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Amazon Retail Arbitrage 2022: How to Resell Products on Amazon

Amazon is a big business. So, what better way to get started than it is to get involved with Amazon directly through something called retail arbitrage.

When you want to start an online business to sell you need a lucrative and public channel for business. Amazon’s retail arbitrage will make it easier for you to earn a sizable income. How? By simply becoming a seller on Amazon.

Recently, there has been a growing popularity for all things in relation to e-commerce on Amazon. We will discuss more about retail arbitrage to get a step-by-step overview of this Amazon program.

sellers have had a lot of success by reselling and remarketing. Read more to learn and discover more about retail arbitrage. Learn retail arbitrage works and as well its advantages and disadvantages. Finally, compare retail arbitrage to the competition and see what works for you.


What is retail arbitrage on Amazon?

What is retail arbitrage on Amazon

Essentially, retail arbitrage is when you buy a product from a brand or just a store for example and from there resell. It is not that easy. You may be wondering what exactly is retail arbitrage on Amazon. A good question with a lot of aspects and features. Overall, retail arbitrage is a difficult phrase. But, overall, retail arbitrage is a concept to understand.

Defined fully, Retail arbitrage is in totality the practice of utilizing the price difference between two or more markets to resell products.  When you take a product and sell it at a higher price this is what amounts to profit. Why? Because there is a verifiable difference. If you’re thinking about getting into retail arbitrage or online arbitrage, it’s important to know what it is and how it works.

All in all, what happens is that with retail arbitrage the seller buys discounted or lower price goods from retailers. From there,  retailers or sellers may sell ​​these discounted goods at a considerably higher price. The key is usually higher than the buying price, because the aim is clear and big profit.


Amazon Retail Arbitrage 101:

Amazon Retail Arbitrage 101

When you look at retail arbitrage it breaks down everything in terms of where you are physically. All in all, with regard to Amazon retail arbitrage, you will physically go to stores to get and buy your inventory. This is a thing you can’t miss on Amazon if you want to stay on top of trends.

In general, retail arbitrage may be involved with shopping at stores. Within these stores, you aim to get products with significant markdowns. So, this would be in retail spots with more likely big box stores. But, you can also do it with vintage or thrift stores. In the end, just try to take advantage of what you can get overall.

Retail arbitrage offers you the concept of getting products you’ve bought at stores or at a discount. The very basis of arbitrage is that you need to resell them on Amazon listings at a visible higher price.


Starting out with Retail Arbitrage:

When you start and begin to be a seller the challenges seem intimidating. Many may not want to be part of an expensive programs or pay a lot of money to try selling. However, investing a good deal of your money for your capital and inventory is wise, it is not necessary. Make sure to be patient, sell and earn on the platform.

It may seem daunting to get started but don’t let budgetary constraints or experience stop you. When you launch a private label product the options are bigger than expected.  Once you have started with retail arbitrage, you are then able to start with surprisingly as little or as much money as you want!? Yes, it is possible. You are able to start with a little or as much as you’re comfortable with overall. The advantage is you can do this without having to go to a physical store.


Step-by-Step Guide to Setting up Retail Arbitrage

Nobody should be held back by trying to do retail arbitrage. For example, with Amazon, you can start and go forward with working with fulfillment. Basically, a platform is formed where third-party sellers can display and sell items. In general, your own personal products are listed on Amazon.

The thing to remember is that Amazon is able to handle and manage everything with the products. There will be goods placed  at the company’s fulfillment centers for Amazon. How? Simply by funding through adding fees. The fees are of the following that manage inventory and basic fulfillment fees.

Retail Arbitrage Fees and Costs:

Nothing comes for free. Retail Arbitrage on Amazon does come at a price, so expect to pay per item sold. For example, when you look at charges you need to factor them in total.

  1. Seller Account Fee: Amazon has a $39.99 per month for a professional seller account.
  2. Referral Fee: On Amazon, they may typically go from 8% to 15% on every sale.
  3. Miscellaneous Amazon Fees: Be aware of fees that will incur on Amazon for standard transcations.

On a positive note, it is worth noting that personal accounts are free. So you will not incur any monthly fees. However, please do expect standard Amazon fees. You need to be aware of AMazon requirements like 40 items or less per month and be conscious of restricted categories for selling.

Selling and Amazon Seller Features

With Amazon Retail Arbitrage, you are able to utilize Amazon Seller as a seller and business. Be prepared to use this for the ultimate function for selling.

In general, Amazon handles shipping out the goods you have. This as well includes returns and the handling of customer service. Just remember to monitor fees and inventory for managing costs overall.

The growth element for Amazon is positive. Recent statistics have shown that third-party sellers are a growing market that account for 58% of Amazon’s sales. This is incredible considering what people may assume about Amazon, but physical growth merchandise sales are from retail arbitrage.  In 1999, third-party sales accounted for just 3% of sales for Amazon.

Setting up Retail Arbitrage on Amazon

You can’t do anything unless you are with Amazon. In summary, to source products you need to have an account with Amazon. You have other platform options for retail arbitrage, but it is best with Amazon.

For any seller, you will need to buy from wholesalers, outlet stores, retailers, and other places. Once this is done, you will start selling and increasing the prices to make a profit.


Guide to Selling with Retail Arbitrage on Amazon

Guide to Selling with Retail Arbitrage on Amazon

Joining Amazon is key. When you join Amazon you are free to start the process and then register. You would start by opening a personal account on Amazon Seller Central.

When you have a personal account you have more options overall. You are able to do some things in terms of payment. For example, you don’t have to pay upfront with a personal account in terms of retail arbitrage. Moreover, you are able to do some sourcing.

Moreover, you are able to move items around and not lose out on the monthly fee. When you add a personal account you can add more in terms of payment options. Like what? You are able to upgrade and customize at any time.Basically, you are able to add a debit and credit card option.


Selling with Retail Arbitrage on Amazon

Selling with Retail Arbitrage on Amazon

Many final steps can be simplified by doing some basic checks. For example, you just need to make sure to do the verification process in total from beginning to end.

Therefore, the most important step is the verification process required. When you do this you must be prepared to have it for your Amazon account. So, you will use a current and up to date debit or credit card. Furthermore, you will have to process and enter information that is pertinent. Like, listing any and all items or sending any shipments. You need to do this so that Amazon can proceed and deduct its necessary and mandatory fees.


The Advantages of Retail Arbitrage

The Advantages

There are more pros than you realize with retail arbitrage. However, many may not realize the work that goes into it overall. When you do any type of sale of goods and services it is best to know the consequences. Therefore, being aware of liquidation is key. One of the biggest benefits is that any and all buyers have more range of options. Lastly, you will be able to buy specific goods and then resell at the process of your choice. This is the essence of the oldest form of arbitrage.

Retail arbitrage has a lot of advantages.

Pros:

  • A fairly low financial barrier to entry. So this means you will not be held back by high costs or expenses. The entry to compete is lower but more viable.
  • Wonderful place to start selling for first timers. As a quality and wonderful marketplace it is a great place to begin selling. You can get on quickly and become familiar with Amazon and e-commerce in general.
  • When you begin with a small amount of investment, retail arbitrage is able to give you an individual account with Amazon. So, you can start quickly with Amazon.
  • You are able to become active in the process of being able to look for deals and bargains. You will be able to hunt for discount in-store specials.
  • More freedom to work wherever you want anywhere. You are able to choose virtually any product space


The Disadvantages of Retail Arbitrage

The Disadvantages of Retail Arbitrage

Cons:

Nothing is perfect so be prepared for some downsides. Retail arbitrage may sound ideal but it has drawbacks as you see below.

  • You need to be ready to move and get products from store to store. This process can be tiring overall so be prepared.
  • There is unpredictability so that means some instability. Be prepared because you might find less than what you are looking for with your job standards.
  • Massive saturation in the market means of course that sales will not come easy. Because there is a large potential for competition.
  • No control of your product flow and listings. As you do the retail price change the actual and original listings are not yours. So, you don’t “own” or control your product or item from the outset.


Conclusion about Retail Arbitrage

Retail arbitrage has a lot of benefits. But, knowing is half the battle, and using it correctly with Amazon or any other platform. Because you will be able to make money quickly and with ease.

Therefore, retail arbitrage has become a popular business idea and trend.  In total, everything included with the added benefits will make the retail purchasing process complete. With retail arbitrage you have more efficiency and benefits on both sides.

Doug Wein

Doug Wein is an independent consultant and coach, working with sustainability-minded businesses and professionals to help them clarify and achieve their most critical goals. He has provided strategic sustainability consulting to Fortune 500 companies across a wide array of industries, including food & agriculture, retail, manufacturing, real estate, green building, and waste & recycling. His coaching work helps clients develop leadership skills, spread bold ideas, transform organizations, and ultimately create positive change. Doug has led strategy development trainings in small teams and in groups of over 650 professionals at such premier sustainability venues as the Greenbuild Conference. Doug has led people and organizations for over fifteen years. He has an MBA from the Ross School of Business and an MS from the School of Natural Resources and Environment, having graduated from the Erb Institute for Global Sustainable Enterprise at the University of Michigan. His undergraduate degree in Psychology is from Pitzer College. When he’s not coaching, Doug is often attempting to invent new culinary sauces to delight his wife, building treehouses, or exploring the backyard with his two-year old.View Author posts