Online Arbitrage: How it Can Help Your Amazon FBA Business

Online Arbitrage Positives

Over the past couple of weeks, we have covered a few topics related to online arbitrage (OA):

Today’s post will cover the basics of why you should consider using OA as a sourcing strategy for your Amazon FBA business. In our own business, we started out slowly adding OA as a strategy, but we have reached a level now where our online arbitrage sourcing equals or surpasses our retail arbitrage (RA) sourcing.

Now that we’ve seen the benefits of doing OA, we want to share with you a summary of our thoughts on the strategy. Don’t worry, the next post later this week will cover the ways we’ve learned to deal with the setbacks you might encounter while doing OA. As with most things in life and business, OA has its pros and cons, and we want to equip you to enjoy the positives and correctly handle with the negatives.

8 Benefits of Adding Online Arbitrage as a Sourcing Strategy

clock_PNG66411. OA saves time. When we do online arbitrage as opposed to retail arbitrage, we don’t have to spend time driving from location to location looking for inventory to purchase, nor do we have to spend time standing in line to check out. Plus OA can be done with the help of time-saving Google Chrome extensions that make the process go even more smoothly. Time is the one resource we can never get back once it’s spent, so we do what we can to save it whenever possible.

gallery-1456231397-odometer2. OA saves wear and tear on our vehicles. I don’t know about you, but we’ve put tens of thousands of miles on our vehicles over the past couple of years from doing RA. Of course, those miles are deductible when it comes to filing our taxes, but I still would rather not have to replace my vehicle so quickly. Once Rebecca started doing mostly OA last year, the number of miles she was putting on her car for business purposes dwindled down to almost nothing.

3. OA saves wear and tear on our relationships. Because OA saves so much time compared to RA (see #1), we’re left with more time to spend with our family. When I’m gone from 7 am to 7 pm to pick up a big RA haul, I just don’t have as much time to spend with my wife and kids. Rebecca and I still enjoy an occasional RA adventure, and we plan to do some more baseball traveltage. But on a regular basis, I would much rather be at home to have lunch with my wife and see my kids after school.

open24hours4. Online stores are open for business 24/7. Some brick-and-mortar stores don’t open until 10am and then close at 7pm. Some aren’t open on Sunday mornings. This can be a huge limitation for folks trying to do RA when they’re not at their full-time job. With OA, anytime of the day or night that we feel like shopping, we can work at sourcing for FBA.

5. OA allows us to source at stores not located in our geographic area. We don’t have a Kmart in the Fort Worth area, but I can shop online at Kmart if I choose. Same goes for many other retail stores across the U.S. In RA I’m limited by the number of stores within a certain radius from my home.

brownbox26. OA provides free shipping boxes for our Amazon FBA shipments. When we receive an OA shipment from a retail store, we’re often able to ship the items out to the Amazon warehouse in the same box. We can save time and money by not having to make trips to Home Depot or Lowe’s to buy shipping boxes.

7. OA provides free dunnage for our Amazon FBA shipments. Dunnage is the stuff that goes in the empty spaces of a shipping box you’re sending to the FBA warehouse. We can reuse the air pillows, paper, and even small cardboard boxes that come in OA shipments as dunnage in our Amazon shipments, saving time and money from having to get that dunnage elsewhere.

ebates-logo-300x1568. OA allows you to save money by shopping through cash back websites. We typically shop through Ebates and Swagbucks to get cash back on our online purchases, but there are other sites that have similar programs. Your purchases cost the same amount by going through their link to shop, but you get a percentage back on every purchase. The percentage varies by store and can change from time to time, so do your due diligence to figure out how to get the best percentage. Another bonus with Ebates and Swagbucks is that they both have a Google Chrome extension you can activate with one click after you’ve already started shopping, rather than having to navigate to the cash back website before you start filling up your online cart.

I hope we’ve been able to show you some reasons why OA can be a great strategy to implement in your Amazon FBA business. I know it’s not for everyone — some people much prefer the thrill of the hunt in thrifting or RA, and I get that. In our next post we’ll cover a few of the negative aspects of OA and how we deal with them in our business.

One last thing…. a great OA tool that we recommend is called Tactical Arbitrage, and you can check it out at this link. We’ll have a blog post review of Tactical Arbitrage coming in the future!

Are they any benefits to OA we left off this list? Let us know your thoughts in the comments!

7 responses to “Online Arbitrage: How it Can Help Your Amazon FBA Business

  1. Thanks for the post Stephen. Another benefit of OA for me is that it allows me to use a prep service. I could use one for my RA as well, but I have a hard time justifying shipping out my RA to prep. As your number one listed above, this saves me even more time, and also allows me to buy some items that I prefer not to prep myself (e.g. heavy / oddly shaped or fragile items).

  2. I’ve found that products from online sources quickly end up in the Amazon listings – from multiple sellers – resulting in a downward spiral of prices and margins. ThinkGeek is one of the worst online sources. Other online sources I discovered by using OAXray are now frequented by my competition and I have seen the number of sellers on listings grow from 3 to 30 within the span of 10 days. RA has the advantage of being slightly more difficult to source due to geography and thus is more difficult for the competition, as well.

    • In my experience, it really all depends on what you buy… Always check the CamelCamelCamel and Keepa graphs to make sure that what you’re buying will actually hold its price and sales velocity. Sometimes a list will give you a lead that is only based on today’s sales rank and price… Everyone needs to make their buying decisions based on the sales and price history more than today’s info. Be looking for more about CamelCamelCamel and Keepa on this blog very soon!

      • Thanks, Stephen, for your reply. I will pay more attention to CCC and Keepa going forward. Thank you for providing such awesome content.

  3. Pingback: The Most Harmful Amazon FBA Sourcing Decision You Could Ever Make - Full-Time FBA

  4. Stephen, What tools do you use to find the online arbitrage deals? Then what repricing tool? What listing tool?

    I am driving myself crazy since everyone has something different?

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