Lately I’ve been talking with several people who have read my book and are on step 2- Arbitrage (finding items that can be bought low and sold high on Amazon and/or Ebay.) It’s interesting. It seems out of the people I’ve talked to, I hear 2 distinct, but opposite responses to their arbitrage journey. On one side are the people who are doing amazing. Everywhere they look, new merchandise is popping up. Everything they find seems wildly profitable and sells out quickly! For these people, there is simply not enough time in the day to buy up all of the profitable inventory they are finding! On the other side, I’m hearing from sellers who are discouraged. They are either not seeing the sales volume they were hoping for (including having items that are simply sitting in the warehouse) or they are having a hard time finding enough items that are truly profitable (or both!) The funny thing is, I’ve been in both spots! Today, I’d like to take this opportunity to use what I’ve learned and what others (who are having success) have shared with me to help encourage those who are feeling discouraged!
Below are 10 tips that will definitely help you find the profitable items you’re looking for and jump-start (or boost) your sales!
1. Repeat after me: PEOPLE WILL BUY ANYTHING
By now you may be wondering why in the world I have a picture of a monkey on a bike at the top of this post. Well, because the monkey on the bike is royalty free and it represents a ridiculous item that may buy. I wasn’t sure if I could legally post THIS picture (due to copyright law) but that is a real life example of a hot selling product! What is that you ask? It’s apparently a wildly popular travel pillow! A reader sent me this and told me that he found it for $15.00! (yes, that is a profit of over $50.00 after fees at the current selling price- the price was even higher when he found it- that’s over a 300% profit!). I will be coming back to this example several simply because I find the item fascinating. My friend almost passed this one up before checking it out on Amazon and finding that people were actually BUYING IT! Remember, you are not your buyer. Just because something seems off the wall or absurd to you, does not mean you should disregard it. I repeat this to myself every time I go out “people will buy anything.” Remembering this will help you find a lot more great (profitable) items!
2. Sales rank is very important
Occasionally, I’ve explained how I’ve bought DVDs or other media with high sales ranks. I will generally do this if there is a lot of profit to be made and my plan is generally to lower the price and hope that the sales start coming in. I will also do this if there are no other FBA sellers on the listing. However, this is the exception, NOT the rule. I must admit that in most of these cases, I lose. So why even bother going after high sales rank items? I want to test everything and occasionally I’ll win big time making the whole things worth it. Honestly though, twice a year, I end up getting a lot of returns that didn’t sell- and it’s usually primarily media that I took a risk on (when Amazon’s long term storage fees hit, I opt to get my items sent back to me that have been sitting for close to a year) The bottom line is, if you want to take risks like I do, just make sure it’s money you’re willing to lose. You may be pleasantly surprised on some of the items, but please don’t run an entire business on this model. Low sales ranks, high profits are always best. If you’re not finding items that meet this criteria, don’t buy them just so you can “walk away with something.” It’s not worth it- particularly when you’re just starting out. Aim for the top 1% – 5% in your category in the beginning, but if you can find them in the top 15%, you’ll still do ok (but these will not sell as fast.) If you’re not familiar with sales ranks, please check out this post to better understand how I calculate it. You’ll see the “ostrich pillow” from tip number 1 has a very good sales rank! That’s definitely (and strangely) a winner!
3. When you’re tired of searching, go for 10 more minutes!
I can’t tell you how much profit I gained from this little rule. There were times where I’d go out shopping and would scan through 50 or 100 items (or more!) and come up with nothing (this was not typical, but did happen occasionally). If you’ve been in this situation, then you know how incredibly discouraging and draining this is- feeling like you’re just wasting your day! When I got to this place, I would force myself to keep scanning for 10 more minutes. Inevitably, I would get a “hit” which would be enough to motivate me to keep going! There were times that the first “hit” was just the beginning of a gold mine! In these cases, I literally went from an empty cart, ready to give up to an overflowing cart! When you’re ready to give up, just don’t. You’ll be glad you stuck with it a little longer!
4. Get to know a store’s clearance schedule
Stuck in a single section/niche website/category? Time to diversify! When I started, I started with the toys when they were on clearance (July is the best time for this by the way- and also right after Christmas). This was great… until the clearance all sold out- and then it became tough- and I felt like I couldn’t find anything good! All stores have a clearance schedule and most of them are similar. Clearance schedules are based on seasonal activity (for instance, winter goods will go on sale toward the end of the season etc). I learned a ton about clearance schedules from Steve Lindorst’s book: “Retail Flipping.” A large part of this book is devoted to clearance schedules. In fact, when I bought it, it was titled “The Best Time to Buy.” I assume Steve realized that the title did not draw people in as much as he had hoped, so he changed the title to encompass the broad material covered in teh book. Nonetheless, the book is really great and helped me tremendously! He goes through each month and tells you what type of products to look for in the given month and what departments to target. He also offers great advice for specific stores like Walmart, Target etc. Once you get to know the schedules, you’ll know what sections to look in for great deals
5. Don’t focus ONLY on clearance
Did you know that you can buy products at regular retail price and sell them on Amazon and/or Ebay for 2, 3, 4 or 5 times the price?! Yeah, I didn’t either. I learned this by going to Family Dollar which as I understood it, is basically a “clearance store.” – they get what didn’t sell at mainstream clearance sales and sell it at a deeper discount (at least that was what I thought). I found some great stuff there by just scanning random items (since there are really no “clearance deals” I just scanned freely!) A couple weeks later, I saw one of the very profitable, very popular items I bought at family dollar at Target- for the same price! This item was not on clearance and was not on sale. This got me thinking. I started scanning items I knew were popular along with some items I had never heard of- and even some that seemed downright ridiculous (see #1). I was shocked! Many of these items were extremely profitable and very popular on Amazon and Ebay! Like Chris Green says in his book “arbitrage“, it’s all about finding inconsistencies and inefficiencies in the market. I’ve since developed extensive techniques to take advantage of these inconsistencies- how to spot them and what to look for, but that’s too big of a topic for this post. (Maybe a mini-course in the future?) For now, just start scanning!
6. Look in “odd” places.
There is a reader who seems to find several new profitable items to sell every day! Occasionally he will email me with some of his finds! He recently found a collectible toy with an amazing sales rank and a very nice profit. I asked where he found it. he replied by telling me he found it in an obscure local book store! Who knew? If I were looking for things in a book store to sell on Amazon, I might expect to find… well… books… but not much else! The truth is, merchandise can be found anywhere! The key is sometimes going to the least likely places. Check out that aisle at the grocery store that sells odds and ends. Try the mom and pop knick-knack shop around the corner or a specialty store- they probably sell more than just the merchandise they “specialize” in. Try just driving around your community and simply looking for stores that sell stuff (any stuff!) You might be pleasantly surprised!
7. Spend time offline AND online
It’s no secret that buying locally and selling online is a great way to make some quick cash, but did you know the same can be done online, from the comfort of your own home? Some sellers will tell you that good online arbitrage is difficult or impossible because “all sellers” have access to those deals (rather than local deals that only a handful of sellers have access to.) Consider this, there are over 600 Million active websites today. Of these, several hundreds of thousands of them are ecommerce sites. Each of these sites will have anywhere from 20 to 100,000+ products. You’ve got a LOT to choose from. No seller could ever establish a monopoly here. There are simply too many products and possibilities. Don’t disregard selling online. See the next tip for a great strategy I use online!
8. Let Amazon “find” products for you!
There are 2 parts to arbitrage. Part 1 is finding popular products to sell (this requires looking a product up on Amazon or Ebay to see if it’s in demand). Part 2 is finding a place to buy the product at a cost that will be profitable. What is part 1 was done for you? Here is a simple strategy for you that has made me a lot of money (I am actually hesitant to give it away… ah what the heck…) Amazon regularly sends out emails from “Amazon Selling Coach.” Pay attention to these. They often include lists of products that are frequently out of stock, highly searched on Amazon, or from brands you already sell (particularly great if you’re working directly with suppliers!) There are several different types of these emails and they are generally tailored to your account specifically meaning the list you receive is not the list that every other seller receives. This equals opportunity! Say Amazon gives you a list of 20 “frequently out of stock products.” Simply take the product name and do a google search for it. I like to add words and do a few searches like this:
“product name” closeout
“product name” clearance
“product name” in stock
“product name” sale
Now here is the key: go deep into Google’s search results- page 5, 6, 7, 8, 22, 23, etc (at some point, the results will become much less relevant, but it never hurts to try a couple of very deep pages.) These are the pages that are not getting traffic for that keyword. It is not uncommon to find stores looking to unload old merchandise, or selling at rock-bottom prices to attract customers. I’ve done this numerous times and have found some great bargains! If you don’t find the product you’re looking for, guess what? You just found some new online stores you’ve likely never been to before! Search around- see what they offer. They will likely have other products that can be profitable on Ebay or Amazon! I’ve found many of my “regular arbitrage sites” this way!
9. Scout out the competition
This tip has served me well! Look at the items you’re currently selling. Go to the main page for the item on Amazon. Look at all of the sellers selling the same item. Click on their store name to be brought to their storefront. You’ve just gotten access to dozens, hundreds or even thousands of other products that you could potentially sell! Surprisingly, some of these people stick to buying from the same stores when doing arbitrage. It can be quite easy to copy what they are doing and sell their successful products (as always, check the sales ranks and other relevant data first.) This can also be done on Ebay. Do a search for your product, and click on each seller that is selling that product. You’ll be able to access all of the products that seller sells. If you can’t narrow down a set of places they are buying, remember from tip number 8, Google is your friend
10. Try out the same stores in different parts of town
I’m fortunate enough to live in an area where there are several stores for each chain within a relatively small area. I can easily drive to 3 different Walmarts, 4 Targets, 2 different Best Buys, 2 Big Lots, 4 Family Dollars, several Dollar Generals, countless grocery stores, and even a Krispy Kreme (not for merchandise- just for a break!) I’ve found that some stores are better than others. Even within stores, mark downs and clearance sales and vary. Don’t make the mistake of scanning a few items and saying “Walmart doesn’t have anything.” First see tip number 3. When you’ve exhausted this option, check to see if there is another Walmart anywhere nearby. You might just hit gold!
This is just a partial list, but I hope it is helpful to those of you who are struggling through this step. Inventory is everywhere- it’s just knowing where to look. Don’t get discouraged and don’t give up. The more you experiment, the better you’ll get and the easier it will become!
I’ve already mentioned it once, but Chris Green’s “Arbitrage” is basically the authority on this subject. He’s been doing this for a long time and has many many tips that helped me tremendously when I started! It also comes free as part of the “Proven Amazon Course” which is basically the “Selling on Amazon Bible.” This course will give you more information than you’ll know what to do with as it is essentially a collection of courses ranging from arbitrage, to wholesale to private labeling! Of course, there is no need to purchase either of these courses. They are helpful, but as always, the best thing you can do is to take action! Get started now and build your business!