1. Online arbitrage is another great way to sell on Amazon.
It is very similar to Retail
arbitrage in that you are buying from retail stores to sell on Amazon FBA but the major
difference being that you are not physically going to stores to purchase, you are
purchasing and ordering strictly online.
2. This method of selling on Amazon requires being a bit more creative because of the fact
that the barrier to entry is much lower than retail arbitrage. You need to understand that
because we are sourcing from online stores anybody with an internet connection can
access and sell the same items. So we need to use coupons and cashback to really
maximize the amount of ROI we get from selling.
3. The first thing you need to do is to set up an Amazon seller account, here you have 2
options. You can choose either an individual or professional seller account. If you plan
on selling on Amazon long term or making it a part of your income you should choose a
professional selling account.
4. A professional selling account will cost you $39.99 per month, but it will save you $0.99
every time an item sells. This is the major reason to choose a professional plan if you
plan on selling more than 40 items per month. You also get access to a bunch of other
selling features and tools on the Amazon seller platform as well.
5. You will also need to set up an account with https://www.rakuten.com/ for cash back
rewards.
6. Another idea to maximize profits is to get set up with any kind of cashback credit card.
Even a 1 or 2% cashback card really adds up when spending multiple thousands per
month on inventory. Combined with Rakuten rewards that around an extra 5% back in
your pocket.
7. Once you have your Amazon seller account set up we can now start looking for
profitable products to sell on Amazon. There are two paths we can take when doing
product research, one involves a manual approach that can be done with spending no
money on tools or we can use tools like tactical arbitrage to help us find products. This
depends on your starting budget, the manual method is totally free but does take more
time. It can also be beneficial as the software approach can tend to miss products
sometimes.
8. If you decide to use the manual approach we can start quite simply. By using some of
the most popular ecommerce sites like Walmart, Target, Homedepot and many others.
The best way to do this and look for products with extra profit is to look for the deals or
clearance section of the site. You can also look for any coupon deals either on the
retailer site or off coupon specific websites. This is a list of almost 400 ecommerce
websites to source from in the USA alone and hundreds in other countries.
https://tacticalarbitrage.com/arbitrage-sites/
9. You now need to start searching products on Amazon and checking to see if they are
good sellers, have good reviews, are ungated and are profitable. This is slow and
tedious work but will be worth it in the end. With more experience sourcing and finding
products will become easier and easier.The ultimate is finding a product where all you
need to do is reorder over and over again. It will take time but there are products like this
out there.
10. The quickest and most efficient way that I’ve found is by using the Amazon Seller app
with a mobile device. You can either use the scanning part of the app found in the top
right corner and scan the product image or use the search bar on top of the app and
input either the product title or if you have access to it the UPC code, which is listed on
some websites. You can also use your desktop with chrome and install amazon price
extensions as well as FBA calculator tools to help you dissect the information.
11. When researching products you need to be aware of what items you should stay away
from due to Amazon gating certain products. Toys and games that are for young
children, certain health, beauty and food products require health & safety paperwork.
Large brands that you may see a lot of big name Amazon sellers on Youtube sell like
Nike, require either invoices or direct authorization from the manufacturer to sell on
Amazon. A very important thing to note here is that receipts from retail stores will
NOT work to ungate a brand, category or product. The only thing that may aid in
ungating certain brands and products is having a good selling record on your seller
account as far as performance , sell through rate and good reviews and time. Having a
good performing, aged Amazon seller account is the only way to ungate a certain brands
and product WITHOUT either an invoice from an authorized wholesale supplier or direct
authorization from the manufacturer.
12. Once the product is found tap on the item image on the mobile app.You will now be on
the mobile version of the Amazon Seller product page for the particular product you have
found. This is where all of the information you need to know before deciding if this
product will be good to buy and sell on Amazon is found. You will see the following
information :
- Name & Image of the product
- Review count and rating - Ensure the rating of this product is at or above 3 stars and
that it has a good number of reviews, higher the better. Try not to go less than 30
reviews.
- Sales Rank and category - A good rule of thumb in almost every categories is that you
want to see a sales rank of 100,000 or less. Lower the number the more an item will sell.
- Price Information - the top bar will show the “seller fulfilled” price and return, ignore this.
The bottom bar will show the FBA price, gross return and if Amazon is currently a seller.
- Gating or “Seller Eligibility” - this will tell you if you are able to currently sell this item,
or if you will need to apply to be able to sell this item
- Product description
13. The order of checking I will usually take is this :
**Before any of the steps identify if Amazon itself is selling the item, if they are move on
and find another product**
Step 1 - Check if the product is gated or if you are eligible to sell. If you are not able to
sell the item you will see a lock icon and the words “Requires Approval” over the product
image. If you see that you will need to apply to sell the product. You can try to get
approval by clicking the “Seller Eligibility” bar, then clicking “Request Approval”. If the
next screen says congratulations you are approved then you are now able to sell the
product, if not the best thing is to move on and find another product. You could possibly
try again at a later date once you have some sales history and age on your account.
Step 2 - Check sales rank, this is very simple as you should aim to keep the sales rank at
100,000 or lower to ensure your products will sell quickly. You can also use the
https://www.junglescout.com/estimator/ as a free tool to check monthly sales on an item.
Step 3 - Check the rating and reviews, you want as high as possible for the number of
reviews and the rating. Try to only aim for items with at least 30 reviews and a 3 star or
higher rating. If the sales rank is really low and the profit is good you can experiment but
expect to possibly have returns on this product due to quality.
Step 4 - Checking for profit is the final step. You need to click on the bottom bar of the
pricing section where it says “FBA offers”. This will bring up the listing of all the current sellers
and their prices. Obviously if your cost for the item is higher than the current selling prices this
will not be a good product to buy. If you are buying the product for cheaper than the current
lowest price on that page you may have something. You then need to click the back arrow and
click the top bar where it says gross proceeds. Once the new page opens up click the Amazon
Fulfilled tab on the top right. Where it says Cost of Purchase you need to input how much you
will be paying for the product. The app will then show you the net proceeds on the last line after
Amazon selling and fulfillment fees. Keep in mind you will still have to ship the item into Amazon
and possibly pay sales tax depending on where you live or if you can get a reseller tax
exemption. Here is an example of a good item :
Online Store Cost of item : $37.99
Amazon Lowest FBA Price : 78.00
Amazon Seller and Fulfillment Fees $17.5
Net Proceeds from Amazon Fulfilled : $60.5
Profit : 22.51
This would give us a return of investment or ROI of : 59.25%
You ideally want to aim for a minimum of 35% ROI BEFORE shipping to Amazon to
ensure decent profit margins.
This ends the manual method.
** A quick note when purchasing online from retailers, some have maximums on
amounts of one product you can purchase. If this is the case just place multiple small
orders and you should be fine. Always follow the rules of the retailers as you do not want
to get banned from purchasing their products. **
14. Using tactical arbitrage to source products - using this method is extremely quick and
efficient and has a plethora of built in features for making OA sources a breeze. It does
cost $89 per month for the online arbitrage version of the software but you will quickly
pay for this software 10x over when using it to source. In the USA alone there are 376
websites that you use to automatically source products to sell on Amazon. As well as
built in tools that will help you filter ROI, sales per month, gating, price history, and
custom profit inputs like cashback percentage and sales tax. Something very important
to keep in mind when using this software is that once again people will have access to it
so doing basic scans will not come up with much. A really good trick is to use coupon
codes in combination with the store searches. You can add this to the custom section in
which you can input coupon discounts, cashback percentages and sales tax if paying.
You can also add custom websites to scan if you find a really niche website to source
from. Lots of potential here you just need to be creative when finding deals on products.
Watch the below video as it is super in depth in how to use tactical arbitrage specifically
to source for online arbitrage.
How to Use Tactical Arbitrage For Amazon Online Arbitrage 2022
A very important note before we talk about sending your products into Amazon FBA
when it comes to online arbitrage is using fulfillment centers in NON sales tax based
states. There are many fulfillment centers in NON sales tax states that will allow you to
avoid paying sales tax which can drastically add to your profits. They will also handle all
the packaging and label required to send into FBA. Turning online arbitrage into a
completely hands off business as far as manual work.
You can also apply for sales tax exemption certificates based on being a reseller but it is
more complicated and takes more time than the above method.
15. Once you have your items purchased you will need to list them all on your Amazon seller
page. You can do this from either desktop or mobile. Make sure to have your products in
front of you or have the UPC codes handy. You will also need to know the quantity of
each item you will be sending in. Before you pack any items in boxes, create your
shipment on the seller page first as Amazon may request to have different items
sent to different warehouses.
16.
How to create a shipping plan on Amazon (FBA)
Amazon FBA Packaging Requirements, Labeling and UPC Barcodes Tutorial for Beginner…
When you are really cranking along and scaling up your item quantity and amount you
can streamline listing along with automated a lot of other small details and information
points by using the software turbo lister found here -
https://www.asellertool.com/manual/1/en/topic/overview
17. Once your items are on the way to Amazon you can sit back until you get the email that
your items are now being received. It is now up to you to pay attention to pricing, how
quickly your items are selling and your stock levels.
18. A note on pricing, for the most part other sellers will not begin price wars with you, as
long as you do not undercut each other you will all share the buy box evenly. In the case
that a seller does start a price war with you do not panic, first thing is to identify how
much stock the competition has in stock for this product, you can check using tactical
arbitrage or buy choosing the competition seller on the amazon product page, and
adding 999 items to the cart, amazon will then say they do not have enough in stock and
reveal to you the actual amount the seller has in stock. Then based on the amount of
stock they have vs the units per month this product sells you can decide whether to let
them sell out first or to compete with them and lower the price on your product. If they
keep lowering the price and they have a lot in stock you have a decision to make.
Usually the best thing is to leave the product alone, if their price is still lower wait a few
days and try to match it then, sometimes you can sneak past them without them noticing.
If they keep fighting you, the best course is to let them sell out, then you can put
whatever price you want or move it to the price of the next lowest FBA seller. Some
sellers have been selling a product without any competition for years and will not give up
without a fight. You need to decide based on your capital and profit margins if it is worth
fighting for the product.
19. Also as far as pricing with no competition, since the pandemic Amazon has instituted
price gouging rules so you need to be careful. If you are the only seller on a listing and
want to maximize profit the best thing to do is to price the item at the highest price its
been listed for within the last year or so, based on the price history charts either on
Keepa or CamelCamelCamel.
As mentioned above when scaling up your online arbitrage business keeping track of pricing
can become a massive undertaking and can take up a lot of your time. Using Repricer tools like
https://www.bqool.com/ can really give you a lot of time back by automating pricing rules as well
as help win more buy boxes.
