Amazon arbitrage could be a fantastic opportunity for you to make an additional income, whether you do so purely to make some extra money on the side or have ambitions of building your arbitrage activities into your main income.
What is Amazon Arbitrage?
Amazon arbitrage is the act of buying a product from a retailer at a low price in order to sell it at a profit on Amazon.
In terms of selling on Amazon, you will usually have the option of selling the item yourself, or using Amazon Fulfilled by Amazon (FBA) to help you sell your stock.
What are the Benefits of Using Amazon FBA for my Arbitrage Activities?
There’s nothing wrong with deciding to source products for arbitrage to sell on Amazon yourself.
However, by using Amazon FBA to sell your products, you could save yourself time and money, thus making your arbitrage more profitable and enabling you to source products quicker.
When you sell with Amazon FBA, Amazon takes care of everything for you. When you have sourced products, all you have to do is add them to your Amazon online store for sale and send them to your designated Amazon fulfilment center. You will then see a “Fulfilled by Amazon” badge added to your product page, while your products may then become eligible for Amazon features such as “Free Next Day Delivery with Prime” and “Free Super Saver Delivery”.
From the perspective of a customer shopping on your Amazon page, they see those badges and features and instantly you’re a more appealing choice of online store. This increases the likelihood of you making a sale and of your arbitrage activities making a profit quicker.
From a logistics perspective, using Amazon FBA means that Amazon take care of everything for you. As your items are held in Amazon’s fulfilment centers, once an order is placed they will pick and dispatch the order for you. Furthermore, they will deal with any returns or other customer queries.
Meanwhile, when your item is sold, you get paid, and can start to think about reinvesting in further stock.
I Know How to Sell, So Where Do I Get My Stock for Arbitrage?
Amazon FBA is a fantastic opportunity for anyone who sells on Amazon.
If you’re a seller of your own self-made products or you use Amazon for what we’ll call traditional e-commerce, then you will almost always know where your products and stock is coming from. Sure, you might have the odd hitch with your wholesaler or a time when your supplier can’t fulfil your needs, but you’ll have your supply chain in place and it’ll usually be pretty consistent.
On the flip side of this, if you’re selling products via Amazon FBA that you’ve sourced for arbitrage purposes, you will need to think about:
- What you’re going to – and want to – sell.
- Whether you’re going to specialise in a specific type of product to give your Amazon online store a focus and opportunities for link and combination sales.
- Where you’re going to get your products from.
There are pros and cons to choosing to either focus on one type of product or selling items more generally.
Specialising in a specific niche for arbitrage may help you to build the reputation of your Amazon store. You as an individual may already hold knowledge or an interest in a specific range of products, too, which may help you to find arbitrage opportunities.
On the other hand, if you decide that you’re only going to sell a narrow range of products via your Amazon store and using Amazon FBA, you may be severely limiting your potential for making an extra income or growing your arbitrage business.
Whichever way you lean, you’ll have a number of options for sourcing arbitrage stock.
1. Sourcing Locally in Bricks and Mortar Stores
Sourcing arbitrage stock locally can take some time, especially if as you get started you’re still doing a full-time job or simply want to try arbitrage as a means of getting extra income. This method can be intense, as you’ll be out and about and looking for items on store shelves yourself. If there is bulk stock in stores, and you’re allowed to buy multiple pieces, it might be challenging for you to buy and transport everything you want to buy unless you own a van. You’ll also need to manually check Amazon while in the store before making the decision to buy.
You may benefit by being able to acquire products and take advantage of offers quickly, while you could also mix up your purchasing between larger chain stores and smaller, “pure local” businesses and specialist stores.
2. Shopping Yourself Online
Shopping online is far easier than going to the store in person.
Not only do you have the benefit of doing it from the comfort of your own home, but the retailer will take care of delivering it, ideal if you want to buy discounted items in bulk. You can also easily sit with another screen or device open on Amazon, enabling you to quickly compare prices and to understand whether there is an arbitrage opportunity for you to capitalise on.
One potential downside is that you could be limited as to how many pieces you buy, but there will likely be nothing stopping you making multiple orders to purchase the inventory you want to. Shopping online for the best deals while always checking back prices on Amazon could also be time consuming, while if there are online sales being heavily promoted stock could sell through too quickly for you to buy what you need to turn a significant profit.
3. Using an Online Retail Arbitrage Tool
Using an online tool gives you all the benefits of searching for arbitrage opportunities online, plus some others, while taking away many of the potential disadvantages, particularly in terms of the demands on your time.
With our own Tactical Arbitrage portal, you can source products from over 1,000 retailers in a number of geographical locations. The portal allows you to set your own parameters for searching, so if you want to search for specific products, or want to focus purely on volume, or high margin arbitrage products, or alternatively just shop as you find opportunities, you can.
As well as sourcing products for sale at a low price with the retailer, you can also view the Amazon rank of products and the current price, helping you to understand the scale of the opportunity.
Taking Advantage of Amazon Retail Arbitrage Opportunities
How do you plan on taking advantage of arbitrage opportunities with Amazon?
Whether you are looking to make a small side income from Amazon arbitrage or want to build a profitable business, choose the path you find the most convenient to help you buy the best products to sell on your Amazon store via Amazon FBA!
All new Tactical Arbitrage users can enjoy a seven-day free trial, sign up and start yours today.