Retail Arbitrage Explained
Retail Arbitrage may not be a new phrase if you are planning to sell on Amazon and going across some product research and analysis. It also can be in your knowledge that it is one of the three best methods to sell on Amazon and sellers can make serious money using Retail Arbitrage. It is easy to get started win Retail arbitrage on Amazon if you consider some factors before entering the Amazon market.
What is Retail Arbitrage?
Although the phrase is complex to understand, the idea behind Retail Arbitrage is simple. It is just the process of purchasing from any retail outlet at a discounted price and selling them for a profit.
You may be thinking how can this be possible? It's possible but you must have keen eyes and find the products that are on sale or at a huge discount. You can also persuade the other retailer to provide a quantity discount if you can buy in bulk. But, we recommend you maintain a margin of at least $3.
Retail Arbitrage is a direct process where you can cut the commission or fees to be paid to the middlemen or the manufacture. It is because in Retail Arbitrage no manufacturers or suppliers are involved. What you do is buy from a retailer and sell on any digital platform.
Check out the seven-step guide on how you can get started with Retail Arbitrage on Amazon in 2021.
Calculate the potential profit beforehand
If you want to make sure that you end up taking a good amount of profit on the items you are willing to sell, you must calculate profit before you start the Retail arbitrage process. You can scan the item with Scoutify to find the price and ranking on which FBA seller is selling and calculate the expected return.
Check about the items on Amazon
Check out the competition level by visiting the Amazon sales page. Check out the lowest FBA price that the item is selling and compare it with what price you are expecting to sell it. Then, you can accurately calculate the possible profit.
Check the items on Keepa
Keepa has a huge database of products with sales price and sales rank. It also gives you the price track and keeps you alert on when the price drops to the lowest. You can get great help from Keepa if you want to know the lowest price the item is selling, sales quantity, and the ranking.
Check out the items sales rank
Check out the seller rank of the product you sell. Usually, a ranking under 1000 is good. But, try to find out whether the ranking is for the whole product category or a subcategory. Always make sure that the seller rank is for the whole product category.
Check out Customer Reviews
Not all customers leave reviews if the item is sold less frequently. So, by looking at the customer’s review also you can estimate how frequently is the item sold. Generally, products with a lot of reviews, both negative and positive are selling more frequently. And with the negative, you can get an idea about how you can give a better product to the customers.
Do you compete with Amazon?
This is tricky and often the calculations you make in this regard may fail. Take this into consideration. First of all, check out whether Amazon is selling the item that you are going to the source. If yes, there is a series of checklists you have to look into. First, check whether you can sell the item below the sales price of Amazon.
Also, if the price charged by Amazon and the price you are going to charge is similar, you can wait till Amazon's product is out of stock. If you are willing to charge a price lower than Amazon, you may end up getting a lower return on your investment.
If you know little about how Amazon FBA can help sellers sell on Amazon successfully and want to try out but haven’t figure where to start from, ZonBase can be your one-spot destination.
We have designed ZonBase product research and listing optimization tools with an expert team consisting of real-life Amazon sellers. We practically solve your Amazon selling problems and convert your business into the biggest source of your online income.
At ZonBase, we develop your strategy and generate profits for you.
Consider the future competition
Consider this fact: you are not the only one doing Retail Arbitrage here. The competition is huge and each day thousands of online sellers are entering the market. There may be some new sellers that may come all along with the same product that you are currently selling. Thousand other resellers may find the exact product in the same retail store and come up with the same idea that you have come up with currently.
So here we are finally. It’s time you go out and get started with Retail arbitrage on Amazon in 2021 with knowledge. Remember, what you do is entirely your choice but there are some consequences that you cannot overlook. Taking these factors in mind will make you prepared for the worst and not fail by surprise. You also know that there are other more profitable business models. But it's always advisable to continue to do what works best for you. Get going and if things fail go a different way.
If you are interested in Amazon FBA and want to find the best place to find the all-in-one tools to sell successfully on Amazon, check out our free 7- day trial of ZonBase. You don't lose anything trying something new that is life-changing. This one is life-changing!