Retail arbitrage is a profound way to earn money among sellers these days. The rapid growth of e-commerce has given sellers a chance to spread their business online and for consumers to buy their favorite products with a single click!
When you are a new seller and don’t want to spend a lot of money on starting a business, retail arbitrage is the way to go! You can begin with as much money you have in your hands, just by doing the correct amount of research! We will guide you through it!
WHAT IS RETAIL ARBITRAGE AND HOW DOES IT WORK?
The concept of retail arbitrage is quite simple. You buy a product from any retail outlet or online retailer at a lower price or discount and sell that discounted product for Amazon’s profit. A simple way to put retail arbitrage is reselling. For example, you find an item at Walmart for $6, you purchase that item and resell it for $22 on Amazon. Sounds cool, right? In other words, it is a procedure of buying a product at a low price to sell it on a higher margin!
A plus point of retail arbitrage is that no third party is involved, such as manufacturers or suppliers. You purchase straight from the retail market, saving you from the extra work of looking for the product and then finding ways to source it.
IS RETAIL ARBITRAGE LEGAL?
Sellers might think it’s a risk to start selling through retail arbitrage because it may sound risky at first. However, it is 100% legal as long as you sell high-quality products without changing their condition. Once you buy a product legally from a retail store, you can resell it on Amazon. The products should be fresh and in the right shape.
HOW TO START SELLING THROUGH RETAIL ARBITRAGE?
Retail arbitrage can help you build your career as a seller and earn a fair amount of money. How do you sign up to resell items? Let’s see!
1. Create an Amazon seller account
Firstly, you need to Have an Amazon seller account to get your business started. You will come across two plans that you can opt for according to your strategy.
· Individual seller business plan
You can create an Individual seller account for free. However, you will have to pay $0.99 as a commission for each item you sell on Amazon. You are allowed to sell up to 40 products if you sign up as an individual account seller. Choosing the individual selling plan is a great idea when you don’t want to invest so much as a new seller.
· Professional seller business plan
A professional seller account charges you $39.99 each month. Besides, you might have to pay referral fees and other variable fees. As a plus point, you can enjoy all the extra tools of Amazon, including the advantage of selling more than 40 products. You can also sign up for Amazon FBA, where Amazon does all the job for you and is very convenient!
2. Sourcing products to sell
To source items for retail arbitrage, you need to shop like a thrift shopper! Look out for any discounted product or deal that you can sell for a better profit on Amazon. However, target and Walmart are always competing with Amazon, which results in a competitive advantage. So you need to find great deals at these huge retail chains to sell at a fair margin. You can find products at clearance sales as well at reasonable prices. Just make sure that the items are in good condition since Amazon doesn’t compromise quality and can take action against you.
We recommend you always to complete your research about the product you want to buy and resell. Check the ranking of the product on Amazon and also the price point. Keep an eye on the customer review and sale rank of the item. It can give you a good picture of any particular product and its position.
3. Start selling by listing your product on Amazon!
Once you are done with your research and know which product you want to bring forward, list the item on Amazon and then begin selling! Make sure to improve your product listing!
HOW CAN ALPHA REPRICER HELP WITH YOUR BUSINESS OF RETAIL ARBITRAGE ON AMAZON?
Well, you have to keep changing prices to stay on the top! The Buy Box on Amazon is the reason behind driving a major part of sales for your business. Every seller on Amazon is the urge to win the Buy Box, and you need it too!
Repricing Manually is a huge waste of time and is not enough to keep you competitive since you can’t respond to each price change quickly! This is where Alpha Repricer comes into action! We reprice your listing as soon as we notice any price change that happens among your competitors! Winning Buy Box is no big-a-deal when you have the best price in the market, and can get you your Buy Box! Count on us to maximize your sales and win Buy Box in no time!
Check out our blog to get more information on why sellers must get a Repricer for their listings!
ADVANTAGES OF RETAIL ARBITRAGE
· Pay less to get started!
The most prominent advantage of retail arbitrage is that you don’t have to invest a lot to start selling. You can start with $100 if you are not purchasing massive quantities of your item from the supplier. In case your product fails to get popular, you still won’t have a lot to lose.
· Earn money quickly!
Retail arbitrage is a powerful way to earn money speedily if you sell the right way. You don’t have to build your brand image or create a long-term relationship with any of your suppliers. If you want to sell on Amazon, this is the fastest way to make money.
· Start faster!
You can generally launch your Amazon business in less than six weeks if you opt for Retail arbitrage. It is a method of low risk to sell on Amazon.
DISADVANTAGES OF RETAIL ARBITRAGE
· Lower profit margins
Reselling a product comes with lower margins than taking products from the supplier or manufacturer directly. If you want to grow your Amazon business and scale it, then directly source from suppliers and manufacturers.
· Following brand regulations is a must.
Amazon is known for taking strict actions to protect its customers. Amazon’s Brand Registry Protection provides brands and all private labels a significant control over their listings. If you sell a brand restricted product without asking or approval of the brand, your listing will be removed by Amazon. Therefore, retail arbitrage is a little risky. Ensure that your item is not included in the brand registry before you start selling it. Your account can be brought down if your product is unauthorized.
If you are a new seller and looking for ways to start selling without investing a huge amount, then Retail arbitrage is a great way to do so! However, it also takes a lot of time, effort and hard work to get successful. Not every product you find is going to bring your profit. Make sure you invest your time, do your research, sell authentic products, and work on methods to keep yourself competitive, including investing in a Repricer!
Try our 14-day trial to see how our Repricer works and helps you get what you need- the Buy Box!