How to Buy Products from Costco to Sell on Amazon?

What is Retail Arbitrage? 

Retail arbitrage is the practice of buying products from brick-and-mortar retail stores at a lower price and then selling them at a higher price, often on online marketplaces like Amazon or eBay. The goal is to profit from the difference between the purchase price and the selling price. This strategy involves finding deals, discounts, or clearance items in physical stores and reselling them for a profit. Retail arbitrage can be a lucrative way to make money, especially if you have a keen eye for finding bargains and understand market demand.

In this article, we will discuss sourcing products from Costco. However, Walmart is another lucrative option for arbitrage sourcing. Make sure you read our guide on how to buy products from Walmart to sell on Amazon before you start sourcing. 

How to Find Profitable Products on Costco?

To successfully buy products from Costco to sell on Amazon, you need to follow these two essential steps:

1. Researching Market Trends

Keeping an eye on market trends is crucial for maximizing profits. Use tools like the Amazon Seller App or Profit Bandit to analyze sales rank, pricing history, and customer reviews. 

Understanding market trends also means being aware of seasonal fluctuations, consumer preferences, and emerging niche markets. By monitoring these trends, you can anticipate changes in demand and take advantage of new opportunities before your competitors do. This proactive approach can give you a competitive edge and increase your profitability over time.

2. Evaluating Product Profitability

While market trends give you a broad overview, evaluating product profitability requires a detailed approach. Consider the product’s selling price on Amazon, associated fees (like FBA fees), and the estimated cost of sourcing the product from Costco. Calculating the potential profit margin will help you decide if a product is worth pursuing.

Also, consider indirect expenses such as storage fees, shipping costs, and advertising expenses. These hidden costs can impact your overall profitability and should not be ignored during the product evaluation process. By thoroughly analyzing both direct and indirect costs, you can make informed decisions that align with your financial goals and business objectives.

Best Tools to Find Profitable Products from Costco 

To buy products from Costco to sell on Amazon, you require the right tools. Here are five great options to help you identify the best items both in-store and online:

1. Keepa

Keepa is a browser extension that tracks the price history of products on Amazon. By analyzing historical price data, you can identify trends and make informed decisions about which products are likely to be profitable. In-store, you can use Keepa on your mobile device to check prices and sales history on the spot. Make sure you read our Keepa reviews to get a better idea of how it works. 

2. Profit Bandit

Profit Bandit is a mobile app designed for in-store use. To buy products from Costco to sell on Amazon, simply scan a product’s barcode to get instant information about its Amazon selling price, potential profit, and sales rank. The app also factors in Amazon fees to provide an accurate profit estimate.

3. CamelCamelCamel

CamelCamelCamel is a website that provides price tracking and alerts for Amazon products. It helps you monitor price changes and sales trends, making it easier to spot profitable items on Costco’s website. You can set up alerts for price drops to ensure you buy products at the best price. Our CamelCamelCamel reviews can give you a better idea of this tool and its features. 

4. ScanPower

ScanPower is a comprehensive mobile app for in-store retail arbitrage. It offers barcode scanning, real-time pricing information, profit calculations, and sales rank data. ScanPower helps you quickly determine the profitability of products while shopping at Costco.

5. Honey

Honey is a browser extension that not only finds discount codes but also tracks price history for online products. By using Honey, you can analyze price trends on Costco’s website and make more informed purchasing decisions. Additionally, Honey can alert you to price drops and best deals.

Things to Consider When Buying Products from Costco

When you want to buy products from Costco to sell on Amazon, there are several important factors to consider to ensure you maximize your profits and make the best purchasing decisions:

1. Membership and Bulk Buying

Membership: To shop at Costco, you need a membership. Choose a membership that suits your needs, such as the Gold Star or Executive Membership. Each offers different benefits and savings.

Bulk Buying: One of Costco’s main advantages is the ability to buy in bulk. This reduces the unit cost of products, increasing your potential profit margins. Make sure you have enough storage space and a plan to sell the products quickly to avoid holding excess inventory.

2. Seasonal and Clearance Sales

Seasonal Sales: Costco frequently offers seasonal sales. These sales are a great opportunity to purchase products at discounted prices. Pay attention to the timing of these sales to stock up on high-demand items.

Clearance Sales: Clearance sales are another chance to find heavily discounted products. Use tools mentioned above to get alerts about these sales and spot deals that might otherwise go unnoticed.

3. Exploring the Store

Costco stores are large and carry a wide range of products, from electronics and groceries to clothing and furniture. Take your time to explore each aisle to discover hidden gems and unbeatable deals.

Costco’s private-label brand, Kirkland Signature, is known for its quality and value. These products often provide significant savings compared to name-brand alternatives and can be very profitable for resale.

5. Market Research and Profitability Analysis

Use tools like Keepa to research market trends and analyze the price history of potential products. Evaluate the potential profitability of each product by considering the selling price on Amazon, associated fees, and the cost of sourcing from Costco. Don’t forget to factor in indirect costs like storage fees, shipping, and advertising expenses.

Step by Step Guide to Sell Costco Products on Amazon

To buy products from Costco to sell on Amazon, you need to follow several key steps. Here’s a detailed guide to help you navigate the process:

Step 1: Create an Amazon Seller Account

1. Go to Amazon Seller Central and sign up for an account. Choose between an individual plan or a professional plan, depending on the scale of your business.
2. Complete the registration by providing necessary information, including your business details, tax information, and bank account information.

Step 2: Get a Costco Membership

1. Purchase a Costco membership. The Gold Star Membership or Executive Membership are popular options.
2. Take advantage of the benefits, such as bulk buying and access to exclusive discounts.

Step 3: Research and Select Products

Use tools like Keepa, Profit Bandit, and CamelCamelCamel to analyze market trends, sales rank, and pricing history. Look for products with a high demand and good profit margins. Keep an eye on Costco’s seasonal and clearance sales to find discounted products.

Step 4: Purchase Products

Visit a Costco warehouse and explore various aisles to buy products from Costco to sell on Amazon. Use mobile apps like Profit Bandit to scan barcodes and check profitability on the spot. You can also browse Costco’s website for deals and use browser extensions like Honey to track price changes and find discounts.

Step 5: List Products on Amazon

1. Log in to Amazon Seller Central and create listings for your products. Ensure your listings are detailed and contain accurate descriptions.
2. Price your products competitively by analyzing similar listings on Amazon. Consider your costs and desired profit margin. You can also invest in repricing tools. 

Step 6: Manage Inventory

1. After you buy products from Costco to sell on Amazon, store the purchased products in a safe, organized manner to ensure they remain in good condition.
2. Decide whether to use Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM). FBA allows Amazon to handle storage, packaging, and shipping, while FBM means you handle these tasks yourself.

Step 7: Handle Shipping and Fulfillment

If using FBA, ship your products to Amazon’s fulfillment centers. Amazon will then manage storage, shipping, and customer service. If using FBM, ensure you have a reliable shipping method in place to deliver products promptly to customers.

Step 8: Monitor Sales and Performance

1. Regularly monitor your sales performance on Amazon Seller Central. Pay attention to metrics like sales volume, customer feedback, and return rates.
2. Adjust your pricing, listings, and inventory based on sales data and market trends. Stay flexible and responsive to changes in demand.

Step 9: Provide Excellent Customer Service

1. Address customer inquiries and issues promptly to maintain a good seller rating.
2. Handle returns efficiently and ensure customer satisfaction.

Step 10: Scale Your Business

1. Use your profits to purchase more inventory and expand your product range.
2. Continuously optimize your processes, from product sourcing to shipping, to improve efficiency and profitability. If you can affort it, invest in automation tools and software.

Conclusion

If approached strategically, it can be a lucrative business venture to buy products from Costco to sell on Amazon. By understanding the process of identifying profitable products, leveraging Costco’s membership benefits, and effectively managing your inventory and listings, you can maximize your profits and grow your business.
Whether you’re a seasoned seller or just starting out, following this step-by-step guide will help you navigate the complexities of arbitrage. With dedication and smart decision-making, you can turn your Costco finds into a thriving Amazon business.

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