7 Retail Arbitrageurs Common Mistakes

January 30, 2024
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During the past years, retail arbitrage has been one of the popular jobs, and it is expected that people will come to this business increasingly during the coming years. By studying the behavior and activities of those who started this business earlier, we found some common mistakes among most newbies. This post explains the retail arbitrageurs common mistakes that you will be aware of and avoid committing.

What is Retail Arbitrage?

It is called retail arbitrage when you buy your discounted products from any local retail store and resell them with markup price in any online marketplace. This way is one of the eCommerce methods to earn a considerable profit. Walmart, Home Depot, Target, and Lowe’s are the retailers that offer a wide selection of products that you can purchase from them.

retail arbitrage is the act of buying products locally and sell them online.

On the other hand, there are many online marketplaces such as Facebook, Amazon, and eBay that you can sell your products. In general, many people prefer Amazon for their business because of its attractive features.

Below, seven retail arbitrageurs common mistakes are listed:

1) Dependence on One Marketplace

In General, depending on just one marketplace is not a wise decision, although it is simple for most sellers. Actually, selling your products through a single online marketplace such as Amazon,eBay, and Etsy is not the only viable option. You should expect that any of these platforms change their policies or algorithms at any time. You will undoubtedly have a problem continuing your business with new approaches. Basically, your customers aren’t your customers when you sell on Amazon. They belong to Amazon. Amazon has rapid access to them and sends e-mail marketing campaigns, and obviously try to turn your customers into its customer. So don’t put all your eggs in one basket, and try to sell in different marketplaces other than Amazon.

2) Buying Products Without Checking Its Condition

When you buy a product and don’t know it or its company, it would be great to check it out before purchasing. So firstly, do some online research for the name of the company or product. Read the reviews that people wrote to know about the “scam” or “complaint.” Checking their physical address and landline phone is another good way to check on the seller.

In retail arbitraging you should check product condition before buying

buy a product because the Amazon seller app suggests it. Before purchasing, check the IP complaint to keep your account safe.

3) Buying Products Without Checking Expiration Date

It is one of the retail arbitrageurs’ common mistakes that they don’t check the expiration date. Sometimes it takes time to sell your products in retail arbitrage. Even non-food items have an expiry date, like toothpaste. Although, different brand and manufacturer has a different expiration date. So choose the one with a broader range, so you have a more extended period to sell. Besides, when a product is on sale, don’t forget to consider the expiration date. The low price maybe because of the close expiry date.

4) Buying Insufficient Number of Products

The retail arbitrageurs’ common mistake that should mention here is buying an insufficient number of products. In online arbitrage, you must purchase a sufficient number of products because you are purchasing the products at the lowest price from brick and mortar retail stores. Otherwise, your profits will decrease as the profit margin in retail arbitrage is low.

5) Buying too Much from One Product

It is not a good idea to buy a large quantity from one product, even if it has an excellent price. It would be great if you always have a strategy for your buying. You need to consider the number of specific products that you can sell on retail arbitrage. Otherwise, you waste your money on buying too much from one product.

In general, you can sell the consuming products more. So, you can provide more of them. But be aware that it is not easy to sell luxury and entertainment products. Never buy a large quantity of them.

6) Impulse Buying of Discounted Products

In fact, the price is a leading factor in deciding impulse buying. About 27% of people will purchase if the product has over 50% discount. But you can’t be successful in the retail arbitrage business with an impulse purchase.

Woman is buying retail products with discount

Before buying a product, You should always consider the cost of transportation, the possibility of providing more products in the future, the market, and how people welcome it.

7) Not Having a Product Warehouse

As starting your retail arbitrage business, it is crucial to allocate a space to store your products. Start with a small place until you can have warehouse space to stock your inventory. Obviously, you can’t buy a massive quantity of bulky items if your small closet is the only available storage. This shortage may cause making less profit, because you may find a product with a perfect discount. If you would not have proper storage, you must buy it in small numbers. Therefore your profit will decrease.

Final Thought

Apart from learning all aspects of retail arbitrage, you have to master the fundamentals of eCommerce if you want to be successful in this business. Here, we explain to you the most popular guides to learn the ins and outs of this business. The retail arbitrageurs common mistakes are mentioned in this post. You can save a lot of your time, money, and effort with the retail arbitrage model. Besides, selling on Amazon lets you focus on your sales.