Use the Weekly Deals
There are a number of ways to source product for your store. Speaking in broad terms, you have arbitrage, wholesale, and manufactured (or private label) products. Each one of these types of products has a different time frame involved in adding them into your store.
Getting started with Arbitrage can take a lot of time from your day to day activities as it does require an immense amount of research to find the products that are selling low at one location and high at another. Fortunately, Investible’s Weekly Deals can make this task significantly faster and easier, taking the majority of the research work out of the equation for you. If you do not have a subscription to weekly deals, you will need to research retail sites and stores on your own, looking at various sales, discounts, and clearance items to find good deals on products and then compare those prices to online outlets to which you have access to sell products.
One major benefit to arbitrage, in addition to the fact that it is quick and easy to get started in, is that there is low risk. Most arbitrage products will have a limit of how many you can buy at one time, so by its very nature, arbitrage prevents you from putting all of your eggs in one proverbial basket. Because you will be purchasing most of your products from a retail channel, you will also benefit from most retailer’s generous return policies. If you buy a product and it does not work out, you will usually have 30 – 90 days to return it to the retailer for a refund which you can use to purchase a better product.
While an arbitrage-only business model is perfectly sustainable, you will eventually want to add in wholesale and/or private label products into your inventory to round out your business and open up even more lucrative opportunities. However, for the short term, arbitrage is the best way to get started with an online retail store.
1. What to Look For
Look for products with a minimum of $5 net profit, as shipping is the only cost not factored in to the analysis. It’s often helpful to look for products with a sales rank under 200,000 and a minimum of 2 FBA Sellers.
2. Adding a Product
Prior placing your order on retailer’s website that’s offering the product on sale, ensure that you have proper permissions by adding the product onto your Seller Central account.
After logging into your Seller Central account, click on “Add a Product” under the Inventory drop down menu. (Note: You can also upload products by clicking on “Add Products via Upload”. This method is beneficial for various kinds of products, but if this is your first listing, you may be overwhelmed by the spreadsheets involved.)
On the Add a Product page, you may choose from three methods. First, you can add a product which is already on Amazon. You can do this by searching for the product by name or product ID (ASIN OR UPC).
3. Make Your Purchase
You can now make your purchase with the retailer. You can use handy Chrome extensions to check to see if there are any discounts on shipping. When you’re ready to check out, make sure that the delivery address is set to your home address, as this is where you’ll initially be receiving your products. Once you’re comfortable with this process, feel free to use a Prep or Forwarding Company to receive the products and will prep it and ship the products into an FBA warehouse.
In the case of online arbitrage, there are several factors that will determine that. While there is quite a lot that goes into product research, which we will cover in further lessons, we want to cover some of the basic criteria here first. Some of these criteria may require specialized tools, but we will also be covering those tools in detail, so not to worry.
This one is arguably the most important factor in determining if you want to purchase a product for your online store or not. With arbitrage, everything hinges on getting the product for less than the amount for which you can sell it in a different market. You will want to make sure that the price you plan to sell the product for is viable in the market you wish to sell. For your own store that can be a matter of comparing the price to similar items in your store or comparing the price to the average online price over several markets. For a site like Amazon it is considerably easier; you will just need to look at the current “buy box” price (e.g. the “add to cart” button price).
This is the second most important factor when deciding if a product is good or bad. You want to know how well this product is selling. There are many online tools to help you determine the sales volume of a product as well as consumer study and review sites to give you an idea of the overall demand of the product. Amazon is probably the easiest marketplace to track this information with tools like Jungle Scout which will estimate the monthly sales for you. The bottom line, however, is if the product is not selling, it will not make you money.
This is also an important factor as, even if you are making money, you want to make sure your risk to reward ratio is reasonable. If you have to invest (and thereby risk) $100 for a $5 profit, that product is not going to be very practical for your business. While you need a good balance of profitability, sales volume, and ROI, you can generally rule out most products which have an ROI of less than 20%. To determine the percentage of ROI, you will need to follow this formula: ROI = Net Profit / Total Investment * 100.
Other, Amazon specific questions to ask before buying a product:
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| Amco Avalon Bay Belkin Bentology Big Mouth Mugs Black & Decker Bogzon Breville Calphalon Char-Broil Cuisinart Cupture Dewalt ($1000 fee) Dyson Farberware Fred & Friends Hamilton Beach Harley-Davidson Honeywell Joseph Joseph Keku Keurig ($1,000 Fee) Kilner KitchenAid Lasko Le Creuset LED Lenser Lodge | New Metro Design Norpro Oxo Good Grips ($1000 Fee) Palais Glassware Plow & Hearth Proctor Silex Progressive Pyrex Qooltek Richards Homewares Roommates Rtic S’ip by Swell Simplehuman Spark Innovators Stanley TCP Tide Weber Wilton Work Sharp Wusthof Yankee Candle Yumco |
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| Adidas ($1500 fee) Anne Klein Birkenstock Brooks Champion Clarks Converse ($1500 Fee) Disney Dockers Dr. Scholl’s | Nike ($1500 Fee) Northside Puma Reebok Skechers Teva Toms Shoes ($1500 Fee) Uggs Vans |
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| 1 Body Ahava Aidance Skincare Algenist Amope ANSR Babyliss Baire Bottles Balm Cosmetics Bare Essentials cosmetics Baxter Benefiber Billy Jealousy Bioderma Blinc Bliss Borghese Burberry Burt’s Bees Butter London Calvin Klein Cane + Austin Cargo Catrice Chanel CHI Clarins Clarisonic Claritin Comfort Zone COOLA Crabtree & Evelyn Crest ($500 fee) Cult Cosmetics DDF Dermalogica Dolce & Gabbana Dr Tobias Elizabeth Arden Eminence Enfamil Epicuren Discovery Erno Laszlo Escada Essie Eyeko Fitbit Georgio Armani Gianna Rose Gillette Glad GNC GrandeLashMD Greens First Boost Gucci Hot Tools HydroPeptide Jack Black Jane Iredale Japonesque Jouer Juice Beauty Juicy Couture Julep Kiehl’s Korres L’ Occitane | Lancome Lorac LVX MAC cosmetics Melaleuca Mario Badescu Marvis Maybelline MDSolarSciences Menaji Cosmetics Michelle Phan Molton Brown Mustela Nature’s Bounty Nature’s Sunshine Neutrogena Nia 24 Nivea Norelco Now Foods NuBrilliance Skin Care NuFace Nuxe Olay Optimum Nutrition Oral B Oribe Orlane Ortho Molecular Oscar Blandi Pampers Paraso Patchology Perfume samples Perfume testers Perricone Peter Thomas Roth Phyto PMD – Personal Microdermabrasion Device Prevagen Proactive Pureology Reserveage Nutrition Rodial Sachajuan Sara Happ Sheer Strength Labs Skinceuticals Skyn Iceland Somme Institute St. Tropez Standard Process Starwest Botanicals Stila StriVectin T3 Tarte The Art of Shaving The Body Shop Urban Decay Vimerson Health Vincent Longo Wen by Chaz Dean Zirh |
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Before you add a new listing, you will want to make sure you’re approved in that category first. Amazon has several categories, brands, and items that are restricted from public sale for various reasons. There are ways to have these restrictions lifted, but you will want to first check if they are present for your account.
One of the easiest ways to check for restrictions is by using a tool called Zally. This tool is an extension for the Chrome browser which will auto-load into an Amazon window. As long as you’re logged into your seller central account while using this tool, it will tell you in the top right corner of the tool’s window whether or not a product is restricted to you or not. You can learn more about this tool in our Zally lesson.
If you do not have Zally, you can see if a product is restricted by copying it’s “ASIN” number or UPC code and searching for it in the Seller Central’s “Add a Product” page. This page can be found by going to the Inventory menu and clicking “Add a Product.” Once you run the search, it will tell you what restrictions, if any, apply.
If you do run into a category or brand restriction, you can click the button that shows up next to the item to learn what the requirements are for lifting the restriction. For a brand restriction it is typically an invoice from a recognized supplier with at least ten of that item on the invoice. Category restrictions often have different requirements but they typically involve providing some kind of documentation regarding your business.
4. Creating a Shipment
Since this is your first shipment you select Create a new Shipping Plan. If you are adding items to an existing plan then you would select the other button. Hit the button and you will see this next:
Notice that I have filled in the quantities. I would not normally send in a shipment this small, but wanted to keep it simple for this example. (If you look at the ship from address I have blurred out my home address. You will also see my real name is Harry McGrath [Skip is my nickname and pen name])
You can’t see the button in this screenshot but if you scroll down the page there is a button that says Continue. Hit that and go here next:
Notice the drop down button that says Merchant under who preps. There are two selections: Amazon and Merchant. Amazon will prep items for you, but they charge fees for this.
We have not gotten to label our products yet (we do that in the next step), but before you do that you want to prep them. If your product is in a standard retail box and is not fragile, you can just put your labels right on the box covering up the existing UPC code on the box. If your item is fragile or not in a retail box, what we like to do is bubble wrap the item, poly-bag it and seal them with a heat sealer. You can also use a fitted box, but that can get expensive. Here is a photo of an item we send in fairly often.
Now you are almost ready to ship. Put all your items into a box and use newsprint or bubble pack as filler and cushioning. (Note: Amazon does not allow Styrofoam peanuts or shredded paper as filler. If you have a lot of Styrofoam peanuts and want to get rid of them, you can place them in polybags and use for filler, but Amazon just does not want loose peanuts, as they tend to screw up their automated handling equipment.
Next weigh and measure your box and fill in the information in the weight and size fields. Then hit the button that says “Calculate.” After you do that a shipping estimate will appear and you need to check the box that says “I accept shipping charges (Amazon gives you 24 hours to change your mind and void the shipment).
Once you accept the shipping charges the button that says “Print Shipping Labels” will appear. Click that button and it will download a shipping label to your desktop. Print that label out on your computer using Avery number 8465 full sheet labels.
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