How to Make Money on Amazon FBA with Retail Arbitrage?

What is Retail Arbitrage?

Retail arbitrage is the process of buying products at a lower price in your local retail stores and then reselling those products online for a profit.

The products are generally bought from Amazon, Walmart, or eBay and sold online at various marketplaces, including Amazon.

Is Retail Arbitrage legal?

After understanding the concept of Retail Arbitrage many people might think if the process is even legal or not.

Retail arbitrage is completely legal in the US and UK.

Step by Step guide to get started with Retail Arbitrage on Amazon

Getting started on Amazon’s eCommerce business is not much complicated or any different from sourcing and selling products by other processes. To understand completely here are the steps:

Create an Amazon seller account

To start selling your product on Amazon the first step is to create an Amazon seller account. There are a few options that Amazon provides to register as a third-party seller.

1. Individual Seller Account- There is no charge to register as an individual seller account on Amazon. What you need to pay are just $0.99 whenever a sale is made and a 15% consolidated fee. You can only sell 40 products as an Amazon individual seller.
2. Professional Account- While registering for a professional seller account you need to pay a fee of $39.99.

Source Products 

If you are starting new or haven’t found your supplier yet, then you should start with visiting retail stores, finding who has good products and who is selling at a reasonable price to make you a good profit. You can buy products on discounts or clearance sales and sell later at its selling price. Find best-selling products on Amazon or you make take the help of product research software. If you sell products that are selling well at Amazon and have demand, then your chance to get a good sale is high.

Create Product listing 

Like Google, Amazon also has its own algorithm using which it decides which product to rank higher on search results. In order to get high ranking and organic sales, you should create Amazon SEO optimized product listing.

Start Selling

In order to get started with a good number of sales, you should know how to market your product. You can leverage Amazon PPC, social media to get customers for your Amazon products.

Amazon Retail Arbitrage: Pros and Cons

There are pros and cons of selling on Amazon using Retail arbitrage, let’s look at some:

Pros

• The best advantage of Amazon retail arbitrage is it has a low cost of entry. Anyone can start with money as little as 100$ and then scale the business while selling on Amazon. Low investment is because you are not buying the products in bulk from the supplier. So, even if the product fails to give you a good profit, you are not going to lose much.
• If you want to earn money quickly or want to make some money before building your brand on Amazon then Retail Arbitrage is the perfect solution. You can start with little investment and start selling on Amazon to earn a profit.

Cons

• With little investment to start with and an opportunity to earn money quickly there comes on the disadvantage of having lower margins. Retail arbitrage is the reselling of products and thus has lesser margins. This option for sourcing products is best for earning money quickly. If you want to build a sustainable business then source products directly from the manufacturer.
• Brands can sometimes control the reselling of products and Amazon according to its Brand Registry Protection gives them control over their product. So if you are selling a product that is restricted then you may be banned as a third-party seller on Amazon.

Final Thoughts

Yes, Retail Arbitrage is an easy way to start making money online. So if you are looking to save some money for a sustainable business then Amazon retail arbitrage is the perfect solution. Another product sourcing option like private labeling is best when you want to build a long term sustainable business. Whatever your goal is, make sure you source the right products, create Amazon SEO optimized product listing, market it right, and start making a profit.