Selling on Amazon is a great way to make money each month, but only if you have the products to sell. Well, that is a common problem for a lot of people and definitely an issue that has to be addressed if you want to successfully sell on Amazon. One of the best ways to learn more is to know what exactly Amazon retail Arbitrage is and how you can capitalize on the programs that are available.
What Is Amazon Retail Arbitrage?
One of the first things that you need to know is what retail arbitrage is and if you can take advantage of the process. The simple process is buying products at a discount and then reselling the product for a profit.
That is the basics of arbitrage, but it is now time to take a deeper dive into exactly what Amazon arbitrage is and how you can perform it easily.
Now, for a simple process, you will use something that people use on an almost daily basis like a phone charger cord. Let’s say, you find a discount on a cord that is selling for 5 dollars at your local store. Well, you can check the price on Amazon, either manually or using software like Arbitrage Hero, to see how much it sells on Amazon. Let’s say the same cord is selling for 10 dollars per cord on Amazon.
Now, you have the two prices which lets you get an idea of how much you could make. Well, what you do next is to buy quite a few of those cords at a discounted price from the store. Then you go to Amazon, your seller account, and list the cords with all the details that you have for a price lower than the 10 dollars the cord already sells for on Amazon.
By doing this you are undercutting the normal retail amount, but still making a profit. Now, the key thing is to make sure you are keeping the price under the retail price, but high enough you are making a profit. In the example of the cords, if you sell them for 7.50 dollars, you would stand to make 2.50 per cord and make a tidy profit for something that people have been using daily and always seems to break.
Why Does Retail Arbitrage Work?
A common reason that retail arbitrage works on Amazon is not everything costs the same across the planet. Building on the cord example, let’s say you live in Georgia and pick up the cords for the 5 dollar price.
Well, once you list the cords on Amazon, then you can find customers in a place like California where the cords could cost 15 dollars. Well, the shopper in California is going to see the cord that you have listed and jump all over the deal.
Now, on the downside, the exact opposite could be true as well. You could think you are getting a great deal on the cords, but if you are living in a state that the sale price is the normal retail price then people are not going to want to buy the product because your markup is over the retail price. To avoid this you need to make sure you do your research properly and guarantee that there is profitability in the products you are reselling.
Pros And Cons Of Retail Arbitrage With Amazon
As with any business model you may notice that you have multiple pros and cons. Well, here is a very short list of pros and cons.
- The cost of starting a retail arbitrage company on Amazon requires very little investment. In fact, some of the investment is so small that you can start it for under the cost of a cup of coffee.
- If you are using Amazon as your selling platform you are going to reach millions of potential customers each day. This alone is going to make it easier for you to sell products and make money.
- Depending on the seller account type that you have you could either pay a steep fee per item sold. An individual seller account is limited to 40 items and .99 cents and 15% per sale. The professional store accounts allow for branding, but cost 39.99 a month and still have fees.
- The number of competitors for some of the products can be rather high. While you could luck out and get a product with only one or two sellers, you could find another product that has several hundred people selling the product, and then you have to compete against each one of them.
How Does Amazon Retail Arbitrage Software Help
With anything online from content writing to selling products, you can find software to help out. Well, Amazon retail arbitrage is no different. Generally, the software you can use online is developed to help you maximize your profits and update your stock right away to avoid customer letdowns.
In the more advanced software, like Arbitrage Hero, it helps you find the suppliers online that have the products you are looking for. These can either be wholesale, drop shipping, or even other sources that are hidden online. This makes it easier for you to source multiple products to add to your store and make a profit.
Speaking of profit quite a few of the products that are online to help with arbitrage help you find a profit margin as well. This way you are able to find the best profit for your business and have a generalized idea of how much you make each month based on potential sales and profit.
Finally, most software works on updating your inventory for you. Nothing is worse than thinking you have plenty of inventory for your sales and finding out that you have none left when you go to have it processed as an order. With the software, it automatically adjusts the inventor and the pricing as your supplier has to make changes as well.
Overall, is it easy to make money on the Internet? The answer is a combination of yes and no. It does take quite a bit of work for you to start to see the profit from selling products online, but at the same time if you take the time the profits can be enormous. To make your life easier, though, you just have to make sure you know about the various software products available online to make your life easier than you ever imagined. You also need to make sure you find the best product online to find the best products on the market to help you potentially make a tremendous profit and that is exactly what Arbitrage Hero was set up to do when you are looking to open up your own Amazon retail arbitrage business.