy on paper, but many people who go this route end up throwing in the towel because they underestimate the cost of effort and expense.
There’s product research to be done, there’s sourcing, then there’s the discussion, there’s the list to create, the customer to support, and of course the fulfillment process. There is also regular shopping, and daily business.
Usually, it is part of the process of preparing the wheat from the chaff! Because finding and dealing with international suppliers can often be difficult and frustrating.
This is not to prevent you from starting an e-commerce business of any kind. No way! Acquiring products from wholesalers at low prices and reselling them at a profit is a fantastic opportunity for you to build a truly profitable online business. But, you don’t have to build this business the traditional way. Wouldn’t it be great if there was an easy way to buy products to sell at a profit, without having to deal with international suppliers or negotiate lower prices?
Well, there is! This is called commercial arbitration.
What is Retail Arbitration?
Retail Arbitrage is the only way to buy low and sell high, but use reverse! Instead of buying your products from wholesalers or retailers, products are bought from brick and mortar stores. In stores like Target in the US or Argos in the UK, shoppers can find great products on sale or at clearance prices. You then sell those products online, usually on eBay or Amazon, for high and pocket-friendly prices!
Sounds a little cheeky, doesn’t it?
Well, it’s pretty cheeky, but it’s completely legal. In fact, retail players have been known to buy products from wholesalers at full price and sell them even better on Amazon!
But why would consumers buy a product that is more expensive than its selling price? The main reason is that online shoppers are often impatient. They want their goods immediately, so it is easier for them to order online and have their goods delivered the next day instead of going to the store. In addition, impatient buyers will pay more for this convenience.
Therefore, it is an opportunity to earn money by selling products that are already selling well in stores.
Do you like this idea? If you are new to retailarbitrage, it is best to start with Amazon as your selling platform. Later, when you know better and see opportunities in your inventory to grow, you can also integrate your campaign arbitrage strategy with Amazon fulfillment service, FBA.
How Does Retail Arbitrage Work on Amazon?
In a nutshell: The thrift store buys products at low prices from brick-and-mortar stores and resells them online for a profit.
The best way to explain is to use an example. Imagine you go to your local Argos store and find they have a watch on clearance for £25. You should do a specific search of the product to see if it is listed on Amazon and the price it lists.
So let’s take the same watch selling for £65 on Amazon. You can buy it from Argos for £25 and list it directly on Amazon for £65.
Once sold, the difference (minus the selling fee) is yours. It’s your advantage. So you can get a profit of £20 on your first deposit. And that’s just one topic. You can have different products in your inventory.
Learn about Stephen Smotherman’s nine-step process for finding products for sale on Amazon.
In short: you find and buy cheap products from retail stores like Argos and list them on Amazon at a higher price, putting that profit after your selling fee.
How do you know if an arbitrage product is worth trading?
You will want to carefully compare prices before buying any product you intend to sell using the retail arbitrage scheme. You can do this by logging into Amazon while you are in the store and comparing prices.
On the other hand, to see exactly how much you will get after shipping and selling, Amazon has an awesome free app that will give you all that information. It’s called Amazon Seller and is available for download on the App Store. The application allows you to analyze the product to see the price, cost, value, and other useful information, including the number of sellers of the product, the best-selling level, and the type it is applied to. All this information is necessary for you to not rely on guesswork and be a wise person.
In short: basic research. Scan potential product codes in physical stores using the Amazon Seller app before purchasing to check sales status and value.
Can I Make Money on Amazon Retail Arbitrage?
You might be thinking that all of this sounds a bit overwhelming and has everyone been there? Of course, they are not because, like everything, everything sounds fabulous in theory, but in practice, many people want to try, but don’t!
The main reason for this is that, like any online business, you will need to put some effort into finding the right product. You have to go to the store and check the prices, but remember that this completely eliminates the need to deal with salespeople, which can make you nervous or anxious. In fact, you will be able to start an Amazon Retail Arbitrage business with less money than needing hundreds of pounds to buy a large product. It’s easier to try one or two products first to get started and develop later. All the products are there, but the right strategy and, to some extent, the right mindset is required.
In short: commercial arbitration is a comprehensive strategy that can pay off when you understand the process. It requires effort and the right thinking, so just research and choose your products carefully.
Why don’t retail stores sell clearance products online themselves?
You may be wondering why retail stores don’t sell their clearance products online instead of wholesalers making money from their products. Surely that’s the profit a retail store can eat?
Yes, it is. But the reason wholesalers sell their products is to make room for other products that should be sold at full price! Therefore, with limited space, retail stores are more focused on acquiring new merchandise that can generate profits rather than selling their clearance merchandise.
Remember that sellers will still need to offer clearance items as well as new items if they decide to sell online. Most don’t have room for other merchandise or want it lying around.
So while this may seem like a tricky strategy for sellers because they are intentionally losing revenue, the reality is that they will be making more money from the product. they’re new.
And that’s good news for you and your Amazon referral business.
In short: sellers are happy to make money where they can on old products, hence the “stop line”. Make them focus on new products while you enjoy their cheap products.
Want to try business arbitration?
Here’s how to get started with ad campaigns on Amazon.
- Create a seller account on Amazon
It’s very easy and will take you about 10 minutes to complete the basics.
- Download the Amazon Seller app from the App Store
You must have a verified Amazon account to access the app, so make sure you’ve completed the first step before proceeding.
- Make a list of the shopping malls to visit
If you see an area to clear while you are walking, keep on sniffing because you never know what you will see. Here are five stores with the best products:
- Argos: for electronics, toys, and homewares
- B&M Bargains: For beauty/hair products and accessories
- Great deals for the home: for household items, garden products, and seasonal products
- TK Maxx: For home goods and sports equipment and other clearance items
- Shoes: For 3 for 2 gifts
- Supermarkets: Especially Aldi and Lidl “between the alleys”. Tesco, Asda, and Sainsburys for their clothes, homewares, and toys sections, not to mention BOGOFs!
Pro Retail Arbitrage Tips: Look for deals on yellow stickers at supermarkets. These are products that can make up for damaged packaging or broken labels and are perfect trade-offs!
- Go to the clearance section
This is where you should start your search for real estate brokerage products. Keep in mind that some stores won’t have a specific clearance section and you may have to search a little harder to find the best deal in-store.
Arbitrage Pro Retail Tips: Know the customs clearance process at each store. Most stores will discount once and then discount again. Other stores will always mark their clearance products at the same time or on the same day. If you learn the calendar, you will get immediate benefits and can get immediate opportunities.
- Use the Amazon Seller app to search for sale or clearance products
Use your Amazon Seller app (or equivalent) to review all potential products. This will ensure that you make the right decision and you can decide, in advance, what your benefits will be.
All you have to do is scan the product barcode and check two important details about the app.
The first step is to verify that you are eligible to sell products on Amazon. It is very important! The second is to check the sales level of the product, because this will tell you how popular the item is.
If the number is low, it is a fast seller.
You should pay attention to the sales rank as it is your most significant indicator whether the product is suitable for a business case on Amazon. Keep in mind that the market level depends on the number of products in the total volume, so if you have a brand with a high number of products listed, while the market level may seem low, the product is still can be effective.
- Buy products that will earn £5 or more
Check the value of the product using the seller’s tool. All you have to do is enter the product price and shipping cost, then the app will calculate the value. Make sure the net profit is shown above the minimum profit value of £5. If you are new to Amazon retailarbitrage, buy no more than five products to start with to reduce your risk. You can buy more as you get to know this plan.
- List your products for sale on Amazon
This is the exciting part of the process! When you list your products, you want to make sure they sell, so you need to make sure your title contains all the important keywords. Bullets and your product description are also important, so think carefully about the information you add to your Amazon listing.
You will also need to deliver products to your customers. You can do it yourself (Merchant Fulfillment) although when you increase your inventory, you should consider using Amazon’s fulfillment service, FBA.
There is no perfect product that will work for trading arbitrage over other products. However, it is important not to limit yourself to one type of thing or group, because you don’t know what kind of products may exist or be possible.
The key to a successful Amazon Retail Arbitrage business is to do your research well and be patient as you gain experience and confidence. Take your time to browse when you are in each store and look for the best products.
Amazon Retail Arbitrage is a great option for selling on Amazon compared to traditional shopping or importing. Stick to it with the right mindset to be successful.