Side Hustle – Retail Arbitrage

As a result of the economic situation that we are now facing in this country, it is so important to have a side hustle to supplement your income. Also, many persons have been furloughed or outright lost their jobs due to this pandemic. Having multiple streams of income has been shown to be a major factor today for many. As a matter of fact, due to inflation and other negative economic impacts, it has been a necessity to have multiple streams of income to be able to survive, let alone thrive.

One side hustle that has now become very popular among many is:

Retail Arbitrage – The art of buying products that are on sale or clearance (buy at a low price) from one retailer and sell it on another Marketplace platform such as Amazon and eBay for a higher price.

How to get started on Amazon:

1.      Sign up for the Professional Seller Account on Amazon for $39.99 monthly in which you will become an FBA Seller

2.     Download the Amazon Seller App to your phone

3.    Visit your local retail stores such as Wal-Mart, Target, Ross, Marshalls, T J Max and Walgreens these stores tend to have an abundance of goods that are typically on sale. You can search online as well.

4.      Use the Seller’s App to scan these products to see what they are selling for on Amazon.

5.       When you scan a product, you want to look at the selling rank of the product, whether there are other FBA Sellers selling the same product, how many sellers on the listing, the buy box price and what is the highest and lowest price and Amazon Fees to sell the product.

6.       Let us choose an example – Disney princess Doll. Wal-Mart is selling it for $9.99, the rank on Amazon is under 100,000, and there are 10 sellers and 3 FBA sellers. Amazon Fees are $4.50. The lowest FBA seller is $14.00 and the highest is $19.99. You can list your for $19.50 so that once that low price seller is sold out, then yours is next, thus making a profit. I would list this for sale on Amazon.

7.       Next example – An RC Race car in Target for $19.99, the Rank is 250,000 and Amazon Fees are $7.50. There are 30 sellers on Amazon, 15 are FBA Sellers. The lowest seller’s price is $29.99 and the highest is $37.49. I would not buy this one because it will not sell quickly.

How to get started on eBay:

1.     Sign up for an eBay and Pay Pal account (Pay Pal is how you will get paid).

2.      There are no monthly fees for selling on eBay so once you have signed up; you can list 200 products for free.

3.      Download the eBay app to your phone and you can begin listing products.

4.      Visit Wal-Mart, Target, Ross, T J Max, Marshall's and Walgreens sale and clearance are and begin scanning.

5.      For eBay, see how many sellers are selling that particular product, what is the highest and lowest price it is selling for, whether shipping is included or excluded from the price.

6.       Based on that evaluation, then you can decide whether to buy that product and list it on eBay for sale.

7.       For example – Disney Princess Doll is selling at Wal-Mart for $9.99. There is no listing fee for eBay, shipping costs $3.99. There are 10 sellers, the lowest seller is $15.99 and the highest is $24.99 plus shipping. Typically on a low price item such as this, eBay fee might be $1.00 and PayPal transaction fee $1.00. Therefore I would list this for $19.99 and include shipping and still make a profit and get this sold quickly.

8.       The great thing about selling on eBay is that you can sell pre-owned items such as books and clothing as well. A great place that you can purchase these items from is Goodwill or any Thrift Store for pennies on the dollar and then sells them higher on this platform. Two categories that sell well on this platform for me are Toys and Career wear such as blazers / jackets and women’s blouses.

The Cons of Retail Arbitrage

The cons of retail arbitrage are; that it is not a scalable business model in that you are limited to the amount of inventory that you can find on sale at any one location. Also, it can become a time consuming effort to drive from store to store in search of products.

 I had been doing this as a side hustle and using this business model with Amazon for two years now and eBay for the past year. I am having success with it, it is generating for me on average and extra $2,500 monthly. I do work full-time and have a full-time job and this is as I mentioned my side hustle. I can scale this up if I want to and look for wholesalers and distributors to purchase products from if I choose to. However, because I am the only person doing this (I have no help), I prefer to keep it this way for now until I am ready to perhaps do it full-time.

Let me know if you have any questions or leave me a comment.

Comments

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