January 28, 2022

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Pros and cons of retail arbitrage

3 min read
Retail Arbitrage: What is It & How Does it Work? - Side Hustle

Retail arbitrage is a good option now to make more money through Amazon sell. But you can make money when you are doing it right. There are some simple steps that you need to follow. 

To start the process, you need to start with a seller account on Amazon 

To start your Amazon business on Amazon, you need to set up your business account. This is a seller account that you need to create. You will get two options when you are creating your seller account. These two accounts are different. 

Individual seller account 

Here the first option is an individual seller account. You don’t need to pay anything for the account, it is free of cost option. But you need to pay only $0.99 commission for every sale that you will get on Amazon. If you are an individual seller, you need to sell only 40 products. If you are willing to pay 40 products only, you can sell through retail arbitrage on Amazon in restricted categories. 

Professional account 

To create a professional account, you need to pay a certain amount every month. There are some referral fees involved in it and there are also the fees of variable closing. As you are selling under this category, you can list more than 4 items at once. 

Source the products 

You need to source your items for this, it is more like an option of thrift shopping. If you are looking for an impressive deal on every product that you can sell at a good margin. Your target can compete with Amazon itself. Price should be competitive. 

List your product 

If you are done with all the methods, you need to list your products to start selling on Amazon. Optimizing the products can be a good option to drive sales. So, to know more about it and can go to this blog. But keep it updated and keep changing it. 

Pros and Cons 

There are some advantages and disadvantages to selling on Amazon through retail arbitrage. 

Low entry cost 

With the model of retail arbitrage, you can start with a low budget. As you are not supposed to buy so many things from the suppliers directly, you will not lose more money. 

Short term revenue 

You can make money through the process very quickly. It is not about creating a brand but selling your products fast. Go to blog to read related subject.
 

Low margin 

If you are going to resell your products, you need to set your margins low especially if you are sourcing the products from the suppliers. If you want to scale your Amazon business, it is advisable also to source it directly from the suppliers or your manufacturers. 

Regulation of your brand 

Amazon is a great platform to protect customers. The brand registry program gives great protection and private labels. If you have brand restricted products with any type of approval. Amazon will flag your listing. In that case, this retail arbitrage can be a risky option. So, it is important to make sure that your product is not a part of any brand registry. Your account can be stopped if you are not an authorized seller. 

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