Online Arbitrage can be an extremely profitable online side hustle, but only if you do it right. In this article we will discuss 5 tips to help you increase your Online Arbitrage profits:
Before we start it's important to gain a firm understanding of what online arbitrage is and there's an article we wrote earlier this year that can help you with that. View that article here
It's no secret that this business is all about the sourcing. Buy low, sell high. That's how you make money when you sell on Amazon and that's the name of the arbitrage game. But there are some sourcing strategies that can help you make even more money. Lets discuss.
a. Check for clearance items
One way to find great deals is to look for clearance items. These are items that retailers are trying to get rid of quickly, so they deeply discount them. You can find clearance items both in-store and online. To find them online, just do a search on the retailer's website for "clearance" or "on sale."
b. Use coupon codes
Another way to get great deals is to use coupon codes when you're checking out online. Many retailers offer discounts when you enter a code at checkout, and these codes can be found with a quick Google search or using a tool like Rakuten, Honey, or Retailmenot. Those will all search for coupon codes that you can try to save on your purchase.
To learn about other online arbitrage sourcing methods be sure to check out our article "5 ways to find profitable products to sell"
2- Savings Stacking
Savings stacking is simply to take advantage of the several options you have for earning a little cash back. My favorite way to savings stack is by using a tool called RevROI. Luckily we have this feature built into our custom built chrome extension ASIN Gadget too.
RevROI is a simple tool that will show you the best cash back, gift card, credit card points, and airline miles savings available for the website you're on. For example if you are sourcing at Walmart's online site you can click the extension and it will tell you EVERY company that offers online cash back there.
Using the extension you can see that Hoopla Doopla has the highest cash back % at 5%. So when you shop online at Walmart through Hoopla Doopla's extension or website you will earn $5 for every $100 spent on qualifying purchases.
Stack that with the 1.8% you can save when you buy discounted gift cards through Raise and your savings is up to 6.8%
But wait, there's more! Don't forget you can save even more with your credit card's points system. If you use a top tier credit card who has a great points system you can easily add an additional 1-2 % on top of that. This would potentially total your savings stack to almost 8%!
Now that's an easy way to Rev up your ROI!
3- Get Free Shipping
Many large online retailers offer free shipping these days but it's not always offered and sometimes you have to meet minimum cart values to get it. Always be looking at the retailers shipping policies so you know what your cart value needs to be to get free shipping.
Sometimes this can be as simple as adding a few more of the products you've already found to your cart! It seems simple right but it's commonly overlooked. So go get the free shipping!
Having a repricing strategy that runs itself is probably the best way to increase your profits. As an FBA seller you are always at the mercy of Amazon’s ever-changing prices, so it’s important to have a repricer that can adjust your prices quickly and efficiently.
The advantage to using a repricer for your arbitrage business is that you can stay one step ahead of the competition, and always be competitive in the fight for the buy box. While you are sleeping, at work, sourcing, or anywhere else it can be doing the heavy lifting and adjusting your products pricing. Amazon is a very dynamic marketplace and the 3rd party seller market is extremely competitive.
There are now several repricers available and many have come out with artificial intelligence (AI) that adjusts your pricing without the need for you to set up rules for it to follow. Just enter your minimum and maximum pricing and let the AI do the rest!
5- Protect Your Money
When I say protect your money I don't mean to put it in a safe and never look at it. I mean when you are making purchases you need to have a checklist that you go through with every single purchase.
This checklist should guide you through the sourcing process so you know for a fact you aren't missing anything.
A simple checklist could include (but is not limited to)
- Am I restricted
- Is the item Hazmat (and am I ok with it if so)
- Is Amazon OR the brand on the listing (check IP alert & ASIN Gadget)
- Pricing history (Keepa data review)
- Offer count
I have a simple checklist like this and use it regularly but if you want to use it you can get a copy by visiting this page.
There are several tactics you can take advantage of to increase your profits in your online arbitrage business. These are the common ones that I find are often overlooked and costing you money!
If you have any questions or want to talk about this topic further please leave a comment below. Be sure to let me know if there's anything I missed!