Online Arbitrage: Essential Checks to Ensure Business Growth

Online arbitrage is a popular and profitable method for Amazon FBA (Fulfilment by Amazon) sellers to source products from online retailers and resell them on Amazon for a profit. While online arbitrage offers great potential, it’s essential to conduct thorough checks to ensure the products you source are both profitable and compliant with Amazon’s guidelines. In this blog post, we’ll explore the critical checks you should make when completing online arbitrage for Amazon FBA.

This blog post is focused on the necessary checks online arbitrage sellers should make. However if you would like to learn more about in depth product analysis and understanding what makes a good product we’d suggest checking out this video.

Completing the Necessary Checks to sell the Product on Amazon

Check 1: Product Eligibility on Amazon

Before making any online purchases for resale, verify whether the products are eligible for sale on Amazon. Some products may be IP (intellectual property) risks or be Dangerous Goods which require specific requirements to be met to sell them. If an item is a Dangerous Good it is easy to apply to sell them, however it is good to know before purchase. To check a products eligibility:

  • Check the product on Profitl. Profitl will provide any product warnings which you can look into further. However, it is always important to complete your own thorough checks before investing in any deals.
  • To ensure a product is safe to sell use Amazon’s Seller Central to search for the product’s ASIN (Amazon Standard Identification Number) or UPC (Universal Product Code).

Analysing the Product

Check 2: Sales Rank and Historical Data

Understanding a product’s sales rank and historical sales data is crucial to assessing its demand and potential profitability. Online arbitrage tools like Profitl provide access to this information, allowing you to:

  • Analyse the product’s sales rank to gauge its popularity within its category.
  • Review historical sales data to identify trends, seasonality, and potential sales volume.
Check 3: Pricing and Profit Margin Analysis

Profitl can be invaluable in this analysis by providing key product information that helps you to make an informed decision about a product, this includes:

  • Estimated FBA and referral fees.
  • Product price graphs to visualise price trends and understand the products sale history.
  • A succinct breakdown of Amazon’s fees as well as ROI and profit per unit. Are you interested in selling multiple units of the same item? Use Profitl’s Multiple Quantity feature to see the profit you could generate from sending in multiple units.
Check 4: Competitor Analysis

Assess the competition for the product on Amazon. Profitl’s analysis features can assist in this evaluation. Analyse:

  • The number of sellers selling on the listing.
  • Competitor pricing and the amount of stock they currently have.
  • Customer reviews and ratings.
Check 5: Brand and Seller Restrictions

Pay attention to potential brand and seller restrictions that may limit your ability to list and sell certain products on Amazon. Confirm that you are not restricted from selling the product by:

  • Integrating your Profitl account with Amazon. So that when you scan an item you can see if you are gated or not in the brand or category.
  • Checking Seller Restrictions policies if you are still unsure if you can sell an item.
Check 6: Compliance with Amazon’s Policies

Stay well-informed about Amazon’s policies regarding product listings, pricing, and customer service. Ensuring compliance with Amazon’s guidelines is essential to avoid potential account suspensions or other penalties.

Check 7: Shipping and Packaging

Evaluate the shipping and packaging of the products you source online. Confirm that the items will be delivered in good condition and without damage. Consider any special packaging requirements, especially for fragile or delicate items.

Sourcing a Supplier for the Product

Check 8: Supplier Reliability

When sourcing products from online retailers, assess the reliability and reputation of the supplier. Read reviews and gather information about their shipping and fulfilment practices to ensure a smooth and reliable sourcing experience.

Concluding Thoughts

In conclusion, online arbitrage can be a lucrative venture for Amazon FBA sellers when approached with thorough checks and due diligence. Utilising tools like Profitl for product research, competitor analysis, and profit margin calculations can significantly enhance your success in online arbitrage. By conducting these essential checks and adhering to Amazon’s policies, you can minimise risks and maximize the profitability of your online arbitrage business.

We want to help you to succeed and reach your FBA goals. That’s why we made Profitl. Profitl determines the best FBA deals wherever you are – in-store or online – through two solutions for one monthly price. Scan any item and analyse the data in a split second. Profitl supports you so you can create an incredible business. Check out our website here

If you are interested in learning more about Amazon FBA check out our Youtube channel. It is a great place to learn more about how Amazon FBA works and how to grow your business.

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