Amazon

Retail Arbitrage UK – Buying Low and Selling High

Retail Arbitrage UK

The process of buying low and selling high dates back into ancient history.  It’s as old as human civilisation itself.  Merchandising and trade are one of life’s constants and the only things that change are the products and the tools.  However, retail arbitrage is something relatively new and its existence is due to the technology and innovation that can be found in the online world.

In the world of retail arbitrage UK sellers have a smaller market that their US counterparts, but they should not think that they are the poorer cousins for it.  Amazon’s reach is long and stock sent to UK fulfillment centres can be sold in Germany, Spain, Portugal, and elsewhere in Europe.

The UK is a smaller but different market.  Developing expertise in this arena will equip Amazon sellers with the experience that will help hugely if and when they decide to branch out into the USA.

What is Retail Arbitrage?

Simply put, retail arbitrage is the process of buying products from retailers and selling them yourself as a retailer at a higher price (e.g. on Amazon).

This is made possible by the fact that some retailers have excess stock they want to clear to make way for other products.  It could also be due to the fact that the product sells so well on Amazon that the price has not been reduced due to the demand.

There may be other reasons, but the point is you can buy things from online shops, ship them to Amazon, and sell them at a profit, even after you’ve deducted the Amazon fees and shipping costs.

This provides an opportunity for Amazon sellers and merchants, but the tricky bit is finding the products.  Not only that, you need to find them and buy them when they are in stock and before the price difference closes.

Profit Sourcery for Retail Arbitrage

Profit Sourcery is a tool that does all the hard work for you.  It is a browser based product research tool available on a three tiered subscription.

(I’ve written two other posts about it: Profit Sourcery Tips and Amazon Shipment Warnings.)

The tool collects all the data (freely provided by Amazon) relating to products, prices, seller rank, size, weight and much more  It then analyses all this and presents the results on your own dashboard.

Each subscriber sees a unique set of products on his or her dashboard each day so you’re not competing with other Profit Sourcery subscribers.

Subscriptions are paid monthly.  You can cancel or upgrade in your dashboard. There are no long term contracts and you can cancel at any time.

Using the online training provided by the Profit Sourcery team, and by reference to their extensive supporting documentation, you can quickly learn how to interpret the data and make good buying decisions.

If you get stuck, have any questions, or just want to give some feedback, you can send messages to the team through your dashboard.  I can tell you from personal experience that they are usually quick to respond.

Once you get the hang of it you’ll see how your profits can be reinvested to buy ever increasing amounts of stock.  The online business grows according to the pace and scale you choose.

However, my guess is that the people at Profit Sourcery will eventually limit the number of subscribers.  There is mention of this in the video interview below with Ed Brooks (Profit Sourcery founder), so if you haven’t tried it yet I suggest you do so soon.

Sign up now for a free 7 day trial.

Amazon

Amazon FBA Shipment Warnings

ProfitSourcery TipsI’ve had some good wins with Profit Sourcery this week.  The product stream has been mostly toys for a range of ages.  It’s really satisfying to see that toys I packaged and sent to Amazon one evening earlier in the week have already been sold to customers in Spain, France, and Germany.  However, I encountered two Amazon FBA shipment warnings this week and here I explain what they were and what I did to resolve them..

This past week plastic figures of characters from films like Star Wars and Teenage Mutant Ninja Turtles were a good buy, and so were certain dolls that are part of a range, which makes them collectible – children love to have the full set!

One thing that I saw for the first time was this message:

Inventory alert.  We’ve identified this product to be slow-moving, overstocked or both, and it likely will incur Long-Term Storage Fees. We recommend that you remove it from the shipment.”

This appeared while adding products and preparing a shipment in the Amazon Seller dashboard.  Obviously I double checked the analysis on Profit Sourcery, and I went ahead with the shipment anyway because all the indications were good.

I suspect that the Amazon mega computer flags this as a warning in case you’re about to ship hundreds of a single product, but if like me you’re only shipping in small quantities, five to twenty-five for example, then there’s no need to worry.  It may be something that sells slowly, but it will sell out eventually.

What it does remind us though is the importance of the size of the products.  The volume i.e. the amount of space that your product takes up in the Amazon warehouses has a proportional effect on your long term storage fees, so if you do ship a slow selling product then it’s probably best not to send anything large and bulky, particularly if the profit margin is less than ideal.

Another warning I encountered for the first time was in the form of an automated email that came started with this statement:

We are writing to inform you that we have temporarily blocked your ability to create and send in shipments to Amazon.co.uk fulfilment centres due to a problem that we found with your inbound shipment (FBAXXYYZZ). 

No need to panic though.  It was quickly resolved by going to my Seller dashboard and clicking a few acknowledgements.  The shipment was then accepted and the block was instantly removed.  I suspect that I made an error with the labels and/or the packing lists as it was a two parcel shipment.

That’s probably the main lesson of the week – take the time to examine each product’s analysis carefully and concentrate when preparing the shipment.

Give Profit Sourcery a go yourself and let me know how you get on in the comments below.