There are third party sellers on Amazon who source products on online and retail arbitrage and resell on Amazon. Arbitrage is the practice of knowing an item’s price and capitalising on its differences in different markets. Amazon arbitrage is a type of reselling that is quite common and growing in popularity as the number of Amazon sellers increases.
You can find a product in retail stores at a much cheaper cost. We will take you on a more detailed tour through arbitrage in this article.
Retail Arbitrage (RA) is when you buy products from physical stores, like Walmart or Costco, and then sell them at a higher price on Amazon.
Online Arbitrage (OA) is when you buy products from online retailers to sell on Amazon for a profit.
Amazon has introduced some rules and regulations to ensure the quality of products.
The Three Trends That Are Making Retail Arbitrage Harder
Too Many Sellers on the Amazon Platform
Over the past 5 years, the number of Amazon sellers has increased drastically. As people searched for online sources of generating wealth, Amazon FBA topped the list. The platform is now crowded with sellers, and the competition has been rendered tougher.
A lot of Chinese sellers are seeking to sell products in the US and UK market. Their prices are much less, that gives them a cost advantage over UK or US sellers. This makes them tough competitors.
Amazon Brand & Category Gating and Restrictions
Amazon restricts the sale of certain items. Customer satisfaction is the most important area that Amazon looks after. Hence, the largest online platform for shopping imposes certain restrictions and rules on the sellers to improve the quality of products and heighten the customer service. The main categories of restricted items include collectibles that have specific condition requirements, high-quality expert items and goods regulated by state and/or federal law.
Amazon specifically targets new sellers with many restrictions. There are several categories on Amazon that are restricted to certain sellers. Gated categories require approval to be sold. Every product has a specific set of guidelines to become ungated.
Refusal of Retail Stores to sell in bulk
As the number of online sellers are increasing, the bulk purchase of items are on the rise. This poses a problem to retailers, who have imposed a restriction on the sale of products in large quantities.
Should I Still Start Retail or Online Arbitrage Selling on Amazon?
The process has become more rigid than before, yet it is not impossible. You can actually be profitable if you know how to do it. And as the saying goes, if there is a will, there is a way.
Be careful and avoid risky products. You also need some calculated action while buying stocks. Split your orders among various stores, or buy only a limited quantity in a time frame.
It can have a catalytic effect on your Amazon business profit. Although the rules might become more stringent in the future, online or retail arbitrage will still hold its value among sellers as the competition continues to increase.
Plan ahead, ungate the categories, strategize and lo! You are set for deriving the benefits from retail or online arbitrage.
What Steps Should I Take to Build a Healthier Online Business That Will Last?
If you are hesitant about setting off an online selling business on Amazon FBA, shred off the dregs of doubt and venture out. This is a prospective market, given that financial idols like Warren Buffet have been investing in this sector. As the physical retail stores are shutting down, and the people’s trust in online products are increasing day by day, Amazon is a promising market.
Research the market, choose the right product, get the right keywords and optimise the listing to get the products visible before the customers. Diversify and build new strategies.
Do not get deterred by gated products. Amazon imposes restrictions to improve the quality of products and heighten customer satisfaction. There are ways to ungate the categories-
- Be a professional seller
- Have a good performance metrics
- Show the proof that your product is authentic
- Maintain acceptable invoices for the inventory
- Maintain a web presence
Online Arbitrage Tools and Sourcing Software
The downside of retail arbitrage is petrol costs and time spent sourcing. But if you source deals online using online arbitrage you don’t need to travel anywhere, you can do it any time of the day or night and you can usually buy in bigger quantities.
If you want to step on to online arbitrage, it is wise to invest in some training course. It can be incredibly strenuous and tedious to manually source products via online arbitrage. This leads most sellers to resort to online software for online arbitrage.
Tactical Arbitrage is one such tool that will help you scan through the market and find the best website for online arbitrage. It showcases the deals that can bring you potential profit margin. Over 1000 online stores can be scanned in 7 different countries using Tactical Arbitrage.
The Best Free Retail Arbitrage Apps and Tools
Keepa is a powerful tool for retail and online arbitrage and in the field of competitive research. Level up the pricing game and avail the various features that Keepa offers:
- Price history charts to analyse historical trends
- Price drop and availability alerts to keep you updated
- Recent drop in price
- Daily deals and offers so that you do not miss out
- Comparison of international price list
- Browsing through different locale Amazon market places like UK, USA, etc.
- Wishlist import
- Easy browser extension
You can use all the data to predict future price trends and stay ahead in the competition.
Click here to check out Keepa!
Amazon Seller App
This is made by Amazon. You will need an Amazon account to use it. It provides sales analytics, order fulfilment, product research guidelines, inventory and return management, offer management and more.
Best Amazon Retail Arbitrage Course
The Selling Family Amazon Bootcamp
Learn the intricacies of online selling on Amazon with this course. The course is currently running the 4.0 version of the Bootcamp. Learn the details of retail and online arbitrage. That will take you deeper into profit making strategies while purchasing from retail. Learn the skill of buying products cheap from store and sell them at higher value on Amazon.
You will also learn about the sourcing processes and open up new product idea opportunities.
- Module 1 – Amazon Business Basics
- Module 2 – Amazon Seller Account setup
- Module 3 – Scanning apps and other supplies
- Module 4-5 – Amazon Categories, ranks and buy box
- Module 6 – Evaluate whether it is worth selling a product
- Module 7 – Retail Arbitrage Sourcing
- Module 8 – Online Arbitrage Sourcing
- Module 9-10 – Listing your product and Amazon and its optimisation
- Module 11-13 – Packaging and Shipping
- Module 14 – manage your Amazon account
Click here to check out my The Selling Family Amazon Bootcamp Review!
The neat thing about arbitrage is that you don’t have to stick to one method — you carry out both online and retail at the same time.
Out of the two, probably online arbitrage is preferable because it is easier and something you can do from the comfort of your own home.
Use the tools, course and software to make the arbitrage as easy as breeze.