Introduction to Online Arbitrage Sourcing for Amazon Sellers
Sourcing is a way for online arbitrage sellers on Amazon to find products that fit their criteria across various online marketplaces. The general idea is that the product should be priced lower than on Amazon so that the seller can make a profit by reselling it, but many other factors are involved. For example, one seller may focus more on ROI while another focuses on competition and stock levels. This depends on your individual goal and needs and the state of your business.
Online arbitrage sourcing involves a lot of research and analysis. OA sellers typically use various tools and software to help them find products that meet their criteria. The criteria usually include ROI, profit, BSR, estimated monthly sales, price history, Buy Box eligibility, competition, in-stock level, number of reviews, and IP complaint.
The Importance of Efficient Sourcing Strategies
So, why is it essential to use different methods for online arbitrage sourcing, such as a sourcing list or VA? First, sourcing products is a time-consuming task that not everybody enjoys. Most sellers prefer to assign this task to a VA or purchase sourcing lists from providers so that they can focus on more critical tasks.
In addition, having an efficient sourcing strategy can help sellers stay ahead of the competition and find fast-selling and profitable products before their competitors. It also allows sellers to build a sustainable business that can withstand market fluctuations and changes in customer demand and scale their business when needed.
Method 1: Online Arbitrage Sourcing Lists
To determine if our OA business needs a sourcing list or VA, we must first familiarize ourselves with each method. Online arbitrage sourcing lists are pre-prepared lists of products that service providers and sourcing companies source. These lists usually consist of up to 10 leads the seller receives daily in their inbox. Sourcing companies such as OABeans have teams of experts working on the online arbitrage sourcing list using various tools and software. Other companies hire a virtual assistant to handle the sourcing.
These lists typically contain information such as the product name, ASIN, buying price, and selling price on Amazon. They are also checked against various criteria such as IP complaints, price history, etc. Online arbitrage sourcing lists can be a helpful resource for newbies or sellers who don’t have the time or expertise to do their own product research.
However, sellers must carefully evaluate the products on the sourcing list to verify the information provided and ensure the leads match their criteria.
Pros of Using Online Arbitrage Sourcing Lists
Online arbitrage sourcing lists are a time-efficient and reliable method for sourcing the right products to resell on Amazon. Here are the benefits of OA sourcing lists:
One of the most significant advantages of using OA sourcing lists is that they save time. Sourcing products to resell on Amazon can be time-consuming, but sourcing lists allow sellers to quickly find fast-selling products without having to do the research themselves.
As mentioned, sourcing lists are typically compiled by experts who utilize various tools and software to identify and handpick fast-selling and profitable products. This means you will receive a list of carefully curated items with potentially high profit margins daily.
Lower Learning Curve
You don’t necessarily have to learn to work with complicated software or do manual research when using sourcing lists. All you need to do is check the leads’ viability and ensure they match your criteria before purchasing them because the research has already been done.
Cons of Using Online Arbitrage Sourcing Lists
As with any method, online arbitrage sourcing lists have some challenges to consider before choosing between a sourcing list or VA. Here are the disadvantages of online arbitrage sourcing lists:
Sourcing lists result from the time and energy spent researching products, so they come at a cost. However, the price is usually nothing compared to the time it saves you and the potential profits you will make.
Sourcing lists are used by multiple sellers, which may increase the competition for specific products. However, some sourcing list providers, such as OABeans, try to solve this by limiting the number of seats for each list.
When using a sourcing list, sellers rely on someone else’s research and analysis to find the right products. This means sellers have limited customization options and control over their products.
Method 2: Using Virtual Assistants
Virtual assistants are also very popular among sellers when choosing between OA sourcing methods such as sourcing lists or VA. This method allows you to hire an online assistant to outsource the time-consuming task of finding products. Before hiring an online arbitrage virtual assistant, you must define the task(s) they will be responsible for. Then, you can use online platforms such as Upwork, Fiverr, and Freelancer to find a VA. It’s essential to choose a virtual assistant with experience in OA sourcing who can provide a portfolio or references of previous work.
The virtual assistant will need access to your seller central account and other tools and resources. After setting clear expectations and providing guidelines for accessing and using these resources, you must monitor the VA’s progress and provide feedback or guidance when needed. Ultimately, the VA should be paid for their services according to the agreed-upon terms (hourly, daily, or project-based).
Pros of Hiring Virtual Assistants
Hiring a virtual assistant to do online arbitrage sourcing can provide several benefits for OA sellers, including:
When you outsource the time-consuming task of sourcing products, you can focus on other essential tasks such as customer service (especially if you use FBM or Fulfillment by Merchant). This way, you can increase productivity and efficiency and eventually scale your business.
Flexibility can play an important part when choosing between sourcing list or VA. VAs can provide sourcing services on a flexible basis according to your needs. This is particularly helpful for sellers with fluctuating demand or wanting to scale their business quickly.
Hiring a virtual assistant allows you to customize your sourcing options. After developing an individual strategy and defining the criteria that are most important for the success of your business, you can provide this information to the VA so that they can source products according to your needs.
Cons of Hiring Virtual Assistants
While there are many benefits to hiring a VA to do online arbitrage sourcing, there are also some potential disadvantages that sellers should be aware of, including:
Hiring a virtual assistant can be cost-effective or expensive, depending on the experience and expertise required. This is considered a challenge, especially for sellers with limited budgets. This is something you should consider when choosing between sourcing list or VA.
Training and Management
When hiring a VA for online arbitrage sourcing, the seller may need time and effort in training or managing the assistant. This can be time-consuming, especially if you are not experienced in managing remote workers.
Monitoring and controlling the quality of the work provided by the VA can be difficult, so you may need to implement processes to ensure the assistant is sourcing high-quality products that meet your standards.
Comparing Online Arbitrage Sourcing Lists and Virtual Assistants
Sourcing lists or VA are two different methods for online arbitrage sourcing, and each has its own advantages and disadvantages, which we discussed earlier. Now, let’s compare them and find out what makes them different:
Comparing Costs and ROI
The cost of hiring a VA can vary based on expertise and experience, and the hourly rate for a VA can range from $5 to $30, depending on their location and specialty. On the other hand, sourcing lists’ price depends on the provider and the number of products included. Sourcing lists can range from $20 to $200 or more. It is important to note here that VAs need tools and software to work with, and you must pay for them. This makes hiring virtual assistants more expensive than sourcing lists.
In both cases, the ROI depends on the quality of the products sourced and whether they meet your criteria. However, the ROI of using sourcing lists may be slightly lower because researching and curating products has already been done.
Balancing Time Investment and Results
When comparing sourcing lists or VA, hiring a virtual assistant may require a significant time upfront for training and managing. Once the assistant is trained and familiar with your preferences and criteria, they can do the sourcing by themselves, but you still need to manage them and provide feedback to keep the quality of the leads high. In comparison, sourcing lists can save time up front, as researching and curating products has already been done. However, you may still need to review the list and ensure the leads meet your criteria, but the time needed is significantly less than the time required to train and manage a VA.
In addition, sourcing lists can provide quick results since the research is done and the leads are ready. On the other hand, VAs can offer better results in the long term since they adapt to your specific needs and preferences.
Assessing the Level of Control and Customization
When comparing sourcing lists or VA, hiring a virtual assistant can provide a higher level of control since you can work directly with the VA to set criteria, provide feedback, and make adjustments when needed. In addition, VAs provide a higher level of customization since they adapt to your specific needs and preferences over the long term.
On the other hand, using a sourcing list can provide less control since you rely on a third-party provider to research and curate the products. Additionally, the products may not be tailored to your specific needs or preferences. You can combat this by preparing a formula in an Excel or Google Sheets file containing your criteria and checking each lead against them to ensure they fit your business needs.
|OA Sourcing Lists vs Virtual Assistant|
|Sourcing Lists||Virtual Assistant|
|Costs less – may have a slightly lower ROI||Needs a bigger investment – has a higher ROI in the long term|
|Requires less time for checking the viability of leads||Needs a lot of time to train and manage|
|Provides less control since the lists are pre-prepared||Provides a higher level of control|
Choosing the Right Method for Your Amazon Business
Choosing between sourcing list or VA depends on your specific needs and preferences, but generally, you should consider factors such as budget, time availability, expertise, control and customization, and scalability. Here’s what you need to do to choose between sourcing list vs VA:
Evaluating Your Business Needs
What are your overall business goals? If you have ambitious growth plans and want to scale quickly, hiring a virtual assistant may be a better option because they will adapt to your needs and preferences over time. If your goals are more modest and you need a low-risk method to generate extra income, sourcing lists are the way to go. Additionally, consider the factors below when choosing between sourcing list or VA:
- Budget–sourcing lists are generally cheaper than hiring a virtual assistant and better for the short term.
- Time availability – If you’re short on time and prefer a more hands-off approach, sourcing lists are a better option.
- Scalability – A VA may be a better option if you plan to scale quickly and need a flexible and adaptable approach to sourcing products.
Considering a Hybrid Approach
A hybrid approach combines both methods and can be a good option for online arbitrage sourcing. Here’s how you can implement it:
- Use a sourcing list as a starting point for product research, especially if you’re new to online arbitrage. You can identify profitable leads on the list and pass them on to your VA for further research and analysis.
- Hire a VA for personalized research. You can work with your VA to set specific criteria and preferences, and they can use their expertise and experience to find products that meet your needs.
- Use a sourcing list to supplement your product selection. Even if you have already hired a VA, sourcing lists can be a helpful tool for identifying new products or checking for any products the assistant may have missed during their research.
Tips for Implementing Your Chosen Strategy
Whether you choose sourcing list or VA, you must implement your chosen strategy into the everyday workflow. Here are some tips for doing this:
Establishing Clear Communication Channels
Effective communication is the key to success if you are working with a virtual assistant. Communicate your preferences and expectations, provide feedback, and be available to answer any questions they may have.
In addition, choose a preferred method of communication (for example, instant messaging, email, or video conference) and set expectations for response times. When communicating with your VA, use clear and concise language and provide detailed instructions. Finally, schedule regular check-ins to review progress and provide feedback.
Integrating Tools and Software Solutions
If you hire a VA, they will need tools and software solutions to do their job. The sourcing list method also requires using specific tools to check the leads. So, whether you choose sourcing list or VA, you must integrate tools and software solutions to streamline your sourcing process and improve efficiency. For example, Keepa and CamelCamelCamel are two of the most popular tools among OA sellers.
Expanding Product Selection and Market Reach
Broaden your product categories to reach new customers and avoid relying on one category. Consider adding complementary products to your current offerings or exploring new categories. Use data analytics tools to analyze price history and the number of reviews for each product to see what’s in demand and can be sold quickly.
Adapting to Changing Market Conditions and Trends
Keep up-to-date on the newest Amazon guidelines and news to stay ahead of the competition. Monitor sales data regularly, and use data analytics tools to identify patterns to help you make more informed decisions. Be open to trying new strategies, such as adjusting your pricing, exploring new categories, etc.
Ultimately, choosing between sourcing list or VA depends on your business needs and preferences. Virtual assistants are more flexible and can provide personalized support and expertise in product sourcing, but they usually come with a higher cost and require ongoing management and communication. On the other hand, sourcing lists are an affordable and convenient option – especially for online arbitrage beginners – but they may lack a VA’s personal touch and customization.
When deciding between these two methods, consider your budget, time constraints, and business goals to choose the best option.