Arbitrage allows the sellers to get into selling at Amazon with little effort and investment. The seller is required to get a product at a discount from another website selling the product at a discount or from a supplier who has live sales and discounts on the product at the online store. The profit is considered the difference between the cost of the product and the selling price of the product at Amazon. In this case, the higher is the sale or discount, the higher is the profit against the arbitrage business.
Below are a few details which the prospective sellers against the arbitrage business need to know before going to decide on the business.
Does it cost to sell through Online Arbitrage?
This is an important question which should be answered in a better and clear way. Most of the articles say it’s a zero investment business model having great profits. However, the picture isn’t like this.
The seller for the arbitrage business needs to get registered with Amazon as a seller choosing the FBM, where the inventory management, shipping to buyers, and all other services are maintained by the buyer. In this case, FBA costs are exempted, however, the website service costs are there and Amazon will deduct the charges against the seller account and selling through its website.
What amount can get online arbitrage to start?
Over half of the online arbitrage sellers make their seller journey start with some dollars around 2 to 3 thousand dollars. There are also profit-making online arbitrage sellers who started their business with a few hundred dollars. This is because the inventory is not an issue, the product is listed and once the order is received, the product is purchased from the online seller offering a sale or discount and then the order is processed.
What is the ratio of profit with Online Arbitrage?
Sellers who started their seller journey with few thousand dollars usually make double their investment. The same is in the case of sellers who start selling with a few hundred. As most of the sales are fixed around 50% of the total price, the average profits are so defined to be 50% as well. This is due to the reason that the products would be sold at their actual price.
Is it a long process to get started?
If the seller is on the right path of getting registered and knows how to go through the registration process along with the documentation required by Amazon for sellers, it’s quite simple and you can make sales coming for the online arbitrage products within the second month of getting registered.
What are recommended categories for online arbitrage?
Below listed categories are considered profitable categories for online arbitrage:
- Home and Decor Category
- Games and Toys Category
- Beauty and Personal care Category
- Books category
- Health and Household Category
What are the top challenges for online arbitrage?
- Getting the online arbitrage products from the supplier
- Managing logistics
- Hunting suppliers and making the agreement with suppliers
Zonebase.com has all the required information on a number of other topics related to Amazon FBA.