The dream of being his/her boss has become common recently. Gradually, more and more people want to know how they can make money from home. They want to transform their exhausting, boring, or otherwise unideal jobs. And mainly don’t want to spend the valuable resources they already have.
The COVID-19 Pandemic has affected lives in many aspects. People understand that it would be possible to work from the comfort of their own homes. So, remote work has become more popular.
But, few home office jobs can expand fast and earn massive money out of it. Today, we are going to show you one of the most attractive online jobs and explain how to make money with that.
What is Online Arbitrage?
There are various business models to sell your products online. Online Arbitrage, or in the short term “OA,” is one of them. 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.
Amazon Online Arbitrage is one of the fantastic opportunities to make money from home. All you need is to find profitable products to buy from the source site and sell them on Amazon.
Instead of using various tools to find good deals, you can buy an arbitrage sourcing list and just list the items you want on your amazon account.
Is Online Arbitrage Legal?
Many sellers ask this question before starting their business. The answer is yes. But there are some rules that you have to follow.
Amazon has some restrictions on selling some brands and categories. You need to get permission then these groups become ungated for you to sell. If you don’t respect these rules, your account on Amazon may affect and ban. Don’t forget that there are always some grey areas that you should be careful about.
How Much Initial Capital Do You Need to Start Online Arbitrage?
The seed money you require to start your business with Online Arbitrage is insignificant. At the first step, you can invest only a whopping $100. This is one of the positive points of this method: it doesn’t need much money initially.
Actually, Online Arbitrage is known as a low-cost business model. So, if you mean to make money with this business model, $1000 would be a reasonable amount to have on your hand. Below is the list of costs to start:
- $39.99 monthly subscription fee for Amazon Seller Central Pro
- Amazon Fees (FBA fees, storage cost)
- The initial investment for inventory ($250 – $500)
- Inbound Shipping Cost
Can Newbies Do Online Arbitrage Too?
Anyone can engage in Online Arbitrage, as it doesn’t need any license like what you would require as a shop owner. It is simple for newbies, and they can embark on looking for products.
When they can find cheap and lucrative products, they can see the outcome within a short time. Besides, they should put some time and effort into learning when using tools or software for product research. In general, the Online Arbitrage business is progressive.
Average Income of Online Arbitragers
It varies based on the time and effort each arbitrageur put into their business. Besides, different strategy brings different outcome. The capital investment also has a vital role in the gain.
Sellers can make $100 per month, and if they scale up their business, they can monthly earn $50,000. Typically, by finding the right products, the profit margins are between 30% and 60% on Amazon FBA. But, don’t forget to consider the sellers who fail and can never earn money.
How to Get Started with Online Arbitrage?
Follow the below steps to get started with Online Arbitrage:
- Register for an account on Amazon
- Select between an Individual or a Professional Amazon plan based on your selling numbers. The individual plan is free and more suitable for a newbie, and it has 40 items monthly sales. In contrast, the Professional plan doesn’t have a number limitation, but Amazon charges you $39.99 monthly.
- Find a product by yourself or use automated tools such as Tactical Arbitrage
- Choose the fulfillment method: FBA (Fulfilled by Amazon) or FBM (Fulfilled by Merchant)
- Order the item and ship it to your home or Amazon’s warehouses
- Sell the product
Is Online Arbitrage as Same as Retail Arbitrage?
Indeed, they are two different selling methods on Amazon. Although both ways want to make a profit from the price fluctuation in various marketplaces, they are different. Basically, each of them source product differently.
In Retail Arbitrage, sellers buy products at a low price from brick-and-mortar stores and resell them at a higher price on Amazon for a profit. In contrast, in Online Arbitrage, third-party sellers purchase discounted products from online retailers and resell them on Amazon with markup. They earn money from this difference.
However, some companies provide an online arbitrage sourcing list that sellers can buy them.
If you would like to know more details about Retail Arbitrage, click here.
Pros & Cons of Online Arbitrage
It is essential to know the pros and cons of Online Arbitrage.
- Low entry threshold as it needs a little money to start
- Low risk, putting small money has less risk
- Time-saving as you should not go to physical stores
- You can buy as many products as you want
- Time and location independent
- Missing sales in local stores
- More technical knowledge is required to use product research tools
- Constant products repricing is necessary
Although the world of Online Arbitrage seems overwhelming for newbies, it is straightforward. You can buy discounted products from online retailers and sell them on Amazon for a profit.
With patience and determination, you can succeed in the Online Arbitrage business and make enough money. You can even choose it as a full-time job. It is a legit method, but you should avoid counterfeit and follow the Amazon rules.