Arbitrage is nothing but a simple practice of using the price difference prevailing in the market. This price difference usually takes place between two markets, which is ideally known as reselling. For this case, retail arbitrage is the best process for buying various discounted products from retailers.
You can buy these discounted products for selling on Amazon. For example, a product is available at $5 at Walmart. You can buy the product from Walmart and sell it at $20 on Amazon. Many sellers even buy products online, which is known as online arbitrage.
If you have confusion regarding whether retail arbitrage is legal. As per the first-sale doctrine, if you buy any product legally, you can resell the product. However, you have to make sure that the product is in the good condition.
There is a difference between retail arbitrage as well as normal retailing. Retail arbitrage does not involve any suppliers and neither it involves any manufacturers. The product you are buying is directly coming from the retail market. Although it can affect your profit margin; however, it is easy to find and source products through suppliers.
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There are different reasons behind the working of retail arbitrage. You might think that why would you buy any product selling for a high price when they can just get the product from somewhere else at a less price. A simple economics work behind this.
Suppose, you are buying a pen from one city at $2. The price of the pen can increase to $5 in other cities. It is necessary to understand that common or slow-moving products in any area can be in huge demand in other areas. Therefore, sellers can use this advantage for making huge profits.
Related: 7 Tips On How To Buy Wholesale To Resell On Amazon
You will notice that consumers have accepted eCommerce and are willing to pay for it as well. The reason behind this is, eCommerce companies like Amazon already changed the shopping experience. Since people do not have to deal with the hassle of visiting the stores or stand in queues, they willingly pay extra for any product. Moreover, with the Prime benefits, customers even do not have to wait for making any purchase.
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You already understood that Amazon retail arbitrage yields better income and a high-profit margin. Now, you will feel like getting started for it. Here are a few steps that you need to follow.
Before you start selling your product, make sure to start your business account or Amazon seller account. You will get two options while making your account. First is the individual seller account, which provides a free registration option. However, you have to pay a $0.99 commission for every sale. Next is the professional account, where you have to pay $39.99 per month.
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Product sourcing when it comes to retail arbitrage works like thrift shopping. However, you have to keep in mind that companies like Walmart and Target are competing with Amazon too. You have to look for products, especially during clearance sales so that you can get the best price.
After you found the products you want to sell, make sure to list the products on Amazon, you can start selling. Also, you have to keep changing the prices if you want to be competitive.
Therefore, from this detailed guide on retail arbitrage, you can start listing the products on Amazon and sell them.
Next article: Finding the Best Products for Amazon Arbitrage