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Is Online Arbitrage Dead for New Sellers in 2021?

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With the increasing growth rate of digital markets and more and more people who can use the internet easier, many think that Online arbitrage is dead and online arbitrage profitability is not impressive anymore. Coronavirus lockdown drove many shoppers to avoid in-store shopping, and online shopping is receiving more attention these days. As a lead online store, Amazon increased its profit by about 200% and became a pandemic giant. Here we want to answer the most frequently asked questions that new sellers have asked and discuss the future of this business.
The surprised man holds a sign that written " is online arbitrage dead" on it

Table of Contents

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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