In this article, let’s talk about online arbitrage and how can you make money on Amazon
Many are familiar with the term online arbitrage. Amazon sellers and soon-to-be Amazon sellers are planning to make money with Amazon. In every Amazon business, knowing where to get the best online arbitrage deals is the key to understanding which suppliers will give you the best results.
Topic Rundown:
What is online arbitrage?
Online arbitrage (OA) is basically buying an online product for a cheap price and selling it at a higher rate. Also, think of it as buying from different online retailers and reselling them for a profit on another platform or marketplace such as eBay, Craigslist, or Amazon.
The process of looking for products to sell is called sourcing. Oftentimes, products are sold cheaper on some websites and we take full advantage of it on online arbitrage. When you find a product you want to sell, that’s called online arbitrage leads. Remember that if we say online arbitrage deals and leads, they are the same. When you start selling on Amazon, you’ll encounter these terms all the time.
The best thing about online arbitrage is that you can do it in the comfort of your home. And also, anyone can do it.
If you’re thinking online arbitrage is legal on Amazon, the answer is yes. Always identify the brands that you’re allowed to sell on Amazon.
Where can you find online arbitrage deals?
Of course, if you want to do online arbitrage. You must first know where to look for deals or leads. There are many online stores that you can look into aside from different marketplaces. Take note that there are two kinds of websites that you can always look for when sourcing.
Retail websites
There are online platforms that sell goods or services for a particular target market. They sometimes feel like a grocery store but online. Some examples are Amazon, eBay, Argos, Tesco, and more.
Brand websites
Aside from retail websites, we have brand websites. The name itself is a website where it sells its own brand of products or services.
Pros and Cons of online arbitrage
Before jumping into the world of online arbitrage. Remember the pros and cons:
PROS
You can do it at home
This is the most remarkable advantage of doing online arbitrage, is that you can do it at home. You can source profitable products while playing with your dog or just anywhere. No need to be physically present while sourcing for products you want to sell.
Free packaging
Most products you order online already have their own packaging materials which you can reuse.
Infinite inventory
You can also order as much inventory as you want.
Many sites to source from
Since there are many profitable sites to source your products, there are many possibilities. You never have to worry about which categories to sell because there’s a lot.
CONS
You need to be knowledgeable
Although online arbitrage can be done by mostly everyone. It requires certain knowledge on how to calculate your profit. Although there are free tools you can use when you are just starting, some require you to purchase some of them.
Mismatched inventory
When you resell the products, you buy from suppliers or websites. Make sure that the product is already on Amazon. Take extra effort to double-check if the products are identical, in terms of brand, size, weight, color, and more.
Time-consuming
Sourcing products significantly from everywhere is an advantage of doing online arbitrage, but remember that sourcing products can be time-consuming. Scanning through retail websites and brand websites requires time and patience.
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What to look for in suppliers for online arbitrage
Big range of products
When a supplier buys a lot of stock, they can negotiate better prices with manufacturers. And as a result, better prices for you when you buy.
Easy clearance section
This is an easy go-to place for you. Your best friend for most websites you’ll encounter when sourcing for deals. Basically, you can jump and look for deals on this section first before scanning the whole website for deals.
Good delivery service
The main objective here is to get your orders as soon as possible.
Large quantities
Aside from the things mentioned above, you would also want the option of buying in large quantities. Being limited to 2 or 3 products might be a problem, so it’s better if you can order 10 or even more.
Big discounts
On online arbitrage, discounts are your savior! Always look for voucher codes you can use when sourcing for deals. Remember, the goal is to spend less while earning more.
Free tools you need for online arbitrage
Calculator Tool
When doing online arbitrage, the first tool you’ll need is a calculator.
SellerAmp or SAS is a tool that helps you understand competition, profitability, eligibility, and more. It will tell you if a deal meets your sourcing criteria and supports you in analyzing deals.
You can also try Amazon FBA Revenue Calculator, a free tool from Amazon that gives accurate calculations.
Tool for sourcing deals
Amazonopen Right Click is a chrome extension whereby if you highlight a text, and right-click the mouse, it can directly search for the product on Amazon. Sourcing products, as said earlier, can be time-consuming, and this tool is very efficient in spending your time wisely.
Tool to check sales history
Knowing the history of the product before reselling them on Amazon can make you understand what happened in the past so you can predict the outcome in the future.
Keepa is an amazing tool that collects data across all products in the Amazon marketplace. It is a Google Chrome extension that you can just add to your browser and it will give you a graph of the products’ history.
Categories you can resell on Amazon
- Video Games
- Health and Household
- Pet supplies
- Beauty and personal care
- Home and Kitchen
- Toys and Games
- Sports and Outdoors
- Movies & Television
- Tools & Home Improvement
- Industrial and Scientific
- Luggage
- Software
- Automotive
- Baby
- Women’s Fashion
- Men’s Fashion
- Girls’ Fashion
- Boys’ Fashion
- Amazon Music
- Amazon Appstore
- Kindle E-readers & Books
How to do online arbitrage
If done correctly, online arbitrage is really a great way to earn a profit on Amazon. When starting on Amazon, remember that you can’t just resell any items. For you to earn money, you need to do your research and always learn from your mistakes.
If you want to know the complete guide on how to find products to sell on Amazon FBA. You can watch this video we created, which can be your guide when sourcing.
Top Tips
Check eligibility to sell
When you are starting, Amazon gates certain brands and categories for the main reason of limiting the sellers who can sell the product. You can always un-gate brands and categories through Amazon. Doing this will give you a bigger market and a larger variety of products to sell.
Apply for cashback credit card
Cashback is basically free money for you. It is one fundamental way to help you save money for your business. Here is our guide on how to get cashback for your Amazon online arbitrage business.
Seasonal products
These products are a hit-or-miss situation. Always double-check the history of the product using Keepa before going forward.
Always try to win the buy box
Winning the buy box is always the way to go because the majority of Amazon sales will go to the owner of the buy box. Be reasonable when trying to own the buy box and don’t over tank the price of the listings.
Consider hiring an Amazon Virtual Assistant
Outsourcing tasks in your Amazon business will help you spend your time efficiently. We created a guide about VAs and if you’re interested in learning more about them, you can check it out.
Start online arbitrage now and earn money from home
Doing online arbitrage is one of the easiest ways to earn money online if done the right way. Knowing the proper tools and strategies will help your business thrive in the near future.
If you are thinking, How much money do you need to start Amazon FBA? you can read our guide that talks about all the things you'll be needing to start your Amazon business. And if you just starting your online arbitrage journey, why not check our article named How to start Amazon FBA: Sourcing tools for online arbitrage.
There are already a number of people who already made a name through online arbitrage. Why not add your name to the list?