This is buying physical products from shops and/or retail outlets (wholesale and non-wholesale) and then selling either offline car boot sales etc or online, eBay, Amazon etc.
More often than not, retail arbitrage products are resold online, and probably mostly on eBay as opposed to Amazon.
The profit is made when you buy, not when you sell. The better the buy price, the better the eventual profit.
If you are unsure if the product will sell, then resist the urge to just buy and hope it sells. Check on eBay first if the product (or similar products) is listed and what they are selling for. If the product has lots of sellers it’s a high competition product, but that doesn’t necessarily mean you can’t sell it.
You might still be able to undercut other sellers, and also they will eventually sell out so as long as your product is listed and there is a demand for it, it should eventually sell.
Remember, You’re Investing not Buying Short Term
This is another arbitrage mindset tip. The product you are buying to sell on might take weeks or even months to sell. This is an income generation exercise, it’s an investment and should be thought of as such, not as a shopping exercise. So yes you will need a little capital to get started.
It can help to have a separate bank account, or a ‘pot’ within your bank account where you ‘seed‘ some capital initially and then plough any sales back into the same ‘pot‘ to use to reinvest in more arbitrage. This way you see the compounding effect of your arbitrage income effort, which is motivational when you see the account balance growing much faster than a normal savings account.
Doing this will also help you to view this more as a business than a casual income sideline.
Buy Bargains in the Sales
Clearly, retail sales are the best time to pick up the discounted prices to max your profits.
Christmas sales and January Sales are good times to go bargain hunting. You just have to remember you are not buying for yourself, you are looking for the biggest discounts for products you think you can sell online. That’s it. If you think there is a demand for the product and it will sell on eBay that’s all that matters. Whether you personally like the product or not is irrelevant and you should change your mindset if you find yourself thinking in that way.
Throughout the year there are temporary sales, ‘closing down sales’ and maybe other seasonal sales apart from the above. So it’s really a case of being aware when you see a bargain for something you know you can flog.
Another example is ‘end of season’ sales and discounts. When summer is coming to a close, unsold summer stock is often discounted by retailers to clear out space for winter stock and to just clear out the current summer stock so they can sell new summer stock the following year.
The advantage of retail arbitrage over online arbitrage is bargaining power. If you’re in a shop or a car boot sale or auction, you can always try your luck and offer below the price on a product. Bargaining and not giving in is an art form and one that can lead to higher profits. Remember, the profit is made when you buy, not when you sell.
Search for wholesalers in your area and check out what they are selling that you could sell online, using the knowledge and mindsets described above