I want to follow up on a post I wrote about using online arbitrage (OA) in our Amazon FBA business. If you haven’t seen it yet, you should check out The Perfect Online Arbitrage Starter Kit.
In that post I talk about one of my favorite ways to boost my online arbitrage sourcing: using subscriptions to OA sourcing tools that speed up the sourcing process, streamline the tasks involved, and increase your OA profits.
There are a few main types of subscriptions you can use to do your online sourcing:
- Daily deal lists (Gated List, Rabbit Hole Riches, etc)
- Scanning tools (OAXray and Tactical Arbitrage)
- Tools to help with making buying decisions (Keepa, How Many, Scanalyze, etc)
When I first got started with OA, I had some reservations about paying money to get daily deal lists or a Chrome extension:
- Is it really worth the money?
- Will I really find enough items to purchase from these subscriptions?
- Will these lists be sent to so many Amazon sellers that anything I buy from them will increase in competition and decrease in selling price?
As I gained experience in using deal lists and extensions, I developed a way to decide whether or not a OA tool works for me as a reseller. Stephen and I have tried out more lists and more paid Chrome extensions than the ones mentioned above, but the products mentioned in this post are the ones we have stuck with and received the most benefit from.
Each time I try a new OA tool, I follow the same set of guidelines so that I can make an objective decision about whether it is good for our Amazon FBA business. I’ll share my steps with you below, but know that your own guidelines may vary. The great thing about selling on Amazon is that you can conduct your own experiments – you’re your own boss, so decide what you want to try and how you want to try it, play around, and have fun!
Here are the ways that I get the most out of my OA subscriptions:
1. Use free trials when they are offered.
Most subscription services offer a 3-day or 7-day trial or a money back guarantee period. If they don’t offer one, ask for one. If they still don’t give it to you, that’s a red flag for that service.
The great thing about a free trial period for a service that provides you with leads on items to resell is you can use the money you make from those items to buy more months of the subscription. If you can’t find enough during the free trial period to pay for your next subscription plus plenty of profit, then you know that particular service isn’t for you.
2. Subscribe for a month to test the tool even further.
Free trials are great, but 3 days or 7 days still isn’t that long. If you subscribe for one month, you’ll get a better sense of what the product offers on a regular basis. This isn’t like signing up for a cell phone contract — you won’t be committed to subscribe for two years. Just try a month, see how it goes, and make your decision on whether you want to keep subscribing. Don’t forget to set a reminder in your calendar to assess the situation when it gets close to time for the month to end.
3. Set strict buying parameters for yourself.
Every good list service has different parameters for the deals they provide: the minimum net payout, return on investment (ROI), sales rank, etc. Find a list that most closely resembles your buying parameters, but then don’t get caught up in the excitement of buying off the list and throw your own guidelines out the window. I keep a piece of paper with my minimum ROI, net payout, sales rank, favorite shoe sizes, maximum number of color variations, etc, near my computer while I’m sourcing OA, so that I remember to stick with it. A deal list is only helpful if YOU already know what types of deals you’re looking for.
4. Use filters within the list to help your decision-making process.
Another way to help you stick to your buying parameters is to use the filters provided by the maker of the subscription list, if it comes in the form of a spreadsheet. The very first thing I do when I start looking at a list each day is filter out items below my minimum ROI requirement. I also filter out items from certain stores I’ve had trouble with in the past. If I can eliminate a few items right off the bat, I can save myself time in not having to look at them and keep myself from being tempted to buy something that doesn’t fit my guidelines. The same goes with scanning software — you can set your filters right within the software and filter out anything that doesn’t match your parameters. You know how you’re tempted to buy something, anything, just to keep from walking out of a store empty-handed when you’re doing retail arbitrage? The same phenomenon happens with OA, but you can prevent it by using your filters well.
5. Keep detailed notes about your free trials or test months.
You won’t be able to make an objective decision at the end of a free trial or a test month of a subscription if you don’t pay attention to what you’re actually doing with that subscription during the trial. Keep a notebook or spreadsheet with notes about how many items you purchase, how much money you spend, how many items sell, how quickly they sell, and how much the selling price differs from the time you sent it in.
6. Follow rabbit trails.
The great thing about deal lists and scanning software is that they set you off in the direction of deals…but then you’re on your own! You have the freedom to buy the exact item on the list, or you can buy other items similar to it. If you’re only buying the exact items on the list, you’re limiting yourself as a reseller. Spend the extra time to do some research on the rabbit trails, and you may find even better deals that no one else knows about.
7. Don’t get lazy about going through your deals each day.
The worst thing to do with an online subscription list is ignore it. Set aside a specific time each day to work through your list or play around with your scanning software. If you don’t put it on your calendar, you’re much more likely to forget it or slough it off. Be consistent and you will develop a habit of doing solid OA each day. Most lists are released at around the same time each day, so figure out when it will be in your inbox and set a reminder on your phone to look at it as soon as possible after it’s released.
I hope these tips can empower you to try a new online arbitrage service and find success in this aspect of your Amazon FBA business. Do you have any tips you would like to add? Please let us know in the comments.