Tools for Online Arbitrage: Sourcing, Research and Profit Calculation


By Richard Shrubb


Online arbitrage sounds like the perfect work-from-home business: If you have a computer, an internet connection, and a few hours to spare each week then you’re all set.

So what do you have to do to? It’s pretty simple: you buy products from ordinary online stores, then sell them for a profit on the Amazon marketplace.

But making money as an online arbitrage seller is not as easy as it sounds.

It’s not easy to find products to buy for less than the price on Amazon – much less, if you want to make a respectable profit. The price difference has to cover all of Amazon’s fees and any other expenses you have.

It’s also not easy getting a grip on Amazon’s constant and unpredictable price changes. A deal might look great at the moment you find it, only for Amazon’s price to fall off a cliff a few hours later and force you into a loss.

Then there’s the fees. Sure, Amazon tells you how their fees work upfront, but they’re detailed and complex. It’s easy to make a mistake and calculate your profit wrongly.

So in this post I’ll explain what online arbitrage is really like, and how you can use online tools to help with all of the main challenges: sourcing, price research, and fee calculation.

What is Online Arbitrage?
James Rugg, founder of Amazon seller tools company Daily Source Tools, and a former arbitrage seller in his own right, told us:

Arbitrage is exploiting a price mismatch between two marketplaces. For Amazon resellers that means finding things in retail stores and online that we know are selling for a higher price on Amazon.
Online arbitrage is not a risk-free way to make money. It requires some capital investment: perhaps a few hundred dollars (or pounds) to make a good start.

It also requires an investment of time. Not only are the fees complex, there are many rules, policies and good practices to learn if you want to sell successfully through the Amazon marketplace.

But there is a real opportunity out there. Ed Brooks, founder of online arbitrage product scanner ProfitSourcery, has also seen the potential at first hand:

My wife spends half a day a week on FBA and makes more money out of that than her part-time job as a librarian. Recently she found a Barbie convertible car on Tesco at a low price, bought 30 and has sold 15 in under a month. She’s made £225 profit on a £375 spend.
A big attraction is the low barrier to entry: if you can shop for products on the internet, then you can do online arbitrage. Can you make a fortune from it? Probably not. Can you supplement your income with some useful extra cash? Yes, you can.

What is Online Arbitrage NOT?
Retail Arbitrage
This isn’t “retail arbitrage”, where you buy products from physical bricks-and-mortar stores.

Retail arbitrage typically requires spending hours with a scanning app to find products at a low enough price to make a profit, then buying up as much of that product as you can get. It can be profitable, but it’s not what we are talking about in this post. With online arbitrage products are only sourced from online stores.

We interviewed Robyn Johnson just a couple of months back about her successful business based largely on retail arbitrage. It’s a great introduction to that topic.

Reselling
This isn’t reselling either.

The reselling model involves buying products from conventional business-to-business sources: wholesalers, manufacturers and distributors. With online arbitrage, you are buying from normal consumer-facing stores like Walmart and Target in the US, or Tesco and Argos in the UK.

Buying from wholesale has the big advantage that profitable products can be easily reordered, but it’s often not accessible for sellers just starting out. At small volumes, the prices are often too high to be profitable. At larger volumes, the high risk and capital will be difficult to justify.

We wrote about reselling recently in Five Ecommerce Business Models: Reselling, Private Labelling, Used and More.

Amazon-to-eBay Arbitrage
In Amazon-to-eBay arbitrage sellers do not buy any stock in advance, but simply take items that are available on Amazon and list them for a higher price on eBay. When an order comes in from eBay they buy the goods from Amazon and have them delivered directly to the eBay buyer.

Web Retailer covered Amazon-to-eBay arbitrage in detail in The Truth About Amazon to eBay Arbitrage. What’s the key difference compared to online arbitrage? With “mainstream” online arbitrage, products are purchased before they are sold. Also, with Amazon-to-eBay arbitrage, where there is no need to invest money up front, profit margins are often paper-thin.

Tools of the Trade
Arbitrage Deal Finders
Your online arbitrage business will never get off the ground if you can’t source products. Amazon is known for being extremely competitive on price, so it’s rare to find items for sale much cheaper elsewhere. But it’s not unheard of. There are so many online stores, and so many products being sold, that one-in-a-million opportunities come up every day – you just have to find them.

There are tools that completely automate the work of finding arbitrage opportunities, providing daily lists of products that can be resold at a profit. Tools in this category include ProfitSourcery (UK and US), ScanDroid Pro (US) and FindSpotter (US). The Web Retailer directory includes arbitrage deal finders, and prices range from around $20 to $100 per month.

A lower level of automation is available using browser extensions like OAXRAY and Cleer Platinum, both for Chrome. OAXRAY turns product search results from 21 different online retailers into spreadsheets of product information – including current Amazon selling prices and fees. The output is similar to that from the daily product lists, but it is driven by browsing through stores rather than the list service scanning automatically. OAXRAY is $99 per month.

Cleer Platinum adds links to product pages on Amazon, eBay and 20 other supported online stores, to the same product on major marketplaces and sourcing sites. It costs $97 as a one-time payment. A free version with a lower level of features is also available, called Cleer Pro.

Price and Rank History
If you use an arbitrage deal finder, why would you need anything else? One reason is that prices are always changing, and deal finders are only accurate at one point in time.

Amazon price trackers like camelcamelcamel and Keepa provide price history and volatility of several million products sold on Amazon. Both show how the price and sales rank have changed over time, providing an insight into the typical price and sales volume for a product. If an arbitrage deal is only profitable because of an abnormal – and possibly temporary – price jump on Amazon, it may be best to avoid it. Price trackers should make that easy to spot.

Keepa also shows how often a product has gone out of stock by Amazon themselves. Frequent stock-outs by Amazon can be a big opportunity to win sales while Amazon is out of the running.

ProfitSourcery have created a detailed guide What Makes A Good Product To Buy? which covers many of the factors for choosing profitable products beyond just a low buying price. It’s normally just for ProfitSourcery subscribers, but they have kindly provided it for free to Web Retailer readers.

Fee Calculators
Amazon provide their own revenue calculator which covers marketplace fees as well as FBA fees.

The North American Amazon revenue calculator covers Amazon.com, Amazon.com.mx, and Amazon.ca.

The European Amazon revenue calculator covers Amazon.co.uk, Amazon.it, Amazon.es, Amazon.fr and Amazon.de.

A number of tools link to the Amazon revenue calculator, including a Calculator Widget for Chrome which saves time by adding a link from Amazon product pages, and automatically populating the product’s ASIN.

Fulfillment by Amazon (FBA)
Amazon’s FBA fulfilment program offers two big advantages:

You don’t need to pick, pack and despatch orders yourself – that’s all part of the service.
You get increased exposure to buyers on Amazon, with an advantage in the Buy Box and Prime eligibility.
By using FBA you don’t have to keep stock at home while waiting for orders. Your products only need preparing (labelling, packing etc.) and shipping to an Amazon fulfilment centre. Even that is avoidable by using an FBA preparation service such as Amazon’s own or a specialist third-party provider.

Online Arbitrage FAQs
We asked Ed Brooks from ProfitSourcery and James Rugg from Daily Source Tools a number of questions that we frequently hear about online arbitrage – and product lists in particular. Here’s what they told us.

Isn’t everyone chasing the same deals?
Ed Brooks said:

Not everyone gets exactly the same list of products. There will be some overlap obviously! If you are on our Accelerated Plus program, you get around 300 products a month. It is very unlikely that everyone on that program is going to go after all those opportunities. Some people naturally gravitate towards electronics or babywear or whatever it might be. And we won’t take on a huge number of customers – we’ve got a limit.
James Rugg has a similar approach:

My USP is the exclusivity of my lists. I’ve got one that I limit to 60 people, and one that’s limited to just 25 people. If all 25 people went for a product, then some people would not make money on that item. But not everyone opens the list every day. Some do, but the majority don’t. My products have a sales rank in the top 1.6% and an average 96% net profit margin across both lists, so there’s plenty to go around.
What if the price drops suddenly before you have sold your stock?
Ed Brooks said:

We’ve got a direct link to camelcamelcamel. That shows how stable the price history of the product is. If you know that for the last year something has been continually selling for $20 then it is quite unlikely that it is going to drop to $10. If someone does undercut you, let them sell out and the price is likely to go back up to what it has been averaging in the past. With any business there is an element of risk but we try to provide enough contextual information to understand that. You have to use a bit of common sense.
Won’t you make more money if you ship orders yourself?
Ed Brooks said that FBA really is worth the investment:

We have very, very few problems with FBA. We have sent in 300 items at a time, and it has been fine. If you think of all the personal time to do the packing and go to the Post Office, it’s a huge time saver. It means that you can have a permanent full time job and do Amazon FBA.
Do you need a repricing tool?
James Rugg thinks that an automatic repricing tool is essential in the online arbitrage business:

Repricers are an excellent way to stay on top of price movement. The automation they provide is brilliant. If you are buying wisely then it is invalid to complain that repricers are causing a race to the bottom. Yes, you can use them wrongly, and someone new going for the Buy Box can burn through their stock in no time. You’ve got to be aware of your strategy and how you’re going to use them. They definitely make the business more efficient, and you’re at a disadvantage if you don’t use one.
How should sellers handle returns?
Ed Brooks said:

We sold 2,500 items in our testing program, and we had no more than 25 returns. That’s about 1%. People send the product back and you can sell it as used on eBay. When you first get the stock in you need to check it is in A1 condition. If a retailer sells you something in bad condition, you should always send it back to them. The key thing with returns is to provide people with good customer service. If you do that it keeps your Amazon account in good standing. That’s critical in everything from winning the Buy Box to having your account suspended.
Does online arbitrage scale?
Many people starting with online arbitrage just want to make a little extra money in their spare time. Those who are successful often want to turn it into a full-time income. We asked Ed Brooks and James Rugg if that’s possible.

James Rugg said:

Online arbitrage is a very good way of learning the ropes. But over time you should find lines that you want to hold in stock day in and day out. If you can do that, something like my list is going to become less necessary. I have clients who have been using my list for 18 months, but they are not relying on it as their sole means of product sourcing. Many do at first, but then they branch out to find higher volume items they can buy repeatedly.
Ed Brooks told us:

Try buying a few things that are going to sell fast before you spend hundreds or thousands. It really does work as long as you’re willing to put in a bit of time learning the ropes. There’s a real mix of people doing this. You have people like my wife who spends half a day a week on it. At the other extreme there’s a guy in the US who’s turning over $10 million a year. It is very possible to be earning $4,000 to $5,000 a month just using Amazon FBA.
On balance, I think that online arbitrage provides a low-risk way to start selling online. It’s not zero risk – you can certainly lose money, but probably not your shirt. And it’s not zero skill: although it’s easy to get started there is a lot to learn to become a real expert.

So if you have time to spare, and like hunting for online bargains, it could be a great way to earn some extra cash.

Or, if you have big ambitions in the ecommerce business, it could be a great way to learn but it’s probably not the road to your dreams.

(SOURCE)

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The Basics of Tactical Arbitrage - Online Arbitrage Super Tool

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How To Make $3,000 Per Month Arbitrage

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INTERVIEW WITH AMAZON FBA MASTER CHRIS WILKEY

By Adam Snyder

In this blog post I am going to share with you the interview that I did with Chris Wilkey. Chris has a lot of great advice and information for all sellers, not just new sellers. This interview covers a lot of different topics. If you want to get my take on all the questions and answers, then make sure you watch the video below. Underneath the video is the exact question and answers that Chris gave.

How long have you been selling on Amazon? Do you think Amazon FBA will be a safe business to get into for long term success? One piece of advice for somebody on the fence about Amazon FBA and not sure about risking their money.

I have been selling on Amazon for just over 3 years and have learned a lot over those years. That being said, one of the biggest lessons I have learned is that Amazon is always (and will always) be in a constant state of change. Long term success is possible with Amazon FBA, but it shouldn’t be your end goal. Your end goal should be to learn how to see opportunities to make money in all areas of online business and to build a portfolio of passive income streams (with one of those streams being FBA). If you are worried about jumping in, remember that some of you paid thousands of dollars for a college education with no clear end goal. A few hundred to get some real world experience should be a no brainer.

We all know that retail arbitrage and online arbitrage are not going anywhere. Yes, they may be harder than they were a year ago, but they are both still profitable. What would you say is your biggest piece of advice for somebody who is just getting into retail arbitrage and online arbitrage and has never gone through Q4 before?

Don’t listen to all the negative people out there. Get your butt out and start sourcing. The more you source, the better you get. The more mistakes you make, the more you learn. Find your niche and stick to it. You might not be a toy seller, but you may rock at video games. This Q4, really really rock at video games. If you are just starting, go with what you know. Don’t think you have to be some crazy successful seller who gets multi-million dollar deals. I started out with 5 toys at a local Walgreens. Just hustle and make your own destiny.

From your experience what category is the riskiest in terms of Q4 returns? Where should newer sellers limit their sourcing?

The riskiest in my opinion are high dollar electronics. If someone is paying top dollar for a present, they will want to make sure the person receiving the gift gets exactly what they want. That equals a lot of returns on big ticket items which will make a new seller cringe.

I have always been a big fan of bundles and utilize them quite a bit in my business. Do you do many bundles for Q4? If so, are you creating your own bundles or piggy backing off others? One tip for finding the best bundle ideas or bundles already on Amazon?

I’ll be upfront. I don’t do a ton of bundling, because I invest my time into other things such as trade-in opportunities, other marketplaces, etc. People who bundle have a great advantage because the average seller won’t take the time to make it happen. The biggest lesson here is that the money is to be made doing what no one else wants to do.

How do you plan for Black Friday? Are you hiring people to get items for you since you can only be in one place? What is your advice for people wanting to shop the Black Friday deals?

My plans for Black Friday…This is a fun one. This year (like the last two years), will be the exact opposite of what most people will do. I will only go to two local stores: Walgreens and Rural King. That’s it. I don’t like messing with all of the people and can make more money sourcing online with a beer or glass of wine instead of waiting in line. And I have a kick-a@# Black Friday I have to prepare for that evening.

One of the tactics that I use for Q4 is I find toys and tools that have a sales price history that is more of a roller coaster during September and October and then I price these rather high and wait for the sale. Would you recommend this strategy to somebody who has never gone through a Q4 before or what would you recommend being that many people struggle to find profitable inventory on a consistent basis?

That’s a great strategy, but I do it a little different. I’m going for sheer volume and I’m willing to take a lower ROI to have it turnover quickly. I look at Q4 as a time to flip items as quick as possible. It’s the whole notion of compounded interest and time periods. I would rather sell an item 10 different times at a 30% return than sell it once at a 300% return. For example:

If I sell a $10 item for a 300% return and it takes 3 months, I make: $30.

If I sell a $10 item for 30% return 10 times in 3 months, I make: $179.

Now this is great in theory, but the second part of your question shows some light on the real world issue: Not being able to find enough profitable inventory.

Well, I’ll say this: The lower you go with ROI, the more opportunities there are out there. Volume might be an issue, but as you source more and more, it becomes less of an issue. Trust me on that one. I used to have trouble finding anything to sell. Now I leave a ton of items on the shelf because I have better ROI items. It will happen with practice.

Do you do much in regards to merchant fulfilled during Q4? If so, is it mainly to get your items onto Amazon faster than having to wait for the warehouse to process your inventory? Do you have any advice on doing merchant fulfilled that people who do primarily FBA need to know?

Oh yeah. I merchant fulfill (MF) from now until the end of the year. There is no better feeling than listing something in the store and having it sell before you check out. I have MF’ed small toys, hard to find items, and even Frozen bicycles over the years. If you are going to MF anything, make sure you have the boxes on hand and make sure to ship it ASAP. That is where you will have your biggest issues. When I sell MF items, they go to the top of my list for pack and prep and I get them out within 24 hours.

Used video games, used books, or used electronics. If you had to choose one of these items which one would you choose to sell in Q4 and why?

Used books. Amazon started off as a bookstore and the sheer volume of books sold during Q4 astounds me. If they are a good price point, I would sell books all day and Q4 long.

I currently sell any item with a ROI above 25%, good ranking history, and limited sellers. Is there a minimum ROI that you go after? What should people expect from Q4 in regards to ROI? Do you find the ROI goes up around this time of the year?

My minimum ROI and sales rank requirements are on a complex three dimensional matrix that is extremely difficult to explain to anyone but myself. It sounds really complicated, but each judgment I make takes in all of the information available and then I throw my gut into it to come up with my final answer.

In simple terms:

I’m willing to take less of an ROI if the sales rank is extremely low.

I’m willing to take a high sales rank if the ROI is out of this world.

Sometimes I see sales rank as a made up number and decide that the item will sell, so I buy it.

Sometimes I decide that I would rather spend my money on other items and leave a good item on the shelf. It just happens.

Do you do all your research before you go to the stores or do you spend a lot of time scanning? Or Both? How important is research beforehand in your business?

I do a little pre-sourcing research, but I am a scanner through and through. I learn by doing and I love to scan stuff just for the hell of it. I’m blessed with a semi-photographic memory and I am constantly adding in new product prices and deals into the rolodex in my head.

In regards to online arbitrage. What is your favorite tool/extension that you didn’t create? What is your favorite tool/extension that you did create and how will it benefit sellers during Q4?

This is an easy answer. The two tools I couldn’t live without are OAXRay and Tactical Arbitrage (both of which I did not create). These two tools make online arbitrage so easy it’s stupid (once you know how to truly use the tools). These tools are a little pricey, but I have made my money back time and time again without batting an eyelash. A full comparison between the two can be seen here: http://www.fbamaster.com/oaxray-or-tactical-arbitrage-the-battle-of-the-online-arbitrage-softwares/

Now for the tools I built, I have two personal favorites:

1. Variation Checker – This is a free tool that I built to help people quickly figure out which product variation is on sale on an Amazon product page. https://gumroad.com/products/HMRXB
2. Textbook Arbitrage – This one was literally built because I thought it was an awesome idea and it is now loved by over 600 other users. As the semester ends for most college, I hit this one hard to find textbook flips and make some easy money for Christmas shopping on Amazon. https://gumroad.com/products/PMEs

Many of my viewers tell me they can never find any books that sell well on Amazon. As somebody that has only used bookscouter a handful of times I am hesitant to tell them to try it. I know you use bookscouter, so what is one piece of advice you have for people that are looking to flip books using bookscouter? What is the best way to find profitable books to sell to bookscouter? Do you sell any books on eBay?

This is actually how I got started back on Amazon while I was in college (and I didn’t even realize it at that time).

There is some money to be made on textbook flips, but it’s a heck of a lot easier to get out there and source for other items. If you live close to a college campus, hit it up around the last week or two of the semester and you will be amazed at the deals you can find.

So the short answer would be: Don’t get fixated on this idea. Get your feet wet in arbitrage and then expand once you have some experience under your belt.

How important would you say Keepa and CCC are to choosing profitable inventory during Q4?

Anytime you scan an item, you are just getting a snapshot for that current moment. With Keepa and CCC, you get to see the whole picture. Imagine it like this: You look up the stock quote for Apple and you see that it is up 15% in one day. Does that make it a good stock? Well, it depends. It could have just crashed and is starting to recover or it might have just released an awesome new technology. Seeing the stock price doesn’t give you that info, but the historical data and outside factors can, thus why something like Keepa and CCC is extremely important.

What would you say to all those people that are worried about brand restrictions? Are you going deep on many products or just very wide?

Scan every item, ship quickly, price competitively, and repeat. I haven’t changed a thing that I do in terms of sourcing or quantity of each item due to brand restrictions.

Are you currently using any prep centers for your business? Why or why not? If so, how important has using a prep center been for growing your business?

I use a prep center for all of my online arbitrage and it has allowed me to focus on only processing my retail arbitrage sourcing (which has given me a ton of time back). During this time of year, I usually hire one or two workers to take the prep and pack side of the business over and I solely focus on sourcing as much as humanly possible.

If you are looking for a prep company, I recommend checking out: http://www.simplepriceprep.com/

Do you sell much grocery, health & personal care, or beauty? Would you recommend new sellers attempt to get ungated as soon as possible or wait until Q4 is over? Roughly how many listings do you have that are gated replenishables and how long did it take to build up to that?

I sell a good bit of health and beauty, but there are so many products out there that I tend to sway more towards sports, toys, home, and clothing/shoes. I think the whole idea of people being worried about being ungated is crazy and they should focus on the categories they can already sell in.

On a percentage basis, 15% of over sales comes from health, beauty, or grocery combined.

Will you continue to offer online arbitrage lists during Q4?

Oh yeah. Q4 sellers are short on time and always looking for product leads. We will keep pumping out the lists all Q4 long at https://gumroad.com/fbam.

I got the email about Score In Q4 and it looks incredible. I wish I had that available a few years back when I got started. You said that this group is for people who are not strapped for cash, but based on what you know will be inside this group what would you say is a good amount of money people need to have to get the most benefit from this group? In your opinion what would you say will be the two best parts about this group?

As for money, this group is designed for people who have around $2,000 – $3,000 to spend in inventory per month or up. If you are just getting started, an investment into your business is better spent with trial and error with your own sourcing. If you just really want to ramp up quickly, you can still be successful with the group with $1,000 in sourcing funds, but you are going to have to hustle and really leverage the group and get your products into Amazon superfast.

My favorite two parts are:

1. The Facebook live session and coaching. We have brought in experienced sellers with skill sets outside of our comfort zones and that means even I am learning things in this group already (and it’s only be live for 3 days).
2. The community aspect of the group. A single connection in the Amazon community can be more beneficial for your bottom line than any product out there. You have no idea where that connection will lead you.

You can learn more about the Score in Q4 program here: http://www.fbamaster.com/make-the-most-of-your-q4-2016-fba-master-score-in-q4/

CONCLUSION:

I hope this interview shed some light on where Chris’ business  is coming from and where mine is as well. We both have similar strategies for sourcing, but these are not the only strategies out there. Even though we both source similar ways, there are still many differences to the way we run our businesses and where both are headed.

If you have anything to add to this email interview that I had with Chris then please comment below.

(SOURCE)

Online Arbitrage Selling At Christmas (Amazon FBA)

- Get behind-the-scenes access to this $400k a year Amazon business!

Growing Your Amazon FBA| Retail & Online Arbitrage? Private Label? Whole...

- Watch this video for tricks or starting advice for retail arbitrage, online arbitrage, wholesale, and private label!

Online Arbitrage: How it Can Help Your 

Amazon FBA Business

By Stephen

Over the past couple of weeks, we have covered a few topics related to online arbitrage (OA):

• The perfect starter kit for OA beginners
• Tools to help you take OA to the next level
• Ways to get the most out of your OA service subscriptions

Today’s post will cover the basics of why you should consider using OA as a sourcing strategy for your Amazon FBA business. In our own business, we started out slowly adding OA as a strategy, but we have reached a level now where our online arbitrage sourcing equals or surpasses our retail arbitrage (RA) sourcing.

Now that we’ve seen the benefits of doing OA, we want to share with you a summary of our thoughts on the strategy. Don’t worry, the next post later this week will cover the ways we’ve learned to deal with the setbacks you might encounter while doing OA. As with most things in life and business, OA has its pros and cons, and we want to equip you to enjoy the positives and correctly handle with the negatives.

8 Benefits of Adding Online Arbitrage as a Sourcing Strategy

1. OA saves time. When we do online arbitrage as opposed to retail arbitrage, we don’t have to spend time driving from location to location looking for inventory to purchase, nor do we have to spend time standing in line to check out. Plus OA can be done with the help of time-saving Google Chrome extensions that make the process go even more smoothly. Time is the one resource we can never get back once it’s spent, so we do what we can to save it whenever possible.

2. OA saves wear and tear on our vehicles. I don’t know about you, but we’ve put tens of thousands of miles on our vehicles over the past couple of years from doing RA. Of course, those miles are deductible when it comes to filing our taxes, but I still would rather not have to replace my vehicle so quickly. Once Rebecca started doing mostly OA last year, the number of miles she was putting on her car for business purposes dwindled down to almost nothing.

3. OA saves wear and tear on our relationships. Because OA saves so much time compared to RA (see #1), we’re left with more time to spend with our family. When I’m gone from 7 am to 7 pm to pick up a big RA haul, I just don’t have as much time to spend with my wife and kids. Rebecca and I still enjoy an occasional RA adventure, and we plan to do some more baseball traveltage. But on a regular basis, I would much rather be at home to have lunch with my wife and see my kids after school.

4. Online stores are open for business 24/7. Some brick-and-mortar stores don’t open until 10am and then close at 7pm. Some aren’t open on Sunday mornings. This can be a huge limitation for folks trying to do RA when they’re not at their full-time job. With OA, anytime of the day or night that we feel like shopping, we can work at sourcing for FBA.

5. OA allows us to source at stores not located in our geographic area. We don’t have a Kmart in the Fort Worth area, but I can shop online at Kmart if I choose. Same goes for many other retail stores across the U.S. In RA I’m limited by the number of stores within a certain radius from my home.

6. OA provides free shipping boxes for our Amazon FBA shipments. When we receive an OA shipment from a retail store, we’re often able to ship the items out to the Amazon warehouse in the same box. We can save time and money by not having to make trips to Home Depot or Lowe’s to buy shipping boxes.

7. OA provides free dunnage for our Amazon FBA shipments.Dunnage is the stuff that goes in the empty spaces of a shipping box you’re sending to the FBA warehouse. We can reuse the air pillows, paper, and even small cardboard boxes that come in OA shipments as dunnage in our Amazon shipments, saving time and money from having to get that dunnage elsewhere.

8. OA allows you to save money by shopping through cash back websites. We typically shop through Ebates and Swagbucks to get cash back on our online purchases, but there are other sites that have similar programs. Your purchases cost the same amount by going through their link to shop, but you get a percentage back on every purchase. The percentage varies by store and can change from time to time, so do your due diligence to figure out how to get the best percentage. Another bonus with Ebates and Swagbucks is that they both have a Google Chrome extension you can activate with one click after you’ve already started shopping, rather than having to navigate to the cash back website before you start filling up your online cart.

I hope we’ve been able to show you some reasons why OA can be a great strategy to implement in your Amazon FBA business. I know it’s not for everyone — some people much prefer the thrill of the hunt in thrifting or RA, and I get that. In our next post we’ll cover a few of the negative aspects of OA and how we deal with them in our business.

Are they any benefits to OA we left off this list? Let us know your thoughts in the comments

(SOURCE)

- If you have more ideas on online arbitrage feel free to add them on the comments below!

Amazon is shutting down RA & OA! Is it panic time?

By Jim Cockrum

Many sellers are nervously reacting (and overreacting) to some recent developments at Amazon that some are claiming could change or end RA and OA (Retail Arbitrage and Online Arbitrage).

There’s simply no need to panic and there’s EVERY reason to be optomistic! We’ll give you the FACTS as to why this is 100% true for ALL online entrepreneurs in our community.

From Amazon’s perspective, these new changes are all about protecting some of the major brands on Amazon from counterfeit duplicates. We applaud this initiative!

Listen to this short recording with my partners Brett Bartlett and Nathan Bailey as we go through this topic from every angle.

Keep in mind that we have tens of thousands of products across multiple platforms including Amazon and we are running a $25million annual business online between the three of us – and we have zero panic about these changes.

EXAMPLE: Brett has an 8 figure business on Amazon himself with multiple thousands of different items – and he’s been entirely unaffected by the latest changes by Amazon.

Listen to the full audio here: http://provenamazoncourse.com/brandrestrictions

(SOURCE)

- What do you guys think?

FBA / e-commerce models..... continued

By Julie  Čolan

In one of my earlier blogs I spoke a little about the different approaches that can be adopted when sourcing products and selling through FBA and how there is (in my mind at least...) a logical sequence in how and when to apply these models. Last time I dealt with retail arbitrage (step 1) and online arbitrage (step 2) and today I'm going to talk around "distribution" (which I see as the next step in the journey).

So what do I mean by "distribution"?
I'm not sure if it's the best term for what I am trying to explain but I am really just talking about coming to more formal / repeatable agreements with suppliers for a continued supply of stock (i.e. becoming a "distributor").

So far the RA and OA models have not really required any negotiations or the building of relationships with suppliers but this is where, I think,  you can drive some real value in you business (as well as  through branding - more on that later).

So instead of simply visiting stores (high street or online), step 3 requires you to get out there and actually talk to suppliers of goods that you may want to sell - there are a few different types of supplier you will want to talk to and I would generally categorise these as:

• Niche retailers
• Wholesalers
• Distributors
• Manufacturers / brand owners
• Liquidators

I'll give a quick summary of each as follows:

Niche retailers are people that are selling items not widely available on the High Street. They may be fairly local in geography or simply only sold through catalogues / direct marketing / events etc. By getting these types of products on to Amazon you may just be opening them to a much wider market. The reason I distinguish this from RA is that you are much more likely to want to build a relationship with the retailer to secure continuity of supply on favourable terms.

Wholesalers seem to be the logical step for those graduating from RA / OA but, in my experience, most wholesalers are not going to provide you stock at a price you can make work on Amazon unless you commit to a very significant volume. I have had some product lines that have worked and been supplied by commercial wholesalers although I would say that they have been few and far between. As a rule of thumb, the more difficult a wholesaler is to do business with you, the better the opportunity. Any wholesaler who will give you access to their pricelist at the drop of a hat (e.g. just on provision of your e-mail address) is unlikely to have any compelling offers.

Distributors are essentially wholesalers but tend to have exclusive (or near exclusive) deals with manufacturers / brand owners to sell the products wholesale in specific territories. This is almost as good as dealing with the brand owner themselves but does take a lot of time and energy to build up a relationship and credibility with this type of seller. Distributors tend to be a bit wary of FBA sellers as they don't necessarily perceive that we bring a lot of value to the table but they can usually be persuaded. Personally I tend to prefer to deal with manufacturers / brand owners directly (especially as there are tools you can bring in to play to demonstrate value - more on that below) but distributors can be a lucrative source of products.

Manufacturers / brand owners are my favourite supplier! Most people confuse manufacturers and brand owners as the same thing but they often aren't. I'm pretty sure that Nike don't own the factories in the Far East where there products  are made, in fact that same factory probably makes Addidas in the evening shift (brands used for illustration purposes only - I have no idea on the manufacturing of either one). Anyway, most manufacturers just want to make stuff and not get involved in all the marketing and sales palaver that follows and the brand owners don't necessarily want to own the factories. This is the dynamic that can help us all move into the "private label" space (for another day) but it is important that you understand the difference,  Anyway, locating either manufacturers or brand owners is easy, the difficulty is persuading them to let you be the owner of their Amazon listing, marketeer  and online sales lead - all stuff that they need (badly) but just don't know about it. The way I have approached this is to seek out local(ish) brand owners, firms that have been producing products for years but aren't tuned in to the magic of e-commerce as yet. It is surprising how many firms you will find that are local to you with a bit of research. I started with Google, simply asked around and ended up driving around commercial / industrial parks in my local vicinity to find target suppliers. 

The people you really want to find are those with a good product but an established "old school" route to market - probably through wholesalers. There are many many business owners out there creating great products but without the knowledge of e-commerce to understand that they are missing out on a huge market place. So how do you persuade such companies to partner with you? You don't own a shop (in the physical sense at least), haven't been in "the trade" since 1952 and so may have little credibility in their eyes. So now you're really in the heart of business, selling the benefit and trying to demonstrate how YOU can really help them as business owners. Hopefully by the point you are at this stage you have mastered the RA and OA models and have learnt a thing or two about Amazon. Demonstrating to the brand owner that you understand how Amazon works, the sheer volume of sales that are processed through it and the turnover of similar products (Jungle Scout can be a great way of concisely demonstrating this benefit - another topic for another day I guess) can be particularly compelling stories. You can also start to bring into play how you can optimise their product listings to drive more traffic and better conversion rates, and manage follow-up comms with customers to help build brand awareness and develop follow-on sales.

Anyway, I'm starting to realise that I have tried to tackle a huge subject over a few blogs and all of this stuff needs much more depth to do it justice - that will follow I promise. For now though I hope you're enjoying my insight - I really do welcome your comments (even if not wholly positive) and questions. I will complete this series of blogs on the overview of approaches to e-commerce / FBA to talk about Private Labelling / building a brand in the coming days.