Make Money On Amazon Using Retail Arbitrage

There are many ways to make money on Amazon, and retail arbitrage is one of them. I know, it sounds pretty badass. We’ll teach you how it’s done.

 We have Jessica and Cliff from The Selling Family on the show to talk about their experience using FBA to create a successful lifestyle business. They started in 2010 and now make 300K in sales a year bringing in 100K in profits.

What is FBA?

FBA or Fulfillment by Amazon allows anyone to sell goods on the Amazon platform and store inventory in their fulfillment centers. Simply put, you buy items you want to sell, and Amazon will list them, store them and ship them to your customers. They also handle most customer service inquires, refunds and returns. Interestingly, more than 40% of Amazon’s total sales come from third-party sellers.

Amazon is the go-to place to buy anything from vitamins to dog tu-tus. It’s trusted name with a highly trafficked marketplace (understatement) which makes it a perfect place for your products to gain visibility to millions of buyers. FBA gives everyone the tools they need to start a small online business.

They now have warehouses all over the U.S. making same day and next day shipping available to many people across the country. Based on what you are selling, Amazon will have you ship your items to whichever fulfillment center would sell the most of your product. If you use FBA, your products are eligible for free shipping which will increase your chances of getting into the “Buy Box.”

What Can You Sell?

There’s a surprisingly short list of items you can’t sell on Amazon. Unless you are trying to push imitation weapons, baby crib bumpers or foie gras, you can sell just about anything you want. However, you need to be smart when choosing your items. If Amazon itself is listing the same item that you are listing, they obviously are going to take the sale.

Jessica and Cliff sell mostly health and beauty products as well as some grocery. They look for items that Amazon no longer carries or that have run out of stock. You have to do your research and test the waters before finding what works best for you.

Also keep in mind that to list certain types of items, you may need a Professional Seller account. A Pro Sellers account will run you $39 a month but is entirely worth it if you are selling forty plus items a month.

Finding Your Items

The Amazon Sellers App offers mobile tools that help sellers search and scan barcodes of items, check prices, sales ranking, and reviews, list items, as well as communicate with customers.

You might find the best deal ever on passion fruit candles, but it won’t necessarily bring in the profits your are looking for. Amazon does a 30% cut so you’ll need to find products with high-profit margins.

Jessica and Cliff set a minimum of five dollars profit on any one item they sell. It’s important to make sure there is a healthy gap between my purchase price and profit after Amazon’s cut.

Make sure the item has good reviews. The profit margin might be 300%, but if it has terrible reviews, you will have less chance of selling it. The size and weight of the items is also something to consider. You do have to pay for shipping to the Amazon warehouse. Although it is heavily discounted, the price still depends on weight.

Know the best time to shop.  Learn when the stores around you have sales or push things to clearance.

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