How to Start Doing Online Arbitrage?

Creating your first eCommerce business goes way beyond creating a fancy logo, an apt name, writing product listings for online sales. It might sound like a piece of cake, but trust me, it’s not. When people look to sell online and set up their online business to sell products, they will start an Online Arbitrage on Amazon.

To get started making real profits and generating actual revenues, it seems reselling on Amazon with Online Arbitrage is the quickest and easiest way. Still, of course, it has its own challenges. In this method, you purchase low from everyday stores and resell them on Amazon FBA. Moreover, reading the successful sellers’ stories can be very helpful, and you can learn from them. The basics of Online Arbitrage are explained in this article.

What is Online Arbitrage?

Online arbitrage is the act of buying something online (from online retailers like Walmart) and selling it on an online marketplace (like Amazon) for a profit. It seems all you need is a computer, yes and no. Online arbitrage isn’t a “get rich quick” scheme. If you don’t want to end up out of pocket and holding plenty of inventory that you can’t sell, you need tools, data, and a systematic approach to identifying profitable deals.

Actually, it is essential to use tools and automated software to take most of the hard work out of it. Moreover, instead of limiting yourself just to physical stores, you source lucrative products from thousands of websites. Besides, the most attractive part of this business model is that there is no need to have any business license to purchase products and resell them with Online Arbitrage. So, everybody can do it.

“Online arbitrage is the act of buying something online (from online retailers like Walmart) and selling it on an online marketplace (like Amazon) for a profit.”

Is Online Arbitrage Profitable?

There are many reasons to show you that Online Arbitrage is still profitable. The economy is the first reason. As the product price is not the same everywhere, this exists for the coming year as well. So, you can still make a profit from it. The second reason is it is convenient. Many consumers would like to pay extra for their comfort. So they prefer delivering the product to their door instead of going to stores and looking for the items.

Because of the pandemic, online shopping has become a trend in recent years, and it is predicted that it will increase in the coming years. This means that you have an excellent chance to make money out of Online Arbitrage. The last reason is demand and supply. The process of the supply chain is complicated. The big retailers send the products for sale or clearance to make a higher profit from new products on their shelves.

Can I Do Online Arbitrage on Amazon from Nigeria?

To find international customers, use an online platform like Amazon. This will give you the incredible opportunity to improve your sales. Online Arbitrage on Amazon is a method that is allowed in many countries, including the United States, the UK, Australia, Canada, China, Nigeria, South Africa, and many others. You can check the OABeans website to see the list of countries in which Amazon lets the sellers do Online Arbitrage from them. Apparently, you need to follow the local rules and tax regulations.

How Much Can You Make from Online Arbitrage?

The answer to this question is not straightforward as it depends on the amount of money you invest and the time you put into your Online Arbitrage business. Besides, the type of deals you could find also has a main effect on your profit.

But, there is a positive point about selling through Online Arbitrage, the nature of making money is very exponentially driven. So, even if your budget is small, you can expect your money to grow drastically. Your monthly profit can be from $100 to $50,000.

It is essential to mention that some sellers may not succeed in earning profit from Online Arbitrage because of repetitive mistakes or not learning deeply about Amazon FBA and arbitrage.

How to Start Doing Online Arbitrage?

After preparing the basic requirements like a computer, internet connection, and small capital for investment, the below steps are what you need to do:

1. Create an Amazon seller account

Choose your plan between individual and professional. The former costs $0.99 per item sales, latter costs $39.99 monthly, which is better to choose when you have an amount selling of 40 items per month. Then click on “Sign Up” on this link:  https://sellercentral.amazon.com/

2. Amazon will ask for some data. Have the following information available:

• Business name and address (can be your individual name as well)
• Credit card and bank account information
• Tax information (social security number or EIN for a business)
• Telephone number

3. Choose which fulfillment methods you want to use: FBA (Fulfillment by Amazon) or FBM (Fulfillment by Merchant)

4. Find suitable products for selling on Amazon with helpful software and tools that can make a good profit.

5. Provide your Amazon listing for sale (To have a healthy profit, set a competitive price)

Different Types of Online Arbitrage

Online Arbitrage is not limited to selling on Amazon, although it is the most popular marketplace. You can resell your products in other marketplaces in this eCommerce business model. Here, they are listed:

• Amazon to eBay Arbitrage
• eBaytoAmazon Arbitrage
• Facebook Marketplace
• Google Shopping
• Bonanza
• Walmart

Online Arbitrage VS. Retail Arbitrage

Regardless of whether making money is the same target in both, some points can be mentioned as the difference between these two methods.

Firstly, the product sourcing of Online Arbitrage is more convenient as it is entirely online. Moreover, Retail Arbitrage relies mainly on brick-and-mortar stores or retail outlets and needs transportation. However, some sellers believe that even in Retail Arbitrage, you can also source your items from online stores.

Besides, in Online Arbitrage, you can find your products at any time, day and night. There is no time limit. But, in Retail Arbitrage, the retail stores have working hours.

Final Thought

Online Arbitrage and Retail Arbitrage both can be profitable. However, it is essential to do good product searching and analyze competitors to sell on Amazon successfully. Follow the mentioned steps to get started on your business on Online Arbitrage.