How to Optimize Your Amazon FBA Sourcing For Retail Arbitrage?
Written by Bashar Katou on March 6, 2018
Two of the most common questions that most people who want to succeed as sellers on Amazon ask are: where to find good products to sell and what kind of products move fast. Here are five solid insights from our experience which will answer these questions and help you optimize your Amazon FBA sourcing.

     1. Look Out for Deep Discounts and Clearance

This is a primary sourcing technique that we advise sellers to embrace in the beginning. It is the most fundamental and logical way to start your new business as an Amazon seller: locate products that are heavily discounted and sell them on the Amazon platform to become profitable from day one.

Start from the clearance section of physical stores (if your business model is retail arbitrage). Scan your targeted products using an app that can scan barcodes via your smartphone’s camera and provide data on the selling price of the product, sales rank, sales history, and other relevant aspects.

Explore diverse products in the clearance sections at several stores. Gradually, you will get a hang of what works for you and what does not.

Go by your personal knowledge and instinct while making initial choices of products. You may be inclined to go straight for sporting items or electronic goods, or you may be attracted to toys. After a few hit-and-trials, you will get a more intimate understanding of sellable items and brands, and will be able to identify compelling deals even without scanning the product.

Sourcing the right product involves a close review of price-related data because your customers on Amazon are going to be price-sensitive. Focusing on the deeply discounted and clearance products at the beginning will ensure that you do not go drastically wrong even when you are at the initial experimenting and learning stage.

How to identify the right categories

Your objective should be to discover your niche and start building your expertise in that product line. You will notice over time that stores typically mark-down products in a set pattern and with some observation (and keeping notes) you will soon be able to gauge when a certain product is likely to come up for clearance.

Your goal should be to acquire the ability to anticipate and make your purchase moves with some foresight. While it may take some time to happen, but once you gain expertise in certain products, you will start hitting the bull’s eye in that product category.

Just make sure that you scan all products in the particular product category or area that you want to focus on. During your market research, it will soon become apparent to you that certain stores stock specific variants, flavors, colors, or models that most other stores do not.

You might like to specialize in exclusive items that are not readily found in the marketplace. That is another safe strategy for beginners.

Many times you may see that certain products are in demand even when they are being offered at the full price. However, once you have acquired some expertise, you will know to stock up on these items the moment you see them on discount.

   2. Find Discontinued or Surplus Products

A key aspect of products categorized in sections such as Health & Beauty is that products that have been discontinued can be highly lucrative. The same holds true even for grocery items. Flavors that are seasonal or have been discontinued can be hugely profitable as they become hard to find.

Products that have been unavailable for a while in stores can sometimes be sold at higher prices.

While we do recommend a quick turnaround, sometimes it is best to stock up on a product to sell it at a premium. This approach to sourcing is more complex and advanced, but it offers dramatic possibilities to make money. You could end up purchasing a discontinued product at a killer discount of 70 percent and sell it for over two or three times its actual retail price. That is a fantastic profit margin!

You should locate stores where you can purchase these items in adequate numbers as most retail outlets would have limited quantities left over when they put these products on clearance. Liquidation or surplus outlets come in handy in this situation.

How does liquidation sale work?

Chain stores keep clearance products on the shelves for a limited duration. Then, these items are transported to a centralized location, and subsequently sold off to liquidation stores. After that, small family-owned discount outlets purchase these items by the pallet, which means that they only pay a few pennies on the dollar.

They typically mark-down these products by 50 to 70 percent lower than the original selling price. This is the price that these products are sold for at regional chain stores.

The best part is that virtually everything at such stores is available at substantial discounts. The entire store is akin to a gigantic clearance aisle.

But there is one caveat – this process can be significantly time-consuming. By the time these products actually reach the local discount stores, most of the items have already become scarce! The price and demand for these products increases as customers realize that the toothpaste that they like so much isn’t on the shelves anymore.

These customers then try to locate their favorite item online and are willing to pay a higher price for it. The same toothpaste that they once paid $3 or $4 for can now go for more than $20 apiece!

Once you have grasped this concept, you can start sourcing highly discounted products from liquidation outlets. Usually, if you buy merchandise worth between $1,500 and $2,000, you can expect to turn a profit in the range of $8,000 with this strategy. The timeframe for this stock turnover is approximately 12 months or less.

   3. Explore Online Sourcing

We initially began selling on Amazon with retail arbitrage, but soon added digital sourcing or online arbitrage to our portfolio. You will love online sourcing, particularly if want flexible hours, want to work from home, and want to fairly divide time between your work and your family.

However, online sourcing is not just meant for people with kids and family. It is equally appealing for folks who are employed full-time and cannot visit brick and mortar stores to conduct a side-business as an Amazon seller. And in case you have difficulties walking around too much in physical stores, or you are located in an interior or remote region with fewer buying options, online sourcing can be a terrific idea for you. It is an astute, less time consuming way to add variety to your product portfolio.

Two useful online arbitrage tips

Here are two ways to go about online arbitrage on Amazon:

Go wide

“Go wide” means purchasing small quantities of 5 or lesser for any particular product. This allows you to buy a wider variety of items and quickly replace products as they sell. If one product does not do well or is unavailable, then don’t wait to drop it from your portfolio. This approach is more ideal for beginners.

Buy in bulk

Buying in bulk is a more powerful strategy, but it is not meant for everyone.

If you have come across a heavily discounted product that is on clearance online, then get ready to purchase all possible inventories within your budget. This can mean purchasing hundreds of units of a single item. Then you hold this stock (just as in the case of liquidation store strategy mentioned earlier.)

While on some of the products the prices will possibly fluctuate momentarily (as you hold the stocks), they will eventually increase. The moment the price has reached your targeted level where you are making a decent profit, start selling your stocks.

While online sourcing can be tedious at times, various techniques, apps and virtual assistants can make it more efficient.

You will gradually love the diverse inventories and the chance to locate some new products and exciting new stores every day, and that will keep you going.

   4. Hire Virtual Assistants or Outsource Work

We definitely endorse outsourcing work when it makes financial sense.

Financially viable outsourcing includes employing virtual assistants who can identify useful items for you.

This allows you to explore many more options when you want to purchase online. You can view product lists every day and wait for the opportune moment when you are gearing up to place a major order.

A virtual assistant encourages you to buy from a store you wouldn’t have otherwise. Virtual assistant can provide you with a much longer list than what you could make yourself because they are engaged in this research activity full-time for 8 hours daily.

Furthermore, they are not biased towards different types of items or stores. They are merely locating products that are profitable!

Hiring a virtual assistant can help you multiply your profits manifold. They can provide you with a wide list of products and stores, while you can focus on growing your enterprise in alternate and more productive ways.

   6. Grocery can Boost Your Business

While you do need to be an approved seller for the Grocery category, but after you get approved, you can grow your business significantly.

We are so excited to sell in the grocery category because it can be profitable, while keeping your risks and investments low. The reason is that this category comprises of replenishables – products that customers purchase repeatedly.

Moreover, just try to imagine how much candy you can sell on Valentine’s Day, Halloween, and Easter. You could even create snack baskets for college survival kits in the Back to School season.

Seasonal flavors can also be very profitable. For instance, pumpkin spice flavored coffee or Limited Edition candy, and more such products can be highly lucrative.

A lucrative thing about Limited Edition products is that they are put up for sale at massively discounted prices around the holidays to quickly relieve the space on the shelves for fresher products.

Many times these products also sell all through the year. So you can purchase those different jellybeans at 85 percent discount and keep selling them for a long time at a sweet profit margin.

We suggest that you review your local advertisements every week and strategize. You can also review the products that you already have and understand if you purchase items that can be profitable.

But do not restrict your search to conventional grocery stores. Sometimes stores such as Target or Walmart also have great items on discount. You can purchase from any store that stocks grocery items.

   Key Takeaways

We suggest that you should let any strategy that you choose unfold gradually, or drop it if it is not meant for you.

While some strategies prove effective for some people, they may not work for others due to various reasons.

It could be that your location does not have specific kinds of stores or you are just not comfortable purchasing online without getting a feel of the product. You may like a particular category such as kitchen gadgets while others like health and personal products may feel alien to you.

If a strategy fails due to any reason, don’t blame yourself for it.

Your enterprise is dynamic and will keep changing over a period. You might be enamored by a niche presently, but may locate something even better down the line.

In the final analysis, you will win as an Amazon seller if you remain flexible and work consistently towards your goals. Stay determined to hit your targets but keep an eye out for new approaches to continually take your business to a higher plateau.

Bashar J Katou

Bashar is a 7-figure Amazon FBA seller who also has a passion to helping other start successful Amazon businesses. Bashar has spent the past year educating thousands around the world of this missed opportunity and has in the process create many 5, 6 & 7 figure Amazon sellers from scratch! If you want to learn more about how Bashar can help you, reach out and schedule a call with his team today!
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How to Optimize Your Amazon FBA Sourcing For Retail Arbitrage?
Written by Bashar Katou on March 6, 2018
Two of the most common questions that most people who want to succeed as sellers on Amazon ask are: where to find good products to sell and what kind of products move fast. Here are five solid insights from our experience which will answer these questions and help you optimize your Amazon FBA sourcing.

     1. Look Out for Deep Discounts and Clearance

This is a primary sourcing technique that we advise sellers to embrace in the beginning. It is the most fundamental and logical way to start your new business as an Amazon seller: locate products that are heavily discounted and sell them on the Amazon platform to become profitable from day one.

Start from the clearance section of physical stores (if your business model is retail arbitrage). Scan your targeted products using an app that can scan barcodes via your smartphone’s camera and provide data on the selling price of the product, sales rank, sales history, and other relevant aspects.

Explore diverse products in the clearance sections at several stores. Gradually, you will get a hang of what works for you and what does not.

Go by your personal knowledge and instinct while making initial choices of products. You may be inclined to go straight for sporting items or electronic goods, or you may be attracted to toys. After a few hit-and-trials, you will get a more intimate understanding of sellable items and brands, and will be able to identify compelling deals even without scanning the product.

Sourcing the right product involves a close review of price-related data because your customers on Amazon are going to be price-sensitive. Focusing on the deeply discounted and clearance products at the beginning will ensure that you do not go drastically wrong even when you are at the initial experimenting and learning stage.

How to identify the right categories

Your objective should be to discover your niche and start building your expertise in that product line. You will notice over time that stores typically mark-down products in a set pattern and with some observation (and keeping notes) you will soon be able to gauge when a certain product is likely to come up for clearance.

Your goal should be to acquire the ability to anticipate and make your purchase moves with some foresight. While it may take some time to happen, but once you gain expertise in certain products, you will start hitting the bull’s eye in that product category.

Just make sure that you scan all products in the particular product category or area that you want to focus on. During your market research, it will soon become apparent to you that certain stores stock specific variants, flavors, colors, or models that most other stores do not.

You might like to specialize in exclusive items that are not readily found in the marketplace. That is another safe strategy for beginners.

Many times you may see that certain products are in demand even when they are being offered at the full price. However, once you have acquired some expertise, you will know to stock up on these items the moment you see them on discount.

   2. Find Discontinued or Surplus Products

A key aspect of products categorized in sections such as Health & Beauty is that products that have been discontinued can be highly lucrative. The same holds true even for grocery items. Flavors that are seasonal or have been discontinued can be hugely profitable as they become hard to find.

Products that have been unavailable for a while in stores can sometimes be sold at higher prices.

While we do recommend a quick turnaround, sometimes it is best to stock up on a product to sell it at a premium. This approach to sourcing is more complex and advanced, but it offers dramatic possibilities to make money. You could end up purchasing a discontinued product at a killer discount of 70 percent and sell it for over two or three times its actual retail price. That is a fantastic profit margin!

You should locate stores where you can purchase these items in adequate numbers as most retail outlets would have limited quantities left over when they put these products on clearance. Liquidation or surplus outlets come in handy in this situation.

How does liquidation sale work?

Chain stores keep clearance products on the shelves for a limited duration. Then, these items are transported to a centralized location, and subsequently sold off to liquidation stores. After that, small family-owned discount outlets purchase these items by the pallet, which means that they only pay a few pennies on the dollar.

They typically mark-down these products by 50 to 70 percent lower than the original selling price. This is the price that these products are sold for at regional chain stores.

The best part is that virtually everything at such stores is available at substantial discounts. The entire store is akin to a gigantic clearance aisle.

But there is one caveat – this process can be significantly time-consuming. By the time these products actually reach the local discount stores, most of the items have already become scarce! The price and demand for these products increases as customers realize that the toothpaste that they like so much isn’t on the shelves anymore.

These customers then try to locate their favorite item online and are willing to pay a higher price for it. The same toothpaste that they once paid $3 or $4 for can now go for more than $20 apiece!

Once you have grasped this concept, you can start sourcing highly discounted products from liquidation outlets. Usually, if you buy merchandise worth between $1,500 and $2,000, you can expect to turn a profit in the range of $8,000 with this strategy. The timeframe for this stock turnover is approximately 12 months or less.

   3. Explore Online Sourcing

We initially began selling on Amazon with retail arbitrage, but soon added digital sourcing or online arbitrage to our portfolio. You will love online sourcing, particularly if want flexible hours, want to work from home, and want to fairly divide time between your work and your family.

However, online sourcing is not just meant for people with kids and family. It is equally appealing for folks who are employed full-time and cannot visit brick and mortar stores to conduct a side-business as an Amazon seller. And in case you have difficulties walking around too much in physical stores, or you are located in an interior or remote region with fewer buying options, online sourcing can be a terrific idea for you. It is an astute, less time consuming way to add variety to your product portfolio.

Two useful online arbitrage tips

Here are two ways to go about online arbitrage on Amazon:

Go wide

“Go wide” means purchasing small quantities of 5 or lesser for any particular product. This allows you to buy a wider variety of items and quickly replace products as they sell. If one product does not do well or is unavailable, then don’t wait to drop it from your portfolio. This approach is more ideal for beginners.

Buy in bulk

Buying in bulk is a more powerful strategy, but it is not meant for everyone.

If you have come across a heavily discounted product that is on clearance online, then get ready to purchase all possible inventories within your budget. This can mean purchasing hundreds of units of a single item. Then you hold this stock (just as in the case of liquidation store strategy mentioned earlier.)

While on some of the products the prices will possibly fluctuate momentarily (as you hold the stocks), they will eventually increase. The moment the price has reached your targeted level where you are making a decent profit, start selling your stocks.

While online sourcing can be tedious at times, various techniques, apps and virtual assistants can make it more efficient.

You will gradually love the diverse inventories and the chance to locate some new products and exciting new stores every day, and that will keep you going.

   4. Hire Virtual Assistants or Outsource Work

We definitely endorse outsourcing work when it makes financial sense.

Financially viable outsourcing includes employing virtual assistants who can identify useful items for you.

This allows you to explore many more options when you want to purchase online. You can view product lists every day and wait for the opportune moment when you are gearing up to place a major order.

A virtual assistant encourages you to buy from a store you wouldn’t have otherwise. Virtual assistant can provide you with a much longer list than what you could make yourself because they are engaged in this research activity full-time for 8 hours daily.

Furthermore, they are not biased towards different types of items or stores. They are merely locating products that are profitable!

Hiring a virtual assistant can help you multiply your profits manifold. They can provide you with a wide list of products and stores, while you can focus on growing your enterprise in alternate and more productive ways.

   6. Grocery can Boost Your Business

While you do need to be an approved seller for the Grocery category, but after you get approved, you can grow your business significantly.

We are so excited to sell in the grocery category because it can be profitable, while keeping your risks and investments low. The reason is that this category comprises of replenishables – products that customers purchase repeatedly.

Moreover, just try to imagine how much candy you can sell on Valentine’s Day, Halloween, and Easter. You could even create snack baskets for college survival kits in the Back to School season.

Seasonal flavors can also be very profitable. For instance, pumpkin spice flavored coffee or Limited Edition candy, and more such products can be highly lucrative.

A lucrative thing about Limited Edition products is that they are put up for sale at massively discounted prices around the holidays to quickly relieve the space on the shelves for fresher products.

Many times these products also sell all through the year. So you can purchase those different jellybeans at 85 percent discount and keep selling them for a long time at a sweet profit margin.

We suggest that you review your local advertisements every week and strategize. You can also review the products that you already have and understand if you purchase items that can be profitable.

But do not restrict your search to conventional grocery stores. Sometimes stores such as Target or Walmart also have great items on discount. You can purchase from any store that stocks grocery items.

   Key Takeaways

We suggest that you should let any strategy that you choose unfold gradually, or drop it if it is not meant for you.

While some strategies prove effective for some people, they may not work for others due to various reasons.

It could be that your location does not have specific kinds of stores or you are just not comfortable purchasing online without getting a feel of the product. You may like a particular category such as kitchen gadgets while others like health and personal products may feel alien to you.

If a strategy fails due to any reason, don’t blame yourself for it.

Your enterprise is dynamic and will keep changing over a period. You might be enamored by a niche presently, but may locate something even better down the line.

In the final analysis, you will win as an Amazon seller if you remain flexible and work consistently towards your goals. Stay determined to hit your targets but keep an eye out for new approaches to continually take your business to a higher plateau.

Bashar J Katou

Bashar is a 7-figure Amazon FBA seller who also has a passion to helping other start successful Amazon businesses. Bashar has spent the past year educating thousands around the world of this missed opportunity and has in the process create many 5, 6 & 7 figure Amazon sellers from scratch! If you want to learn more about how Bashar can help you, reach out and schedule a call with his team today!
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