Why wouldn’t I try retail arbitrage out for myself?
When I hear about someone starting a business reselling on Amazon that requires little investment and minimal risk, I’m all ears.
Like you, I am a curious person.
Before I started working at StartupBros, I came across multiple videos and articles they had posted online that explained how reselling on Amazon using retail arbitrage can be profitable.
Here’s one of my favorites, check it out:
Best Way to Find Items to Resell on Amazon
Most well-known stores like Walmart, Big Lots, Target, and Home Depot have clearance sections where you can find products that you can resell on Amazon or even ebay.
The idea is to find the clearance item, buy it, ship it to Amazon FBA and make a profit on the margin.
It’s not illegal to do and people do it every day to earn some extra income on the side.
Take a look:
Popular Stores to Source Items for Retail Arbitrage
- Marshall’s
- Ross
- Home Depot
- TJ Maxx
- Staples
- Models’s Sporting Goods
- Gamestop
- Craigslist
- Big Lots
- Outlet Stores
- Local Boutique Shops
My Experience Buying and Reselling on Amazon
So, I went out to Walmart, Big Lots, and Target to try and sniff out some great deals.
Unfortunately, I had no luck at Big Lots. Some cheap bracelets at Walmart admittedly stood out to me, but most of what I purchased came from Target: red sticker clearance items are great places to start reselling.
Now:
The time it took for me to shop and check profitability with manufacturer SKU lookups was about 2 hours.
Truthfully, at certain moments, I was paranoid that store employees were surveying me with their eagle eyes. But the nervousness was all in my head, though – nobody from the store interrogated me, or even approached me at all.
I ended up walking away with 6 unique products, but 13 items in total when you factor in multiple purchases of the same product.
I just couldn’t help my urge to double and triple up on some of the better deals.
The Exact Items I Found to Resell on Amazon
Of course I could have bought more, but I didn’t want to waste any money.
What’s the bottom line?
This was a reselling experiment, so there was no need to go crazy. I set a $150 budget and stuck to it.
GET YOUR ARBITRAGE CHEATSHEET AND FIND HOT OPPORTUNITIES
Now to Sell the Products with Amazon FBA…
Open a free Amazon Seller account. (Since I was selling less than 40 items a month, I chose the “free” option. That was a no-brainer.)
(Note: If you want to buy products without paying sales tax, obtain a resale certificate. This may also be a legal necessity in your State.)
Scanning my clearance items into my account was absolutely painless. I just used the Amazon iPhone app and created a shipment to an Amazon fulfillment center.
It gets better:
I even let Amazon label my items for me. They did charge me a little for this, but I was fine with it. They know what they’re doing, after all.
Now, I live in Florida, and Amazon instructed me to ship all of my items to an Amazon warehouse in Joliet, IL, which is just outside of Chicago.
I thought that was strange, since there are several warehouses much closer to me, but I just went with the flow.
CRAZY CHEAP shipping to the Amazon warehouse.
The cost for sending this entire shipment, thanks to Amazon’s discount, was only $5.03.
I dropped the package off at the UPS store and never looked back.
A few days later, my items were delivered to Amazon, checked into their system, and placed within the Amazon US Marketplace.
Amazon notified me of every step throughout this entire process, so I was always in the loop.
I Made My First Sale!
To my surprise, I had a sale the very next day.
And then another.
And another.
Wow!
People were actually buying these items, and I was making a decent profit!
After about a month and a half, I was able to resell every single item!
(Well, actually one item took a little longer.)
Look:
The Peanuts blanket didn’t resell until I dropped the price multiple times.
Regardless, the profit from the other 12 items more than made up for it.
After it was all said and done, I made around $100 from selling 13 products reselling using Amazon FBA.
It took around 2.5 hours of my time, which equates to an impressive $40 an hour.
Not too bad for just getting started!
Obviously, there is more to reselling on Amazon than just watching a YouTube video or reading an article.
Here’s the deal:
So, The reason I wrote this article is to motivate you to stop waiting around for the right conditions, opportunity, weather, [insert excuse here]… Just DO IT already.
You could research things until you pass out.
You can obsess over all of the “what-if’s” until your brain oozes out of your ears.
Or you can just, you know, START.
Therefore, take action, learn, and change direction if you need to.
You will never know everything there is to know. You will constantly learn new and improved ways to grow your business.
And that’s just fine.
Experimenting with Retail Arbitrage Taught Me…
- Create an Amazon Seller account
- Use Amazon Seller Central
- Ship products to Amazon FBA centers
- Label products to buy and resell on Amazon FBA
- Set up my bank account to accept payments from Amazon
- Understand the importance of Amazon FBA and using Prime
And, naturally, there were boatloads of other tiny lessons learned along the way.
The real-world hands-on education I received just by taking a very small financial risk and leaping into action was worth thousands of dollars in itself.
So, this took less than 3 hours of my time, and about $150 in startup costs in order to pay for the products up front.
And personally, I look at the $100 I made in profit as a BONUS.
Have you ever been curious about buying and reselling products on Amazon?
Retail arbitrage is a great way to get started with very little risk.
Go ahead, give it a shot!
Use our Retail Arbitrage Business Guide to turn this into a business.
Exact Steps to Start a Retail Arbitrage Business
If you end up enjoying the process, and you’d like to grow as an Amazon seller, the next logical step would be to private-label a product.
We have incredible resources to get started from product photography to Amazon ranking hacks to get you up and running quickly!
Don’t forget that if you have questions about retail arbitrage, reselling on Amazon, or private-labeling a product, we have a live Q&A session weekly. Ask away, and we’ll be more than happy to lend you a helping hand.
So, what are you waiting for?
Because, if you’re looking for an 7,000 word all-inclusive step by step guide to learn how to sell on Amazon with videos, checklists, and detailed to-do’s then check out our Amazon article!
If I can get started selling on Amazon, so can you.
Additional resources you might be interested in:
9 Methods to Make Money on Amazon in 2019
Amazon Seller Income Tax and Sales Tax Reporting: The Ultimate Guide
3 Amazon Product Research Tactics You Need in 2019
Top 20 Most Successful Job-Killing Amazon Products of All Time
136 Comments
I hate risk taking and suffer from the syndrome of over researching. This was very encouraging, and appreciate being told to "just do it!" I do have a question. Today it is 05/26/2017. I'm not sure of the date of this blog post. Are there any new challenges today vs. the date of this post that a new person would have to consider? Thanks! -G:Man
G-man,You start again, you over thinking, just do it and there any new challenge today (06/14/2017), just go with the flow and see what happens, in worse case you will learn something Great post to author
Did you have to add any type of keywords or do any optimization
Hey G-man, the challenges with arbitrage are the same today as when the article was written. Arbitrage is a fantastic business model in order to get started and to understand what goes into selling on ebay or amazon. Long term I'm not sure if it's the best way to go but so many people are out there crushing it. If you are willing to take the time and do the research you can find some incredible deals and make some serious money!
Thank you so much for that awesome comment! You are so right, sometimes you just need to take a leap and just do it. You learn more by doing than anything else! A lot of people don't realize how great things can potentially be if they just take action.
Believe it or not for arbitrage you just need to describe the item as is and not do anything extra because most people are already aware of the brand and that does most of the heavy lifting.
Hey, I bought some sample products for Alibaba. Would selling this items on Amazon be the same concept as retail abtriage?
Hey Shon, the idea is exactly the same. The only difference is that when you do retail arbitrage you are relying on brand names to make the sale. When you buy samples on Alibaba you are doing what's called private labeling because you are selling an unbranded products. The process though is the exact same when listing on Alibaba.
I'm confused. You say that you made a $100 profit but spent $150. Wouldn't that be a $50 loss? What am I missing here?
So Jim spent $150 and made $250. He didn't clarify that!
I want to buy products on Alibaba or other and sell them on amazon, how should I manage the orders without checking them in person?
There are a few ways to do that. In general you need a third party company willing to do it for you. We use fbaprep.com. They are willing to do all the checks and prep so it can go directly to Amazon FBA without you having to do that yourself.
Hey Jim, I have a question I want to try selling things on amazon through retail arbitrage. Do I have to take pictures of the items I buy for discount before I ship them out to amazon?
Hi, this is more of a question. Than a comment. You mentioned using fbaprep.com. Do you pay a fee for that service?
Hi, and thanks for the info....my question is, when you sell Arbitrage do you list it as new or used? If it is in perfect condition how would Amazon know if I bought it wholesale or from a discount rack?...Thanks again!
Hey Cara, you can't list arbitrage as new but there is an option of "like-new" that you should use. Then in the product description you can mention that it is unused and unopened!
Dangggg your fast! Kudos! Does Amazon require you to show an invoice or proof of purchase? (Back to the second part of my question)....Last thing I want is to get my account closed before I get going good but Im not understanding why a sales item is considered" like new", when it is new..... Do you know exactly where, in seller central I can read up on this?.....I seem to be chasing my tail more than I care to admit.........Thanks again for such a surprisingly quick reply!
Thanks for sharing your experience with retail arbitrage. The nice thing about Retail arbitrage you can start with limited risk. A few years back, I was finding Foot massagers at a local store and selling them on Amazon as fast I could buy them. I sold enough of them to pay off a car.
On seller central, there is definitely a page that lists "Item condition" definitions. In fact, I think if you start a blank listing you can see it in a drop down. You don't have to list Like New just because you bought it from a third party. As long as it's unused and unopened.
How would you provide invoices for gated products like "Apple" if you've bought them at a retail store? I'm trying to sell authentic apple iphone/ipad cases that I bought at a retail store for significant discount but having trouble listing them up on Amazon. They require me to send them invoices, which I don't have.