Are you tired of struggling to make money online or just looking for some extra income? How would you like to make some extra cash every time you went shopping? People around the country are doing just that, they’re finding money at their favorite stores using something called retail arbitrage.
What is Retail Arbitrage
With retail arbitrage, you buy items that are on sale for less at your local store than they are selling for online and then resell them on eCommerce sites like eBay and Amazon. Besides Drop Shipping, Retail Arbitrage (RA) is probably the easiest way I have discovered to make money using the internet and I’ve tried a lot. Check out the book RETAIL ARBITRAGE “The Blueprint for buying retail products to sell online for BIG PROFITS” by Chris Green.
How Retail Arbitrage Works
Once you find an item you think is a good candidate for arbitrage, you simply scan the barcode using a mobile app like ‘Amazon Seller’ or ‘Scan Power’ on your mobile phone and you will see a real-time listing of the item’s price, its sales rank, and how many of them are currently for sale on the site.
If the item is a good seller, and there is enough of a price difference between what you can purchase it for and what it is selling on Amazon.com, minus packing and shipping fees, then you can resell it for a profit.
With Fulfillment by Amazon (FBA) you can purchase an item and send it into Amazon using (its highly discounted rates) and Amazon will store it for a small fee and take over shipping, customer service and returns. FBA allows people who want to make some extra cash from retail arbitrage to purchase as much inventory as they want and not have to worry about storage, fulfillment or any of the other hassles that come with owning a business.
So next time you walk down the shopping aisle, drive by a garage sale or see a sign advertising a closeout sale in your neighborhood, remember you might be able to turn those opportunities into cold hard cash using retail arbitrage!
Where Are Some Good Places For Retail Arbitrage?
My favorite places to retail arbitrage are Target, Walmart, Toys R Us, Home Depot, Costco, Sam’s Club, Tuesday Morning, IKEA, Radio Shack, Office Depot, CVS, Walgreens, Big Lots, Ross, TJ Maxx and thrift stores like Goodwill. When you find a good item at one store, try going to the same store in different parts of town and buy all you can. You can also call ahead to save time.
Be sure to check out the clearance section and don’t be afraid to ask for a discount for buying all they have of an item.
Garage sales and auctions are good too (try auctionzip.com). They have higher profit margins, but they are usually one off items. Your best bet to limit your competition is to find specialty stores and non-chain mom & pop stores.
Retail Arbitrage Tips
Choose Items With A Low Sales Rank – Most items listed on Amazon are given a sales rank that is updated hourly in their given category based on historical and recent sales data. The lower the sales rank number is, the faster it should sell. Look for a sales rank that’s consistently in the top 5% of its category. Multiply the number of items in a category by .05 to determine if it’s in the top 5% of that category. You can use a site like CamelCamelCamel to check a products sale history and rank.
Buy Items With Good Ratings and Reviews – Focus on 4 and 5 star ratings, people on Amazon just don’t buy products with bad ratings and reviews.
Source Late at Night – This is a unique way of gleaming extra information from doing the exact same thing you are already doing. By going at night, before the shelves get stocked for the following day, you will be able to see what sells out.
Source Exclusive Items – Exclusive items, those that can only be sold at a certain retailer, also prove to be successful items for retail arbitrage. An example of an exclusive item would be certain Nerf toys that are only sold at Toys R Us or Ridgid power tools only sold at Home Depot.
Remember The 3x Rule for Profit Margin – You want to be able to sell an item for 3x the price you buy it for. If you buy an item for $10 and sell it for $30 on Amazon you’ll pay approximately $10 for shipping & fees. So your profit is around $20 or 100% ROI on that item. You can also shoot for a 50% ROI.
Don’t Sell Yourself Short – Don’t lower your prices to match the lowest price. If you can, wait until the lower priced competition sells out and then your item will start to sell.
Get Ungated in Restricted Categories – This will increase your inventory and your income while decreasing competition.
Create Bundles – The key to creating bundles is to start with one product that is popular then add something with it that makes sense for that customer. A quick way to get ideas for bundles is to look at the “Frequently Bought Together” section as Amazon tracks customer purchases so they can suggest related products and increase sales.
Get Your Own Bar Codes – I get my UPC codes from BarCodesTalk.com. I’ve never had a bad code and their service and support is great. Amazon now requires a UPC code for all new product listings and you’ll need them for bundles. eBay requires them for certain categories too.
To Your Retail Arbitrage Success!