If you consider starting an online arbitrage business on Amazon, you may wonder if it is still viable in 2024. Indeed, online arbitrage is not dead. However, it is becoming more difficult for new sellers to be successful.
Despite that, new sellers still have opportunities to succeed in online arbitrage. The key is to focus on finding profitable products with less intense competition.
In this post, we will take a look at the current challenges of online arbitrage and provide tips to find winning OA products.
Can You Do Online Arbitrage in 2024?
For new sellers starting out on Amazon, online arbitrage can be a great way to enter the platform. That is because with online arbitrage, you don’t have to put much money into your business initially, and it is relatively easy to set up. Also, sellers can potentially earn good money by finding the right products.
However, nowadays, it is becoming more difficult for new sellers to be successful. The market is more competitive than ever, and the margins are not very high. The remedy to that is using Amazon product research tools. They help sellers successfully identify winning online arbitrage products.
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How does online arbitrage work in 2024?
Online arbitrage is a type of e-commerce business where sellers buy products from one online store and sell them on another online store, such as Amazon, for a profit. Below you’ll see how it works.
Online Arbitrage in 2024 Step-by-step
Step 1. Find profitable products
You can do that by using product research tools, such as Seller Assistant App. These tools can help you identify products that sell well on Amazon and have low competition.
Step 2. Source the products
Once you have identified some profitable products, you need to find a way to source them. That could involve buying them from online retailers, such as Walmart or Target, or from wholesale distributors.
Step 3. List the products on Amazon
Once you have sourced the products, you need to list them on Amazon. That includes creating product listings, setting prices, and choosing shipping options.
Step 4. Fulfill orders
When customers purchase your products, you need to fulfill their orders. That could involve using Fulfillment by Amazon, shipping the products yourself, or using a third-party fulfillment service.
Step 5. Repeat the process
Once you have sold a product, you can repeat the process and buy more products to sell.
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Why Is Online Arbitrage Still Popular with Amazon Sellers?
Online arbitrage can be a profitable way to make money on Amazon, and there are more and more sellers coming in. However, it takes time, effort, and research to be successful. Here’s why online arbitrage is still popular with Amazon sellers.
Low startup costs
Online arbitrage is a low-cost business to start. Sellers don't need to invest in manufacturing and can begin reselling products immediately.
Easy to get started
Online arbitrage is also comparatively easy to get started with. Sellers need to find profitable products, source them, and list them on Amazon.
Potential for high profits
With online arbitrage, sellers can potentially earn high profits by finding products that are selling for a lower price on one retailer and selling them for a higher price on another retailer.
Flexibility
Online arbitrage is a flexible business model that sellers can run from anywhere with an internet connection.
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What Are the Challenges of Online Arbitrage in 2024?
The way you do online arbitrage is different compared to 3-4 years ago. There are more challenges in this business, and it requires more effort to overcome them. Despite that, there are still opportunities for new sellers to succeed in it.
Increased competition
The online arbitrage market has become increasingly competitive in recent years. That is because more and more people are starting online arbitrage businesses. In 2023, 2.4 million third-party sellers listed products on Amazon.
More restrictions on products and brands
Intellectual property (IP) complaints are on the rise on Amazon. Brands are putting pressure on Amazon to prevent sellers from listing branded products. That means there are more brands and even categories you cannot sell without Amazon’s permission. That has made it more difficult for online arbitrage sellers to find profitable products to sell.
Using tools becomes a must
Several years ago, it was enough to find a product substantially cheaper than it sells on Amazon and list it. Currently, you must research and verify many product metrics to ensure the product will bring you profit. That is only possible with the help of product research tools.
Price drops
Due to increased competition, prices change quickly, and most sellers use repricing tools to price their products automatically. That makes it challenging to maintain the projected price and guarantee long-term profit.
Rising costs
The cost of shipping and Amazon FBA fees are rising. That makes it more difficult for online arbitrage sellers to remain profitable.
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Is Online Arbitrage Still Profitable?
If you are willing to put in the work, it is still possible to make money with online arbitrage in 2024. However, it is important to understand its challenges to mitigate them. Below are the do's and don'ts to stay profitable in online arbitrage.
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How to Find Online Arbitrage Products in 2024?
Finding profitable online arbitrage products is key to a successful online arbitrage business. At the same time, you must research hundreds of items daily to find your winning product. OA sellers use product research tools like Seller Assistant App to simplify this process. Such tools help select the products that hit the profitability targets you’ve set.
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Criteria to Choose the Right OA Products
Estimated sales
Make sure the products you sell are popular and have a high chance of selling. You can use Seller Assistant App to estimate product demand by looking at the Amazon Best Sellers Rank (BSR) and its trend (upwards or downwards). Seller Assistant App also provides estimated sales figures.
Competition level
Stay away from products that have too high a competition level since such items are more complicated to sell. You can identify if the competition is too high by using Seller Assistant App. It displays the number of FBA and FBM sellers selling the product, as well as how many products you can sell if you join the listing as another seller.
Competitive price
It's important to price your products competitively so that buyers are interested in purchasing them. Seller Assistant App shows you the product's price dynamics, the average Buy Box price, and the minimum FBA and FBM prices so you can set your price accordingly.
IP complaints
There are products having intellectual property complaints from brand owners. They claim sellers violate their IP rights by selling these branded products on Amazon. In such a case, Amazon can suspend your account, so you shouldn’t sell them. Seller Assistant App has an exclusive Advanced IP Alert system that tells sellers about intellectual property claims. This proactive feature helps sellers spot possible problems and take steps to keep their accounts healthy.
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Restrictions
Some products are restricted, and you must get permission from Amazon to sell them. With Seller Assistant App's Restrictions Checker, you can detect restricted products.
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Profitability
Checking profitability is necessary to know if you will earn money from sales. You must factor in all product costs, including the Cost of Goods Sold, Amazon fees, and shipping expenses. When you deduct all costs from the selling price, see to it that the product is still profitable. You can apply Seller Assistant App's to calculate an item's profit.
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FAQ
What is Online Arbitrage?
Online arbitrage is a business model where sellers buy products from one online retailer and sell them to another online retailer for a profit.
How much can you make with Online Arbitrage?
The amount of money you can make with online arbitrage depends on a number of factors, including the products you choose, the margins you are able to achieve, and the amount of time and effort you put into your business. However, it is possible to make a significant income from online arbitrage, with some sellers reporting profits of over $10,000 per month.
Is Online Arbitrage worth it?
Online arbitrage can be a profitable business model. Still, it is important to be aware of the challenges, such as competition, increasing number of restricted products and brands, and price changes. You can use Amazon seller tools like Seller Assistant App to find profitable products to sell.
Is Arbitrage still viable?
Online arbitrage is still viable, but it is becoming more competitive. It is essential to be aware of the challenges and to focus on profitable products and markets where the competition is less intense. You can find such products with Seller Assistant App.
Final Thoughts
Online arbitrage is still feasible in 2024 but is getting more difficult. New sellers can still succeed, but they must be aware of the challenges and take steps to reduce them. They can mitigate these challenges by using product research tools and data analytics to find profitable products.
Seller Assistant App is one of the best product research tools. This browser extension integrates all the features you need to find profitable products for Amazon. Its new generation functionality lets you quickly detect the highest-profitable products for your sales. Seller Assistant App’s Quick View, Stock Checker, Restrictions Checker, and other tools help make data-driven decisions prior to purchasing your products.
