Online Arbitrage Explained
Online arbitrage (OA) is a business model where products are purchased at lower prices from online retailers and resold at higher prices on platforms like Amazon, eBay, or Craigslist. The process of identifying profitable products for resale is known as sourcing.
One of the biggest benefits of online arbitrage is its flexibility, as it can be done entirely from home, making it accessible to anyone interested in starting this business.
Essential Online Arbitrage Sourcing Tools
- Keepa
A Chrome extension designed to track Amazon’s product price history, Keepa helps sellers analyze pricing trends, ensuring they make informed sourcing decisions. - SellerAmp SAS
This all-in-one solution includes a web app, mobile app, and Chrome extension, making it a versatile tool for deal analysis. It offers features to identify and evaluate profitable products efficiently. - DS Quick View
This free Chrome extension provides valuable insights into Amazon listings, including:- The number of FBA sellers.
- The presence of Amazon as a seller.
- The product’s sales rank.
These features help improve productivity and sourcing accuracy.
Online Arbitrage Sourcing Methods
- Manual Sourcing
Manual sourcing involves visiting online retail websites to find products for resale. While straightforward, this method can be time-consuming.Example:- Visit a website like Lego to browse offers and discounts.
- Manually verify if the product is listed on Amazon.
- Evaluate sourcing criteria such as profit potential, Return on Investment (ROI), and sales rank.
- Keepa Product Finder
Using Keepa’s advanced filtering options, you can streamline your sourcing process. This tool allows you to set specific parameters such as ROI, profit margins, and sales rank to identify suitable products efficiently.
- Reverse Sourcing
Reverse sourcing flips the traditional process. Instead of starting with suppliers, you:- Identify profitable products already selling on Amazon.
- Search for suppliers who can provide these products at a lower cost, leveraging the existing demand on Amazon.
- Storefront Stalking
Storefront stalking involves analyzing the inventory of a successful Amazon seller. By reverse-sourcing their products, you can uncover their suppliers and replicate their profitable strategies.Tip: For a detailed guide on reverse sourcing and storefront stalking, check out our dedicated article on these methods.
- A2A (Amazon-to-Amazon)
A2A arbitrage involves purchasing products on Amazon at discounted prices (e.g., during sales, promotions, or when the price is unusually low) and reselling them on Amazon at a higher price when the market adjusts.
- Deal Sites
Deal websites compile lists of discounted products shared by other Amazon sellers or deal hunters. These platforms can be a goldmine for discovering profitable products.Popular Deal Websites:- HotUKDeals
- LatestDeals
These platforms enable you to uncover additional opportunities to source products for your Amazon business.
Conclusion
Online arbitrage offers multiple sourcing methods to suit different strategies and levels of expertise. Whether you prefer manual sourcing, leveraging tools like Keepa, or exploring creative approaches like storefront stalking and reverse sourcing, there’s a method to fit your goals.
By combining effective tools and sourcing techniques, you can build a successful online arbitrage business and capitalize on the growing e-commerce market.
