Retail Arbitrage with Amazon and Ebay
Retail arbitrage is a concept wherein an online marketer sources for products online or physically from retail stores at cheap rates, and sales same products either online or in-store for a higher price. It is a profitable venture that could fetch one good bucks at short times online. Retail arbitrage also has some grey points in the sense that if not properly managed could lead to losses and loss of funds. To save against this, there are several.
Retail arbitrage is done by scanning a barcode into a special iPhone or Android app when the marketer visits the physical store. It can as well be done online, here the online marketer would copy/paste the barcode between a third party store and Amazon.
Profit is easily calculated, and because you sell under the brand’s name on Amazon, there is no guesswork as to whether or not your item will sell. You just select products with a certain profit margin, buy them, send them to Amazon FBA, and they sell with no extra effort or uncertainty on your end except you also engage in affiliate marketing for such products.
Choice of products and retail shops to source for products has been a major concern for online marketers. Just because a product is discounted somewhere online or at a particular big brand store doesn’t mean that it’s a bad product overall – it could mean that one particular branch of a big brand store didn’t sell that much of one particular item during one particular time frame. The business model of a big brand store revolves around finding products that people buy, sending them to individual branches, and selling the items. If the sales volume for a branch is incorrectly estimated and there is no room for the excess, it gets discounted so that the goods could be sold faster. This is a vital information for all online marketers. They buy the discounted products, then flip them around on Amazon where people are willing to pay full price. This transforms to quick profit for the seller.
Big brands like Amazon have an almost unlimited number of buyers to purchase verified products. It is not everyone on Amazon or Ebay that is a price shopper. Many people especially those with Prime subscription on Amazon see a price on Amazon and assume that it’s the lowest, hence buy as promptly as they desire the products.
Other big brands are always trying to compete with Amazon on price. Price savvy shoppers can see where the big brands are beating Amazon, and take advantage of that by selling to people who don’t have such information.
So all in all, there are two ways to source products – finding lower prices from online ecommerce giants, and capitalizing on specific products that are not selling at specific big brand stores for sale on Amazon or Ebay. The next is to move a random assortment of products from a list of inventories resident in big brands.
How does retail marketplaces work
Sourcing for products has something to do with reliable information about the retail shops of choice. One of the factors to look out for is to search for retail shops that are consistent in the products they sell. How widespread and popular is the shop and if there are variations of the types of products that they sell.
The rate of patronage or influx of customers to a particular shop also determines credibility as well as trust in patronizing such stores. When there is a considerable sale to customers, then ther would be a lot of inventory on daily basis. Average sales of their products on weekly basis could speak well of their price, quality of products and popularity in the market.
Profit Margins and shipping
Profit margin set by each online store in comparison with its competitors ia also a contributing factor in the choice of numerous retail shops online. Timeliness in shipment of products as well as record safety of products during and after shipping is one of the things to consider in the choice of retail shops to purchase from and handle your shipping. Big brands like Walmart, Target, and Costco compete for efficiency in this area.