Many budding entrepreneurs dream of running an online business that is successful. Amazon is one of the most popular ecommerce platforms. Although it may seem easy to run an online business, most people who try this route fail because they underestimate the effort and commitment involved.
There is product research to do, there is sourcing and negotiation, listing to be created, customers to deal with, and then finally, the fulfillment process. Along with the daily running of the business, there is always marketing.
It’s usually the sourcing portion of the process that separates the wheat from the chaff. It can be frustrating and difficult to find suppliers.
This is not meant to discourage you from starting an online business. Not at all! It’s a great way to make a profitable online business. You don’t have to build your business the traditional way.
What is Retail Arbitrage?
Retail arbitrage simply means buying low and selling higher, but with a twist. Stock is not purchased from wholesalers or traders suppliers but instead it is bought from brick-and-mortar retail stores. You can find clearance or special offers at stores like Argos, Tesco, and B&M. The goods can then be sold online at a higher price, usually on Amazon or eBay, and you pocket the profit!
It is quite brazen, but legal. It has been known that those involved in retail arbitrage have purchased products at full price from retailers and then sold them on Amazon for a higher profit.
Why would customers pay more for a product than it retails at? Online shoppers are impatient. Online shoppers are impatient and want their goods immediately. It’s much easier to order online and have products shipped the next day than to walk to the shops. Impatient buyers will pay more for this convenience.
How Do I Know if a Retail Arbitrage Product is Profitable?
Before you buy any product you plan to resell via the retail arbitrage strategy, you will need to compare the prices. This can be done by going to Amazon while you’re in-store and comparing the prices.
Amazon also offers a free app that will show you how much profit you can make after shipping and selling fees. The app is called Amazon Seller, and it’s available for download in the app store. You can scan products to view prices, profits, and other useful information, including the number and best seller ranks of the product and the category it is in.
These bits of information are crucial for you to ensure you don’t rely on guesswork and that you can be a skilled retail arbitrage expert!
Why Don’t Retail Stores Sell the Clearance Products Online Themselves?
It may seem strange that retail stores don’t sell clearance products online, rather than risking being robbed by retail arbitragers. This is surely profit that the retail shop could reap.
That’s right. Retail stores often sell their stock to make way for more stock that can be sold at full market price. Retail stores are more concerned about getting new stock because they have less space and can make more money than selling their clearance stock.
If they wanted to sell the stock online, the retailers would still need stock to store both the clearance and new stock. Many don’t have enough inventory or want to keep it around.
It might seem odd for retailers to do this, as they know they are missing revenue. However, they will make more money with their new stock.
Head over to the clearance section
This is the best place to start your retail arbitrage product hunt. You should also remember that not all stores will have clearance sections so you might have to search a bit harder to find the best deals in the store.
Pro Retail Arbitrage Tip – Get to know the clearance procedures in every store. Most stores will only offer a discount once, and then they will reduce the price even further. Some stores will mark clearance items up at a certain time or day. You will be able to grab deals as soon as you know the schedule.
Purchase products that will bring a profit of £5 or more
The Seller App allows you to check the product’s profitability. The app simply requires you to enter the price and shipping costs. Once that is done, the app will calculate your profit.
You should ensure that the net profit is greater than your minimum profit threshold. To keep your risk low, don’t buy more than five products if you’re new to Amazon retail arbitrage. As you get more familiar with the strategy, you can purchase more.
List your products for sale on Amazon
This is the most exciting part of the whole process. You want your products to sell. To do this, ensure your title includes all relevant keywords. It is important to include bullet points in your product description. Also, think carefully about what information you will add to your Amazon listing.
Shipping the products to your customers is another task. This can be done by yourself (Merchant Fulfilled), but once your inventory has increased, you might consider using Amazon’s fulfillment service, FBA.
Conclusion
Retail arbitrage is not possible with every product. You shouldn’t limit your options to just one type of product or category. You never know what other products might be available.
