Amazon Online Arbitrage in 2023: How to Make Money
Amazon online arbitrage is a great sales model because it’s easy to start and scale. Who wouldn’t love the idea of earning cash without initial investment? That is how online arbitrage works.
Sounds too good to be true, but it worked out for many Amazon sellers.
Interested to know whether online arbitrage is profitable and how it works? Read this post to find out.
What Is Amazon Online Arbitrage?
Online arbitrage is a business model of finding lower-priced products and reselling them on Amazon for profit.
For instance, you can find a product on a discount aggregator like Brickseek, compare its price with the same product on Amazon, check if it’s profitable to sell, and list it on Amazon. Your profit comes from the difference between the product price on Amazon and your discounted purchase price minus expenses.
It’s a legitimate way of making money that doesn’t require any license.
Is Online Arbitrage Worth It?
Arbitrage is a common type of reselling model on Amazon. Around 17% of Amazon sellers do online arbitrage. Arbitrage grows in popularity as the number of Amazon sellers increases.
That is no wonder since it has low entry barriers and is easy to scale with little investment.
More than 50% of online arbitrage sellers earn monthly around $5,000 with profit margins of 16% and up.
Online arbitrage model: pros and cons
- fast, easy, and relatively cheap to start;
- you don’t have to roam brick-and-mortar stores for deals physically;
- it’s a work-from-home business;
- huge amount of product ideas;
- it’s a good complement to other business models in your Amazon store;
- you can learn how to sell on Amazon without significant risk.
- product research takes a lot of time;
- prices on Amazon change all the time, which makes it challenging to keep sustainable profitability levels;
- low-profit margins after Amazon fees;
- you can’t resell certain products or need approval;
- the items you source may look different from what’s listed on Amazon.
How Much Does It Cost to Launch Online Arbitrage Product?
The online Arbitrage model is relatively fast and inexpensive to start.
You can launch an online arbitrage business for $500 to 2,500. The typical cost of profitable online arbitrage products ranges between $10 and $50.
You can get this business up and running in about six weeks. Also, you can scale it fast as soon as you earn money.
How Does Amazon Online Arbitrage Work?
With online arbitrage, you must register an Amazon account, find a profitable product to list on Amazon, source it, and start selling.
Amazon online arbitrage step by step
- Step 1. Product idea: identifying lower-priced items.
- Step 2. Product research: identifying sales potential, restrictions, and account health problems.
- Step 3. Product analysis: making sure the product is profitable to sell on Amazon.
- Step 4. Supplier search: finding where to source products.
- Step 5. Product sourcing: recalculating profitability with the supplier’s price and making an order.
- Step 7. Product listing: listing an item on Amazon, promoting, and managing inventory.
- Step 8. Monitor the sales and adjust the price as needed to ensure a profitable sale.
- Step 9. When an item sells, ship it out to the customer or let Amazon handle fulfillment if you're using their fulfillment service.
- Step 10. Repeat the process to continue growing your business.
How to Easily Start Online Arbitrage Sales?
With incredibly high competition on Amazon, an increasing number of sellers trust seller tools in their product hunting, research, setting prices, and profit calculation.
Firstly, this is because Amazon itself increasingly applies artificial intelligence to rank and show products to its customers. It determines sales and conversions (visits of your listing that become sales).
Secondly, sellers must stay tuned with the competition that uses seller tools to fight for the Buy Box.
Types of Amazon online arbitrage tools
- arbitrage deal sites;
- product research tools;
- product sourcing software;
- pricing tools;
- repricing tools;
- cashback sites;
- profit calculators.
Seller tools help take care of different processes. For online arbitrage sellers, the major challenges are selecting the right product and the reliable supplier, the former being key to success.
Of those, product research is quite a task for online arbitrage sellers. It’s a routine process that takes a lot of time and effort. Moreover, if online arbitrage sellers go through hundreds of products daily, the risk of making mistakes increases.
There are seller tools that help you automate this complicated task. Seller Assistant App is one of such tools. It’s a powerful product research instrument for online arbitrage sellers that can help you see all essential product metrics right on the Amazon search page and save results to Google Sheets. It also enables you to estimate product profitability, Amazon fees, and more. It will help you select the right product.
Online arbitrage is a great sales model because it allows earning money with very little upfront investment. On Amazon, you can start and scale it fast.
However, you’re not the only one who knows it. Due to high competition on Amazon, merchants increasingly use seller tools to win the game from the competition. They help you take care of deal hunting, product research, and the right supplier.
Seller Assistant Аpp is one such tool. It’s an all-in-one app that incorporates the features vital for product research. Advanced IP Alerts can immediately tell you if a product has any sales restrictions or has led to problems with account health in the past. It combines an FBM&FBA profit calculator, Quick View, Stock Checker, and Restrictions Checker in one tool.
Try Seller Assistant Аpp now. Register for our 14-day trial. Grow your Amazon business with confidence.