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Amazon FBA Business, What Is it? & How to Start? [Full Guide 2021]

What is Amazon FBA?

FBA or fulfillment by Amazon is one of the services that Amazon offers to third-party sellers to ship and fulfill their orders easier. Its rule is easy: you sell the product, Amazon ship it. In addition to shipping, Amazon stores your products, packs them or even follows up on customer complaints including refund and return.

Amazon works with third-party sellers, but in 2020, nearly half of all Amazon sales came from third-party sellers and not Amazon directly. Customers usually are unaware that they are buying from a third-party seller. Because they see no difference between buying from Amazon directly and a seller. The shipment, return and refund policies and other services are the same.  

To receive this service, you have to pay Amazon, and what you receive includes Amazon customer service, fulfillment, and shipping service, and access to one of the largest marketplaces in the world. Sellers send their products to Amazon warehouses, and the rest is done by Amazon.

How Does Amazon FBA Work?

The way fulfillment by Amazon works is pretty simple:

  1. You send your products to Amazon
  2. Amazon stores them in its warehouses
  3. A customer purchases your product using the Amazon website
  4. Amazon picks and packs the product and ship it.
  5. If there is any customer complaint, Amazon follows it up, including return and refund.
  6. Every 2 weeks, Amazon deposits your money into your bank account.

You need to use the regular seller account and then follow some simple steps to add your products to your FBA section.

Is Amazon FBA Still Profitable in 2021?

Years ago, Amazon FBA arbitrage was an easy way to get millionerd, but now the market is saturated and many competitors try to win customer attention. So, it’s important to analyze the market and choose the items which are not supposed to remain in Amazon’s warehouses.

a woman with lots of money make it from amazon fba by her laptop

Fulfillment by Amazon business has the costs that you should be aware of them. The fees you pay to Amazon to sourcing products cost are important and should take into account.

Due to pandemics and the rise in online shopping, Amazon sellers made a tremendous profit. So generally, fulfillment by Amazon is profitable more than before, but you should consider all the expenses and possible risks.

Read More: Is Online Arbitrage Dead for New Sellers in 2021?

The Pros and Cons of Amazon FBA

Now it’s the time to talk about exciting stuff, the advantages of Amazon FBA business, and also a few drawbacks to FBA that you should be aware of. Here is a list of advantages and disadvantages of fulfillment by Amazon that everyone always wants to jump to.

Pros of Amazon FBA

1. Headache Free Logistics And Shipping

If you want to ship your items on your own, you need to print several labels, buy a proper box, fold it up, pack your items properly (You need to use bubble wrap for fragile items), and give the packs to the post office. If you sell 10,20 or 30 items everyday shipping will be very time-consuming, and a big part of your time would be lost in shipping.

You pay a small fee, and Amazon does everything from start to finish, and you have more time to focus on the more important aspects of your business.

2. Cheap Shipping

Using Fulfillment by Amazon means that you use the power of a global fulfillment leader. Amazon has a large network of warehouses and shipping facilities. So the fees for the picking, packing, and shipping of your items are less than what you would pay if you do it yourself. The costs depend on the size and type of your item. For more details, click here.  

3. Using Amazon Prime Benefits

All the Prime members receive their orders by free two-day shipping. If you sell your products through fulfillment by Amazon, your items automatically qualify for Amazon Prime. So, the customers trust you as a verified seller. In addition, quick free shipping is interesting for all the customers.

4. Qualifying For the Buy Box

Usually, several people are selling the same product on Amazon. Sellers who use Amazon FBA are higher up in the buy box, and it means a higher chance of selling the items.

5. Return And Refund Management

If you are a self-fulfilled seller, a return and refund request can be a big hassle. You need to deal with the customer, send them an RMA, check the item for faults, and send back their money. But all Amazon FBA products support with return and refund service by Amazon, and you don’t need to worry about returned items.   

6. Using Amazon Customer Service

Using Fulfillment by Amazon means that your customer gets high-quality customer service from Amazon. Amazon offers its customer service for FBA sellers. They follow up on the customers’ complaints and are available on 7/24.

Cons of Amazon FBA

Nothing is perfect, so fulfillment by Amazon has its disadvantages too. You need to consider them all to make the best decision for yourself.

1. Losing Track of Inventory

The products aren’t sold as you expect. When you store more than a thousand items on Amazon warehouse, it’s hard to track what you have, what you need, and what you cut back on. Also, Amazon doesn’t like sitting on inventory, so it gets more for long-term stored products

2. More Returns

Amazon’s easy return process is really easy. So more customers might tend to return their purchases.

3. Difficult Shipping Preparation to Amazon

Amazon has a strict ASIN/UPC system, and the products that are sent to Amazon warehouses should be packed individually with individual labels. Sometimes you need to send them to different warehouses. You can use prep centers to prepare the products based on Amazon policy and send them to the warehouses. You need to add prep center fees to your costs too.

Read More: How to Find Prep Centers For Amazon FBA Online Arbitrage?

4. Paying FBA Fees

Amazon doesn’t offer its service for free! You have to balance between what you gain from Amazon and what you pay to decide if this service fits you.

How do I start an Amazon FBA Business?

Starting Amazon FBA business is not complicated and has several easy steps. The most important Amazon FBA requirement is to improve your knowledge, be patient and passionate.

A couple selling products on Amazon with their Laptop

1. Create an FBA Seller Account

Head to Amazon’s website and create an account. Before starting registration, you need information and documentation. There are two types of seller account: individual and professional.

If selling on Amazon is like a hobby for you, an individual account is enough. But if you dream about a professional seller, you need to choose a professional account. The individual and professional accounts are different in fees and the service you receive.

2. Find the products you want to source

This can be the hardest part for both Amazon FBA beginners and existing sellers. If you are a beginner, we suggest you choose a category you are passionate about, so searching and writing about it is easier and more exciting.

You should search a lot. Improve your knowledge about products you want to sell and analyze the market. Find the trends and rely on the data. Numbers never lie!

3. Source your inventory

There are different ways to source your products. You can look for profitable deals on famous websites like Target.com or Walmart.com manually, but it is very time-consuming. If you want to use your time more efficiently, software and analyzing tools can give your desired results. We suggest buying sourcing lists for both beginners and experienced sellers. Because you receive a list of profitable products every day in your mailbox without spending time finding good deals. Another way that seems good for scaled Amazon FBA business is hiring a virtual assistant.

After you purchase your products, you should send them to prep centers or Amazon warehouses directly.

4. Wait for the customer

List your items on Amazon and wait for a customer to buy them. Don’t forget to analyze your business and find the mistakes and problems and fix them.

How Much Does it Cost to Start an Amazon FBA Business?

This cost can vary from hundreds of dollars to thousands of dollars. We can see sellers who have started by less than $500 but are successful and have scaled their business.

Also, some people started Amazon FBA business with a great investment, but they failed. To show you how much money you need essentially to start the business, we break down the costs here:

  • Essential costs

The costs you need to pay for your seller account, boxes or prep center, Amazon FBA shipping costs, and of course sourcing your inventory. The Individual seller account costs $0.99 per unit sold, and the Professional plan costs $39.99 per month no matter how many units you sell. The costs of prep centers are usually per item and depend on the service they offer.

  • Recommended costs

You can start your business without this kind of cost, but it’s better to consider them. Expenses like buying sourcing lists or analyzing tools and software belong to this type. This cost also is changing, but usually, sourcing lists cost about $100 per month.

  • Extra costs

These costs can boost the business, but they aren’t offered to newbies.

Best Products to Sell On Amazon FBA

Amazon FBA for beginners can be tricky when it comes to choosing a product to sell. As you work more and know the taste of the customer, you can identify the products that will be sold quickly and give you a notable profit. To help you to choose your item easier here we have a few points:

  • Don’t resell well-known or branded products. Most Amazon buyers don’t intend to buy famous, expensive products. It means you have to compete over the same items with other sellers.
  • Don’t resell very cheap or expensive products. Very cheap products can’t give you notable profit, and you need to sell many of them to make money. On the other hand, very expensive items can make an exciting profit, but it’s less likely for them to be sold. So try to find the items that are small enough for buyers to make a quick decision, and it means you sell more!
  • Choose lightweight products. Large items like tables are heavy and hard to ship. Also, it occupies more space in the Amazon warehouse. These parameters lead to more costs for you. Small and lightweight products are a better choice. Also, try to avoid delicate and fragile items like glass.

We suggest you start with the categories like Home & Kitchen, Books, Garden and outdoors and Sport.

How to Source Products in Amazon FBA? 

There are different methods for sourcing that are common. Every method has the benefits and disadvantages that we will explain briefly here.

Online Arbitrage

Using a computer, you can find what you need on different websites. Searching manually, using software, buying sourcing lists, and making a team are all different ways of online sourcing. The most affordable method for both newbies and existing sellers is buying lists because it’s the least time-consuming. On the other hand, you need to pay for analyzing tools, buying lists, or hiring a team.

Retail Arbitrage

It’s very similar to online arbitrage, but here you head to brick-and-mortar stores to find the best deals. Auctions, garage sales, and thrift stores also seem good to hunt profitable products. This business is limited to the local shops and is harder to scale.

Dropshipping

In a nutshell, dropshipping means first you receive an order and sell a product, then you buy it from a retailer. It has a very low risk and the supplier remains invisible to the customer.

Wholesale

Here you buy your inventory from manufacture in bulk, and so you can negotiate for lower prices.

Private Label

You can sell your product under your logo and brand. Many sellers find their suppliers from overseas, and that company makes the products under your control, with your tag and brand.

Best Amazon Sourcing And Researching Tools

There are many Amazon-related tools and each type concentrates on something. A few tools are good analyzers, while another type helps you in managing your inventory. Here is a brief list of useful tools:

1. Revseller

It is a Chrome extension. RevSeller allows you to see the important information on the Amazon product page. You can check the net profit, ROI, and rank of the product with RevSeller.

2. Keepa

Keepa generates the graphs of Amazon price and sales rank that let you see what you need at a glance.

3. Honey

You can search for coupons and waste your time or use Honey to save your time and money. Honey finds the coupons before you check out and apply them automatically.

4. Tactical arbitrage

It’s a powerful software for finding profitable deals. Although you can narrow down the results by setting personal filters, the results are not mistaken free and you need to check the results manually for possible errors and mismatches.

Read More: Useful Chrome Extensions for Online Arbitrage

Amazon FBA vs. Non-FBA

Most of the Amazon sellers have chosen Amazon to handle fulfillment and shipping on behalf of them, but some of the sellers have decided not to choose Amazon and pack and ship their items themselves or through another third party.

Read More: Online Arbitrage vs. Retail Arbitrage on Amazon

Amazon FBA vs. FBM

The researches show that many sellers use both fulfillment by Amazon (FBA) and fulfillment by merchant (FBM) together. You need to consider several parameters if you want to choose one method.

FBA is better for you if:

  • Your items are small and lightweight
  • Your turnover rate is fast
  • You want Amazon to handle your customer service
  • You don’t have logistics
  • Generally, fulfillment by Amazon costs less

But FBM suits you more if:

  • Your items are large and heavy
  • Your turnover rate is slow
  • You want to control your customers
  • You have logistics
  •  Generally, fulfillment by yourself costs less

Amazon FBA vs. Dropshipping

The main difference between these 2 business models is in merchandise possession. In dropshipping, you sell something before you own it. So you are a middle man between the supplier and customer, and you might face the problems like scant information, customer service issues, and lack of good profit. In Amazon FBA you have more responsibilities and handling more risks, but you have full control over your items and can answer customer problems easily.

Amazon FBA vs. Shopify

When you decide to enter eCommerce, choosing between 2 dominant online shopping platforms seems hard. The main difference between this two is that Amazon has made everything ready for sellers, but on Shopify, sellers have to make their stores from scratch. Amazon has a few millions of potential customers while Shopify only builds your website and doesn’t present you to the customers and marketing must be done by yourself.

Amazon FBA vs. Seller Fulfilled

Seller fulfilled is another service that Amazon allows some merchants that meet criteria to send the products from their warehouses to domestic Amazon prime customers. To be qualified for seller fulfilled, you need to have a positive selling history. You need to ship more than 99% of your products on time. Your cancellation rate should be less than 0.5% and a few more conditions. Seller fulfillment seems better for the scaled business that has its large warehouses.

How to Get Ungated in Amazon FBA

Since a couple of years ago, Amazon has been restricting more categories, brands, or ASINS. It means more and more products are “gated” and more sellers can not sell them. Amazon is restricting the brands based on the owner’s request. In addition, some products are more likely to be copied and scam many people. So only authorized sellers can sell them. Such products are more profitable because fewer competitors try to resell them.

Read More: Amazon Restricted Products, Categories, and Brands [Updated 2021]

But to be known as an authorized seller, you need positive selling history, your invoices, and a few more documentation. Getting approval on Amazon FBA gated categories might take time. Some companies can help you to shorten this time and make you ungated in different categories or brands. If you want to scale, this is a necessary step for your business.

Read More: Getting Ungated in Amazon Restricted Categories

Final Thought

Amazon as a global leader in e-commerce, is offering a service: fulfillment by Amazon. In this service, Amazon accepts to pick, pack and ship the products you sell and gives the customer service. To choose this service, you need to consider some parameters like fees and compare this service with other platforms and fulfillment types. 


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How to Prepare for Online Arbitrage Q4 Trading? [Full Guide for Newbies & Professionals]

What is Q4 on Amazon?

Before starting everything, let’s explain online arbitrage briefly.

Online arbitrage means buying a product cheaper and reselling it for a higher price to make a profit. Everything that can make the purchasing price lower and reselling price higher is an excellent opportunity for the arbitrager.

Read More: How to Do Online Arbitrage? [Ultimate Guide 2021]

Online arbitrage Q4 is the fourth quarter of the year, from October to December. It’s the holiday season, so people buy in these months more than any time of the year. This biggest selling season on Amazon can be hectic and thrilling for the newbies, and sometimes it seems out of control. But if you get ready and source the products that sell more on Christmas, you will get surprised by what you have earned.

This high season doesn’t start right on 1st October, but gradually the demand increases, and after Thanksgiving and then Christmas, the big push starts.

Which Months Are in Which Quarters?

A fiscal year divides into four quarters for financial accounting, and so every quarter includes three months.

The first quarter (Q1) starts on January 1 ends on March 31. The second quarter (Q2) is from April 1 to June 30. The third quarter (Q3) is from July 1 to September 30, and the fourth quarter (Q4) goes from October 1 to December 31.

Why is Q4 Important?

It’s said that sellers can make about half of their yearly income on Amazon in November and December. If you choose the proper products that sell more on Christmas, you can sell your whole inventory as fast as you could get them to the Amazon warehouse.

Online Arbitrage Revenue chart in Q3 and Q4

Also, at this time, many leading websites like Target.com or Walmart.com have huge discounts on their items, and so you can make better deals than before.

Several holiday events like Halloween, Thanksgiving, Black Friday, and Christmas make the 3 last months important. So, this season is like a challenge for sellers, demand is high on special products, and these products in the sourcing website fly off the shelves. It’s a real competition!

But there are some steps you can do ahead of time to make this challenge goes more smoothly and get ready for the real rush.

How Do I Prepare for Q4?

Don’t start stocking up from today! There’s no way to understand what items go up in price until the sales start. Most times, stocking up from now leads to loss of profit and hold up money.

1. Planning Ahead

Prepare your strategy for Q4 3 months earlier. Storage fees are higher during Q4, so if you think you want to pack and ship your items yourself, you need to have a plan for the supplies.  So, if you’re not going to use prepare centers during online arbitrage Q4, you will need more boxes, tape, labels, bubble mailers, and so on. Imagine you have more sales on Christmas; for example, you ran out of proper, boxes, and you have to buy the boxes to ship your items. If you ship an item too late, you probably lose the high profit due to a price fall.

2. Organizing Your Workspace

Online arbitrage Q4 is hectic enough, and we believe you don’t want to make it more! If you chose to send your products and don’t use prepare centers, organize your office before the busy time.

 Imagine as you are ready to ship one of the high-profit products, and you see you can’t find your tape dispenser! You have to spend at least a few minutes searching high and low to find it. Multiply this time by 100 or 200 items per day, and you will understand how an organized office can save your time.

We don’t mean you need to move somewhere very large during this season, but we mean you put everything in a place you can see and reach easily.

3. Selling Right Now

This is one of the most common mistakes that some sellers make. They keep their inventory in anticipation of high prices during Q4. If you can sell your items right now (of course, for a good profit), you can reinvest your money and increase your capital.

4. Watching The Trends

Check the trends to identify the new products you can add to your listing. You can check Amazon’s best seller products for great deals. After you find your potential listing, check if you are allowed to sell the products or not. Some products are restricted, and you need to go through approval. It probably takes a few weeks.

Read More: How to Get Ungated in Amazon Restricted Categories

5. Managing Inventory

Forecasting how much inventory you need and you will come out of the holiday season with great profit.

Too little inventory leads to loss of opportunity, and also it harms your Amazon sales rank. Too much inventory also costs you a lot due to storage costs.

Generally, sellers have a 30% to 50% rise in sales. So, with a few months of experience as a seller, you can predict your sales number during rush season.

What Can I Sell On Amazon for Christmas?

woman thinking about what can she sell on amazon

Every season has special trends; for example, in summer, beach towels or summer dresses are top sold items. Before Christmas, people want to decorate their homes or repair them. Also, gift items and warm clothes are sold highly.

So, categories like home and kitchen or toys can be a good target. Notice that the demand for all the products rises during online arbitrage Q4, and any category can be profitable more than before.

Best Online Arbitrage Strategy for Q4

Watch your sale history during the year closely. Find your mistakes, deficiency, and any possible error. Analyze them and fix them before the high season. You can analyze your problems to avoid them, but you can’t predict everything and stop any errors. Expect unexpected problems so you can handle them calmly too.

Read More: 7 Brutal Mistakes That Arbitragers Need To Avoid

Our next suggestion is that watch the profitable deals near online arbitrage Q4. You can find good leads in October and store them to use when you need more of them before Christmas, for example.

Final Thought

During online arbitrage Q4, everything is happening fast as you can’t understand when it was started and when it was over. So, if you want to come out from this time with plenty of profit, you need to plan ahead and only focus on selling at this time.

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How Much Money Can You Make from Online Arbitrage?

How Does Online Arbitrage Work?

Buying a product for a lower price and reselling it for a higher price on another market is a regular business, and the more modern type of this business is represented in Amazon online arbitrage. So, the basic rule is easy: buy cheaper, sell more expensive. But it’s not all you should know to be a successful arbitrager and make a profit. The required knowledge is unlimited; more knowledge leads to more success. To know more detail about this business, read the following link.

Read More: How to Do Online Arbitrage?

How Much Capital Do You Need to Start Amazon FBA?

The capital needed to start Online Arbitrage

For starting an online arbitrage business, you don’t have to spend your money on regular brick-and-mortar stores, but you have some new expenses.

It’s up to you how much you invest in your business. However, if you want to start this business seriously, it’s better to consider at least $1000; you can get started with only $100. The expenses that you need to take into account are sourcing the inventory, paying Amazon membership, and the cost of some services like buying sourcing lists or using analyzing software.

Read More: How Much Capital Do You Need to Start Online Arbitrage?

How Much Money Can You Make?

Frankly, there’s no promised model for making money from Amazon FBA. The profit you can make can vary from $100 to 50,000$ per month if we don’t consider that some sellers fail and can’t earn money.

Read More: Why Do People Fail at Amazon FBA?

a man is counting his income from online arbitrage

Here is the list of multiple parameters that can affect your profit and change your business:

1.     Invested capital

If you invest thousands of dollars, you can scale your business faster than a seller who has a few hundred. If you put more money into your online arbitrage business, you can expect faster expansion and higher profit.

2.     Sourcing list

The items you list and the deals you find are very effective on your profit. If you don’t want to say goodbye to Amazon FBA business, you should source high-demand products with low prices. You can identify your inventory on your own, use an assistant or a team, or buy sourcing lists. If you are a newbie, buying sourcing lists is highly recommended because it helps you to focus on your business and improve your knowledge.

3.     Invested time

Investing a lot of money isn’t enough to be successful in the online arbitrage business. It would help if you spent time analyzing your business, learn from your mistakes, and improve your knowledge.

You need a lot of time and effort to find the best deals. However, you can decrease this time by outsourcing the sourcing and buy an online arbitrage sourcing list.

4.     Connections

These years Amazon is restricting more products and brands, and, in some cases, only authorized sellers that have permission from the brand can resell the products. For some categories, you can use “ungating services” to be approved as the seller. For few companies, only official approval from the brand works. So, if you can get such permissions to sell favorite products (like some toys), you can guarantee a huge profit.

How Long Should You Wait for a Good Profit?

There’s no promised model for earning money from Amazon FBA. But the following timeline can give you a general view of how much money you can make from online arbitrage. Notice that the time and amount of money are approximate and based on our experience.

  1.  0-3 months: $100-$500 per month – you are a newbie and analyzing the market. You might make a big profit and also a big loss. The important point here isn’t the amount of money you have earned, but it’s important to identify your mistakes and learn from them.
  2. 3-9 months: $500-$2000 per month – now you are more comfortable finding good deals and analyzing the market. If you have made any profit from the first months, you can now invest them back to improve making money level. So, you can start scaling your business.
  3. 9 months and more: $2000 and more – after getting through the first 9 months successfully, you can call yourself a pro. The amount that you can make now only depends on the time and capital you invest.

How to Succeed in Online Arbitrage?

In a nutshell, success in online arbitrage means making more profit by buying cheaper products and selling them more expensive. So, everything that can help you to achieve this goal can make you more successful.

Before starting this business, investigate enough about everything. Sufficient investigation on different sourcing methods, using profitable tricks like cashback, and so on can lead you to a more successful business.

Read More: Top Cashback Website for Online Arbitrage

happy-girl-doing-online-arbitrage-with-laptop

Don’t ignore the importance of information. Using online tools and services can give you plenty of information about good deals and help you to choose better products.

Always consider a margin and profit for your business and don’t decrease them in price wars. If you deduct your profit in price wars, you can probably sell your items, but you never be the winner of this fight.

Read More: Mistakes That Arbitragers Need to Avoid

Final Thought

Making money from online arbitrage is not limited. The more money, time, and effort you put in, the more profit you can make. The critical parameter in this business is patience. You can’t make thousands of dollars from the first day you register your list, but if you learn from your mistakes, don’t get disappointed, and improve your knowledge, you can expect thousands of dollars.

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Is Online Arbitrage Dead for New Sellers in 2021?

Can You Still Do Online Arbitrage?

The rules for online arbitrage aren’t changed a lot these years. As long as you sell valid products and follow Amazon policies, it’s legal, and you can do it. Some tips like keeping invoices can help you protect your business from all possible problems.

Read More: Is Online Arbitrage Legal?

How Online Arbitrage Changed?

Believe it or not, everything is changing rapidly. The number of internet users increases, more customers are shopping online, and more online shopping websites are opening. But have things changed about Amazon FBA online arbitrage? What is it like now compared to what it was once like?

There are More and More Competitors

Amazon FBA is attracting new sellers every day. By now, it has about 10 million total sellers worldwide. About 2 million sellers are active now, and the rest have no active product list. From the beginning of 2021, about 400,000 new sellers joined All Amazon market places.

We mentioned the above numbers to show you the number of competitors is increasing. You need to use new strategies and improve your knowledge to compete with this big seller community and not fail.

Read More: Why Do People Fail at Amazon FBA?

There are More Restrictions

IP Complaint infringement on Amazon

These years, more brands are putting pressure on Amazon not to allow all sellers to list their brands. It means more brands, categories, or even products are banned, and you’re not allowed to sell them without permission. It makes finding “ungated products” more difficult for new sellers. It doesn’t mean that there are no open products for new sellers, but listing gated products is more profitable.

Read More: The Amazon Open Categories That Don’t Require Approval

More Tools for Analyzing Data

analyzing data tools

Just 5 years ago, many buying decisions were made based on sales rank and comments for the product we were analyzing. Also, managing your inventory without building complicated spreadsheets was impossible.

But today, many online tools help us to choose the best products by giving efficient data. We can manage our inventory, invoices, and our business easier with simple software. Chrome extensions give many data just in a glimpse.

Read More: 11 Useful Chrome Extensions for Online Arbitrage

More Price Changes

Due to increased competition, prices change fast, so the need to an analyzing software feels more because the only current price or a profitable deal cannot ensure a real long-term profit.

More Chance for Growth

A few years ago, online arbitrage was not as famous as today, and so many services that we have today didn’t exist before. But by the rapid growth of Amazon FBA and joining more and more new sellers to Amazon, different services have sprung up to help the sellers to scale their business.

Sourcing list services, scraper software, analyzing extensions, and much more are here to help sellers scale easier.

More Online Purchases

The pandemic had a significant impact on online shopping. People got used to buying their needs online. The growing trend of online shopping now moved to a different level. As a result, the demand for items on Amazon has increased as well. So although the competition is getting more rough on Amazon online arbitrage, there are more opportunities available more than ever.

Read More: Online Arbitrage vs. Retail Arbitrage

 Can You Make Money from Arbitrage?

A woman with all the money she earns from online arbitrage

Here on Amazon, arbitrage includes two types: online arbitrage and retail arbitrage. Making money from arbitrage, especially on Amazon, is not a get-rich scheme, but it is a process. In summary, arbitrage is based on buying for a lower price and selling for a higher profit. So, arbitrage can still be profitable. But online arbitrage, due to easier sourcing and shipping, is attracting more attention than retail arbitrage. When you can order something with just a few clicks and then ship it, why choose brick and mortar store to source your items?

Read More: How Much Money Can You Make from Online Arbitrage?

Is Online Arbitrage Still Profitable?

YES! This the shortest answer we can say. According to statistics, during Prime Day 2020, small- and medium-sized businesses in 19 countries made $3.5 billion. You need to choose new strategies to improve your business, use data to make the best decisions, and monitor your business to find the problems.

Read More: How to Do Online Arbitrage? [Ultimate Guide 2021]

Final Thoughts

Many think that online arbitrage is not profitable in 2021; on the contrary, we believe it’s more profitable than before. Amazon is receiving more attention every day; more products are sold on Amazon, more services are available for sellers, and more people get used to shopping online. Along with all new opportunities, competition is increasing, and Amazon is applying more restrictions on different products. You can make money using Amazon FBA, but you need to try even harder than before.

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Is Online Arbitrage Legal? [Latest Updates]

Ways to Avoid Trouble When Selling Online Arbitrage On Amazon

Buying goods and selling them for a profit is not only legal in the US, but also is encouraged because it causes market efficiency. But there are some grey areas. In this article, we focus on the legal problems that you may face and suggest ways to protect your business. If you wonder how to start an online arbitrage business or need more information about online arbitrage, we have a handful of guides on our blog.

Read More: Complete Guide on starting online arbitrage

As long as you buy a product legally, you can sell it again without changing the product’s condition. If you want to resell a “NEW” product, you have to resell it as new, not used.

Counterfeit Products

Counterfeit Products on amazon

Amazon will ask you to submit your invoices for the random products to assure you are a valid seller. So, getting the receipt when you purchase the items is advisable. Because if you cannot submit the required proofs, you can’t make Amazon sure that your purchase was legal and get suspended. Notice that sourcing counterfeit products is a huge danger for your business and can lead to losing your Amazon account or other worse legal consequences. Don’t forget to avoid any counterfeit products.

But online arbitrage legality doesn’t guarantee easy, headache-free selling.

Read More: Online Arbitrage vs Retail Arbitrage

Restricted Brands, Categories, or ASINs

Products that are prohibited on Amazon

Selling some brands, categories, or ASINs is only possible for authorized sellers. For example, you’re not allowed to sell in the book category. If you sell the books in another category, like home, it’s considered illegal and may lead to getting suspended. Don’t try to circumvent the laws.

If you need to sell banned products, you need to go through an approval process to be authorized.

IP Complaint

Another warning that you might receive is an IP complaint. If you violate the trademark or copyright, the brand owner can contact Amazon and file a complaint against you for ignoring their intellectual property. The best way to avoid IP complaints is not to sell brands that are known to issue IP Claims even if you are approved to sell them.

Notice that every platform has its terms and conditions. Also, selling some products to some territories/countries can be illegal. Before selling your goods to other countries, check the rules.

Read More: Is Online Arbitrage Dead for New Sellers in 2021?

Final Thought

Buying and reselling products is a legal business as long as you purchase the products legally and avoid counterfeit. Although online arbitrage and retail arbitrage are legal, selling the items can have the headaches like banned brands or IP complaints. For staying away from this grey area, it’s enough to consider several simple steps.

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How to Do Online Arbitrage? [Ultimate Guide 2021]

What is Online Arbitrage?

Online arbitrage is the act of buying something online (from online retailers like Walmart) and sells 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.

In this article, we break down the important tools for doing online arbitrage and all you need to get started. Then we will answer some of your most frequently asked questions, and finally, we are going to give you a few expert tips to have a more successful business.

Different Types of Online Arbitrage

all types of online arbitraging

When we talk about online arbitrage, the first way that comes to mind is Amazon online arbitrage. It is not the only but the most famous marketplace to do eCommerce business. Here I want to introduce several marketplaces briefly.

1. Amazon Online Arbitrage

the most famous platform to do online retail arbitrage that includes more than 2 million sellers and attracts hundreds of millions of buyers across the world every month.

2. eBay-to-Amazon Arbitrage

It doesn’t have a huge difference from other sourcing methods. You find a product on eBay with a lower price and list it on Amazon for a profit. But the point you should notice here is that many of the products on eBay are used. If you are working on a “new product” condition on Amazon, you can’t use second-hand items. You need to check eBay products more carefully for possible damages and errors.

3. Amazon to eBay Arbitrage

In Amazon to eBay arbitrage, you don’t buy goods from online retailers. You can sell the items without possessing them. First, you find an item on Amazon, then list this item on eBay for a higher price. Whenever it is sold, you order it from Amazon and send it to the eBay buyer.
But this can make both eBay buyers and Amazon sellers unhappy.
If the eBay buyer receives the product inside the Amazon box, he/she will understand that he/she could buy the product at a lower price on Amazon.
Amazon seller also won’t be happy if understands that his/her products are resold without permission.
eBay has banned direct shipping products from Amazon to eBay buyers in some countries like the Us and UK. Although repacking the items by the eBay seller and sending them to the eBay buyer doesn’t have a problem. It is explicitly written:
“Dropshipping, where you fulfill orders directly from a wholesale supplier, is allowed. However, listing an item on eBay and then purchasing the item from another retailer or marketplace that ships directly to your customer are not permitted.”

4. Google Shopping

You can upload your product data on Google Merchant Center (GMC) and use the power of google for presenting your goods to the customers.

5. Walmart

Walmart is another huge marketplace with lots of opportunities to buy and sell. One of the most common sources to buy products at a reasonable price is Walmart. However, you can also use Walmart as a selling platform too.

6. Bonanza

Bonanza is recommended highly by the customers and gives unique features to know the potential buyers.

What is Amazon Online Arbitrage?

Online arbitrage, or online retail arbitrage, is like retail arbitrage. You buy different items at a lower price to sell them for a profit. But the whole process in online arbitrage is based on the internet, so it’s not limited to your geographical location. You can do it everywhere and spend how much time you want. That’s why every year, more and more arbitragers are attracted to online arbitrage.

a woman is amazon online arbitraging with laptop

Amazon is the biggest online marketplace in the world. Thereby many online arbitragers sell their items on Amazon. This is called Amazon online arbitrage.

How Can I Make Money with Online Arbitrage on Amazon?

The rule is easy: buy goods at a lower price, sell them on Amazon at a higher price. It seems easy, isn’t it?

After registering on Amazon as a seller, you should find the products on different websites. There are millions of various products all over the internet, and not all of them are profitable. You need technical knowledge to identify the best ones and buy them. Then all you need is to send your inventory to FBA prep and wait to sell your goods.

a man got lots of money by online arbitraging

It can be challenging at the beginning. You can’t make a very high profit. However, if you monitor your mistakes, define your procedure and understand your margins and revenue, you can reduce the risk and make your business more constant. 

Read More: How to Get the Most from Online Arbitrage Subscriptions?

Online Arbitrage vs Retail Arbitrage

In both methods, online arbitrage and retail arbitrage, our goal is to make a profit. So, there is no basic difference between these methods but sourcing the products.

Although online arbitrage is easier and more time-efficient, you can do both like many sellers who do online and retail arbitrage. Why leave money on the table if you can make a profit with it?

For example, you can find big liquidation, reduced stock, or clearance on retailers. Also, outlet stores are a good place for hunting very profitable deals. Some online stores like Target.com offer the seller the opportunity to order the goods online and pick them up from the stores.

However, online businesses are trendy, especially after covid-19. Today, more people are doing online arbitrage, and fewer people are attracted to retail arbitrage. The primary constraint of retail arbitrage is that you are limited to stores that you can go to physically. But in online arbitrage, you can use all the websites, regardless of where they are.

Read More: Online Arbitrage vs Retail Arbitrage

Why Does Online Arbitrage Work?

If I can find a product with a lower price, why can others not?

It is usually the first question that comes to our mind when we think about online arbitrage. We use Target.com or Walmart.com to find a profitable deal for our business, but it’s not always working.

We have to check dozens of online retailers (that most of them are not as famous as Walmart) and use coupons and cashback services to profit.

First of all, most people don’t have enough information about online retailers or cannot trust them.

Then they don’t have time, or they don’t feel like searching a lot. So that’s why many people choose Amazon. They can find their favorite products fast, order them and receive them with Amazon customer service. In fact, about 50% of buyers start their search for items on Amazon, not on Google! That’s huge. It means they don’t even check other websites, they like to buy from Amazon, and they are ready to pay higher to have peace of mind during their purchase.

Is Online Arbitrage Legal?

It is generally legal, but there are some problems that you should stay away from them.

If you are not allowed to sell a product (and you need to be an authorized seller), don’t try to bypass it. It might lead to being suspended by Amazon. Also, avoid sourcing any counterfeit. Amazon takes such infringements seriously.

Generally, if you are doing something that you are not sure about it, don’t risk it. Search about it and ask from other sellers.

Read More: Latest Updates About Online Arbitrage Legality

How to Do Amazon Online Arbitrage?

a man searching how to do amazon online arbitrage on the internet

If you are still a little bit confused about how Amazon FBA business works, continue reading. I want to break down the process into a few simple steps:

  1. Before buying, identify the products you want to purchase. You need to analyze the data to find the best ones. You also need to set a criterion for yourself to make your decisions on that basis.
  2. The next step is sourcing your items. You can head to a retailer website like Target or Walmart, buy sourcing lists and even hire a team to do it for you.
  3. Place your order. You can send your items to preparation centers. They can check the items for possible damages and pack them again to ship off to the Amazon warehouse.
  4. List the items on Amazon.
  5. Wait for selling your inventory.
  6. Don’t forget to respond to the customers’ issues to avoid negative feedback!

Now, after getting familiar with the general process of Amazon’s online arbitrage business, it’s time to talk about getting started.

How to Get Started Online Arbitrage Amazon FBA?

You need 3 simple items to start your Amazon online arbitrage business:

  1. Computer and internet
  2. Amazon seller account
  3. Little capital to invest

Computer, internet and initial money for starting your business don’t need explanation. If you don’t have an Amazon seller account, you need to make it. Notice there are two different types of accounts: professional & individual. You need to choose a plan based on your volume of sales and the type of products you are going to sell. A professional plan has advanced features that help the arbitrager to improve his/her business.

Before signing up, prepare these documents because Amazon will ask you several questions:

  • Business name and address
  • Telephone number
  • Credit card and bank information
  • Tax information

If you already have had Amazon seller account, signing in is enough!

Now we want to talk about sourcing the best items in detail.

Online Arbitrage Sourcing

Sourcing the items is one of the essential parts of the online arbitrage business. Identifying profitable deals is an important step to increase the benefits. Here we want to introduce 4 different methods for sourcing products briefly.

Manual Sourcing With Online Arbitrage Websites

There are hundreds of online retailer websites, from very famous ones like Walmart.com to fewer famous websites. This method fits newbies who don’t have high demands. Websites like Rakuten can show you the companies that offer deals and coupons.

Looking for a profitable product manually between millions of products on many different websites doesn’t make sense, especially if you consider this business serious because it can not meet your demand. So, it’s good to warm up yourself for few days, but if you want to improve your inventory, choose from other methods.

Read More: Four different methods for sourcing products

Using Online Arbitrage Software

Checking websites one by one to find a reasonable deal is time-consuming. You can use scraper software to check the websites and list the items based on your criteria. You can identify the best deals, the actual demand for the product, and product price history.

Still, there are possible errors, and you have to check them and also pay a membership to use the software. If your business is scaling, we suggest you buy sourcing lists instead of making them on your own and focus on your business, not finding the products.

Online Arbitrage Sourcing List Service

If you want to do online arbitrage without software headache and consume time for checking every single website, you can buy a list of products from valid companies. From Mon to Fri, you are given a list of products. These lists include 5-10 items, usually with necessary data like net profit and ROI.

Online Arbitrage Without Software

When you buy sourcing lists, you don’t need to struggle with different software, paying for them, and spend time learning how to work with that software. Sometimes, the software you have chosen doesn’t have good customer service, and you have to deal with a new hassle too!

Why Use Online Arbitrage Sourcing List?

It is the most headache-free way of sourcing! In any other type – from manual sourcing to hiring an assistant for it – you have to be a part of this procedure. But when you buy sourcing lists, you receive various profitable lists on your email and check the items as you drink your morning coffee.

 Also, if you buy the lists from the companies that offer a money-back guarantee, you can assure that the items have satisfying quality.

So, if you don’t want to spend your time finding profitable deals, paying for a different software, and struggling with them, buying a high-quality online arbitrage sourcing list is my suggestion.

Online Arbitrage Virtual Assistant

When you scaled your business, maybe buying sourcing lists and using the software doesn’t work for you. You need more items every day. Sometimes your brand has grown up very fast, so you even need to hire someone to respond to the customers and follow up on their issues. If you want to do everything in a scaled business on your own, you can’t focus on the more important stuff and keep a steady flow of growth of your business.

So, it is time to hire a virtual assistant and teach him/her. If you have a professional team, you can make your sourcing lists based on your criteria and find as many products as you need. By having your team, you have complete control over the items.

Online Arbitrage Apps and Extensions

Tools and apps are used to give you enough data to make the process as profitable as possible.

logo of extensions and software's for online arbitrage

Some of them are Chrome extensions like Revseller. This type of extension can show you the crucial data you need about an item like net profit, ROI, sale rank, etc. For example, such extensions calculate the buying price, shipping expenses, and many more features to give you the real net profit.

Another group of apps is used for checking if the categories, brands, and products are open or not. They can protect you from costly mistakes and let you know if you are not allowed to sell a product. Also, there are several mobile apps for an online arbitrage business.

Online Arbitrage Tools: Free vs Paid

We discussed the disadvantages of not using tools in online arbitrage. Tools can mine data from hundreds of stores, store and filter it, collect the data about the product price history to estimate its future efficiency, and help us to be realistic and make the right decisions.

These tools are divided into two groups: Free online arbitrage tools & Paid online arbitrage tools. This is important because there are dozens of tools and extensions that you can pay for in the online arbitrage business. If you don’t choose them wisely, you may end up spending lots of subscriptions every month.

Free Online Arbitrage Tools

The extensions are beneficial and can put critical info at your fingertips on any web page. Usually, they are free but very useful. There are dozens of such tools, but here we introduce the following extensions:

1- Keepa – Amazon Price & Sales Rank Tracker

keepa price chart chrome extension

For limited data, it’s free, but the premium version is highly recommended if you are a pro. You can see sale rank history, price history, and much more at a glance (the extra futures are open in paid version)

2- Amazon assistant

amazon assistant chrome extension

When you check a product on an online retailer (usually Target.com), it brings up the potential matches on Amazon. Notice that the matches aren’t always correct!

3- PriceBlink

priceblink chrome extension

As you look at a product on a website (no matter it’s Amazon or retailer), it tries to find a lower-priced product for you. Remember that check two items carefully to avoid a mismatch deal.

4- Rakuten – Get cashback for shopping
With Rakuten, All you need to do is shop like normal, and it will let you know if you can get cashback on your purchase. Also, it can find the coupons.

Paid Online Arbitrage Tools

If you are serious about this business, don’t be afraid of paying for using a premium service. There are many extensions and software that are not free, but they have a free trial. You can pay for them after assuring that they are useful.

  1. RevSeller
    You can plug in your buy data to see the estimated profit and ROI.
  2. IP Alert
    If you want to protect your business against Amazon IP complaints, this extension is what you must have. It can inform you if you’re on an Amazon page for a brand that has been reported to file IP Complaints against third-party sellers. 
  3. HowMany
    HowMany shows you the number of units your competitors have in stock of an inventory item. So you can decide if you want to compete with them how deep you want to go yourself on an inventory purchase.

How to Be an Online Arbitrage Pro?

If you are not satisfied with a regular seller and you are ambitious in this business, you should scale your business and be an online arbitrage pro. But how can you be a pro?

a man is working with computer in office

It is essential to sell what other competitors can’t sell. It improves your profit margin. Also, customers can see your brand more, and your brand can be trustworthy for them. But almost all of the low-competition categories are restricted. Amazon restricted categories, brands or products are not open for all the sellers, and you need to go through an approval process to be an authorized seller. If you want to make these restricted categories, brands, and ASINs ungated, you can use Amazon ungating service. In this way, you can scale up your business and sell items that many cannot.

What is Online Arbitrage Q4?

Q4 or the fourth quarter is from October to December. It is the time that every seller is waiting for and is the high selling season. You can earn in these 3 months half of your yearly income. But it is rush time, and if you are not experienced enough, it can be stressful at the same time. Sourcing items are tough because they run out so fast. If you don’t plan, you might spend the rest of Q4 with an empty inventory.

We suggest you don’t wait for the last 3 months of the year and keep selling now. Stay organized and watch the trends before the busy season so you can identify the possible hot toys in advance, for example.

Online Arbitrage Q3 Selling Revenue Chart

Read More: How to Prepare for Online Arbitrage Q4 Trading?

Final Thought

In the internet era, many companies tend to be digital, and that’s why online arbitrage has been so famous. Amazon as a lead marketplace is one of the biggest platforms that people do online arbitrage on it.

Amazon Online arbitrage seems easy and has some straightforward steps. But if you don’t want to fail, you should improve your knowledge about this business.

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How to Source Products to Sell on Amazon FBA? [Full Guide 2021]

You need to choose your business model and products up to your goals and plans for the future. But whatever your business model is, finding goods with lower prices and higher quality is one of your goals for sure.

In this article, we break down different ways of sourcing that help to make more profit in your business.

1. Online Arbitrage

It is a good business model for new sellers. In online arbitrage, you source your products from online shops like Bestbuy, Target, Walmart, etc but there are different ways how to find. The most reasonable way to source products online, is by subscribing to a online arbitrage sourcing list.

Read More: Four different methods for sourcing products that every online arbitrager should know

online arbitrage sourcing

This sourcing method is very beneficial for newbies. They can start their business with a small investment and buy products.

On the con side, you should have a plan if you want to have a consistent profit. For example, you should know how many goods you need to source to ensure the benefit. Also, you should be aware of shipment costs. There are plenty of tools which give you enough details so they can help you to decide.

Read More: 11 Useful Chrome Extensions for Online Arbitrage

2. Retail Arbitrage

In this business model, you are looking for discounted products in retail stores like Walgreens, Costco and …. Also, Liquidation and surplus stores are good choices for retail arbitragers because everything they sell is discounted.

retail arbitrage sourcing product

Another way for sourcing discounted products is buying from auctions, garage sales, and thrift stores.

This business model seems easy. All you need is to find discounts and clearances and you don’t need a lot of money upfront. But it is very time-consuming and like online arbitrage, you should consider all the costs like shipment or storing and selling volume carefully. The other downside of retail arbitrage, compared to online arbitrage, is the scale capacity. In retail arbitrage your business is limited to your local shops.

Read More: Online Arbitrage vs Retail Arbitrage

3. Drop Shipping

First, you sell something, and then you buy it from a retailer or a wholesaler! This is a “drop shipping” business in simple words. You sell something without actually having it. Here you rely on a wholesaler or retailer to ship the products to the customers.

If you don’t want the hassles of managing inventory, this option is right for you. It is a low-risk business because you buy something when you have sold it. The supplier remains invisible to the customer.

Drop-Shipping-on-Amazon

It has pros and cons. On the pro side, it has no risk; first you sell then you buy. But on the con side, if the supplier missed shipment, you will receive bad reviews. Because the customer only knows you! Also, the delivery time usually is long, so its harder to convince your customers to buy from you and wait to recive their item.

4. Wholesale

When you are working with the wholesale model, you purchase goods in bulk directly from the manufacturer/brand owner and sell on Amazon.

Even after you established a good business relationship with the manufacturers, you can negotiate for lower prices and buy the products with better deals.

When you want to resell a brand as a wholesaler, you should go through the Amazon category approval process to be an authorized seller. Otherwise, your account can be suspended.

It’s easy to source products from wholesale suppliers online via wholesale marketplaces like Alibaba, Thomasnet, and others. If you are looking for more wholesale suppliers it’s enough to search on the internet.

5. Private Label

It is a good idea to sell your products under your brand. Privet label suppliers make products and label and package them under your brand. This means you have control over product quality, tagging, packaging, and so on.

Here you directly buy your goods in bulk and for a discount from marketplaces overseas. Many Amazon seller sources their products from marketplaces like Alibaba where they can find many manufacturers and purchase their goods in bulk and with lower price.

If you are looking for a private label supplier, you can have a quick search on the internet to find a supplier in your desired category.

Don’t forget that if you found a very good deal that doesn’t seem real, it is probably a scam. Counterfeit is unfortunately one of the important issues in the global marketplaces.

Read More: How to Prepare for Online Arbitrage Q4 Trading?

Final Thoughts

Amazon is offering many different business models and you can choose one of them based on your abilities and goals.  You can be an online arbitrager and source your products only online or you can be a private labeling vendor and ask the manufacture to label the products under your brand.

No matter how scaled or simple your business is, it is important to know different ways of supplying and choose the great ones so you can have a consistent and profitable business.

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What Every Amazon Seller Needs to Know about Amazon IP Complaints? +Action Plan

What Is Amazon IP Complaint?

If you violate any intellectual right, the brand owner can contact Amazon and file a complaint against you for ignoring their intellectual property.

Intellectual property is broken down into 3 types:

  1. Trademarks: it is used to protect the name, symbol, or design of a brand that is used to identify goods or services.

  2. Copyrights: it is the legal protection of authorship

  3. Patents: it is used to protects inventions.

It is more likely you have violated the first two rights if you received an Amazon intellectual property complaint as an arbitrager.

For the brand owners, it is very easy to file an IP complaint on an ASIN that is usually abused. These claims are not always valid. Sometimes brand owners or other competitors use this dirty trick to shut down your account and decrease the competition and keep the prices high.

Regardless of the problems of the system, we have to handle this issue and protect our business against such claims.

Read More: Brutal Mistakes That Arbitragers Need To Avoid

Valid vs Invalid IP Claim

You can find valid Amazon intellectual property complaints in two places:

  1. In an email from Amazon. The subject of this email may include this sentence: “Notice: Policy Warning”
  2. In your Performance Notifications in Seller Central.

You don’t need to answer any claim that is sent by the buyers or any other email adresses but Amazon. You can report such messages to Amazon as well.

Does IP Claim Have a Bad Effect On My Account Health?

The most stressful point about receiving IP complaints is getting suspended. If it is the first time that you receive such a claim, Amazon won’t suspend your account entirely. But it might suspend you from selling that specific ASIN.

If receiving IP complaints is repeated several times, the risk of suspension will be high. So, make sure that you respond to the legitimate claims properly.

Read More: Why Do People Fail at Amazon FBA?

How to Respond to Intellectual Property Claims Properly? [Action Plan]

Amazon needs to see you take the claims seriously. So, in the first-place contact with the right owners. Their contact details should be in the IP claim. Try to understand the basis of their complaint. Sometimes the complaint is mistaken or not accurate.

Once you understood how you violated their intellectual property, you can assure them you are not going to violate rights or even you will remove your listings of the affected ASINs. We hope that they accept it and issue a retraction with Amazon.

Sometimes no one responds to your email. It’s better to send another email within 24-48 hours. In this way, you can show Amazon that you took the complaint seriously but the brand owner wasn’t available. You need to show Amazon you are trying to do the right thing.

If the right owner won’t issue a retraction, you can contact Amazon directly and explain the current condition. It’s better to try to remove an IP claim from your account.

Don’t forget to attach your invoices to your email. Also, you can remove those ASINs and let Amazon know. It helps them remove the claim from your account faster.

Read More: How to Do Online Arbitrage?

How to Avoid IP Claims?

Complaint on Amazon

The first and the best way of prevention is to not sell brands that are known to issue IP Claims even if you are approved to sell them.

If I want to be clear I should say there is no official list of the brands that file an IP claim against you if you sell their products. It was better if these brands were registered as restricted brands and didn’t put the seller’s business at risk by false IP claims. But it is what it is today!

If you want to know about these brands, you can ask other sellers in Facebook groups. I’m sure you can find generous sellers who share their knowledge.

Some extensions can help you and send an alert about these troublesome brands.

Read More: Best Chrome Extensions for Online Arbitragers

Final Thoughts

Even a little knowledge about IP claims can help you to protect your account a lot. If you are in a condition that you want to prevent future IP claims so these points will help you a lot.

But if you have received an IP complaint, don’t be scared. Just follow the steps mentioned above and don’t forget to take the valid claims seriously. Not responding to legitimate complaints can have very bad consequences for your business.

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The Amazon Open Categories That Don’t Require Approval

 If you search “Ungated Categories on Amazon” you would find many results that explain gated categories and how to make your seller account ungated! It’s hard to find an explicit and comprehensive guide for newbies.

Although if you expect more profit you need to sell restricted categories with low competition and higher profit margin, selling open categories and products is a good start for the new sellers.

In this article, we will explain what an open category on Amazon is, then we breakdown the differences between gated and open categories and finally we list more than 20 ungated categories that you can sell without any permissions.

https://oabeans.com/amazon-ungating-service/

What Is An Ungated Category?

If you have ever tried selling products on Amazon, you may have realized you are not allowed to sell certain categories or products. These restricted – or gated- categories are a challenge for the new sellers.

So usually, the new sellers start their business by ungated categories which don’t need any approval from Amazon.

Amazon has restricted some certain categories to protect its customers from counterfeit products and keep its brand reliable. So if you want to sell gated categories you need to prove you are a trustworthy seller.

Read More: How to Get the Most from Online Arbitrage Subscriptions?

What Is the Difference Between Gated And Ungated Categories?

As it’s mentioned above, there are a few reasons why Amazon has kept some categories open and restricted others. The performance metrics of your account need to be good if you want to sell such gated products.

To start your selling journey, you need ungated categories and products. Although the competition is higher than gated categories, ungated products and categories are good enough for a beginner.

After you can improve your performance metrics, you can ungate your account by using unagating services.

What Are the Open Categories?

More than 20 categories are listed as open categories. They don’t need any specific permissions to be sold. Some categories only allow listing for new products. Some of them can be listed for used or refurbished ones.

Amazon open categories that do not need approval

Notice that maybe a category is open but some brands or products within the category can be gated again.

Here list of the ungated categories that Amazon has officially released.

Product categoryExample products
Amazon Device Accessories
Amazon KindleKindle devises accessories
BeautyFragrance, skincare, makeup, haircare, bath & shower (topicals require approval). See also Health & Personal Care.
BooksBooks, calendars, card decks, sheet music, magazines, journals, other publications
Business Products (B2B)Business-relevant products across multiple categories. Special pricing features to target business customers.
Beauty Tools & AccessoriesBrushes, bags, cases, skincare tools, hair styling tools
Camera & PhotoCameras, camcorders, telescopes
Cell PhonesCell phones and accessories must be listed using the manufacturer’s Universal Product Code (UPC).
Clothing & AccessoriesOuterwear, athletic wear, innerwear, belts, wallets
Electronics AccessoriesAudio, video, camera, photo, cell phone, car electronics, computer, and office accessories
Fashion JewelryJewelry that does not contain precious or semi-precious gemstones, pearls, metals
Grocery & Gourmet FoodSee grocery & gourmet category details on Seller Central
Home & GardenKitchen, dining, pet supplies, furniture, décor, bedding, bath, craft, hobby, home appliances, storage, patio, lawn, garden, pool supplies, landscaping, snow removal, generators
Luggage & Travel AccessoriesLuggage, bags, backpacks, briefcases, umbrellas, travel accessories
Musical InstrumentsGuitars, orchestra, recording equipment
Office ProductsSupplies, furniture, printers, calculators
OutdoorsOutdoor gear, outdoor sports apparel, cycling, and action sports
Shoes, Handbags & SunglassesShoes, boots, sandals, slippers, handbags, sunglasses, eyewear frames
Software & Computer GamesBusiness, media education, utility, security, children’s software, and PC games
SportsExercise & fitness, hunting accessories, team sports, licensed/fan shop, athletic apparel, boating & fishing, and game room
Tools & Home ImprovementHand & power tools, plumbing, electrical, building materials, appliance parts
Toys & GamesAction figures, dolls, board games, arts, crafts, furniture, learning toys (holiday selling requirements apply)
Video Games & Video Game ConsolesGame consoles, console games, accessories

Read More: People Failure Story at Amazon FBA

Final Thoughts

All the products and categories are not available for selling for all the sellers. It has several reasons but the important point is that as a beginner you need products that are open for you to sell.

There are more than 20 categories that you can use. But to be a professional and scale your business you need to use more gated categories gradually.

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Amazon Restricted Products, Categories, and Brands [Updated 2021]

As brand owners become more aggressive in protecting their brands, brand restrictions are becoming increasingly common. Since Amazon has not released an official list of restricted brands, brand restrictions confuse the sellers. Sometimes the whole brand is restricted, and sometimes it may be restricted by category or product-line within the brand or just a certain ASIN.

What Is the Amazon Gated Category?

Amazon has started restricting many brands and categories in 2016. If a brand is gated, it means you need to go through an approval process to be qualified, and then you are allowed to sell.

We will explain how to pass the approval process for selling the Amazon restricted brands or Amazon gated categories.

Why Has Amazon Restricted Certain Products?

Restricting brands or a specific product within a brand can have many different reasons. From protecting the customers from counterfeit activity and products to maintaining the unparallel customer service of Amazon, we will discuss all the reasons.

Ungate Amazon Restricted products, Services and etc.
  1. Some products and categories are more likely to be counterfeited. Luxury cosmetic products, bags, and clothes can be heavily counterfeited than others. This is a crime in many countries and distribution, and selling of counterfeit products also have criminal penalties.
    The brand owners have this right to protect their reputation and not allow third-party sellers to put their brand at risk.

  2. Some companies have policies to keep the perceived value of the brand high. They protect the distribution method and do not sell their products to third-party sellers. In this way, they sell their products exclusively.

  3. Some products and brands exclusively belong to network marketing companies, and their distributors are not allowed to sell these products on Amazon.

  4. Some products are more sensitive, like medicine or baby products. They have more safety concerns and product recall due to the defects that compromise the safety of the consumer.

  5. Amazon is famous for its consumer service, and the company is very aggressive about it. Amazon tries to maintain a good buying experience by gating some products. You need to meet some requirements to ungate these products.

  6. Some products like perfume samples are utterly restricted.

Read More: How Much Capital Do You Need to Start Online Arbitrage?

What Are Amazon Restricted Products And Brands?

Amazon has a high standard and unique customer service and expects the sellers to meet this standard. So before allowing the seller to participate in some categories, she/he needs to achieve certain performances and meet the requirements. Becoming ungated in these categories means lower competition and higher profit.

But becoming ungated in a category doesn’t mean that you can sell all the brands of the category. You can be ungated in the beauty products category, but still, you cannot sell luxury cosmetic brands. These brands are more likely to be counterfeited.

Here are the categories presently gated on Amazon:

  • Collectible Coins
  • Personal Safety and Household products
  • Entertainment Collectibles
  • Fine Art
  • Holiday Selling Requirements in Toys & Games
  • Jewelry
  • Join Amazon Handmade
  • Join Amazon Subscription Boxes
  • Made in Italy
  • Music & DVD
  • Automotive & Powersports
  • Services
  • Sports Collectibles
  • Streaming Media Players
  • Video, DVD, & Blu-ray
  • Watches

These restrictions, which are mostly the result of manufacturers demanding, exclude the sellers from listing the products on Amazon. There is an exception: when the seller has the documentation that shows he/she is an authorized seller. Getting this documentation isn’t possible without having a direct account with the brand owner. Sometimes the whole brand isn’t gated, and the specific products are restricted.

If you are a beginner, you need products that are in ungated categories so that you can sell them easily. We offer our beginner sourcing lists that are designed for newbies, and all the leads are ungated.

Please note that this sourcing list is great to start with, but if you want to become a professional, you need to scale your business and sell gated products too.

How Do You Find Out If A Product Is Gated?

Since Amazon never officially released a list of restricted brands, it is hard to publish a certain list. Leave alone all the lists and extensions to find out if a product is gated or ungated. The easiest and most straight forward way to find out if a product is gated is to check the product on your Amazon seller account.

As you go forward in your Amazon business and sell more items, you will get ungated in some categories. So every seller account has its own gated and ungated list. Thus, if you want to be sure that you can sell in a category or a brand, try to add some ASINs of that category or brand in your seller account (Catalog-Add Product).

finding amazon gating product categories

If you see this button (Apply to sell), It means this product is gated. If this repeat for other ASINs of that brand or category, that brand or category is gated for you.

Read More: How to Find Prep Centers For Amazon Online Arbitrage?

How to Ungate Amazon Restricted Products, Categories, And Brands?

Before explaining the different ways of ungating a product, let’s emphasize a few points.

  • If you have a product in a gated category and you are not ungated in that category, don’t list the product in the “Everything Else” category or another category to circumvent restrictions.

  • Sometimes you can sell a used product of a brand, but you cannot sell it in a new condition. Don’t use the condition description to state the item is new. Because if Amazon realizes, your account can be suspended to attempt to way around the listing restrictions.

  • Don’t make any fake documentation to represent yourself as an authorized seller. It’s a crime and can suspend your account as well as criminal penalties.

Now let’s talk about different methods of ungating a brand.

The general way for getting ungated in Amazon Restricted brands or products is getting the authorization documentation from the brand owner that is not very available for all the sellers.

Your Amazon Health Standard should be good. It means:

  • Order Defect Rate should be less than 1%
  •  The pre-Fulfillment Cancellation rate should be less than 2.5.
  • Late Shipment Rate should be less than 4%

After ensuring that you have met Amazon Health Standard, you need to begin the Amazon category approval process.

You can do the ungating by yourself to save time and use Amazon ungating service. This process doesn’t have any bad effect on your account, and just in 24 hours, you can ungate any brand, category, or a single product. This service doesn’t only belong to professionals, but also the beginners are more than welcome.

Read More: Amazon Open Categories That Don’t Require Approval

Final thought

Although Amazon restrictions on brands, categories, or products seem frustrating for the sellers, it’s understandable, and such restrictions will become more common in the future because both brand owners and Amazon want to protect their reputations and protect their customers and eventually their business.

So, if you’ve not already started the ungating process, you need to begin it as soon as possible if you want to take your sales to the next level.