There are lots of sourcing videos out there, but do you know what is an online arbitrage deal? In this article, we will walk you through what is an online arbitrage deal, what we should prepare first, and the best online arbitrage websites to look into.
If you prefer a video format rather than an article, we got you.
One of the hardest problems Amazon sellers have in sourcing products is finding a supplier that works for your business and, in order to do so, you need to find the best online arbitrage websites. A supplier that delivers profitable deals where you can order large quantities and the selling price remains stable on Amazon. It can take a long time, but the reward for having this list is money in your pocket, and that is what we are trying to achieve.
Before learning what is an online arbitrage deal, it is important that you should learn what is Online Arbitrage. In a simple definition, online arbitrage is when you buy products online and sell them online like on Amazon for a profit. When we say online arbitrage, every transaction and the nature of the whole business itself happens online.
Now, what is an online arbitrage deal? Basically, it is the product itself that you need to find online and sell for a profit on Amazon or simply buy it low and sell it high on Amazon. Always remember that when we say online arbitrage deals or online arbitrage leads, they are the same. Also, the term we use when looking for deals online is sourcing. When you sell on Amazon, you will encounter these terms all the time.
When you are an online arbitrage seller, your deals automatically come from the best online arbitrage websites. There are many online stores that you can look into but always remember that there are two kinds of websites where you can buy your deals.
These are one of the best online arbitrage websites that sell retail products. They are even like a grocery store but of course, online. One example of this is Walmart.
Another best online arbitrage website where you can find online arbitrage deals and sell them online on Amazon is the brand website. From the name itself, it is a website where it sells its own brand of products. An example of this is the website Boots for beauty products.
In our Amazon USA and UK business, we made our Top 100 Supplier List, where we buy deals that we always update from time to time.
If you check our Amazon supplier list, you’ll see the Supplier Name and supplier URL. Fast Track FBA generated this list based on our Leads service, which we also offer on our website. If you are interested in this list, you can check it out and download it for free.
Before sourcing, you should first set your own deal criteria. Your ideal criteria are based on your strategy in your Amazon business. Composed of your Return on Investment (ROI) and Profit margin. Let’s go through this one by one.
ROI is how much you earn back from your investment while the Profit margin is how much you earn from your sales.
Yes, it is hard to see the difference, so here is a sample computation to differentiate ROI and Profit margin.
Cost of Goods sold (COGs) – $5
Sell price – $15
Additional fees – $3
Sales proceeds- $12 or this is what Amazon pays you back
Ship to Amazon cost and Prep = 1
Get first your profit by adding all your expenses such as COG, additional fees, shipping, and cost. The sum will be deducted from your sell price. So, this will go as…
All you need to do is divide the profit ($6) by your COGs ($5). After computing, we will have an ROI of 120% for this example.
The next step is to compute the Profit margin. How to do that? Simply divide your profit, which is $6 by the selling price of $15. We will then get a 40% Profit margin.
Other things that you need to consider aside from the Profit margin. Some Amazon sellers also look at the minimum profit we can get from the online arbitrage deals they source. It can be $3 or more.
Aside from your deal criteria, these are things that you should also consider.
There are lots of tools you can use in sourcing to check if the deal fits your criteria. Using sourcing tools will help you analyze if you will make a profit from a deal or not. In our Amazon business, we use Keepa, FBA Multi-tool, SAS, and BuyBot Pro. With years of selling on Amazon, sourcing tools are very important to grow your Amazon business. Check this article out. If. If you want to know some of the Sourcing Tools for Amazon FBA,FBA, you can use them online.
It is important that you first need to know what are brands and categories you are allowed to sell on Amazon. Being gated on Amazon means you are not allowed to sell certain categories and brands because Amazon wants to make sure that you are a good or trusted seller to sell those gated brands and categories.
When getting started on Amazon FBA, learn first the brands and categories you’re ungated with. When you start to make revenues and you have a good sales performance, you can now try to apply to those gated categories and brands.
Looking for the best online arbitrage websites and Amazon FBA leads is challenging and very time-consuming. Giving you the right knowledge and understanding to help you go through this is our mission.
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