Most people know what it is without knowing the name.
“Its a Simple Concept - Buy Low, Sell High On Amazon.”
Most large retail stores like costco and kroger buy their inventory straight from china to their stores, and their stores are the warehouses.
When this happens, the middlemen are all cutout. The warehouseing middlemen, the transportation legs, the sales middlemen, all netted out.
What this means, is that stores often have a significantly cheaper cost basis on a product than Amazon could ever get because they’re buying from a factory that is sourcing and warehousing domestically.
Retail Arbitrage is defined as when you can buy retail and succesfully arbitrage the price at another retailer.
Buying from a retail store, then selling those on another store for a profit.
The most common system is buying in bulk at large stores and selling on Amazon.
This can be seen as an opportunity for some people, but also a burden on brands.
Often a brand will specifically target retail channels with certain products while leaving other products for other channels.
this happens because retailers have different levels of investment they’re willing to put into a product or product category. Where on the same notion, Amazon will never invest in your product because they are never willing to put themselves on the line.
For opportunist, there are two main limitations for viability…
- How do I determine which products to buy?
- How do I sell the products once I have them in-hand?
Below is a rough guide for how to start out with retail arbitrage.
- Go into a Costco and find some products that look neat.
- Scan them with your Amazon App.
- decide if you can afford to ship/sell
- …
- Profit?!?!
the hardest parts are ALL OF THEM but the neat thing is that there are only 5 steps.