Online arbitrage is a beginner-friendly way to start an online business or to make some money on the side of your regular income.
From the thousands of marketplaces that you can find on the internet for physical and digital products, Amazon is at the top of this list.
Below, you will learn how and why you should use Amazon Seller Central for online arbitrage.
What Is Online Arbitrage?
Online arbitrage is the process of buying a product from an online marketplace to resell it to customers on another marketplace at a higher price. The difference between the buying price and the selling price is your profit, after fees, of course.
It sounds effortless, and many people have doubts when they learn about this process.
However, it is 100% legit, and most online marketplaces allow online arbitrage and accept that it happens.
For example, if you find a product on Walmart or Target and sell it on Amazon at a profit, this is online arbitrage. It’s the purest form of selling.
You buy low and sell high.
The best part is that it can really work for anyone and will keep working as long as people buy things online.
So, there are a lot of opportunities for those who are willing to invest the time in this venture. You can shop for millions of products online and many e-commerce platforms where you can buy at a low price to sell at a profit elsewhere.
There are plenty of benefits to online arbitrage compared to other online business models.
You don’t need:
- a big budget
- technical knowledge
- skills in writing or creating videos
You buy items, create new listings or list against existing products on Amazon, and get the profit when you make a sale.
Lastly, there are no limitations. While you can start at a low budget, you can use your earnings to buy more items and put time in research to find more opportunities. You can grow your business as much as you want, and many full-time online business owner focus only on online arbitrage rather than affiliate marketing or other channels.
The results of an arbitrageur in this business depend on their ability to search for products and find valuable opportunities.
In many cases, you will earn a small profit from some transactions, but you want to be sure that there will be a profit.
Then, you can repeat the process and increase your earnings.
Why Using Amazon FBA Is A Good Choice
If you want to make potentially amazing sales and get the best results from your efforts, Amazon is the best place to sell your products. There are some advantages that you can’t get on other online marketplaces.
First, Amazon is the biggest online marketplace in the world.
If you are a registered seller on Amazon, you can sell to millions of people.
You want people to view your listings, and then it’s on them to decide if they will buy from you or not.
If you have tried to sell any products by creating your own stores or list them on small marketplaces, you will already appreciate the value of traffic and marketing.
It can take months or years to establish an audience by yourself and requires a lot of work across different marketing channels.
Amazon has already done the marketing work for you, and you can get the traffic you need if your products and listings are good enough.
Also, the chances are that Amazon isn’t going anywhere and establishing yourself as a good seller is a long term investment.
If you are registered for Amazon FBA you can send your products to Amazon’s fulfillment centers and they will do the rest.
They will store, pick, pack, and ship the products for you.
Also, they will provide any customer service needed, including dealing with complaints, faulty products, and returns.
This way you will have more available time to focus on other parts of your business like, finding products, optimizing your listings, or have more free time for yourself.
As a seller that uses FBA, you may qualify for prime listings that can boost your results and visibility.
How To Get Started
Getting started with online arbitrage is not tricky.
However, it’s a process that you need to learn and improve as you acquire experience.
You will not be the only person who will sell on Amazon or search for products.
For this reason, you can read some tips below that can help you to get started faster and avoid some common problems.
Choose A Niche
You want to be good at something because it’s unlikely to become good at everything.
That means you must find a category of products to sell on Amazon.
By focusing on one category, you will become an expert on this type of product and start recognizing the best offers.
Many people overthink this step, so they just visit Amazon and check the available categories.
Every person buys things online or offline and more or less knows the value or the price of these products.
You can take a look at your recent purchases and consider if you are interested in selling similar items.
Many sellers suggest getting started with your passions and hobbies. It’s easier to research things and take action on topics that already excite you.
Each category and subcategory of Amazon has many items, so you don’t need to worry if there are enough items to get started.
You can start even with one or two products and scale it later.
At the same time, choosing a niche you know isn’t essential, as with online arbitrage you’ll be using cold, hard numbers and data to make buying decisions.
Find Online Marketplaces To Buy Products
Once you choose a niche, you can start searching for products that you will buy at a lower price.
Of course, there are thousands and thousands of e-commerce stores on the internet, so you need a system that will help you save time.
Creating a list of a few marketplaces that sell at lower prices would be a great start.
When you find a low-priced item in a marketplace, it’s possible to find more opportunities at the same place in the future.
Save the website or take some notes and go back later.
For a few examples, you can search for products on Target, Walmart, Kmart, or Sears.
Another solution is to get a tool like Tactical Arbitrage that scans many marketplaces and finds places to buy products.
It can save you time and help you to discover more items.
Buy The Products
If you have taken all the previous steps, the next thing to do is to choose the right products.
You probably have decided your starting budget, so here are a few tips to consider before buying your stock.
1. Find What Already Works
Your goal as a seller is to not only find a product at a lower price than you can find on Amazon as well, but you want to make sure there is enough demand to make some sales.
Usually, when a product has enough demand, there are many reviews.
You can also check the best selling products or find a top seller in your niche and check their listings.
When a product is popular, you have a chance to make money!
2. Read Conditions Of Use
You need to know the Amazon terms of service and any other legal guidelines of the marketplace that you buy or sell.
The last thing you want is to lose money or lose your account altogether by making mistakes that you could avoid.
3. Check the Fees
If you have an account on Amazon and are registered with Amazon FBA, you need to know the fees and add them to your expenses.
You want to be sure that it’s possible to sell at a higher price and get a profit.
When you’re using Amazon FBA you will have an FBA calculator you can use to accurately work out what your profit will be.
4. Use Coupons, Gift Cards, and Cashback Sites
These are some great ways to get discounts regularly and increase your profits from each sale.
In some cases, the discount will look marginal, but you can save a lot of money in the long term.
Starting with the coupons and gift cards, you must actively search for them.
You can subscribe to the email lists of some marketplaces or search for gift cards on Google.
Cashback sites are easy to use. You can get a discount if you buy through their links, and they earn a commission from your purchase.
It’s a win-win situation.
5. Send the products to Amazon
Once you buy some products, you can send them to Amazon’s fulfillment center.
They will pick, pack, and ship the items to customers on your behalf. This is what your fees are for (plus a little extra for their bottom line).
Online arbitrage is a fun and profitable activity for many people.
There are many full-time sellers on Amazon and you can get the same results if you take action and master this process, and by doing so, you will never run out of products or opportunities to earn more money with online arbitrage.