Written By Ameraware

In the business world, arbitrage is a practice of purchasing a product in bulk at a low cost in order to turn around and sell it to another market for a profit. On Amazon, arbitrage presents an opportunity for business owners to do this fairly easily. In order to do this, you need to know what products are selling for on the Amazon marketplace, and you also need to know how to find products that you want to sell.

Are the products you have in mind to sell via the arbitrage method right for Amazon? Here are some tips that will help you figure it out:

Compare Prices

In order to determine if our product is right for Amazon Arbitrage, you’ll need to start comparing prices. You can do this by comparing prices across different categories of products you’ll find in clearance isles.

Retailers will often offer a steep mark-down or a discount offer for multiple items bought. A good strategy would be to seek out the most dramatically discounted items. Alternatively, you could purchase in bulk, at smaller discounts.

Understand the Restrictions

Proceed to familiarize yourself with what you are – and what you are not – allowed to sell on Amazon. Amazon has unequivocal, outright bans on certain products. On others, the online retailer will place restrictions or gates. A gated product is one needing approval from Amazon before you can offer it for sale.

Know the Competition

Next, since the likelihood of you being the only seller of any item is pretty slim, you’ll need to scout your competition and review their most successful lines of products and practices. You’ll need to devise your own playbook, but using competitor’s experiences may shorten your research time and provide helpful insights.

Consider what the competitor is doing. Are they selling a product that Amazon is already selling directly? How are their customer reviews – do they rank high on delivery and customer service? Do they offer 2-day delivery options for Amazon Prime customers? Are they offering the RRP?

Gather your data and synthesize the information so you can identify where you can get ahead and where to press for your unique selling proposition.

Look at Customer Reviews

Customer reviews are an excellent resource, a window into the quality – or lack thereof – of a product or products you’re considering for arbitrage. A purchaser’s complaint about a specific aspect of a product or its overall quality can be a red flag and an indicator of potentially slow and lingering sales.

Calculate Costs

When analyzing your revenue potential, remember to include shipping and storage costs for any products you purchase in bulk. If your bulk product needs a lot of storage space, which you don’t happen to have, consider outsourcing the storage of that excess inventory.

The speed of shipping is the very reason behind the enduring enthusiasm among Amazon users. An Amazon shopper will often forego pricing concerns and opt to spend a little more instead of having to browse the clearance racks at a local retailer in person.

For your buyers to be able to take advantage of that crucial convenience, the acclaimed 2-day delivery option is something you won’t be able to do without. And you shouldn’t want to, as your effort may end up an exercise in slumping sales.

If you are thinking of getting of getting into arbitrage, you may be looking for ways to streamline your systems. One of the ways you can do this is by hiring a third party for your shipping. Contact us for more information!