It depends. There are many opportunities for people who want to make money on Amazon, but it depends on if you are willing to learn and work at it.
So yes, you can make money reselling products on Amazon.
How much money you can make depends on what technique you use to source your items and how quickly you can scale your business.
Old School Reselling on Amazon
When resellers first started to sell on Amazon, they approached profit making a lot different than most sellers today. You found that most resellers focused on books and video games.
Why you might ask?
It all came down to the shipping rates.
Amazon provided a flat shipping charge in their categories and sellers could make money off the overcharging of shipping.
This meant that you could buy books in secondhand, thrift, and charity retail stores, list them on Amazon for $0.01, and make a profit on the postage. All you’d need to do is send the book at the cheapest possible postage option, and you’d make a nice profit.
This sounds like a great business model, but there were a few downsides that made it really hard to scale.
- Making $2-$3 profit on a book or game is great side money, but it would take hundreds of books a month to make enough to leave your job or pay off some debt.
- It took a lot of time to find, package, list, and ship each book. Imagine having a library in your garage and having to ship out books daily in order to make a few dollars.
I’m not saying that people didn’t make money, but it was a lot more hassle than it was worth. There are still people to this day who focus on penny books, but I believe there are easier and more scalable ways to make money reselling on Amazon.
My personal favorite method is arbitrage because I think it has the highest possible profit margin and a good bit of scalability.
What is Amazon Arbitrage?
The principle behind Amazon arbitrage is simple.
- You find a product at a local store or an online retailer that is being sold at a discount
- You buy the product and list it on Amazon.
- You make a profit from the difference in the price between Amazon and the retailer.
Now there are a lot of other factors at play that make arbitrage possible, but that’s the general idea behind the practice.
How Is This Possible? I Thought Amazon Was The Cheapest Option Online.
Well. It all comes down the economics and access.
If I am sitting here in the middle of a cornfield in Indiana, Amazon might be the cheapest option for me for millions of items. That being said, I might be able to find some great deals in a local store that beat the price on Amazon.
For example, it gets pretty cold in the winter here in Indiana. Our need for swim diapers drops like crazy once September hits. Retailers need space in the store for more inventory, so they discount the remaining swim diapers (for a fraction of the cost). Now down in Florida, it is a brisk 85 degrees and swim diapers are still needed. I can sell the discounted items on Amazon from Indiana at retail price and the person in Florida thinks they are getting a good deal (because they actually are).
It’s an economic principle called speculation and it is what drives the arbitrage way of life.
The same thing could happen for an online retailer as well. Say I have Amazon Prime and I love two day delivery. I might automatically go to Amazon to buy my online purchases without taking the time to search for the 300+ other online retailers that might sell the same product. I just buy what I know and what is convenient and easy. Now a reseller might take the time to look through all of these other sites and notice a closeout on a given item. And that is where the arbitrage opportunity is born.
How Much Can I Make with Amazon Arbitrage?
It depends (as you can tell, this is one of my favorite answers in the world of selling on Amazon!
The best and probably the most honest answer to this question is: as much or as little as you want.
I started out in arbitrage by making $100-$200 a month by sourcing at my local Walgreens stores. I would go on my lunch breaks at work (or on Saturday mornings) and I would buy as many deals as would fit in my cart.
A few years later, I was making $3,000-$4,000 a month when I added in online arbitrage and started to really understand how and where to find the best deals.
If you want to indulge yourself in Amazon arbitrage just to make a small amount of extra money on the side, then fantastic. If you see arbitrage as a long-term opportunity and potentially becoming your primary source of income one day, then it’s possible that you could make this happen, too.
Probably the most important thing here is to understand that you’re not going to make a fortune overnight. Reselling on Amazon can be lucrative but it isn’t easy, and it definitely isn’t a get rich quick scheme!
Like most things in life, what you get out of your arbitrage activities will correlate with what you put in.
How Can I Make Money Reselling on Amazon with an Arbitrage Strategy?
There are a number of different ways you can approach Amazon reselling and arbitrage.
I personally got started by visiting retail stores, but I would recommend looking into online arbitrage if you want the flexibility and scalability later on as the business grows.
I’ll be honest though – It takes a lot of time and effort to go into a store and scan an entire aisle of clearance items. I actually recommend that most sellers get started in retail arbitrage to learn the basics. RA is a great place to learn, but I started running out of time and places to shop.
And when you start running out of time, that is when you should turn your attention to online arbitrage.
Not only can this be more efficient in terms of finding products at a low price, but if you use an online arbitrage tool you can more easily find specific products to buy that can be sold at a profit on Amazon. There are even some tools that search stores while you sleep (those are personally my favorite).
My favorite tool is Tactical Arbitrage. I have been using it since it was created and I have full faith that it is one of the best tools on the market and for online arbitrage in general.
By signing up to Tactical Arbitrage you can access a seven-day free trial to try it out and get to grips with using an online tool to source products for arbitrage.
Once you know how you’re going to source products, you need to understand how you can leverage Amazon FBA to help you sell them for a profit.
I could spend a ton of time walking you through that process or you can check out this post to see exactly how you can combine Amazon FBA and online arbitrage to start making money today!
Making Money Reselling on Amazon
Regardless if you choose to do online or retail arbitrage, there is a potential that you can make a side income by buying and reselling items on Amazon. I have done this for years (and still do it today) and I can vouch that it is a valid business that can actually be done from the comfort of your own home.
But I will warn you of this. Don’t think you are going to get rich quickly or that you will be an expert right away. Being an Amazon reseller takes time, patience, and mistakes (you read that correctly – mistakes). I am pretty good at finding deals, but I have also learned over the past 8 years from my own successes and my own failures.
Don’t expect to be an expert right away. Start small, scale, and learn from your mistakes.
That’s what will allow you to make some serious money with retail or online arbitrage.
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