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Online Arbitrage Step by Step Guide

Online arbitrage is buying cheap selling expensive
Table of Contents
You must have heard it here and there, in articles, conversations, and tutorials. "online arbitrage" is the new way people make money. OA, or Online Arbitrage, is the practice of making a profit from online sales, especially on Amazon. Online marketplaces have allowed people to make money anywhere, anytime, even in their homes. All you need is a computer and a few bucks (and this type isn't a "get rich quick" scheme either). The start is pretty straightforward, but becoming a severe arbitrager (and staying one) requires knowledge, data, and tools. This article is about online arbitrage deals, how-tos, and tips for success in the business.

What is Online Arbitrage?

Online arbitrage, or OA for short, is the act of buying something online (from online retailers like Walmart) and selling it on an online marketplace (like Amazon) for a profit. All you need is a computer, yes and no. This type isn’t a “get rich quick” scheme. Suppose you want to avoid ending up out of pocket and holding plenty of inventory you can’t sell. In that case, you need tools, data, and a systematic approach to identifying profitable deals.

buying something online and sell in other marketplace is called online arbitrage

This article breaks down the essential tools for online arbitrage and all
you need to get started. Then we will answer some of your most frequently asked questions, and finally, we will give you a few expert tips to have a more successful business.

Online arbitrage is like retail arbitrage but with a few key differences.
You buy different items at a lower price to sell them for a profit. Unlike retail arbitrage, online arbitrage is based on the Internet, not limited to your geographical location. You can do it everywhere and spend as much time as you want. That’s why every year, more and more arbitrageurs are attracted to this method.

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

Pros and Cons of online arbitrage

Here is a list of the pros and cons of online arbitrage against retail arbitrage:

Pros

  • Low physical work
    You don’t need to look for profitable deals from one store to another. Your computer is enough to purchase and resell the product to potential buyers.
  • Location
    You can run your business from anywhere and have access to online stores all over the world. In addition, you can attract customers from everywhere.  So the chance of selling is high.
  • Time Independent
    Whether it’s off today or late at night, you can check the products and find the best prices. You can run your business in your free time as a part-time gig.
  • Low essential capital
    You don’t need to invest so much money at the beginning. Small investments work too. After making a profit, you can reinvest it in your business to scale it up.

Cons

  • Missing discounts
    You might miss local store promotions, garage sales, and other physical promotions.
  • Using different software
    In online arbitrage, you need more analyzing software and searching tools. It can potentially lead to more costs.
  • Restriction and copyright
    Reselling copyrighted products is challenging, and you must receive permission from the copyright owner.

How to Make Money from Online Arbitrage?

The main reason for online arbitrage’s popularity is that it gives inexperienced people a chance to make money and have a side hustle. Imagine buying a pair of shoes from an online marketplace for $ 20$ at a discount. Listing it on Amazon for $ 27$ gives you a $ 7$ profit for a single product. Now if you sell 10 of them in a month, you will be left with a 70$ profit margin. The more you sell, the more money you make. The money you can spend on expanding your business and buying new products.

Tips to Help You Succeed in Online Arbitrage 

  • Select popular niches: it’s important to select the products with popular niches that are important among special buyers. How? Follow the trends, read articles, see reviews and comments, and do simple research.
  • Use tools and software that make the work easier for you: many online arbitrage websites and software help you through sourcing, product management, etc. Search and find what’s best for your business needs.
  • Set your prices using data and studying history: many tools provide you with price history and sales charts. This data helps you decide on the best possible prices to both profits you and fit the customer’s needs.

How to Do Amazon Online Arbitrage?

If you still need clarification about how Amazon FBA business works, continue reading. Follow this guide step by step and in the end, you will have started your business and are ready to go through with it:

  1. Make an Amazon account. The platform has two plans: individual and professional. If you are a newbie in this business, it would be great to choose an individual seller’s account, which is free. After a while, you could sell more than 40 items per month, and it would be better to upgrade your account to a professional one to save on sales fees and access more advanced tools.
  2. Make informed decisions about products. 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.
  3. The next step is sourcing your items. You can head to a retail website like Target or Walmart, buy sourcing lists, and even hire a team to do it for you. Check the top products and try to include them in your purchase.
  4. 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 them to the Amazon warehouse.
  5. List the items on Amazon. In this step, knowing about Amazon’s selling fees is best. The costs you need to consider are:
  • Product’ cost
  • Selling fee of Amazon
  • Shipping cost
  1. Win the BuyBox.

When someone clicks these buttons, Amazon awards the sale to a seller based on a few different criteria, including:

Many of your products may have already been listed on the platform, and now you will compete with other resellers for the “buy box”. The buy box is a listing section where customers can add a product to their cart or click the “Buy Now” button. But there are some factors involved in which seller the platform awards the sale to:

  1. Price
  2. Order defect rate
  3. Customer feedback
  4. Length of time selling on Amazon

Work on competitive prices and address your customer’s needs and demands. The more you sell (and with more quality), the more Amazon considers your account worthy of the buy box.

7-Remember to respond to customer issues to avoid negative feedback!

Beginner Method

As a beginner, there is no shortage of options to source for your online arbitrage inventory. There are a lot of online retailers you can choose from. To get started, follow the steps involved in this method:

  1. Look for good products with lower prices than Amazon on other platforms. Using of online arbitrage sourcing list, such as OABeans Leads, to find profitable OA deals could be very helpful for newbie sellers. The Fayot list provides 5-7 daily leads with 100% ungated products and 75% average ROI.
  2. Since you can find your product online, buy it, and use the FBA service to ship it to Amazon’s warehouse or your facility.
  3.  When the product comes to your inventory, add it to your listing for sale. Choose a competitive price to win the Buy Box and give you a good profit margin.

OA for Advanced Sellers

As an advanced and experienced seller, you would know all tricks of online arbitrage on Amazon. It is time to improve your product research with advanced software and tools like Tactical Arbitrage. It has a free trial, but upgrading the service and paying the cost is well worth it if you are serious about increasing your Amazon sales. A tool like Tactical Arbitrage has the benefit of doing all the searching for you. It will exactly find what you are looking for when you give your criteria to this software. Besides, it will:

  • Ensure a higher sales rank of the product.
  • Cross-reference the Amazon database to ensure the profitability of the product.
  • Help you understand your competitors who sell the same items.

If you are looking for online arbitrage deals with high profits, don’t miss OABeans’ Pinto or Navy OA list. The most important features of these lists are:

  • 7-10 daily leads
  • 75% average ROI
  • 1% of top best sellers rank products

Online Arbitrage Sourcing

Sourcing the items is one of the essential parts of the OA business. Identifying profitable deals is an important step to increasing the benefits. Following, we briefly introduce 4 different methods for sourcing products in online arbitrage.

There are 3 ways for online arbitrage sourcing: 1)manual 2) automatic 3) virtual assistant

Manual Sourcing With OA Websites

As a beginner, it might not be a bad idea to try and search online stores yourself. This way, you will get familiar with the market and products and also get a heads-up about what OA is all about.

Looking for a profitable deal manually between millions of products can be tricky. The search must be clarified, especially if you consider this
business serious because it can not meet your demand. So after a while, it becomes more logical to consider other methods.

  • No knowledge is needed; you only need to know how to search.
  • Its good for beginners and keeps them up to date about websites and sources

Cons:

  • It is time-consuming, especially later when your business grows and you need to get the processes automated.
  • It’s not necessarily data-driven. You see and purchase random products based on your decisions. 

Using Online Arbitrage Software

Since it’s not ideal for searching for products from website to website, you can rely on software. Online arbitrage software lists the items based on your criteria and then gives you suggestions to purchase. Using the software, you can also identify the best deals, the actual demand for the product, and product price history in online arbitrage.

Softwares are usually subscription-based, and you must pay a fee. They’re not always perfect and might not provide customized, filtered deals.

Pros:

  • It’s quick and easy to use. It does not take any time or education; you can use them anytime.
  • Gives you suggestions and makes sourcing easier mostly for newbies and sellers with less experience.

    Cons:
  • It’s not always accurate. Most OA software does not have filtered and customized deals. Meaning they give the same tips to all their users.
  • They are not free, so they might not be perfect for people who are unsure about their decision.

Online Arbitrage Sourcing List Service

Product lists help you go through your OA journey without the headaches of manual searches and software. From Mon to Fri, you are given a list of products. Most of these lists go through filters (IP, HAZMAT, etc) and are tailor made to each group of customer’s needs.

Pros:

  • They are customized for different groups of sellers: newbies, professionals, or even top sellers. 
  • Are updated regularly and dont have the headeches of complaints or sell-outs.

Cons:

  • They are mostly subscription-based and require a fee (a little higher than most software).

Why We Need Software to Do OA?

When you buy sourcing lists, you don’t need to struggle with different software, pay 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! To know more about this article, follow the best free online arbitrage software article.

The Importance of Using OA Sourcing Lists

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 in your email and check the items as you drink your morning coffee.

Also, if you buy lists from companies offering a money-back guarantee, you can ensure the items have satisfying quality. So, if you want to avoid spending your time finding profitable deals, paying for a different software, and struggling with them, buying a high-quality online arbitrage sourcing list is our suggestion.

Online Arbitrage Virtual Assistant

When you scale your business, 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.

So, it is time to hire a virtual assistant and teach them. 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.

want to know which method is best for you? We discussed the two models in our “Sourcing lists vs VA” article. please give it a look, to find out what works for your business.

Online Arbitrage Apps and Extensions

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

You can make more money with online arbitrage apps and extensions

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 other features to give you the net profit.

Another group of apps checks if the categories, brands, and products are open. They can protect you from costly mistakes and let you know if you cannot sell a product. Also, there are several mobile apps for an online arbitrage business.

Online Arbitrage Tools

OA tools have one job: to make the sales process easier and faster for users. They give you product lists, purchase links, price history, and all the other data you need to make the final decision. These extensions are beneficial and can put critical info at your fingertips on any web page. They are free but can be very useful.

But how does one decide which tool to get?

We have gathered some of the best ones here for you to help select the one which best fits your business (the list includes free and paid tools)

1- Keepa – Amazon Price & Sales Rank Tracker

Keepa's amazon price chart is one of the most useful apps in online arbitrage.

For limited data, Keepa is 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). For more info about this tool, follow keepa reviews article.

2- Amazon Assistant

Amazon assistant helps people to check product when doing online arbitrage.

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

3- PriceBlink

While doing online arbitrage, check Price Blink to compare prices in marketplaces.

As you look at a product on a website (whether it’s Amazon or a retailer), it tries to find a lower-priced product for you. Remember that check two items carefully to avoid a mismatch deal. Click here to get PriceBlink chrome extension.

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 coupons.

5- Honey

Honey is a browser extension that helps you find discounts and coupons all over the internet. This tool also alerts you when an item goes out of stock or is marked down to a special price.

6- Amazon Seller app

This tool is best for sellers who want to be online all the time and have the needed information on hand. You can create listings, track sales, and fulfill orders (and more) all from your phone.

7- RevSeller
this chrome extension is useful for sellers who aim to make data-driven decisions. Third party sellers can estimate FBA fees, margin, ROI, and all the necessary details.

to read more about OA tools and extensions, read best online arbitrage tools article.

Online Arbitrage Sourcing Websites

Here are some websites you can rely on for buying products:

The websiteWhy it’s good
www.walmart.comDiversity/ lower prices/ a long history of sales
www.samsclub.comThe ability to buy bulk/ wholesale/ cheap products
www.homedepot.comGreat customer service/ low prices/ in-store pickup
www.target.comGreat deals and discounts/ good quality products/ home and personal accessories
www.lowes.comBig inventory of products/ competitive prices

What Is The Difference Between Online and Retail Arbitrage?

In both methods, the final goal is to make a profit. So, there is no basic difference between these methods but sourcing the products. What’s different is the sourcing method. Third-party sellers usually choose Retail Arbitrage and Online Arbitrage, also known as RA and OA.

Retail Arbitrage is more traditional. In Essence, the act of purchasing
discounted products from retail brick-and-mortar stores and reselling them to another marketplace, such as Amazon, at a higher price to make profits. Looking through liquidations, clearance stock, or reduced supply is very beneficial for finding the products physically.

On the other hand, Online Arbitrage is the process of buying your products online at a low price from one marketplace and selling with a markup in another marketplace to have good revenue. The sourcing form of goods in OA on Amazon is usually a Facebook shop or website you don’t need to go to physically. You can buy your products even in significant quantities, days and nights conveniently and minimize your logistic costs.

It would help to consider that some sellers believe that even in Retail
Arbitrage, you can source your items from online stores and resell them in
another Online shop. Besides, there are companies like OABeans that can help you to search for lucrative online arbitrage leads.

If you need more data about this topic, follow online arbitrage vs. retail arbitrage article.

Winning Buy Box: How to Win Buy Box

Usually, many sellers sell the same product on Amazon. How can a seller grab more customers and attract their attention?  If a seller wins the Buy Box, he/she has a higher chance of selling the items. The Buy Box is where the “Add to Cart” and “Buy Now” buttons are located on a product page.

Using FBA increases the chance of winning BuyBox.  

In the same condition, the chance of an FBA seller is always higher than
other sellers to win the Buy Box. If your product’s Buy Box is very
competitive, maybe FBA is a better option. For more info about how to win Amazon buy box, click here.

Extra Tips for Advanced Sellers

There are some extra tips to help you out before getting started with your online arbitrage business:

  1. Choose the right tools

Some tools make selling on Amazon easier. These are helpful in finding the best keywords. Plus, they monitor your competitors. You can also use them to optimize your ads. You can try the tools at first, as most of them are available for a free trial. Then choose each of them that is the best for you.

For Example, Jungle Scout, RevSeller, and Helium 10 are some of the popular Chrome Extensions that are helpful for Amazon sellers.

Jungle Scout

This tool is available in both web app and extension formats. Users can conduct real-time sales data, Amazon keyword research, product rank, revenue, and many more details with their Chrome extension.

RevSeller

This user-friendly interface makes it possible to break down all costs and provide you with the profit margin and ROI for your FBA business. Besides, sales rank, product dimensions, UPCs, and ASIN are shown in this extension.

Helium 10

This tool is the answer to all of your needs, including searching for the best keywords for your products on Amazon, finding suppliers for ASINs, analyzing demand, and calculating profitability

  1. Use Amazon ads

One of the best marketing strategies is using paid ads on Amazon. This helps you to boost your sales. They are very affordable as well as super easy to set up. You should just pick your desired product for promotion, choose your keywords, and determine your budget, and it’s time to start.

  1. Select the right FBA Service

FBA method of fulfillment offers several advantages. It is a comfort that you don’t need to store the inventory and fulfill orders. Plus, FBA helps you to win the buy box. If an extra fee is not a big deal for you, it is highly recommended to use this program.

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 OA on it.

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

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    1. Yes, Rakuten is one of the good and practical tools in the field of Online Arbitrage, and you can use this tool to find discount coupons.

    1. Hi Emila
      You can not find the illegal and cracked version, and you must pay for the tools on their site and then use them.
      good luck

  1. I installed the RevSeller extension but did not understand how it works and how to use it. Thanks for explaining a bit about this extension.

  2. I sold as many jets as the total sales of the year in q4. Do not underestimate this opportunity, and be sure to plan for extraordinary profits 😉

  3. Hi, I am a newbie Online Arbitrager , and I cannot work with software and other tools a in this area. Can you guide me and tell me where to start?

    1. To get started, we recommend you buy fayot sourcing list, which is suitable for beginners. After you buy this service, start learning simultaneously and use the software and tools in this field after a while. Using tools for newbies is often not recommended as it usually leads to wrong purchases.

    1. Hi Olivia
      The first and foremost difference is that the speed of operation in using Sourcing services is very high because there is no need to spend time looking for goods or using software.
      The second reason is that the profit you get with Online Arbitrage Sourcing services is higher than manual mode. Apart from this, there are other reasons that it is not possible to mention all of them in one comment.
      Good Luck

  4. Hello. I am currently not an authorized seller on Amazon. Can I sell my products in this situation, or first I should authorize my account?

    1. If you are not permitted to sell an item (and you should be an approved seller), don’t attempt to sidestep it. It may prompt being suspended by Amazon. Likewise, try not to source any fake. Amazon views such encroachments appropriately.

    1. Amazon as a lead marketplace is 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.

  5. A question has been on my mind. Please reply
    Given that Amazon handles merchandise easily, it does not hurt sellers? Is online arbitrage still profitable?

  6. I wanted to share an experience that might work for you.
    My mistake when entering the world of online arbitrage was that I entered this field without enough information, and I lost a lot because of this issue.
    If you do not have enough information and literacy or do not enter this field. If you can, use online arbitrage sourcing lists first.

    1. 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.

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    1. Hi Tony. Yes you should have data before starting your oa business. We suggest you to follow our blog & youtube videos for more info about online arbitrage.

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  10. This is a great content and helped me alot. I have a question and I hope you can help me with this question. Is online arbitrage worth it reddit?

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