Do you want to make money with retail arbitrage? Yes? Here is the complete guide for beginners to start a retail arbitrage business.
Nowadays, there are lots of side hustles available to make money online. A retail arbitrage business is one among them. The best thing about the retail arbitrage business is it requires a little bit of effort.
If you’re a person who can find great deals on items, you can make extra money with retail arbitrage. It can be a profitable side hustle if you know how to sell items for profit.
We’re going to learn how does retail arbitrage works and how to make money by doing this. After going through this article, you’ll get to know how retail arbitrage has the potential to reach your financial goal.
What Is Retail Arbitrage?
If you’re a beginner, you might not know what is called retail arbitrage. For that reason, I must answer this question.
Retail arbitrage is the concept of buying retail items at a lower price and selling them for profit. You have to buy items at a lower price online or in-store and then sell them at a higher price on Amazon, eBay, or using your eCommerce site.
How To Make Money With Retail Arbitrage?
The retail arbitrage business does take time, knowledge, and experience. To be a successful retail arbitrage, you need to sell items at a profit that covers your expenses.
While listing your item for sale, you need to include all the expenses like shipping costs. By doing this, you’ll be able to make a profit.
If you can purchase items at relatively low prices and sell them at a higher price, you’ll be successful in this business. After all, nobody wants to waste money.
For example, you have come across a great deal at a store where you’re getting baby toys at $10. If you purchase a large number of baby toys at a discounted price, you can sell them through an online marketplace at a higher price to make a profit.
Let’s do some mathematics to get profit per unit.
Baby Toy’s Purchase Price: $10
Listing Price For Sale: $20
Revenue Per Unit: $20 – $10 = $10
If you sell 20 units of baby toys, you’ll make (20x$10) $200 profit. If you use Amazon to sell your item, you have to pay a $0.99 fee. In that case, your profit rate will be $9.01.
I hope you’re pretty clear about how to make money with retail arbitrage. Now, let’s proceed further.
Where To Find Products For Retail Arbitrage?
To get started with the retail arbitrage business, you need to find products you can resell. Here I’ve found some of the best places to find great deals on products you can resell.
1. Thrift Stores
When it comes to finding products for retail arbitrage, thrift stores are one of the best places. You’ll find great deals on clothing and household items at thrift stores. You can find clothing items at thrift stores for between $5 to $10. Also, you can find household items at affordable prices as well.
To save more money, you should visit local thrift stores on deal days. On this day, they give away items at significantly discounted prices.
2. Department Store Clearance Racks
At the end of each season, department stores clear out all the seasonal merchandise at lower prices. That helps them to make space in their stores. You can take this opportunity to purchase items at low prices and sell them at higher prices to make a profit.
What kind of products you’ll find on clearance racks? It differs between stores. Most department stores clear out products like seasonal clothes, toys, and furniture.
If you search on their inventory, you’ll find great deals on products you can resell. Also, you can visit retailers’ online stores to find exclusive deals.
3. Online Dollar Stores
Online Dollar Stores can be another place to find products for retail arbitrage. You can save a tremendous amount of money by buying in bulk in online dollar stores. You can find items selling for only $1.
All you have to do is buy whatever you like and sell them through an online marketplace to make a profit.
Here are a few online dollar stores to buy items at a cheap rate:
Therefore, use online dollar stores to buy items at a cheap rate.
When it comes to buying and selling used items, eBay is one of the best options. You can find great deals on products that you want to resell. However, you may need to refurbish items before reselling.
eBay is well known for selling and buying items like:
Moreover, you can bid in low-price auctions. You can use online platforms like eBay, Amazon, or Craigslist to resell items. Also, you can consider physical stores as well.
5. Costco and Sam’s Club
Costco is a publicly traded company, and Sam’s Club is a subsidiary of Walmart. They both are known for selling items at great prices.
All you have to do is find clearance items and resell them at higher prices. Therefore, use both of these warehouses to find products for retail arbitrage.
6. Toy Stores
You can visit your local toy stores to see whether they are clearing out old toys like barbie dolls and legos. If they do, you can purchase them at low prices and sell them at higher prices.
Generally, old toys don’t sell very often. In that case, you need to be careful. Don’t invest too much money in toys. The demand for toys decreases over time.
7. Walmart & Target Clearance Racks
When Walmart and Target want to make space in their stores, they clear out old items. For that, you need to look at their clearance racks. You’ll find numerous items to resell to make a profit.
Don’t forget to visit their websites. You may find great deals on their websites as well.
8. Tuesday Morning
Tuesday Morning is an American discount, off-price retailer specializing in selling close-out merchandise from other retailers.
They have over 400 stores across the United States. If you live near a Tuesday Morning store, you need to pay a visit. You’ll be amazed to see the deals.
9. Video Game Stores
There are lots of people available out there who love to play video games. You can sell video games to these people to make a profit.
To find video game deals, you need to visit your local video game stores. Sometimes video game stores want to get rid of old games. In that case, they’ll give away video games at low prices.
You may find great deals on retro video games. Retro video games are no longer made. Still, some people love these games.
Books are one type of product that sells like crazy. It’s one of the best arbitrage items. You can visit your local bookstores to get books at cheap rates. Often bookstores want to get rid of old books. In that case, they’ll give away books at low prices.
Even you can consider thrift stores and garage sales to find books at low prices. When you find great deals on books, you need to buy them in bulk. Your profit rate will increase if you sell in large quantities.
Related Article: 26 Best Places To Sell Textbooks Online & Locally
Where To Sell Items To Make a Profit?
You have purchased products to resell. What next? You have to sell them on marketplaces. You can choose any ways to sell products that are convenient for you. However, you can consider the below places to sell items.
1. Amazon FBA Program
Amazon FBA Program will help you to sell your goods. However, you’ve to be prepared to pay fees.
How to get started with FBA? You need to follow the below steps.
- Create your selling account and set up FBA.
- Add your products to the Amazon catalog.
- Prepare your products for safe and secure transportation to a fulfillment center, according to Amazon packing guidelines and shipping & routing requirements.
- Next, create your shipping plan, print Amazon shipment ID labels, and send your shipments to Amazon fulfillment centers.
Once they receive your products at the fulfillment center, they’re available for customers to buy. When your item makes a sale, they’ll directly ship your item to the buyer. Amazon FBA Program is the best way to sell your items.
To get more information, visit Amazon FBA Program’s page.
eBay is another online marketplace to sell items. It’s a popular site for selling used items. However, you can sell other items as well. According to eBay, they have got over 187 million buyers.
How does it work? First of all, you have to list your items on the eBay marketplace. While listing your items, follow the below tips.
- Write a relevant title
- Take high-quality photos
- Choose a Buying format
- Set the right price
The best thing about this marketplace is you can schedule either daily or weekly payouts. They’ll deposit your earnings directly to your bank account.
They charge two main types of selling fees: an insertion fee when you create a listing and a final value fee when your item sells. To know more about fees, visit here.
OfferUp is an alternative to Craigslist. It’s one of the best places to sell items locally. You can instantly connect with local buyers on OfferUp.
You can sell almost any type of item, including trucks, cars, electronics, furniture, etc. It’s more appealing to buyers than Craigslist. Why? It features photos on its homepage.
To be a successful seller in this marketplace, you have to take high-quality photos of your products. The more your products are appealing, the faster they’ll make sales.
Here are a couple of more options to sell items locally:
4. Your Own Online Store
You can start your eCommerce store to sell items. Nowadays, opening an online store is too easy. You can use platforms like Shopify or Squarespace to open an online store. By using these platforms, you don’t need to be tech-savvy to start an online store.
However, you have to ship your items manually. Moreover, you have to take care of transactions as well.
Tips To Succeed in Retail Arbitrage Business
When you’re getting started with a business, you need to follow some tips. Here are some tips to follow before starting your retail arbitrage business.
- Quantity: You need to measure how many items you should buy. Also, you need to purchase items with a high-profit margin. Never purchase too many items if the selling potential is low.
- Keep an eye on stores: You need to know when stores lower their item’s prices. If you know in advance, you can purchase at lower prices.
- Have patience: You need to have patience to get success in the retail arbitrage business. Every business takes time to flourish.
When you’re starting a business, you have lots of questions. You might have lots of questions regarding the retail arbitrage business model. For that reason, here is some questions’ answer to the retail arbitrage business.
Is Retail Arbitrage Legal?
If you’re looking for a straightforward answer, the answer is YES. According to the US Supreme Court, retailers can’t stop anyone from reselling their products as long as the merchandise is acquired legally. However, you may face lots of challenges if you decide to sell branded items.
How Much Money Can You Make With Retail Arbitrage?
It depends on several factors. The more money you invest, the more profits you’ll make. In the beginning, you can start with as low as $100. You don’t have to invest too much money in the beginning.
Which Are The Best Products For Retail Arbitrage?
You can choose any type of product for retail arbitrage. The best products for retail arbitrage are sports, clothing, household goods, toys, shows, and electronics.
Can You Find Free Items For Retail Arbitrage?
The answer is YES. There are lots of freebie websites available that’ll help you to find free stuff online. Later on, you can resell them online in marketplaces.
Starting the retail arbitrage business can be a great way to make extra money on the side. In the beginning, you need to focus on learning about the retail arbitrage business. Once you learn A to Z about the retail arbitrage business, you can start to make tons of money.
Moreover, retail arbitrage takes time to flourish. Don’t expect to become rich in a few weeks.
Hopefully, this article helped you to know how to make money with retail arbitrage. If you found it helpful, share it with your friends.