Use Amazon Arbitrage to Your Advantage: A Complete Guide

Do you want to sell products on the world’s largest eCommerce platform- Amazon -but don’t know how to initiate it? Do you wish to increase your Amazon store performance and sales but don’t have enough budget to launch branded products?

We have a solution: Amazon Arbitrage. 

With Amazon arbitrage, you can start your seller journey with as little or as much investment as you have for your business. And, with the tips we have, you can even practice the technique and reap its benefits without ever stepping into the retail store. 

In this guide, we’ll talk about Amazon arbitrage and how it can be used to a seller’s advantage. Also, we’ll share in detail how to embark on the Amazon arbitrage journey, the best tips for maximum returns, and how Amazon virtual assistants fare in this equation.

Table Of Content 
Introduction
Amazon Arbitrage: The Concept
Does Amazon Arbitrage Actually Work?
How To Embark On Amazon Arbitrage?
Amazon Arbitrage Best Tips For Maximum Advantage
Bottom Line: Track Performance & Repeat

Amazon Arbitrage: A Small Introduction To The Concept

Behind the complicated term is a simple theory. Amazon sellers buy products at a discounted rate from any retail outlet and sell them for profit on Amazon. 

Technically, Amazon Arbitrage (a product sourcing method) is a process of buying products at discounted rates from traditional brick-and-mortar and reselling them on Amazon to get more money than you paid for them. 

For instance- you step into any retail outlet and find that baby soaps are on sale. An $8 baby soap is being sold for $4 (50% Slash in Price). For Amazon arbitrage sellers, 50% is undeniably an opportunity. You pick 50 baby soaps at 50% off and list them on Amazon. Now the thing is that you are reselling it for $7 on Amazon. It helps you earn a significant profit while still being on discount.

What Is The Difference Between Amazon Arbitrage And Reselling?

In Amazon arbitrage, there is no involvement of manufacturers and suppliers. Instead, you directly purchase products from a retail store. As a result, the profit margin is less in the process than in reselling, but sourcing products is much easier. 

Why Do Most Sellers Prefer Amazon Arbitrage?

The method ensures the lowest cost of entry and gives sellers the perfect way to start their seller journey on Amazon. 

Does Amazon Arbitrage Actually Work? 

You must be wondering if Amazon arbitrage actually works for sellers! After all, why would shoppers ever buy high-priced products? Can’t they just step into the store and buy the same baby soap for $4 rather than paying you $7? 

The answer lies within the laws of economics.

⇒ Product Prices Variations (Based On Many Factors Like Demand, Location, etc.)

The baby soap you’re buying for $4 in Chicago might cost $10 in New York. Products that are generally in less demand or common at a particular location can have high demand at another. Merchants can use these factors to turn Amazon arbitrage to their advantage.

⇒ Convenience

It is a common understanding that customers pay for convenience. Amazon has redefined the shopping experience for billions of people around the world. When customers purchase online, they pay extra to avoid going to the brick-and-mortar and standing in long queues. Also, with additional Amazon features like Prime, shoppers don’t have to wait too long for delivery! 

How To Embark On Amazon Arbitrage?

It is confirmed that Amazon arbitrage can net you a good profit. But how to do it right?

Let’s start from scratch.

  1. Set up An Amazon Seller Account

Undeniably, this is the most obvious step. To start selling on Amazon, you must set up an Amazon seller account. You get two options here-

  • Individual Seller Account
  • Professional Account

So let’s learn about each individually and see which business account will suit your requirements best.

⇒ Individual Seller Account

Creating an individual account on Amazon is free. But sellers with this account are required to pay a commission of $0.99 for every sale. It is in addition to the consolidated fee of 15%.

Also, an individual seller account has a product selling limit- sellers are allowed to sell only 40 products in a month. 

Choosing an individual seller account is best when you’ve less than 40 products to sell and there is no desire to sell restricted product categories. 

⇒ Professional Account 

A professional Amazon account doesn’t come free. Instead, sellers have to pay a monthly fee of $39.99, excluding referral fees. The benefit here is that there is no fixed commission that you have to pay to Amazon for each sale, and no product selling limit.

Additionally, with a professional seller account, you get an option to sign up for Fulfillment by Amazon (FBA). It’s an additional service where Amazon takes care of the entire process of product storage, packaging, shipping, and customer support. And, you only have to ensure that your products safely reach the warehouse set by Amazon. 

Side Note- For Amazon sellers, signing up for FBA can be an opportunity. With FBA, they’ll get eligible for Prime delivery, and winning the Buy Box afterward will be much easier. 
  1. Product Sourcing

Sourcing the products for Amazon arbitrage is like shopping from a thrift store. Basically, you search for products that can earn you a good profit. But here is a twist, all big retail giants like Walmart, Kohl’s, Marshalls, Target, etc., try to compete with Amazon to win the maximum share of customers. Thus, product prices are usually competitive.

The best recommendation here is to look for products during sales to get the most fantastic deal. No quality compromisation is suggested here. So you have to ensure that no products are damaged. 

List of Best Stores To Source Products For Amazon Arbitrage

Walmart Kmart
ShopkoLowes
TargetRite Aid
HomegoodsStaples
TJ MaxxMarshalls
CVSKohls’ 
BurlingtonBig Lots

List of Best Products For Retail Arbitrage (Source: JungleScout)

List of Best Products For Retail Arbitrage

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Tip – Do not try to sell every product that’s at a discount. Thoroughly check which product is performing well on Amazon, and check its price to be competitive. And if you find the process cumbersome, hire an Amazon virtual assistant for product sourcing and related research. Otherwise, you have to invest most of your valuable time and efforts in researching, which will cost your business a fortune in the long run.

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3. List Your Products On Amazon & Start Selling

Once you have sorted the products that you’ll offer, the next thing to do is list products on Amazon and start selling. Here Amazon listing optimization is the key. So, if done right, it will ensure business performance and profitability. 

Then, here are some of the details required for a new listing:

  • Amazon Product Title
  • Amazon Product Description
  • Product Images
  • Variations
  • Bullet Points
  • Featured Offers
  • Other Offers 

Make sure you upload all this information accurately. You will also need proper keyword research to help Amazon notice your listing and rank it amidst its search results for relevant queries. 

Amazon Arbitrage Best Tips For Maximum Advantage

1. Sell Seasonal Products 

Instead of going to a traditional brick-and-mortar and selecting random products that can get you a good margin on Amazon, do some research and think ahead of ordinary products. 

Then best recommendation here is to consider seasonal products. Look for products that become trending or get high in demand during a specific time per year. Also, grab immediate opportunities for a surge in product demand and source your inventory accordingly. 

Take, for example, face masks and sanitizers during the coronavirus pandemic. Undeniably, customers had purchased masks and sanitizer during Covid-19 at higher prices. The reason is they were highly in demand at that time, and people were not allowed to step out of their houses, which translates into an increased selling price online, hence profit for sellers. Therefore, how important it is to stay on top of seasonal trends to get the best advantage of Amazon arbitrage.

2. Make Massive Profits With Discontinued Products

Many times, the products we like get discontinued accordingly and we pay extra money to get those products. 

Additionally, now you must be thinking if a product is discontinued, how to find it in stores? As well, some products get circulated in the market even after the discontinuation, and some brands have old stock. To get what is discontinued, you have to be at the spot at the right time.

Here are some quick tips to find discontinued products-

  • Go to individual retail outlets with a collection of products, not giant retailers like Walmart. In such a store, the chances of finding discontinued products are higher.
  • Look for products in the clearance section. Many times retailers add discontinued products in that section to sell them faster.
  • Go on eBay and type ‘discontinued’ in the search bar. You’ll get a list of all discontinued products that have recently been sold on the marketplace.

3. Additional Tips For Amazon Arbitrage

Therefore, stepping into traditional brick-and-mortar stores and searching for products that can resell at a good margin can become very tiresome. It also disappoints you when you don’t get suitable products for retail arbitrage. And, just carry on! In due course, you will find products that will help you make huge profits.

Only buy products after thorough research on Amazon. If you find the process too bothersome, you can hire Amazon virtual assistants for the job. But, always make sure you have a feasible list of products because you don’t want something in your listing that you won’t be able to deliver.

Check price history and set new prices competitively. Remember, you have to ensure both conversions and profits.

Don’t take big steps initially. It is one of the most common mistakes of Amazon sellers. Before going all-in and making huge investments on Amazon arbitrage, start small so you can adapt to the process. 

Bottom Line: Track Performance And Repeat 

Focusing on arbitrage is just a part of the picture. You must utilize your Amazon seller account to track performance, monitor sales, manage orders, and change product prices if required. If you find positive results, work on finding more products to continue making sales and profits.

While Amazon arbitrage sounds uncomplicated, it does require backbreaking work. Not every product you buy for reselling will turn in a profit. Remember, a lot of things matter more than finding a good deal, including product prices, Amazon product descriptions, titles, images, listing optimization, and big-time product research. Therefore, always have a backup strategy in place