Amazon online arbitrage is a popular business model where you buy products at a lower price from online retailers and resell them on Amazon for a profit. The principle is simple: buy low, sell high. However, finding the right products to sell can be challenging due to Amazon's competitive nature.
In this article, we'll guide you on how to find profitable product ideas and the criteria and steps to source winning deals for Amazon.
What Is Amazon Online Arbitrage Product Sourcing?
Amazon online arbitrage involves purchasing products from online retailers at a lower price and reselling them on Amazon for a profit. Product sourcing is the process of identifying these profitable items. Doing product sourcing correctly is crucial because not all products will be profitable. Some products might even cause problems, such as violating Amazon’s rules, leading to deactivation of your offers and potential financial loss.
How Does Online Arbitrage Product Sourcing Work?
Amazon online arbitrage product sourcing includes three main parts: finding a popular product that will sell well, researching it, and choosing a supplier that offers a low price.
1. Online Arbitrage Product Idea
At this stage, you choose an Amazon product category you want to sell in and find a product with good market demand (popular with Amazon customers) and low competition (to ensure a good profit margin).
2. Online Arbitrage Product Research
The second part involves researching whether the product will sell, whether you can sell it on your Amazon account, and whether it will be profitable. Also, ensure it doesn’t have any problems like restrictions, intellectual property claims, or too many bad reviews.
Typically, this is done using a product research checklist to make sure the product meets all criteria. If it does, you can look for a supplier.
3. Online Arbitrage Product Supplier
Finally, you look for a supplier that offers a low enough price to cover your buying cost, Amazon fees, and leave you with a profit. Make sure the supplier is reliable before purchasing to list the product on Amazon.
How to Find Online Arbitrage Product Ideas?
Finding profitable products is key. However, with so many products to research, it can be difficult to know which ones are suitable for selling without wasting time on unsuitable ones. Here are some methods to find product ideas efficiently:
Use Product Sourcing Tools
Product sourcing tools help quickly identify what’s good for selling and what’s not. One such tool is Seller Assistant, which offers a toolkit of extensions, tools, and features for this purpose.
Seller Assistant’s Quick View Feature
This feature appears on your Amazon search pages and shows essential product details, helping you understand at a glance whether a product is worth researching. It displays information like:
- Product’s ASIN (Amazon Standard Identification Number)
- Best Sellers Rank (BSR)
- Number of FBA and FBM sellers
- Your eligibility to sell the product
- Product restrictions
- Whether Amazon sells the product
How to Choose an Online Arbitrage Product Category?
Amazon groups similar products into categories and subcategories, making it easier for shoppers to find desired items and for sellers to list products within relevant categories. To choose the right category:
- Avoid Restricted Categories: Some categories require approval and additional documentation. New sellers may find it easier to avoid these initially.
- Balance Popularity and Competition: Categories like Beauty and Personal Care are popular but highly competitive. Consider categories with steady demand but manageable competition, such as Electronics or Toys and Games.
- Research Subcategories: Investigate subcategories within the main categories. They can target specific customer segments, increasing your product's visibility.
- Leverage Your Expertise: Starting with a category you're familiar with can be advantageous, as your knowledge will help in better product selection.
Top Places to Find Online Arbitrage Product Ideas on Amazon
- Amazon Best Sellers: Shows the most popular products, providing ideas for high-demand items.
- Amazon Movers & Shakers: Displays products with the biggest sales increases over the last 24 hours, helping identify trending products.
- “Customers Who Bought This Item Also Bought” and “Products Related to This Item”: These sections show products frequently bought together, offering insights into similar popular products.
- Customer Reviews: Look for common customer complaints or suggestions for improvement, which can highlight opportunities.
- Amazon Hot New Releases: Shows the latest product launches and trending items.
- Amazon Most Wished For: Reveals products frequently added to wishlists and registries, indicating high demand.
How to Research Products for Online Arbitrage?
Once you have a product idea, you must research it to ensure it will sell and bring the expected profit. Use a product research checklist and tools like Seller Assistant to simplify this process. Here are 13 steps to researching Amazon products:
Step 1: Remove the Referral from the Product Link
Ensure the product link doesn’t contain a referral (part of the link starting with ref=) as it can provide incorrect information.
Step 2: Check for IP Alerts
Detect products with intellectual property (IP) complaints using tools like Seller Assistant’s IP Alert feature. Avoid products with IP complaints.
Step 3: Check Competition by FBA Seller Count
Avoid products with high competition. Ideally, the count of FBA sellers should range from 2 to 15.
Step 4: Check if Amazon Is a Seller
If Amazon sells a product, it’s best to avoid it as it’s difficult to compete with Amazon.
Step 5: Check the Listing Age
The listing should be old enough (at least six months) to provide sufficient data on sales and price behavior.
Step 6: Find Out How Well the Product Sells
Check the Best Sellers Rank (BSR) to estimate sales trends. Lower BSR indicates better sales. Look at the average BSR over 90 days for consistency.
Step 7: Estimate the Selling Price
Check the maximum, minimum, and average Buy Box prices to estimate potential selling prices and profitability.
Step 8: Research Product Variations
If a product has variations, identify the best-selling ones. Use tools like Seller Assistant’s Variation Viewer.
Step 9: Look at Product Reviews
A good product should have reviews with an average rating above 4 stars.
Step 10: Verify Selling Eligibility and Restrictions
Check if you’re eligible to sell the product and if there are any restrictions.
Step 11: Check for Product Flags
Avoid products with flags like oversize, fragile, meltable, hazmat, or adult products.
Step 12: Assess Estimated Sales
Estimate how many units you can sell per month to ensure it meets your sales targets.
Step 13: Calculate Product Profitability
Calculate Return on Investment (ROI) to ensure the product is profitable. Aim for an ROI above 10%.
How to Find Suppliers for Online Arbitrage Products?
Once you’ve researched a product and confirmed it meets your criteria, find a reliable supplier offering low prices. Online arbitrage sellers typically use reverse sourcing to find suppliers. Here are six steps to find a supplier:
Step 1: Open the Product on Amazon
Start with the product you want to sell.
Step 2: Explore Supplier Options
Use Seller Assistant to search for suppliers on popular websites like Google Shopping, eBay, Walmart, Target, Webstaurant, Katom, The Home Depot, and Alibaba.
Step 3: Redirect to Search Results
Select a supplier website from the list and redirect to the search results page for that product.
Step 4: Match the Product on Amazon with the Supplier
Compare product details like brand name, model, size, color, materials, and pictures to ensure they are identical.
Step 5: Calculate Profit and ROI
Use Seller Assistant’s FBA & FBM profit calculator to enter the Cost of Goods Sold (COG) and calculate profit and ROI.
Step 6: Verify the Supplier (Optional)
If using an unknown supplier, verify their legitimacy through LinkedIn, business directories like Whois or ScamAdviser, and Google references.
Step 7: Order the Product
Place the order from the supplier once verified.
Buying Ready-to-Sell Online Arbitrage Deals
If you prefer buying online arbitrage leads, consider using Seller Assistant Deals, a marketplace for trading leads. It offers verified, profitable leads from professional Amazon product researchers.
Advantages of Seller Assistant Deals
- Targeted Selection: Buy individual leads to match your business strategy.
- Verified Deals: Professional moderators verify deals, ensuring profitability.
- Guaranteed Eligibility: Checks if you can sell the selected products.
- Limited Offer: Leads are sold to up to three buyers within 30-day periods.
- Refund Guarantee: Money-back guarantee if the product differs from the description or is out of stock.
FAQs
How to Find High-Selling Amazon Products?
Use product sourcing tools like Seller Assistant to calculate potential monthly sales and check BSR drops, indicating sales over time.
How Do I Choose the Best Product to Sell on Amazon?
Follow a product sourcing process: find a popular product, research it, and choose a low-cost supplier. Use tools like Seller Assistant for the best results.
What Is the Most Lucrative Thing to Sell on Amazon?
There is no single "most lucrative" product. Success depends on finding a balance between high demand, manageable competition, and high profit and ROI. Use product sourcing software to find such products.
What Is the Most Sold Item on Amazon?
Clothing, including women's dresses and children's shoes, is the most sold category. However, Home and Kitchen products are highly popular among Amazon sellers in 2024.
Final Thoughts
Finding profitable products to sell on Amazon is crucial for success in online arbitrage. Using product sourcing tools like Seller Assistant can help you quickly and effectively identify profitable products. This tool assists with product ideas, research, and supplier sourcing, streamlining the process for Amazon sellers.
For more information on starting and growing your Amazon business, explore Seller Assistant’s website, where you can find tools, guides, and support for your online arbitrage journey.
