What is Online Arbitrage
If you’re reading this, you probably heard about Online Arbitrage, but you’re not really sure what it is. In this article, I’m going to show you how you can use the Amazon Online Arbitrage to build your E-Commerce Business from home.
Online Arbitrage is a business model that consists in buying popular branded products from online shops and resell them at a higher price.
With other business models, Private Label for example, you have to import products from China and wait several months to start selling them. You have to consider the risk of picking the wrong product or having your business destroyed by a competitor offereing a similar product for a lower price.
With Online Arbitrage, you can buy your inventory on any online shop and, in most of the cases, your order is going to be delivered in just a few days.
Moreover with Online Arbitrage, you don’t need a big budget to start. You can purchase as many products as you can afford and quicky grow your business by reinvesting your profits.
But my favorite aspect is that Online Abritrage requires no marketing at all! You don’t have to spend a single cent on advertisement because you sell products that people already know and already want to buy.
Online Arbitrage on Amazon
Amazon is the best place where you can use the Online Arbitrage model and resell popular branded products online.
The reason why many sellers choose Amazon to sell their products is because of their FBA program. FBA stands for Fulfilled by Amazon and is a solution that helps amazon sellers to store and ship their products.
If you use the FBA program you don’t have to ship products one by one to your customers every time you make a sale on Amazon.
You can easily build an E-Commercer Business by sourcing products from online shops and reselling them on Amazon using the FBA program.
How to Select Winning Products
As you can imagine, the key to build a succesful Online Arbitrage Business is to select only the best products from online shops.
In order to identify the best products, you need to asses two very important aspects:
- Expected profit
- Number of sales
To calculate the expected profit you need to check the Amazon Buy Box price and take into account all possible expenses:
- Purchase cost of the product from the supplier
- Amazon Fees
- Referral Fee
- Variable Closing Fee
- Storage Fee
- Fulfillment Fee
Number of Sales
The other fundamental aspect that you need to verify is the estimated number of sales on Amazon. The goal here is to select only products that are on demand, otherwise you are never going to sell what you purchased.
Unfortunately Amazon doesn’t provide any info about how many units are sold every month for a given product. Anyway you can use the BSR (Best Sellers Rank) to estimate the sales volume.
BSR is a ranking system used by Amazon to asses the popularity of a product in a certain category. The lower the value, the more units are sold every month.
You can use Keepa to evaluate how many sales have occurred in the past, by analysing the BSR historical graph.
Amazon Online Arbitrage using Actorio
Thanks to Actorio, you can easily analyze products on all Amazon european marketplaces and quickly identify those that are going to give you the best profit.
Actorio powerful search engine scans millions of products from hundreds of european suppliers every day.
This means that thousands of fresh deals are added daily, ready for you to find them.