Arbitrage is the practice of taking advantage of a price difference between two or more markets, or in other words, reselling. In this case, retail arbitrage is the process of buying discounted products through retailers (including online retailers) to sell further.
It Is A Simple Concept Of Purchasing A Product From A Retail Outlet At A Discounted Rate And Selling It At A Regular Price For Profit. In Retail Arbitrage There Are No Distributors Or Manufacturers Involved. You Are Buying Directly from A Local Supplier, Retail Stores Or Market. This Can Cut Your Profit Margin But Is Often Easier Than Finding, And Sourcing Products Through A Supplier.
You Walk Into A Walmart Store And Notice That T-Shirts Are On Sale. A $10 T-Shirt Is Being Sold At $3. Seeing This Opportunity, You Buy 100 Of Those T-Shirts And List It On Amazon's Existing Listing. After Paying The Amazon Commission You Are Roughly Making $5.50 On Each Sale. At An Investment Of $300 You Made $550 Selling Those T-Shirts.
*EXAMPLE FOR THIS PROCESS*:
The Best Thing About Retail Arbitrage Is That You Can Start Off With Small Capital. Since You Are Not Buying Large Quantities Of Product Directly From Distributor Or Manufacturer, You Are At Less Risk Of Getting Stuck With Inventory.
Retail Arbitrage Is A Great Way To Make Money Quickly. You’re Not Looking To Build A Brand Or Create A Lasting Relationship With A Supplier. If You’re Starting To Sell On Amazon Or Walmart This Is One Of The Quickest Ways To Make A Profit.
As You Are Sourcing Products From Retailers, You Are Not Bound To The Minimum Order Quantity. You Can Purchase Inventory According To Your Investment Capacity.
When You Are Sourcing Your Inventory From A Local Supplier Or Retail Store, Your Margin Is Bound To Be Lower Than If You Were Sourcing From A Distributor Or Manufacturer.
Amazon And Walmart And Other Marketplace Go To Great Lengths To Protect Their Customers. These Platform Gives Private Labels And Brands A Larger Extent Of Control Over Their Product Listings. If You’re Selling A Brand Restricted Product Without Approval, Your Listing Can Be Flagged. Retail Arbitrage Is, Therefore, Risky.
Make Sure Your Product Isn’t Part Of The Brand Registry Before Listing It. If You’re An Unauthorized Seller, Your Account Could Be Taken Down!