My First Amazon FBA Clearance Arbitrage Shopping Trips – And My First Sales!

first amazon fba shopping tripsOver the past few weeks I’ve made several clearance arbitrage scouting trips. After hearing about this side hustle for the past year and some of the success my friends and peers are having with it, I had to give it a shot!

The first thing I did was install the Amazon Seller app (Android | iOS) on my phone. I know others have recommended Profit Bandit, but the Amazon one was free so that’s what I started with.

Upon opening it, I learned an Amazon Seller account was required to run it, so I created a free Amazon Seller account.

(I later upgraded to a “Professional” Seller account, for $39.99 a month after a 1-month free trial, but started out with just the free one.)

Armed with my iPhone, I took to the aisles!

My first stop was Walgreens. I found a few items, including this dancing Groot toy from Guardians of the Galaxy.

dancing groot

It was on sale for $3.79, and the barcode scan indicated my estimated gross proceeds would be $12.41. It also had great ratings and a low sales rank in the Toys category. Unfortunately this was the only one they had, otherwise I would have bought the whole stock!

Many of the items I scanned were shown as “restricted” in the app; meaning I couldn’t sell them. I learned later that certain categories, like Automotive and Beauty, require a special application (and a Professional Seller account) to list those items.

I also hit up:

  • Target
  • Safeway
  • OSH (local hardware store)
  • Walmart
  • CVS
  • Radio Shack
  • Big Lots
  • Office Depot

Radio Shack, CVS, Office Depot, Big Lots, and Safeway were busts, but I did find a few items at each of the other places.

In total, I spent 5-6 hours shopping and spent about $300 so far.

Product Scanning

Scanning is a little awkward at first, especially at smaller stores with employees watching. But it was also strangely addicting. Like a little treasure hunt.

In “real life,” I spend very little time shopping. Like, almost never aside from the grocery store.

I don’t buy much and what I do buy, I usually just order from Amazon. So for me, there’s going to be a learning curve in each location to find where the clearance items are generally found and what to look for.

I knew from reading posts like Travis’ that it would take a lot of scanning to find profitable items, but in practice that was more depressing than anticipated.

To leave a store empty-handed after 45 minutes felt like a big waste of time.

Arbitrage Purchase Criteria

Being a total rookie at this, I didn’t know what exactly I was looking for. I knew that basically I was looking for a healthy spread between my purchase price locally and the “net proceeds” of the item on Amazon (after seller fees).

The other consideration I took into account was the size and weight of the item, reasoning that big and bulky products would be more costly to ship into the warehouse and cut into my margins.

In general, I looked for items that were marked down at least 50% and had estimated profits of $5 or more. If I felt particularly confident about an item, I’d buy two or three.

Getting Gun Shy

I scanned a couple items that looked like winners, but I didn’t end up purchasing for one reason or another. In one case, the packaging was so beat up I wasn’t sure if Amazon (or the end customer) would accept it as “new.”

In another case, a product appeared to have a great spread between the in-store price and the Amazon price, but it had horrible customer reviews. I got freaked out that no one would buy a 1-star rated product and it would just sit in the warehouse.

FBA sellers, do you let the condition of the packaging or the reviews come into consideration on your scouting trips?

What other criteria do you use?

What I Bought to Resell on Amazon

I ended up with mostly toys and some electronics and accessories. Here’s my first shipment I sent off to Amazon:

first fba shipment

Want to know what else is crazy? That 10 pound box only cost $8.56 to ship across the country using Amazon’s discounted UPS rates.

One frustrating thing I didn’t really anticipate was when entering in my items in my Seller account was they wanted items shipped to several different warehouses across the country. I guess I knew they had distribution centers all over the place, but for some reason thought I would be able to send all my stuff to one location.

My current game plan is to batch as many items as I can into each shipment to spread the shipping cost across the inventory.

The cool thing is they deduct the super-cheap shipping charges directly from your account so you’re not pulling out your credit card for each box.

Entering the inventory into Amazon’s system and creating the shipments also took some time to learn, since I’d never done it before. They’ll throw unfamiliar terms and requirements at you at every corner, and you just have to push through.

For instance, a couple of the items apparently needed special labeling. A few clicks later and I found the option for Amazon to do this for me for like $0.20 an item. Not worth worrying about at this point.

Other Doubts and Risks About Amazon Arbitrage

My analytical brain has a hard time with this side hustle.

If these products are such a good deal, how come the store hasn’t been able to sell them? How have the employees who work there not heard of this business yet? How long can this last?

And what about the stores themselves? Walmart isn’t stupid. They know we’re coming in and doing this.

On the risk side, the $300 I spent is the most physical “inventory” I’ve had since my painting days. Everything else has been digital!

Inventory risk is the idea of “tying up” your money in stuff and then having it sit around a long time before selling or potentially lose value. Amazon does charge a nominal storage fee for warehousing your items, so you want to try and pick out stuff that will sell relatively quickly.

Amazon FBA Tax Notes

If you want to give this a shot, be sure to save your receipts. Otherwise it can be hard to claim a deduction for stuff you bought at Walmart/Target.

Also be sure to keep track of your mileage to and from the stores. (This can be a great tax-saving hack if you’re already making a trip nearby; just stop in and do some FBA scanning.)

My First Clearance Arbitrage Sales

It took about a week for my first shipment to make it to Amazon’s warehouse. They inventoried the items late on Thursday or early on Friday.

Saturday morning, I pulled out my phone to check and see if anything sold, and was pleasantly surprised to see this:

first fba sales

Whoa! $221 in 1 day! Granted, only a small bit of that is profit, but it was still really encouraging to see.

What sold?

  • 2 Trolling Motor Adapters (no idea what these are even for): Bought for $7 each and sold for $15 apiece.
  • The BodyMedia armband thingy pictured above: Bought for $69 and sold for $115.
  • The vTech MobiGo2 thingy pictured above: Bought for $15 and sold for $34.
  • The Drax figure from Guardians of the Galaxy, pictured above: Bought for $15 and sold for $28.
  • A dinosaur pattern Boppy slipcover: Bought for $10.99 and sold for $14.99.

That last one was an “oops” — either me making a rookie mistake or the cashier ringing me up at the wrong price. I’ll blame the cashier :)

Why was it an oops? Because you don’t keep 100% of the sales price; Amazon still has to take their cut.

On that Boppy slipcover, the fee was $4.92. Definitely went backward on that sale.

It’s something I have to be smarter about when considering these purchases. Or double-checking my receipts before walking away.

Estimated “profit” from the first day of sales: $50.

Actually it’s a little less if I calculate in the lovely California state sales tax and allocate a portion of the shipping costs to those items. But hey, taking action and learning along the way.

I’ve got more inventory on the way from my first shopping trips, and as I get better at this, I suspect my equivalent hourly rate will improve considerably.

Goals for this Side Hustle

My first goal was to buy $100 worth of stuff to ship off to FBA, and to make my first sales. I can officially cross that off!

The next stage would be to see if this is something I enjoy doing (so far it is, but admittedly I’m still in the honeymoon phase). If it could turn into a $100/week side hustle, it would more or less cover our grocery expenses.

I like to frame these mini business experiments along those lines because it makes them more tangible, like “we’re eating free this month thanks to Amazon FBA.”

And finally, I’m looking at this as a gateway into ecommerce with Amazon, potentially going down the importing and private label path.

Want more retail arbitrage goodness? Check out the podcast episodes I did with Travis Scott and Assad Siddiqi. Assad in particular has taken this hustle to an entirely new level, including sourcing products online and outsourcing his packaging and labeling.

Your Turn

Have you tried this yet? I found it super simple to get started, but does require some upfront investment that’s somewhat speculative.

first fba scanning trips

************
(Walmart image credit)

Opt In Image
Join the Nation!
Free Report: The 5 Fastest Ways to Make More Money

Join today and download the free report The 5 Fastest Ways to Make More Money, plus get actionable tips and insight to advance your side hustle each week.

67 thoughts on “My First Amazon FBA Clearance Arbitrage Shopping Trips – And My First Sales!

  1. I’m not sure if I’m seeing the passive income benefit in this side hustle. It seems like a LOT of work for the money. And, like you, I don’t shop much, so I don’t know if I’d have the requisite skills to pick the winners. And 6 hours shopping means 6 hours less content production.

    On the other hand, as a quick way of earning money, this could be useful. I’ve got to admit that now I’m thinking that if I AM shopping, perhaps I should be more mindful of what’s on the shelves. So overall I’m glad you’re exploring this avenue, Nick.

    • Yeah definitely not passive at this point, but could be a gateway into a more passive model (importing / private-labeling products). Still, pretty fun to test it out and see how it all works.

    • It can become what I will call ‘semi-passive’ in that once you find a home run product that meets your buying requirements (low sales rank, few FBA sellers, great margin) and it is a regular priced store item (not on clearance/no longer available), you can just continue to replenish that product over and over again in your Amazon inventory. So you only had to find the product once, then when you are running low, you just got buy more of that same product (or products as you build up your inventory) and don’t need to spend the time always scanning for new items. Replenishing inventory is where you can really start to see the money rolling in. Scanning constantly is a time killer for sure and not passive, but once you know what to buy/sell, there is much less time involved for the profits.

    • I’m an international seller, just want. To starts selling on Amazon, I’ve choosen my product from a china supplier , it is a screen protector for iphone i want to target US market by Amazon I don’t have address in USA, to add product in Amazon inventory seller central I need a UPC or EAN or ASIN ….. Code.. I cannt skip this step from Amazon it’s a must, how can I proceed in this matter?thanks

  2. Hey Nick,

    So glad to hear you’ve given retail arbitrage a try! I’ve been a listener/reader for well over a year now. But, I’m a farmer with very long hours and haven’t really had the time to dive into anything yet. And that’s what appeals to me about this opportunity. You can put in your hours when you’ve got them and everything just sits put until your next block of time becomes available.
    So, last month I spent a couple of my previous days off sourcing product for Amazon FBA. I ended up spending a similar amount to you on inventory. Within two weeks of Amazon receiving my products I’ve sold about 35 of the 50 items I sent in and have already received over %100 ROI. Overall I spent about 6-8 hours sourcing and another 4 hours or so online preparing my shipment and trying to learn the correct way to do so.
    As far as items with bad reviews, I haven’t purchased anything with less than 3 stars. I just can’t believe many people are buying 1 or 2 star rated items.
    I did run into a couple items that were “new” but the packaging was not in satisfactory condition. I do the gift test: if I would feel comfortable giving this item as a gift then I’ll sell it as new on Amazon. Selling as Like New on Amazon is one option, but with one of these items I had great success on Ebay. Ebay allows you to sell items as “New-Other” for those not technically new items. I just made to take great pictures highlighting how new item actually was, but also showing the not-so-new issues. I also choose not to accept returns (people don’t seem to mind if they are confident in what they are buying). This allowed to to sell a $30 DVD recorder for $265! This item was definitely an outlier that alone raises my ROI mentioned above to over 160%.
    Sorry for the long comment, but I’m so pumped about what you’re doing. Thanks so much for everything you do Nick, you inspire me.

    -CJ

    • CJ

      Don’t get caught up in the star rating. Most people don’t leave ratings when they’re happy. Also, this is very important and probably one of the biggest pieces of advice I can give you. The only thing that matters in selling is that it sells. It doesn’t matter if an item has a 1 star rating out of 5. If its selling 200 units a month, its selling 200 units a month period.

  3. Hey Nick – thanks for sharing. This is Jake (I work for Spencer with Long Tail Pro).

    I’ve done quite a bit of FBA on the side over the years and have a tip for you about the multiple box thing with mixed items (also drives me crazy).

    If you start out the shipping queue by entering a higher quantity, it will affect how many they tell you to ship where. You can keep going back and forth until you get a shipping arrangement you like better.

    So lets say you have 5 random, individual items, and then 8 widgets that are the same. They tell you to send the 5 randoms and 4 of your 8 widgets to Chattanooga and then your other 4 widgets to Phoenix.

    Go back and say you have 16 widgets, and move forward again.

    Most likely, they’ll now have you shipping 8 widgets to Chattanooga (AKA all of them) and 8 to Phoenix.

    Go ahead and finish up the Chattanooga shipment, and then just cancel out that Phoenix shipment.

    I’m sure this isn’t an Amazon approved tactic, but I’ve done it plenty of times to consolidate shipments as best I can and it always works.

      • If you turn on the inventory placement option in your account you will only have to ship to 1 warehouse. I think it’s an extra 0.15 fee per item but at low volume it’s the way to go

    • Thank you SO much for this tip. As one who is just starting out, I was wondering about this as had 16 items (3 different items) and had to ship some of each item to THREE different warehouses.

      Your way makes SO much sense!

    • Great tip Jake, but in your example you wouldn’t have to add anything else. You can add up to I believe 5 or maybe 6 additional units in the shipping queue. So if it told you to send 4 to chattanooga and 4 to Phoenix, you could just update it to 8 to chattanooga and cancel out the Phoenix shipment like you said.

  4. Hi Nick, thanks for this VERY helpful post. I am a college professor, and have boxed up a bunch of books (like, hundreds of books) and am ready to dive into FBA. What do you think about the idea of specializing in one type of item on FBA, like books? Could someone go really deep into this one niche and do well? I guess the key would be finding the right types of profitable books very cheaply (garage sales, etc.).

    • Kent, check out a guy named Andrew on YouTube, his channel is called Picking Profits (and he has a FB page). He primarily sells used books on Amazon and sends hundreds/thousands at a time to AZ warehouses. He’s branched into other areas (eBay) but his primary business model is book and media on Amazon. You can probably pick up some great info from yous youtube channel. Good luck!

    • Hey Kent, there are 100’s probably 1000’s of sellers on amazon that only sell books and make quite a good living from it. In that arena, i’d have to say text books are king especially when campuses are getting back in. Since you’re a professor, you may have access to lots of books but I wouldn’t just pigeon hole myself into one specific category to sell. Sell what sells. I don’t have a clue what half of the stuff I sell does, just that it sells.

  5. Great write up! I have actually started dabbling with Amazon selling as well, but I have been buying and selling Nerf guns.

    I find ads on craigslist, ask the seller for the gun models they are selling(if I cant tell from the picture), search it on Amazon and see what the low price is for collectible. Then if the margin is great enough, I usually offer an even lower price for the guns and start seeing how cheap I can get them.

    So far I have only sold a few guns, but I have made $35-$80 on each one!

    Also, I have chosen to do the shipping by myself and not use the FBA program. Mostly because the guns are awkwardly shaped. But, as long as I budget the shipping costs into my price before I purchase the guns, everything works out okay.

    As a shopper who loves finding good deals, this is so much fun. It offers a way to find the deals while shopping, and then knowing that your actually going to make money off it what you buy.

    Thanks Nick!

  6. Congrats on your first few sales! Glad to hear it’s working out. Arbitrage is pretty time consuming but it does pay off. Keep it up! I’ve done very well since our meetup in December in Seattle and have replaced my full time income. I’m now looking forward to this coming holiday season to further cement my decision to go full-time selling on Amazon.

  7. Nick! You are the man! I’ve searched and searched for a little help… just someone who will spell it out; their first trip, what they did what happened….

    Most people will give advice only with an upsell. You just laid it out there and it was very beneficial. Answered the questions that have been months in the asking. I probably have underwear older than you, but an old dog can still learn a few trick from young pups!

  8. Renee congrats! Good luck to you!

    I did arbitrage selling I found it revenue generating but not really profit generating when you add cost of time to find products, the driving around etc.. shipping is also a big hassle but with Amazon bulk ship and they do rest kind of solves that.

    But congrats to those who solved the problems I had with it.

  9. Hi Nick I have heard of Amazon FBA through DS Domination. I also follow this guy on Youtube who does this full time well he has some other side hustles to but FBA is one of his main hustles. In some of his videos he walks through all the details about packing and shipping and all and one thing he showed was using a scanner to add the product to amazon list. Also he is big on doing the Bundling stuff kind of deal. Once you can get into the beauty side of the business you can bundle a few products together to create a whole new set. And better pricing!

    I also have a friend on Facebook she been doing this for over a year now she started in Jan of 2014 and when Jan 2015 came around I seen a post about how she cleared just under $500,000k doing FBA stuff she is also into branding her own products.

    I plan on getting into this side hustle myself once I get a few things I need like car my own place a smart phone and such. And some hustle cash to work with.

    All The Best
    Edward

  10. Thanks Thunder Feather! You are right there is a ton of work involved that can obliterate your profits quickly and it is more challenging now to do retail arbitrage than it was when I started. Still worthwhile but a challenge all the same. To be fully transparent, I am not doing a ton of retail arbitrage in stores these days, though I started this way. I’d say I’m doing 70% wholesale, 20% online arbitrage, 5% retail arbitrage and 5% thrifting. I am using FBA for shipping about 95% of the time as well. I do know of folks that are 100% retail arbitrage and doing well. However, I had to tailor the business to suit my preferences in order to stick with it. Retail Arbitrage can burn you out. Shopping is fun until it’s your job.. Lol. RA is definitely an investment in time and money and demands that you find ways to work as efficiently as possible.. Otherwise, you’ve created another job instead of a business which defeats the purpose in some cases.. Not that long ago, my business had become a job that I wanted to quit until I made a few tweaks and now it is much more enjoyable and allows more time to do other stuff.

  11. Hi nick,
    You can select to have all your inventory shipped to one place. It might not sell as fast but I find it to be much less of a hassle.
    The labeling process is really easy once you figure it out so I wouldn’t recommend having Amazon take care of that in the future. But congrats on making it happen so fast that is impressive.

  12. Hey Nick,

    Why bother with sending to Amazon? Why not sell the items individually….especially since you are having to ship to more than one warehouse.

    • That’s definitely an option, and you can actually save a lot in fees doing it that way.

      But I was still able to get 6-10 items in a box, and having them “fulfilled by Amazon” makes them Prime eligible and makes it so I don’t have to worry packaging and shipping individual items.

    • Nick hit it right on with his answer. By selling through FBA/Fullfilled by Amazon it makes your items eligible for Prime customers, who have shown to be willing to spend more on a product to get it within the Prime shipping time. So something you could sell Merchant Fullfilled for $20 + $4.95 shipping you could most likely sell for $30+ through FBA for Prime buyers.

      Also if you sell through FBA and there are no other FBA sellers and Amazon is not selling, you are pretty much guaranteed to get the Buy Box and your price will be the price that is shown to customers. So your price becomes the go to versus the line that says “Available from these sellers” .

  13. Hi Nick,

    I just read this an am now really considering starting this. I go “shopping” with my fiance all the time and this could definitely be a better use of time than just playing Hearthstone on my phone. I’m going to download the app and go through things in my house that I am considering just donating or taking to a pawn shop to see if maybe that could be my first shipment. Thank for the article, I have been listening to the podcast for two months now and am really getting pumped up to take off on the side hustle business :)

  14. Just a quick update for anyone interested. I had been thinking about doing Amazon FBA for a while, and Nick’s post gave me the push I needed. I am a college professor and have a LOT of books I’m going to offload (like, hundreds and hundreds). For my first shipment, I’m sending 186 books. It has taken quite a while to put them all into inventory and figure out what I’m doing. Amazon’s process for getting set up on FBA and getting your first shipment ready is fairly complicated, it seems to me. But once you get that figured out, it seems a lot easier.

    I have invested a couple hundred dollars in a thermal label printer, barcode scanner (which I haven’t used yet), a heat sealer, and some other supplies. I am excited about the potential this has for bringing in side income – – plus, my son had a ball helping me label the first batch of books. :)

  15. Nick,
    You can avoid sending stuff to multiple warehouses by choosing the “inventory placement” option on your FBA account. You pay something like $0.30 more per item, but Amazon takes care of distributing your items to various warehouses.

  16. Today, July 1, 2015 was my first day at starting my retail arbitrage business. Made a lot of mistakes, and off to a running stop. My seventeen hour day was cut short at about twelve hours. Just working on logistics. What should have taken one day might take two, and now I have the holiday weekend to get in my way. I’ll just keep pushing through. Nick, I really don’t know what it was that you said, but something (after months of searching and researching) just clicked. In the past I was involved in endeavors that required some engineering brain power. Going outside the box and then making a new box with all new rules. Then one day I didn’t feel well. Seven weeks later I emerged weaker and with greatly diminished mental capacity. Things that are obvious and simple can just sometimes evade me. It can be embarrassing knowing the answer is simple and obvious but I have to work hard for obvious answers. I’m just powering my way through FBA, and the great disadvantage set before me will just make the victory so much sweeter.

    -“Mad” Max Speedwell

    • Max, thanks for sharing this. I just sent off a few boxes–my first shipment–today. I have also made a lot of mistakes, and FBA is not really a simple process. There are a lot of things to get wrong. But I think that’s what separates the successful from the unsuccessful. It’s not really a matter of intelligence or ability–it’s just the stubbornness to push through and get it done no matter what. Thanks for sharing your persistence–I am inspired!

  17. As others have already noted, this is NOT passive. That’s only one of the downsides. Here are more:
    2) It is time-consuming. Ok, that’s part of the non-passive.
    3) It requires substantial investment in various tools and ongoing fees. Yes, you can dabble in it for fairly low entry cost, but if you want to make enough money to make it worth your time, you are going to have to spend $50 or more per month, and about $100-$300 upfront on some things like scanners & some specialized software.
    4) Amazon changes the rules constantly. One day something might be working great, the next it’s disallowed. Without any recourse.
    5) Amazon will screw up, and you get the blame. For instance, I know a seller who had a serious complaint filed against him for something sold as new, but was used. What happened is that some customer decided to “rent” the item for free and return it dirty, and Amazon just restocked it and sold it to somebody else without any incoming inspection.
    6) Amazon will screw, and blame you (part 2). Amazon will co-mingle merchandise without your knowledge or consent, and blame you for problems encountered with it. A notorious example of this was how they handled “Frozen” merchandise.
    7) Good luck with coming up with an exit strategy. Once you are sucked in, it’s going to cost you a lot to stop.

    There is an upside, namely, it’s fairly engaging and fun work. At least, up until it’s not.

    Amazon is currently trying to rid itself of the horde of clueless newbies brought on board by the likes of the Amaz!ng Spamm!ng Machine with their $4000 get-rich-quick scams, but Amazon is doing so in a semi-automated and disorganized way — with a lot of collateral damage (which does not concern them in the least — they can always blame you).

    If you go with Amazon as an FBA seller, be sure that you understand that *THEY* own the business, not you. You are just a middleman in their scheme, and when the time comes, the middleman will be cut out.

    All that said, it’s possible to make a decent living doing nothing by FBA. But if you go that route, you are a fool, because I can guarantee you it won’t last. You need at least one other source of income to fall back on when (not if) that one (probably abruptly) stops.

    • I agree with your post. Amazon rules state clearly that you have to be the original authorized seller or something like that. This specifically precludes buying retail and selling FBA. Amazon is running out of space at its centers, and guess who loses when Amazon is forced to stop building more? It won’t be amazon or its big partners or the Chinese. It will be all of us little guys.

    • At last, someone who understands the shady side of Amazon. The whole idea of FBA is to make sellers have to pay, to sell. I’ve been a MF seller for 14 years, so I know Amazon pretty well. Have not done FBA, looking into it. Since we have been thrown off the cliff since FBA started: suppressed, no Buy Box (even if you pay Pro!), hidden.

      And I’ve been watching FBA sellers get blamed for: anything that could go wrong. Meanwhile, Amazon loses incoming items, breaks them, pretends they are bought, then sells them themselves at a marked up price, warned, kicked off, accused – I mean things no normal business could get away with. It’s scary.

  18. This is a great article. I’ve been researching FBA for awhile. I signed up for your side hustle newsletter. I’m looking for other side hustles because everyone should have multiple income streams in this economy

  19. Hi,
    Could you please clarify the following for me if you can as I searched and searched and still confused and not clear.
    I just can not understand why do I need a UPC and Amazon label for the same item.
    If I have a new product, do I need to have a UPC? and if yes do I also need to print Amazon Label? and if the answer is still yes, do I need to cover the UPC of the product with the Amazon label I just created?.
    If I have to cover the product’s UPC with the Amazon label, then what is the point of having the UPC In the first place?. Why di I have to buy something and then cover it?. If the UPC is used so I can search for my product, can I search by name and not UPC? and my last question is if I have 100 items of the same product and if I have to purchase the UPC, can I buy just one UPC and apply that one UPC to all of the products?. I would really appreciate if you could clarify the above questions for me. Many thanks in advance.

  20. So what will all of the retail arbitrage people do when Amazon cracks down on this? it is against the rules of Amazon, and people are complaining to Amazon about stuff they are getting that originally sold at wal mart. Also does it bother no one that Amazon has all this data in their cloud, and not only can they make a better deal with the manufacturer, but also block your inventory out at will? Also why advertise what we are doing? Most of us that are successful have worked hard at this and now people are giving away the secrets. Its getting harder to find deals now because of you tubers and bloggers bragging about their finds.

  21. I work in a Dept store and get a decent discount on items whether clearance or not sometimes I can get items up to 55% off. I got a pair of asics, new balance and I think the last brand was natural soul shoes for a total of $20. All 3 pairs Mark was over $60. Kids/baby clothes I can usually get on clearance for between $1.20 to $15.

    Just wanna kno if you think retail arbitrage from my job would be a good idea. So far I’ve only bought stuff for my family.

    If I do this would it be better to ship directly to customers or fba. If I do this for fbaAll shipments will be mixed.

    Question to the pros to you think this is a good idea and is it a good idea to do this from my job. Help

    • Hi Tina, thanks for the note. One thing to check on is whether or not your employee discount policy has a rule against reselling. I believe some (like Apple’s) do. If not, I think it’s fair game. To FBA or not is a personal preference. Obvious advantages are you don’t have to worry about fulfillment and items show up as Prime eligible to shoppers … but they take a decent chunk of your margin in fees.

      • That’s what I was thinking to ask the store manager. Amazon has gotten real greedy. If they keep going they might loose there business when another popular website undercuts their price and put them out of business just like they did with all the bookstores.

        • I asked the manager and he said that’s against policy because a former employee would hide stuff and wait for associate shop days when we get an even deeper discount or when items go on 90% off clearance. Then sell it at a flea market. I don’t need to wait for things to go on clearance. I kno a good deal when I see one and besides sometimes the clearance $ is the same as the sale $! Haha.

          I’ve always bought stuff for my son off season unless it’s something he really needed and wasn’t afraid to buy 2nd hand either. Sometimes I’d buy his stuff a year in advance. For me whether I got the items from job or not you just need to kno your market and who you’re selling to.

          I think clearance is a trick of overbuying on purpose then make as much money as possible then placing it on clearance. Then putting out new stock. Store have already made the profit they perceived to make before deep $ off. Now all customers come flooding in for the clearance and are now being advertised to the new stock where they’ll now pay premium $ and restart the cycle again.

          I hope I’ll be able to find another source of cheap stock. I kno it won’t be as cheap as my job but as long as I make a profit even if it’s $1 I’m fine with that. That’s a $ I wouldn’t have if I didn’t try this.

  22. Hey Nick, it’s been a little over a year since your original post. Are you still doing FBA? How have things changed over the last year (either doing business w/ Amazon or finding items to sell based on the number of people doing FBA)? Thanks!!!

    • Hey Brent, thanks for stopping by! My sourcing has definitely slowed down this year since having a baby, but the products I have in the warehouse continue to sell and everything is gravy now — my expenses have been covered and it’s all profit.

      I didn’t really dive headfirst into this is my main business focus as others have (http://www.sidehustlenation.com/amazon-fba-retail-arbitrage-six-figures-in-year-one/). I still look for items to resell when I’m out running errands and think this is a fun side hustle, but I think it takes a little more dedication to turn into into an income-replacing business.

  23. This is a great post for people who are thinking about selling on Amazon FBA. Thank you! I’ve been considering doing this, but wasn’t sure where to start. :)

    • When you add the items as inventory to your SellerCentral account (sellercentral.amazon.com), they’ll have you select seller fulfilled or Amazon FBA. After you select FBA they’ll give you shipping instructions and a packing label.

      • I did that, but they want me to enter the address for pickup, like my home or business address….
        I dont see any address that they give to me

  24. Hey Nick, just a reminder to everyone, if you start with the free seller account on amazon, you can’t claim the free 1 month trial of the pro seller account in the future. You’ll be charged 39.99 off the bat as soon as you switch to pro. Pretty lame on amazon’s part.

    Unless they changed the rule.

    • When you go through and add new items to the inventory, it will give you the option to create a new shipment or add to an existing shipment. I try and batch as many items as I can into one shipment, and sometimes even pay a little extra for their “inventory placement” option to avoid shipping to multiple warehouses.

      After you input the size and weight of your box(es), it will give you a pre-paid shipping label (which they deduct from your seller account). The Amazon negotiated shipping rates are CRAZY cheap compared with what you’d find going to the post office or the UPS store.

  25. Hey this may have been covered in the comments but what about pictures and item descriptions? Did you do all that too?

  26. Hi Nick,

    It was great hearing about the details of your first attempt. I’m thinking about trying it out myself, mostly for fun and a little money on the side. I’m really confused about collecting and paying sales tax though, especially for those who have an individual. I’ve read tons of guides about how to do it when you have a pro-seller account but can’t find a thing about how to go about it with an individual account. Any advice?

  27. Hey all,.
    Omg I know I am asking the same question a million others ask but here we go….
    I am unemployed due to losing home and place of employment during hurricane Matthew. I have about 5000$ in bank and daughter and I living in hotel. I am a outside of the box type of person and punching a time clock I detest, unless it is my own. That said. I have always picked up junk and resold. Things I find on side of road. Yes my daughter gets so embarrassed but it is like a treasure hunt a challenge I love….. reading your article and comments some of the words are fine to me. I won’t just tried buying and reselling things I just don’t have any idea where to begin and can a typical person like me really make this their full-time income. Any comments or suggestions offering help greatly appreciated. Love your article by the way thanks so much

  28. I found this blog, because I was wondering why there was so much stuff being sold on Amazon, way above suggested retail price. Sometimes the price was three times as high as MSRP, and I got curious.

    It appears that retail arbitrage works best, when a popular item gets discontinued, and you hold onto for a while, and there are few merchants selling the item on Amazon.

    Personally, I am shopping Amazon a lot less, because all I find is overpriced merchandise. It used to be, you went on Amazon as your first choice to find a bargain. Not any more, and Amazon knows this. I expect Amazon will start coming down hard on retail arbitrage, because it is damaging Amazon reputation as being the cheapest source.

    I understand, that some of you are starting with no disposable income, so RA is your only option. But once you have some money in the bank; find yourself a legitimate wholesaler (i.e. sells to you for 50% of MSRP). Some industries have less markup (electronics) , some more (clothing). Check around with several wholesalers, the markups should be close. If one isn’t then they are a drop ship middleperson scammer.

    Pick niche markets. It is a lot easier to become a big fish in a small market, than a large one. Once you become a big fish, become a distributer yourself and deal directly with the manufacturer, and still sell retail This should add another 20-30% to your profit margin.

    Set up your own website or setup online shopping with a company that is not stealing your data, and competing with you (Shopify). Learn about Search engine optimization and marketing. I recommend you run your website in parallel with Amazon shopping at first, with the goal of dropping Amazon as soon as your own website can support you on its own.

    The only time I would sell online with Amazon on a continual basis, is if I was the sole manufacturer of a product, because you could threaten to cut them off anytime.

    Small Manufactures, are more concern with growth, and cash flow. Once you become a large account with them, they are not going to complain about you selling retail as a distributer.

    Once you have good cash flow, and a cushion, repeat with another niche market. The idea is not to have all your eggs in one basket.

    Once you are successful, you must ask yourself, do you want to work yourself to death, or enjoy life.
    Once your company grows to the point where you have a large retirement nest egg, can live comfortably and send your kids to private schools, take 2 long vacations a year, you may want to decide to limit growth. This is where I’m at, after 18 years of ecommerce. Probably could have done it in half the time, if I worked harder at it.

    If you are the money is power type, and are saving for your first super yacht, and a upgrade on your trophy spouse, keep at it. Just remember you may not die happy!

  29. Hi Nick,

    Thanks for the great description of how to start selling with Amazon.
    I’m have yet to sell on Amazon but want to give it a try. So far I’ve only researched items to potentially sell. My question is, when you decide on which items to pull the trigger on and purchase, do you first take a look and see if there’s been any reviews of the product? If there are no reviews, is it best to move onto an item that does? I figure if there are no reviews, it means the item may be tough to sell and I could possibly get stuck with it. Would you say this is accurate or am I putting too much consideration into the reviews..?

    Thanks!

    • I passed on a couple products because they had like a 2-star rating, but other re-sellers I’ve talked to have said the sales rank is a better indicator of how fast the product will sell than great reviews / bad reviews / no reviews.

Leave a Reply

Your email address will not be published. Required fields are marked *