Online arbitrage is a very profitable business venture. It is very easy to start, and also to scale up, if you know what to do, and do it right. Here are 10 things anyone thinking of trying out online arbitrage should know.
Arbitrage on eBay is a waste of time
Creating listings, and shipping products on eBay take a lot of time. amazon FBA is much more efficient and will save you lots of time. In many cases, it will even cancel out any commission differences for the same sale on eBay.
Toys are not as lucrative as you may think
It is a common misconception that the Toys & Games category is the best place to start. It is not. Competition is too high, and it would be a while before you make a single sale, and the profits wonâ€™t be worth it. There are millions of other products and categories that you can make a killing in. You just have to find them.
Sell in every category you can the soonest you can
Amazon is continually gating off more and more categories from third-party sellers. The best move, therefore, is to make sure you are already selling in the category before this happens. It does not even matter if you make a profit, in the beginning, just make sure you are already in before the door closes.
Get ungated early
If you are interested in a gated category, make an application to get ungated for those categories as soon as possible. Doing this means that you can sell in many more categories, will have a better advantage over the competition, and your profit will be higher.
Donâ€™t battle amazon for the buy box when it comes to new books
It is possible to battle Amazon for the buy box in many categories, and sometimes, they will give in. when it comes to new books, however, just back off. Dropping your prices with hopes of forcing them to back off will in surely not work, and you cannot expect them to run out of stock. So, to be safe, just let them be.
Software helps you get things done faster and more efficiently
You can choose to do all the work manually, but youâ€™ll spend hours doing very little work. Get a few good software or plugins to help you get the work done faster. They will help you make the right decisions, and you can spend more time doing what matters. Some good ones you can use are FBA Wizard, Tactical Arbitrage, and Keepa.
Test before going in all the way
Keeping your inventory broad and shallow is the best way to go. Do not go deep with any product unless you are absolutely sure you will make a fortune on it. But most importantly, try selling a few items per product before making a huge investment. This will go a long way in protecting you from having items that no one really wants to buy.
Any profit is profit
It does not matter if you are making 50p or $50 profit per sale. As long as you have a positive ROI, then go with it. Getting 50p profit per item on a fast-moving product still contributes as much to your basket as a $50 profit per item on a slow-moving product.
Send things in as frequently as possible
In online arbitrage, momentum is everything. Every minute your products are not in Amazon’s fulfilment centre is a potential loss. So, send in everything whenever you can. Remember, there is nothing like minimum values or minimum quantity of units. Just keep things rolling, and take note of things to consider in future.
You will get sales eventually
There is a common misconception that new sellers with a â€˜Just Launchedâ€™ tag and zero feedback have a hard time getting sales. If truth be told, as long as you set your prices right and are not fighting lots of other sellers for the buy box, you are going to start getting orders as fast as anyone else. So, do not give up just yet.
Bonus: Patience is Key
Above all else, learn to have patience. In the perfect world, we would sell everything within a month and smile all the way to the bank, but in reality, there is a lot going on. The market is going to shift, prices will crash, and a lot of other factors you canâ€™t control. It, therefore, pays to be patient and watch. Also, make sure to triple check and make sure that your business will still be standing even if prices dip.