The Beginners Guide To Retail Arbitrage (Step By Step)

Published on: December 9 2022 by MyWifeQuitHerJob Ecommerce Channel

The Beginners Guide To Retail Arbitrage (Step By Step)

The Beginners Guide To Retail Arbitrage (Step By Step)

The Beginners Guide To Retail Arbitrage (Step By Step)

startTime	durationTime	text
00:00:00	00:00:04	in this video you'll learn how you can
00:00:01	00:00:05	make money online just for shopping at
00:00:04	00:00:07	your favorite brick and mortar stores
00:00:05	00:00:09	with retail arbitrage now if you've been
00:00:07	00:00:11	hesitant to start an ecommerce store
00:00:09	00:00:13	then this business model can be a great
00:00:11	00:00:16	stepping stone to selling your own
00:00:13	00:00:16	private label products
00:00:20	00:00:23	now first off i just want to preface
00:00:22	00:00:26	this video by saying that if you're
00:00:23	00:00:28	looking to create a profitable long-term
00:00:26	00:00:31	e-commerce business then amazon retail
00:00:28	00:00:32	arbitrage is probably not the answer but
00:00:31	00:00:34	if you don't have a large budget then
00:00:32	00:00:36	retail arbitrage can be a great way to
00:00:34	00:00:38	make some quick cash and learn how to
00:00:36	00:00:41	sell on amazon at the same time now the
00:00:38	00:00:42	best part about retail arbitrage is that
00:00:41	00:00:44	if you enjoy shopping and finding
00:00:42	00:00:46	bargains then you can flip the deals
00:00:44	00:00:49	that you find at retail stores like
00:00:46	00:00:51	marshalls tj maxx big lots on amazon for
00:00:49	00:00:53	a profit now on the surface retail
00:00:51	00:00:54	arbitrage is straightforward all you
00:00:53	00:00:56	have to do is buy cheap products at
00:00:54	00:00:58	retail stores from the clearance section
00:00:56	00:01:01	and sell them on amazon at a higher
00:00:58	00:01:03	price but when you dig a little deeper
00:01:01	00:01:05	retail arbitrage has several pitfalls
00:01:03	00:01:07	that you need to be aware of in order to
00:01:05	00:01:08	not lose money now this video will teach
00:01:07	00:01:10	you how to get started with retail
00:01:08	00:01:13	arbitrage along with the pros and cons
00:01:10	00:01:14	of this ecommerce business model now the
00:01:13	00:01:17	first question i want to answer is how
00:01:14	00:01:18	can you possibly make money shopping
00:01:17	00:01:21	well retail arbitrage is the act of
00:01:18	00:01:23	buying inexpensive or clearance products
00:01:21	00:01:25	from a retail store and then selling
00:01:23	00:01:27	them for a higher price on marketplaces
00:01:25	00:01:29	like ebay or amazon now most sellers
00:01:27	00:01:31	prefer amazon retail arbitrage because
00:01:29	00:01:33	you can easily take advantage of price
00:01:31	00:01:35	differences between retail stores in
00:01:33	00:01:38	your area and amazon so here's an
00:01:35	00:01:40	example of retail arbitrage in action in
00:01:38	00:01:42	1995 tikle me elmo dolls became the
00:01:40	00:01:44	hottest selling toy in the world and
00:01:42	00:01:46	they were in extremely short supply and
00:01:44	00:01:48	even though the toy only cost 30
00:01:46	00:01:50	retail arbitrages would buy and sell
00:01:48	00:01:52	tikle me elmo dolls for more than a
00:01:50	00:01:54	thousand dollars on secondary
00:01:52	00:01:57	marketplaces like amazon and ebay
00:01:54	00:02:00	now is retail arbitrage legal well
00:01:57	00:02:02	retail arbitrage is 100 legal retailers
00:02:00	00:02:04	cannot legally prevent a consumer from
00:02:02	00:02:06	reselling their products as long as the
00:02:04	00:02:09	merchandise was legally acquired
00:02:06	00:02:11	as a result you can sell popular name
00:02:09	00:02:12	brand products like lego sony and apple
00:02:11	00:02:14	online
00:02:12	00:02:16	and you do not need permission or a
00:02:14	00:02:19	special license to do so now if you
00:02:16	00:02:20	browse listings on both amazon and ebay
00:02:19	00:02:22	you'll find that there are many sellers
00:02:20	00:02:24	selling other people's brands a
00:02:22	00:02:26	significant amount of products offered
00:02:24	00:02:28	on amazon and ebay are not sold from the
00:02:26	00:02:30	same retail store where the seller
00:02:28	00:02:31	originally purchased the item most of
00:02:30	00:02:34	these sellers are not buying their
00:02:31	00:02:36	products wholesale either in fact the
00:02:34	00:02:38	legality of retail arbitrage was tried
00:02:36	00:02:40	in the u.s supreme court who ultimately
00:02:38	00:02:42	ruled that retailers cannot stop anyone
00:02:40	00:02:44	from selling their products if their
00:02:42	00:02:46	merchandise was legally acquired so
00:02:44	00:02:48	overall you are allowed to sell any
00:02:46	00:02:50	legally purchased merchandise online but
00:02:48	00:02:53	when it comes to selling on amazon and
00:02:50	00:02:55	ebay you also must obey their rules so
00:02:53	00:02:58	for example amazon may require express
00:02:55	00:02:59	approval from the manufacturer in order
00:02:58	00:03:01	to allow you to sell on their platform
00:02:59	00:03:03	in most cases your ability to sell on a
00:03:01	00:03:06	marketplace is not a question of
00:03:03	00:03:08	legality but more a matter of following
00:03:06	00:03:10	a marketplace's selling policies now
00:03:08	00:03:12	today many larger brands will not allow
00:03:10	00:03:13	you to sell their products on amazon
00:03:12	00:03:16	without their approval so here's how
00:03:13	00:03:17	retail arbitrage works you buy a product
00:03:16	00:03:19	from a retail store that sells for
00:03:17	00:03:22	significantly lower than the market
00:03:19	00:03:25	price on amazon or ebay you then list
00:03:22	00:03:27	the item on amazon fba at a 3x or higher
00:03:25	00:03:28	markup and then you pocket the
00:03:27	00:03:30	difference between your cost and the
00:03:28	00:03:32	selling price minus marketplace fees
00:03:30	00:03:35	when your item is sold
00:03:32	00:03:37	now most retail arbitrage sellers shop
00:03:35	00:03:38	the clearance section at retail shops
00:03:37	00:03:40	and are always on the hunt for
00:03:38	00:03:42	discrepancies and prices across large
00:03:40	00:03:44	marketplaces now this sounds attractive
00:03:42	00:03:46	to you here's how to get started with
00:03:44	00:03:48	retail arbitrage now in order to get
00:03:46	00:03:50	started on amazon you need to follow
00:03:48	00:03:53	these steps in order to make a profit
00:03:50	00:03:54	step one sign up for an amazon seller's
00:03:53	00:03:56	account when you first start you should
00:03:54	00:03:58	sign up for an amazon individual
00:03:56	00:04:00	seller's account which is free
00:03:58	00:04:01	an individual seller's account will
00:04:00	00:04:04	allow you to list products in amazon but
00:04:01	00:04:07	you will be charged an extra 99 cent fee
00:04:04	00:04:08	on top of amazon's typical 15 fee for
00:04:07	00:04:11	every product sold
00:04:08	00:04:12	but once you exceed 40 sales per month
00:04:11	00:04:14	you should upgrade to an amazon
00:04:12	00:04:17	professional sellers account which costs
00:04:14	00:04:19	39.99 a month with an amazon
00:04:17	00:04:21	professional seller's account the 99
00:04:19	00:04:22	cent fee is waived and you get access to
00:04:21	00:04:23	additional selling tools for your
00:04:22	00:04:25	account
00:04:23	00:04:28	step 2 go shopping to find products and
00:04:25	00:04:29	sell on amazon now finding great deals
00:04:28	00:04:32	is the hardest part about making money
00:04:29	00:04:33	with retail arbitrage unless you know
00:04:32	00:04:35	where to find bargains you won't be able
00:04:33	00:04:37	to make a profit with this ecommerce
00:04:35	00:04:40	business model here's a list of places
00:04:37	00:04:42	to find great deals for retail arbitrage
00:04:40	00:04:43	thrift stores thrift stores often sell
00:04:42	00:04:46	new and gently used clothing and
00:04:43	00:04:47	household items at rock bottom prices
00:04:46	00:04:50	and most their stores don't charge over
00:04:47	00:04:51	five bucks for most clothing items
00:04:50	00:04:53	department store clearance racks
00:04:51	00:04:55	department stores like nordstrom's and
00:04:53	00:04:57	macy's must clear out all merchandise at
00:04:55	00:04:59	the end of a season by drastikally
00:04:57	00:05:01	marking them down so for example you can
00:04:59	00:05:03	expect heavy discounts from summer goods
00:05:01	00:05:05	once autumn rolls around
00:05:03	00:05:06	walmart or target clearance sales
00:05:05	00:05:08	walmart and target traditionally
00:05:06	00:05:10	advertise low prices on their products
00:05:08	00:05:12	but during clearance sales their prices
00:05:10	00:05:14	are often the lowest you can find
00:05:12	00:05:16	anywhere if you shop at walmart look for
00:05:14	00:05:18	stacks of merchandise in the aisles that
00:05:16	00:05:20	are heavily marked down you can also
00:05:18	00:05:22	look at costco or sam's club shopping at
00:05:20	00:05:24	warehouses like costco requires an
00:05:22	00:05:26	annual paid membership but you can't
00:05:24	00:05:28	beat their prices like any other store
00:05:26	00:05:29	costco and sam's club occasionally run
00:05:28	00:05:31	clearance sales where you'll be able to
00:05:29	00:05:33	find extremely low prices
00:05:31	00:05:35	you can also look on ebay by monitoring
00:05:33	00:05:37	ebay you can almost always find an
00:05:35	00:05:39	auction for a product at drastikally
00:05:37	00:05:41	reduced prices compared to amazon and
00:05:39	00:05:44	vice versa so take advantage of these
00:05:41	00:05:46	price differences to make a profit you
00:05:44	00:05:47	can also look at dollar stores dollar
00:05:46	00:05:49	stores often sell products for a buck
00:05:47	00:05:50	that are selling at retail prices on
00:05:49	00:05:52	amazon
00:05:50	00:05:54	you can shop at outlet malls large
00:05:52	00:05:56	retailers send their excess goods to
00:05:54	00:05:58	outlet stores to be sold at clearance
00:05:56	00:06:00	prices there's an outlet mall in your
00:05:58	00:06:02	area you can visit a bunch of outlet
00:06:00	00:06:04	stores in a single trip to find some
00:06:02	00:06:05	great deals and then finally there are
00:06:04	00:06:07	liquidation stores
00:06:05	00:06:10	amazon return palettes are large chunks
00:06:07	00:06:11	of amazon returns that are sold site
00:06:10	00:06:14	unseen to any seller willing to buy in
00:06:11	00:06:17	bulk liquidation stores like bulk
00:06:14	00:06:19	liquidation.com and 888lots.com
00:06:17	00:06:22	will sell you random lots of liquidated
00:06:19	00:06:23	merchandise at rock bottom prices now in
00:06:22	00:06:25	terms of stores here are the most
00:06:23	00:06:27	popular stores retail arbitrage sellers
00:06:25	00:06:30	shop at for bargains
00:06:27	00:06:32	walmart target kohl's lowe's home depot
00:06:30	00:06:35	best buy big lots tj maxx trader joe's
00:06:32	00:06:37	staples office depot and marshalls step
00:06:35	00:06:39	three is to calculate your profit
00:06:37	00:06:41	potential now once you find a potential
00:06:39	00:06:43	practike on amazon the next step is to
00:06:41	00:06:45	look up the sales for that product using
00:06:43	00:06:47	a tool like jungle scout jungle scout
00:06:45	00:06:49	will give you sales rank information for
00:06:47	00:06:51	any products sold on amazon including
00:06:49	00:06:53	average selling price and monthly sales
00:06:51	00:06:55	revenue jungle scout will also provide
00:06:53	00:06:57	you with historical sales data so you
00:06:55	00:06:59	can determine whether a product is worth
00:06:57	00:07:01	selling now if you can find a product
00:06:59	00:07:03	that you can mark up 3x with a good
00:07:01	00:07:06	track record or sales then it might be
00:07:03	00:07:08	worth selling now why a 3x markup it's
00:07:06	00:07:10	because amazon charges high selling fees
00:07:08	00:07:12	for the privilege of selling on their
00:07:10	00:07:15	platform for every sale made amazon
00:07:12	00:07:18	takes a 15 cut of your sales and if you
00:07:15	00:07:20	fill your order with amazon fba your fba
00:07:18	00:07:23	fees will usually amount to another 15
00:07:20	00:07:25	to 20 percent so all told amazon takes
00:07:23	00:07:27	approximately a third of your revenue
00:07:25	00:07:30	whenever you make a sale so with the 3x
00:07:27	00:07:32	markup you get to keep 33
00:07:30	00:07:34	amazon takes 33
00:07:32	00:07:36	and your goods cost 33 you also need to
00:07:34	00:07:39	be aware that prices on amazon change
00:07:36	00:07:40	constantly sometimes the amazon price
00:07:39	00:07:42	for your product can drop all of a
00:07:40	00:07:44	sudden which will kill your profits now
00:07:42	00:07:47	to find the optimal time to list your
00:07:44	00:07:49	products use a tool like keepa to keep
00:07:47	00:07:51	you alerted of price drops and increases
00:07:49	00:07:52	on any product you choose to monitor on
00:07:51	00:07:53	amazon
00:07:52	00:07:55	keepa will also provide you with
00:07:53	00:07:57	detailed price history charts for every
00:07:55	00:07:59	product sold in amazon and some products
00:07:57	00:08:01	might be seasonal so you want to check a
00:07:59	00:08:03	product sales history before making a
00:08:01	00:08:05	purchase you can also use the free
00:08:03	00:08:07	amazon seller app to research retail
00:08:05	00:08:09	arbitrage products but you will not get
00:08:07	00:08:11	historical sales data or trends by
00:08:09	00:08:13	default now with the amazon seller app
00:08:11	00:08:16	you must look at the amazon sales rank
00:08:13	00:08:17	or bsr to approximate the relative sales
00:08:16	00:08:18	of your product compared to the other
00:08:17	00:08:21	listings
00:08:18	00:08:23	use of the amazon seller app requires a
00:08:21	00:08:25	free amazon seller account step number
00:08:23	00:08:27	four is to check for amazon selling
00:08:25	00:08:29	restrictions now before you can list a
00:08:27	00:08:31	product for sale on amazon you must
00:08:29	00:08:33	check for product restrictions using the
00:08:31	00:08:35	amazon seller app or the check
00:08:33	00:08:37	permissions chrome extension simply
00:08:35	00:08:39	download the amazon seller app to your
00:08:37	00:08:40	phone and perform a search for the
00:08:39	00:08:42	product you want to sell if you see a
00:08:40	00:08:44	green check mark next to selling
00:08:42	00:08:46	eligibility you are allowed to sell this
00:08:44	00:08:48	product on amazon
00:08:46	00:08:50	step 5 look for coupons many retailers
00:08:48	00:08:52	offer coupons which can be stacked on
00:08:50	00:08:54	top of the great deals you find in the
00:08:52	00:08:56	clearance section for example
00:08:54	00:08:58	bed bath and beyond always gives out a
00:08:56	00:08:59	20 coupon that can be used to boost your
00:08:58	00:09:01	roi
00:08:59	00:09:03	but overall you should join the email
00:09:01	00:09:05	list of as many retail stores as you can
00:09:03	00:09:07	find so you receive their deals and
00:09:05	00:09:09	promotions as soon as they are launched
00:09:07	00:09:12	there are also online deal sites like
00:09:09	00:09:14	retailmenot that constantly post coupons
00:09:12	00:09:17	for large retail shops step 6 check the
00:09:14	00:09:18	sales velocity for your product just
00:09:17	00:09:19	because you find a great deal doesn't
00:09:18	00:09:21	necessarily mean that your product will
00:09:19	00:09:23	sell if you choose an item that doesn't
00:09:21	00:09:26	have high sales velocity then you could
00:09:23	00:09:27	be stuck with unsold inventory as a
00:09:26	00:09:29	result you should use a tool like jungle
00:09:27	00:09:32	scout to check how well your product is
00:09:29	00:09:33	selling amazon jungle scout is an
00:09:32	00:09:35	extension of the chrome browser that
00:09:33	00:09:38	allows you to research how much revenue
00:09:35	00:09:39	any product is generating on amazon you
00:09:38	00:09:41	can also look up a product sales history
00:09:39	00:09:43	to check for seasonality and recent
00:09:41	00:09:45	volume of sales and ideally you want to
00:09:43	00:09:48	sell product that yields at least 3 000
00:09:45	00:09:50	units of sales per month step 7 send the
00:09:48	00:09:52	products to amazon fba if your product
00:09:50	00:09:54	checks all the boxes for a profitable
00:09:52	00:09:56	retail arbitrage product the final step
00:09:54	00:09:58	is to ship your product to an amazon
00:09:56	00:10:00	fulfillment center now it's important to
00:09:58	00:10:02	note that you don't have to use amazon
00:10:00	00:10:04	fba to fulfill your orders but amazon
00:10:02	00:10:06	fba allows you to have the amazon prime
00:10:04	00:10:07	badge which gives customers free two-day
00:10:06	00:10:09	shipping
00:10:07	00:10:11	now the amazon prime badge will also
00:10:09	00:10:13	increase your conversion rate roughly 3x
00:10:11	00:10:15	compared to merchant fulfilled listings
00:10:13	00:10:17	but overall the cost of amazon prime is
00:10:15	00:10:20	very reasonable and most retail
00:10:17	00:10:22	arbitrage sellers use amazon fba to
00:10:20	00:10:23	avoid inventory and fulfillment now the
00:10:22	00:10:26	million dollar question is can you make
00:10:23	00:10:27	money with retail arbitrage well you can
00:10:26	00:10:29	definitely make money with retail
00:10:27	00:10:31	arbitrage but your income is limited by
00:10:29	00:10:32	the number of hours in a day you can
00:10:31	00:10:34	shop for goods
00:10:32	00:10:36	below is a hypothetikal example of how
00:10:34	00:10:38	much profit you can make for a given
00:10:36	00:10:40	sale so let's say you buy a product for
00:10:38	00:10:42	10 bucks on clearance at target and you
00:10:40	00:10:44	sell for 30 bucks on amazon do you get
00:10:42	00:10:46	to pocket the whole 20 of profit and the
00:10:44	00:10:48	answer is no the reason is because
00:10:46	00:10:50	amazon charges fees for the privilege of
00:10:48	00:10:52	selling on their platform in order to be
00:10:50	00:10:55	successful selling retail arbitrage and
00:10:52	00:10:57	amazon most sellers use amazon fba to
00:10:55	00:10:59	avoid holding inventory and to outsource
00:10:57	00:11:01	fulfillment and customer service however
00:10:59	00:11:04	amazon fba comes at a cost
00:11:01	00:11:06	first off amazon takes a 15 cut of your
00:11:04	00:11:09	sales right off the bat and if you
00:11:06	00:11:11	choose to use amazon fba the amazon fba
00:11:09	00:11:14	fees will usually amount to another 15
00:11:11	00:11:16	to 20 percent so all told amazon takes
00:11:14	00:11:18	approximately a third of your revenue
00:11:16	00:11:20	whenever you make a sale
00:11:18	00:11:22	as a result in order to be successful
00:11:20	00:11:23	selling retail arbitrage on amazon you
00:11:22	00:11:26	must be able to mark up your goods at
00:11:23	00:11:28	least 3x this way your product costs you
00:11:26	00:11:30	a third amazon takes a third and you get
00:11:28	00:11:32	to keep a third for example if you find
00:11:30	00:11:34	a cheap widget in the clearance section
00:11:32	00:11:36	of target for 10 bucks you better be
00:11:34	00:11:37	able to sell for 30 on amazon otherwise
00:11:36	00:11:39	you're not going to make much money
00:11:37	00:11:42	now in our hypothetikal example earlier
00:11:39	00:11:44	you would make roughly dollars in profit
00:11:42	00:11:46	from a thirty dollar sale and with these
00:11:44	00:11:48	numbers in mind you can absolutely make
00:11:46	00:11:49	money with retail arbitrage in amazon
00:11:48	00:11:51	but it's going to be tough to
00:11:49	00:11:53	consistently find clearance items that
00:11:51	00:11:54	you can mark up three hundred percent
00:11:53	00:11:57	now here are the advantages to retail
00:11:54	00:11:59	arbitrage the beauty of retail arbitrage
00:11:57	00:12:01	lies in its simplicity anyone can start
00:11:59	00:12:02	selling online with practikally no
00:12:01	00:12:05	startup costs and no tiknical
00:12:02	00:12:07	experience here are the main advantages
00:12:05	00:12:09	getting set up is quick and easy there's
00:12:07	00:12:11	low upfront costs and it's great for
00:12:09	00:12:12	learning this is a great starting point
00:12:11	00:12:14	for new amazon sellers who want to learn
00:12:12	00:12:17	how to sell on amazon or ebay before
00:12:14	00:12:18	selling their own private label products
00:12:17	00:12:20	but here are the disadvantages of retail
00:12:18	00:12:22	arbitrage even though retail arbitrage
00:12:20	00:12:24	is easy to start it will never make you
00:12:22	00:12:26	life-changing money and it's
00:12:24	00:12:28	unsustainable in the long run the
00:12:26	00:12:30	primary problem with retail arbitrage on
00:12:28	00:12:32	amazon is that you are at the mercy of
00:12:30	00:12:34	two opposing forces the retailers where
00:12:32	00:12:36	you source your products and market
00:12:34	00:12:38	places like amazon the retailers control
00:12:36	00:12:39	your product supply and the prices you
00:12:38	00:12:41	can buy your goods
00:12:39	00:12:43	meanwhile amazon controls your selling
00:12:41	00:12:45	platform and can even prevent you from
00:12:43	00:12:47	listing a product for sale altogether
00:12:45	00:12:50	here the main disadvantage is retail
00:12:47	00:12:52	arbitrage you don't control your product
00:12:50	00:12:54	supply i've been selling online for over
00:12:52	00:12:55	13 years my e-commerce store over at
00:12:54	00:12:57	bumblebee linens now we sell
00:12:55	00:12:59	handkerchiefs and linens under our own
00:12:57	00:13:00	private label brand and we have many
00:12:59	00:13:02	wholesale suppliers who keep our
00:13:00	00:13:04	inventory flowing from month to month
00:13:02	00:13:06	over time we've developed strong
00:13:04	00:13:08	relationships with our vendors we have
00:13:06	00:13:10	full control over our supply chain this
00:13:08	00:13:12	means that we don't have to physically
00:13:10	00:13:14	go hunting for new deals every day like
00:13:12	00:13:16	a retail arbitrary seller we're about to
00:13:14	00:13:18	run our inventory for a partikular scoop
00:13:16	00:13:20	we simply place another order and it
00:13:18	00:13:23	arrives at our doorstep with retail
00:13:20	00:13:25	arbitrage sourcing you have zero control
00:13:23	00:13:27	over your retail arbitrage products or
00:13:25	00:13:28	your inventory once you've sold out a
00:13:27	00:13:31	product you have to physically go
00:13:28	00:13:33	shopping again for more inventory and if
00:13:31	00:13:35	your local retail store no longer cares
00:13:33	00:13:37	your product you're out of luck you also
00:13:35	00:13:39	don't control pricing or your margins
00:13:37	00:13:41	when you source your products from a
00:13:39	00:13:42	factory or distributor you own your
00:13:41	00:13:44	product and you have a fixed cost of
00:13:42	00:13:46	goods and this gives you the ability to
00:13:44	00:13:48	set prices and control your margins for
00:13:46	00:13:50	example because i own my own brand at
00:13:48	00:13:53	bumblebee linens i can set my prices
00:13:50	00:13:55	however i want and no one can comparison
00:13:53	00:13:57	shop because i'm the only seller of my
00:13:55	00:13:59	products but when you do retail
00:13:57	00:14:00	arbitrage you are selling someone else's
00:13:59	00:14:02	product and there are likely hundreds of
00:14:00	00:14:03	other sellers offering the exact same
00:14:02	00:14:05	item
00:14:03	00:14:07	as a result you have less control over
00:14:05	00:14:09	pricing and margins because you don't
00:14:07	00:14:11	own the brand a retail arbitrage seller
00:14:09	00:14:13	will never ever get the lowest price for
00:14:11	00:14:15	their goods either because you're buying
00:14:13	00:14:16	your products from retail stores you're
00:14:15	00:14:19	already paying more than the wholesale
00:14:16	00:14:21	cost as a result you are at a pricing
00:14:19	00:14:22	disadvantage compared to a traditional
00:14:21	00:14:25	retailer who buys their products
00:14:22	00:14:26	wholesale to sell on amazon
00:14:25	00:14:28	overall when you don't have the lowest
00:14:26	00:14:30	sourcing costs you are at the mercy of
00:14:28	00:14:32	other sellers and it's often a race to
00:14:30	00:14:33	the bottom in terms of price
00:14:32	00:14:35	furthermore your profit margin is
00:14:33	00:14:38	further reduced by amazon seller fees
00:14:35	00:14:40	storage fees and shipping costs
00:14:38	00:14:42	it's also not scalable retail arbitrary
00:14:40	00:14:44	sellers must physically shop for their
00:14:42	00:14:45	inventory and shopping takes a
00:14:44	00:14:47	tremendous amount of time
00:14:45	00:14:48	finding great products to sell via
00:14:47	00:14:51	retail arbitrage is like running on a
00:14:48	00:14:52	hamster wheel once you're sold out you
00:14:51	00:14:54	have to go out and find more product
00:14:52	00:14:56	which means physically driving to the
00:14:54	00:14:58	store getting a truck and bringing your
00:14:56	00:15:00	products back to your house now
00:14:58	00:15:02	successful retail arbitrage sellers
00:15:00	00:15:04	often spend 40 hours per week shopping
00:15:02	00:15:07	are they making a profit yes but it's at
00:15:04	00:15:08	the expense of their time now if you
00:15:07	00:15:10	want to make more money you have to shop
00:15:08	00:15:12	more and constantly find new deals and
00:15:10	00:15:14	personally i would rather work a day job
00:15:12	00:15:16	than shop all day long amazon's
00:15:14	00:15:17	constantly changing the rules and they
00:15:16	00:15:19	can dictate what you're allowed to sell
00:15:17	00:15:21	and win now an acquaintance of mine once
00:15:19	00:15:23	found a great deal on nike shoes that he
00:15:21	00:15:25	promptly listed on amazon but right
00:15:23	00:15:27	around that time amazon started allowing
00:15:25	00:15:29	big brands to stop other sellers from
00:15:27	00:15:31	selling their products and unfortunately
00:15:29	00:15:33	nike was one of those brands and as a
00:15:31	00:15:35	result he could not list his nike shoes
00:15:33	00:15:37	on amazon and was stuck with a bunch of
00:15:35	00:15:39	inventory that he could not sell now
00:15:37	00:15:41	events like this happen all the time on
00:15:39	00:15:43	amazon and the truth is that amazon does
00:15:41	00:15:45	not like retail arbitrage sellers and
00:15:43	00:15:48	has taken measures to reduce retail
00:15:45	00:15:50	arbitrage on their platform today any
00:15:48	00:15:51	large brand can prevent a second-hand
00:15:50	00:15:54	amazon seller from selling their
00:15:51	00:15:56	products furthermore many categories in
00:15:54	00:15:58	amazon are gated and require an invoice
00:15:56	00:16:00	from an authorized distributor or
00:15:58	00:16:02	wholesaler in order to sell on the
00:16:00	00:16:03	platform so bottom line you can't just
00:16:02	00:16:06	sell anything that you find from retail
00:16:03	00:16:08	stores amazon is cracking down on retail
00:16:06	00:16:10	arbitrage sellers and will often ask you
00:16:08	00:16:12	where you're getting your products from
00:16:10	00:16:14	and the worst part is that you can't get
00:16:12	00:16:16	repeat business the nature of retail
00:16:14	00:16:18	arbitrage is that you are constantly
00:16:16	00:16:20	selling random disparate products online
00:16:18	00:16:22	if a product you find in store can make
00:16:20	00:16:24	you money then you sell it period
00:16:22	00:16:25	so what often happens is that you end up
00:16:24	00:16:27	selling commodity items that can be
00:16:25	00:16:30	found anywhere and you rarely sell the
00:16:27	00:16:31	same product twice furthermore when you
00:16:30	00:16:33	sell on amazon you don't receive any of
00:16:31	00:16:35	your customers information and you can't
00:16:33	00:16:36	build a following
00:16:35	00:16:38	but even if you do somehow manage to
00:16:36	00:16:40	build an audience for your business it's
00:16:38	00:16:42	impossible to establish customer loyalty
00:16:40	00:16:44	or repeat business because your
00:16:42	00:16:46	inventory is completely random and not
00:16:44	00:16:48	within your control now for my online
00:16:46	00:16:50	store repeat business makes up thirty
00:16:48	00:16:52	percent of my revenue every single year
00:16:50	00:16:54	and our best customers provide a solid
00:16:52	00:16:56	base of sales that we can easily expand
00:16:54	00:16:58	upon from year year with retail
00:16:56	00:17:01	arbitrage you are always fighting for
00:16:58	00:17:04	new sales from ground zero now overall
00:17:01	00:17:05	retail arbitrage is not a good long-term
00:17:04	00:17:07	business model and with the amount of
00:17:05	00:17:09	time that it takes to make money you may
00:17:07	00:17:10	as well just keep your day job now when
00:17:09	00:17:12	it comes to selling physical products
00:17:10	00:17:14	online there are far better ecommerce
00:17:12	00:17:16	business models to choose from that you
00:17:14	00:17:19	can eventually grow to a six seven or
00:17:16	00:17:20	even eight figure business with a retail
00:17:19	00:17:22	arbitrage business you'll be lucky to
00:17:20	00:17:24	hit five figures per year and it
00:17:22	00:17:27	requires a tremendous amount of time
00:17:24	00:17:28	that can be better utilized elsewhere
00:17:27	00:17:30	now you can watch this video for a
00:17:28	00:17:33	complete list of every e-commerce
00:17:30	00:17:34	business model hope you enjoyed this
00:17:33	00:17:36	video now if you like what you saw
00:17:34	00:17:38	there's actually a lot more where that
00:17:36	00:17:40	came from if you subscribe to my channel
00:17:38	00:17:41	below and if you are interested in
00:17:40	00:17:43	learning how to sell physical products
00:17:41	00:17:45	online then click over here and take my
00:17:43	00:17:46	free six day mini course where i'll walk
00:17:45	00:17:49	you through everything that you need to
00:17:46	00:17:51	know to get started in ecommerce thanks
00:17:49	00:17:51	for watching