Amazon FBA – Arbitrage

Arbitrage


What is arbitrage?


While this guide focuses mainly on launching a private label product onto Amazon, I want to at least introduce you to different arbritrage methods as another option. By definition in this case, arbitrage is the act of buying a product and reselling it on a different market or channel.

Different Methods

Retail Arbitrage (RA): Think eBay reselling but with Amazon. With retail, purchasing a product at Walmart and listing it to Amazon. For popular items such as Fingerlings, this item would be sold out in stores leading consumers to purchase them online. When Nintendo Switches were out of stock, these were being bought in store and sold on Amazon. This method is recommended by a lot of coaches for people just starting out to build up capital by continuing to reinvest their money.

Online Arbitrage (OA): This is the same idea but instead of going to retail stores, people look for deals online. Once you find a great place to source items from, you can ship them into Amazon warehouses and have it be listed and sold for a profit.

With Arbitrage as a method, there are certain caveats to this method of selling. You have to be careful in choosing products where you may need permission from the company. As an example, you find a PS4 on sale at Best Buys and you list it on your Amazon account. Playstation may request to suspend your account for not being an authorized reseller. However, PS4 video games may be a good item to resell, depending on the gaming company.

When you send a product in, you ‘piggyback’ on an existing listing, that’s why sometimes you’ll find products on Amazon with an option to choose the “sold by” or “available from these sellers”.

We know a lot of people who make 6, 7, to 8 figures using this method. By going to stores and finding products, you can build up a large inventory to resell. There’s a lot of opportunity on Amazon, you just have to find the best avenue for you.