In this article, we will explore the concept of online arbitrage sourcing and how it can be profitable.
In the rapidly evolving online business, where opportunities abound, entrepreneurs and savvy sellers are constantly in pursuit of innovative methods to maximize their profits. One popular method gaining attention is online arbitrage sourcing. This strategy involves finding products at low prices on online stores and them for higher prices on platforms like Amazon, eBay, and Craigslist. The best part is that you can do all of this from the comfort of your own home. Let's explore the ins and outs of online arbitrage sourcing and provide helpful tips for beginners who want to take advantage of this profitable opportunity in the Amazon industry.
What is Online Arbitrage?
The term online arbitrage, also known as OA, involves the practice of purchasing products at a lower price from online retailers or websites and reselling them at a higher price on various platforms such as eBay, Craigslist, or Amazon. The process of searching for profitable products is referred to as sourcing.
One of the critical advantages of online arbitrage is the flexibility it offers, as it can be conducted from the comfort of one's home. Furthermore, online arbitrage is accessible to anyone interested in pursuing this business model.
It is important to note that online arbitrage is a legitimate practice on Amazon, as long as Amazon sellers adhere to Amazon's policies and regulations.
6 Online Arbitrage Sourcing Tools
SAS
This is a 3 in 1 solution for deal analysis and a sourcing tool; consisting of a web app, mobile app, and Chrome extension, this sourcing tool is a versatile resource utilized for discovering deals. It also offers a range of features and functionalities to assist in identifying and evaluating profitable products.
BuyBotPro
You can use this tool to analyze Amazon online arbitrage deals or leads, which allows you to make fundamental checks like the ability to sell and Hazmat. It also allows you to calculate your potential profit and ROI.
Keepa
Keepa is a Chrome extension, mainly designed for keeping track of Amazon's product price history.
To have a better understanding of this tool, you can read our previous article and have the ultimate guide in taking advantage of Keepa – Amazon Price Tracker.
DS Quick View
This tool provides valuable insights, such as the count of FBA sellers, the presence of Amazon on the listing, and the product's sales rank, allowing you to enhance your productivity.
ASIN Zen
Using this tool can automate your buying decisions. ASIN Zen is another Chrome extension that calculates profit and ROI and also shows your eligibility to sell that certain product.
IP Checker
You might know that there are products that you cannot sell on Amazon because of property rights – in those instances, it is better to have a tool that can check if you're allowed to sell a certain product without the hassle of getting complaints. This free tool will help you do that.
While I initially mentioned six tools, it is important to recognize that certain tools may appear similar. However, it is worth noting that these tools serve the purpose of simplifying and streamlining the process of online arbitrage sourcing, making it more efficient. By exploring different tools, you can identify the ideal fit for your Amazon business, enhancing your overall experience. To stay updated on our recommended sourcing tools, I encourage you to bookmark this link. Furthermore, we have an article that dives deeper into the diverse range of tools available for your online arbitrage sourcing needs.
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Online Arbitrage Sourcing Methods
In this section of the article, we will explore 4 online arbitrage sourcing methods that can assist you in finding the most suitable approach for your Amazon business. Familiarizing yourself with these diverse methods will not only enhance your efficiency but also broaden your knowledge of alternative sourcing techniques. This knowledge will prove invaluable when you encounter challenges or limitations with a particular method, allowing you to adapt and employ different strategies to source products effectively.
Manual Sourcing
Manual sourcing product for your Amazon business through various websites is a common and fundamental method. However, it should be noted that, while it may appear simple, this approach is actually time-consuming.
For instance, this approach involves visiting a website like Lego to explore different offers and discounts. From there, you manually verify if the product aligns with the items sold on Amazon. Subsequently, you will assess if it meets your sourcing criteria, including factors like profit potential, Return on Investment (ROI), and sales rank.
Keepa Sourcing
This particular Keepa sourcing technique utilizes the Keepa tool mentioned earlier, as it provides a range of features to facilitate the process. One worthy feature is the filtering capability, which allows you to specify desired qualifications such as ROI, profit margins, and more. By leveraging these filters, you can narrow down your product selection and choose the ones that align with your sourcing criteria, ensuring optimal choices for selling on Amazon.
Reverse Sourcing
It's important to note that reverse sourcing is a method that stands in contrast to manual sourcing. With reverse sourcing, the approach is to first identify profitable products on Amazon and then search for suitable suppliers that can offer the opportunity to earn a profit. This method allows sellers to leverage the existing product demand and popularity of Amazon to establish profitable sourcing partnerships with reliable suppliers.
Storefront Stalking
Now, storefront stalking involves locating an Amazon seller within the marketplace and utilizing the reverse sourcing approach to determine the source of the products they are selling on Amazon. This method enables sellers to discover potential suppliers that have proven to be successful for other sellers.
If you want a well-detailed explanation of how to use both the reverse sourcing method and storefront stalking, you can read our article that explained how to do both online arbitrage sourcing methods.
Online Arbitrage Sourcing Hacks
Deal websites
These websites serve as valuable platforms that compile lists of discounted products shared by fellow Amazon sellers or budget-conscious shoppers who enjoy finding great deals.
In the UK, popular deal websites such as HotUKDeals and LatestDeals, while in the US, platforms like SlickDeals and BrickSeek, offer a plethora of discounted items. Taking advantage of these kinds of websites will enable you to uncover additional deals that may be profitable for your Amazon business.
However, it's important to note that when purchasing products from deal websites, you should anticipate heightened competition, as numerous Amazon sellers also regularly scour these platforms.
Search for products without sales rank and rely on the review counts as a metric
In certain cases, sales rank may be absent on Amazon. In such situations, it becomes necessary to shift focus to review count as an alternative metric for evaluating product performance. By assessing the frequency and dates of reviews, you can gauge the products' actual sales activity. This approach will allow you to identify potential products that other sellers might overlook due to the absence of the sales rank data.
For more online arbitrage sourcing hacks, I recommend referring to our previous article. It contains additional hacks and strategies that can further enhance your understanding and expertise in the field.
Top Tips for Online Arbitrage Sourcing
Learn from educational videos on YouTube
Make the most of the abundant educational resources available on YouTube, particularly for beginners on Amazon, as it offers numerous videos that provide valuable insights and guidance on essential knowledge and skills.
Practice
While learning from YouTube videos is beneficial, it is equally important to put into practice what you have learned. Actively applying the knowledge gained from these videos is crucial for developing practical skills and gaining firsthand experience.
Utilize trials without cost
As you hone your skills and utilize the tools learned from YouTube videos or fellow Amazon sellers, it is advisable to take advantage of free trial offers before making any tool purchases for your Amazon business. By leveraging these trial periods, you can assess the suitability and effectiveness of various tools, ensuring they meet your specific requirements before committing to a purchase. This approach allows you to make informed decisions and invest in the tools that best align with your business needs.