Top 5 Tips for Identifying the Right Arbitrage Products to Sell on Amazon

You may have heard of the term “online arbitrage” or “Amazon arbitrage” and wondered what it means, or you may be completely new to the phrase. This guide will help you to understand the basic concept and hopefully give you some helpful pointers on your journey to making money online!

Arbitrage on Amazon is simply the process of taking advantage of price differences between products on Amazon and other online retailers. There are many different ways to do this, but the basic idea is to find products that are being sold for less on other websites and then sell them on Amazon for a higher price.

This can be a great way to make money on Amazon, but it is important to remember that you need to find the right products to sell. Not all products will be suitable for arbitrage and you need to be careful to find the right products that you can sell at a profit. If you want to avoid making a costly mistake, there is much more to consider than just the profit margin.

But before we get into that, let’s first take a look at the different Amazon Business Models available…

Amazon Retail Arbitrage vs. Other Amazon Business Models

There are a few different other business models that you can use to make money on Amazon; the three most common, aside from online arbitrage, are private label, dropshipping and wholesale.

The Private label Amazon business model is where you create your own products and then sell them on Amazon. You have complete control over the branding of your products. This can be a great way to make money, but it is important to remember that you will need to invest time and money into creating your own products. The downside however, is that it can be expensive to create your own products and will also need to find a reliable supplier that can meet your long term needs.

The Dropshipping Amazon business model is where you sell products that are shipped directly from the supplier to the customer. You will first need to find a supplier that is willing to dropship their products and then create listings on Amazon. When an order comes in, you will simply contact the supplier and they will ship the product directly to the customer. The downside of Dropshipping is that you have less control over the quality of the products and it can be difficult to find a reliable supplier that doesn’t already have a strong presence on Amazon.

The Wholesale Amazon business model is where you buy products in bulk from a supplier and then sell them on Amazon. This can be a great way to make money, but it is important to remember that you will need to find a supplier that is willing to sell their products in bulk. Finding a good supplier can also be difficult and take a lot of time. In this model, you will need to create your own listings on Amazon; and when an order comes in, you will be responsible for packing and shipping your own items (unless you have also chosen to make use of Amazon’s FBA service).

Now that we’ve looked at the different Amazon Business Models, let’s take a look as to why you should use Amazon Retail Arbitrage.

Why Should You Use Amazon Arbitrage?

There are a few different reasons why people use online arbitrage to make money on Amazon.

The first reason is that it can be a very profitable business model. If you can find products that are being sold for less on other websites, you can sell them on Amazon for a higher price and make a good profit. You are also in control of your own business and you don’t have to rely on a supplier or dropshipper.

Another reason to use online arbitrage is that it is a very easy flexible business model to get started with. You don’t need any experience or knowledge of the product to get started and you can start making money very quickly. You can also decide when you want to work and many people fit it around their day jobs as a ‘side hustle’.

The final reason to use online arbitrage is that it is a very low risk business model. You are not buying large volumes of stock, and you don’t have any long term commitments to suppliers or wholesalers – you can decide what you want to buy, when you want to buy it, and you don’t have to invest large sums of money to get started.

Tips for Identifying the Right Arbitrage Products to Sell on Amazon

If you want to be successful at arbitrage on Amazon, it is important to find the right products to sell. Not all products will be suitable for arbitrage and you need to be careful to find products that you can sell at a profit.

Here are a few tips for finding the right arbitrage products to sell on Amazon:

Look for Products with a Large Price Difference

The first thing you need to do is look for products that have a large price difference between Amazon and other retailers. If the price difference is small, it is likely that you won’t be able to sell the product at a profit, especially when Amazon marketplace fees are included.

You may find a decent ROI for arbitrage by looking for products with a price difference of 20% or more and a great way of doing this is by looking for products in the major retailers such as Walmart and Kohl’s. Read our guide; Kohl’s Hidden Clearance: Finding the best deals to resell on Amazon, for some great tips

Check for Amazon restrictions

Before you start selling a product on Amazon, you need to check for any restrictions that Amazon has in place. There are some products that Amazon doesn’t allow to be sold on their platform so you need to make sure that the product you are selling is allowed.

Check out the competition

When you are looking for products to sell on Amazon, you need to check the competition to see how many other sellers are selling the same product. If there are already a lot of sellers, it is likely that the market is saturated and it can be more difficult to make a profit.

Analyze Amazon Customer reviews

When you are looking for products to sell on Amazon, it is also a good idea to check the customer reviews. If a product has a lot of positive reviews, it is likely that people are happy with the product and you will be able to make a profit.

On the other hand, if a product has a lot of negative reviews, it is likely that people are not happy with the product and you will struggle to sell it.

Look for Products That Are Easy to Ship

You also need to consider the size and weight of the product. If the product is large or heavy, it is likely that the shipping costs will be high. You need to find products that are small and light so that you can keep the shipping costs low.

Look for Products That Have a Low Return Rate

Finally, you need to consider the return rate of the product. If the product has a high return rate, it is likely that you won’t be able to sell it at a profit. You need to find products that have a low return rate so that you can make money on them.

Even with these tips, finding the right arbitrage products can be time consuming, and profitable items can be sold out very quickly. If you want to be successful at arbitrage on Amazon, it is important to use an automated tool that can help you find profitable items quickly.

Using SourceMogul for Online Arbitrage

SourceMogul makes finding deals easy by identifying profitable opportunities much faster, meaning you get to make more money than the competition.

SourceMogul gathers products and pricing information in a number of ways – either by scanning the internet 24/7 for deals, by analyzing data lists that you upload (e.g. wholesale lists), or by scanning websites in real-time using our browser extension. It then shows the profitability of the products by comparing it side-by-side with the exact same item on Amazon. This can save you a lot of time and money!

SourceMogul also includes all of the tools you need to properly analyze the potential of any products discovered so that you can avoid any costly mistakes.

Why not try a risk free trial with SourceMogul today? You can get a 7 day free trial with no obligation to continue after the trial period.

Sign up now and start finding profitable arbitrage opportunities today!