Amazon FBA Online Arbitrage 101
Posted: January 16th, 2021
Amazon FBA Online Arbitrage 101
Here are 3 different ways that you can source inventory online for your Amazon business. Our business is mostly online arbitrage with some wholesale as well but we do not do a whole lot of retail arbitrage and that's for several reasons. First, the time that goes into retail arbitrage . It can be very time consuming going to the stores, waiting in lines, driving between the stores. In our business we try to be as efficient as possible. Second, retail arbitrage can be very hit or miss. You can do research and sometimes come up with tons of items. On the other hand, sometimes you come out of the store with nothing. For these reasons we prefer to do online arbitrage. I mean who doesn't like inventory you can source from your couch and then receive on your doorstep in a couple of days?
Lets go through 3 different ways that you can source Amazon inventory from the comfort of your couch.
Manual Sourcing is when you go to a store website and manually look up the item on Amazon. For example, you would go to Target.com and then you go and look that item up on Amazon. Then you either use a calculator such as the free Amazon calculator or just run the math and figure out if that item profitable. One huge benefit of manual arbitrage is it is completely free you don't have to pay or use any paid software to find leads. It is a free way to do online arbitrage but it can be very very time-consuming and when you're new it can be somewhat difficult because you don't know exactly what to look for.
Here are a couple of tips with manual online arbitrage. First stick to a handful of websites, maybe 5 to 10 websites that you check frequently. We prefer to stick to big retail companies such as Target, Walmart, etc because they will have pretty clear information about their products which makes them easy to find on Amazon. For example, Target has the UPC of every item they sell so you can quickly just copy that UPC and search that on Amazon.
Another tip it's to look for items that are bestsellers on retail sites. You can filter items by that bestsellers and then just look through those items and see if they're also popular on Amazon as well and see if they are profitable. You can search through different categories on retail sites such as toys or makeup then look through the bestsellers.
Another tip is to look through sale or clearance sections as these items are heavily discounted. There's higher potential for them to be profitable since the price is already reduced. With clearance item it is good to keep in mind the reason why the item is being clearance out. For example, it could be a seasonal item like a summer item and fall is coming so this may not be a good item to source anymore.
Another way to do manual sourcing is in reverse. You can go on to Amazon and look at bestsellers on Amazon in different categories. For example, you can go to video games or baby toys or something more specific like mascara and then search those items on Google and then see where they come up. You can go into Google shopping or you can just google it and see where it comes up for sale. If you search the mascara and you see it is for sale on Walmart and Target and Sephora just look at those items on those sites and see if its profitable. That is the method of reverse manual arbitrage.
Overall manual arbitrage is time consuming, but it is completely free so it's great if you're getting started. It also helps you when you're new because it is slower. You really have to look at the items at depth and do research so you're not making mistakes that way. If you're new I definitely recommend starting out with some sort of manual arbitrage. There are much faster ways to do online arbitrage and we focus on those now. I will do manual arbitrage from time to time when there is a big discount on a site. For example, Target does a buy two get one free toys and game sale pretty frequently and I may but manual arbitrage for this. But I prefer to use more efficient ways to source.
Amazon FBA Online Arbitrage Leads List
The second way to source inventory online is through leads list. A leads list is a list that is provided to you daily with profitable items you can sell on Amazon. Basically, someone else has already done the work for you and they just send you a list of items and you pay a monthly fee.
We do offer a leads list and ours is 20 items delivered each day Monday through Friday to you. Leads lists are great because you're not doing the work of sourcing which is very time-consuming. These are especially beneficial in savings you time in your business and helping you scale your business.
One important thing about leads lists is that they are capped at the amount of people that are in that group because you don't want 200 people getting the same list of items. Our leads list is capped at 50 people per each lead. Our leads list also includes our ungating processes for toys, topicals, grocery and major brands. You also get access to our Discord server which is a community of Amazon sellers where you can get support and ask questions.
These are one of my favorite ways to source because it's just so efficient. You're not doing the work, those items are being prepared for you and you can just go click through them and source them directly. Leads list are provided in a spreadsheet with detailed information about each lead. The spreadsheet will come with the link to where you can source the item, Amazon link, ROI, profit margin, rank, estimated monthly sales and more. You get 20 items a day with all the data surrounding that item. Then you can decide what to item to purchase.
Leads lists are a great way for new sellers to kind of kickstart their business when they start because when you're looking through these items you can see what people think is a valuable product. You can see what other people look for, and what does a good item look like.
Also leads lists are a good way to scale your business because items are provided for you daily and you're not having to do the sourcing which can be one of the most time-consuming aspects of your business.
The third way to do online arbitrage is through sourcing software. Our preferred software for online arbitrage is a tool called Tactical Arbitrage. The monthly fee is around $70 to $120 depending on the features that you require.
Tactical Arbitrage allows you to go in and you select a website or websites that you want to search from and then you select the categories you want to search, and it'll run a search and scan that website. You can filter the results based on different criteria such as minimum profit of $5 each and ROI of 30% or 40%. You can do a lot of different filters to get very specific data. Once the search is complete you can just simply view all of the data that it found. Tactical Arbitrage is one of our favorite way to source because it is very efficient it does the dirty work for you.
The downside to Tactical Arbitrage is there is definitely a learning curve. It's not something you can pick up and then that same day be an expert at running queries. Tactical Aribtrage does have some free training that is included with it. You can basically teach yourself how to use it, but it does take some time and it is a decent learning curve involved. Once you do learn it, it is such an efficient, great tool to use.
Tactical Arbitrage is one of the biggest time-saving tools that we have, and I highly recommend it if you're getting into Amazon There are additional features in Tactical Arbitrage as well that we really love and utilize. You can also run research searches on specific categories, and you can utilize it for wholesale sourcing.