7 Tips to Push Your Retail Arbitrage Sourcing Over the Edge

September 14th, 2015

A couple months ago I sent out an email asking for feedback on blog post ideas, and topics you would like to see covered more extensively on the blog.  One of the topic requests that was repeated again and again was retail arbitrage tips.  I was able to get John from www.fbamaster.com to do a guest post on this exact topic.  He provided some advice for retail arbitrage sourcing.

Take it away John:

Ever since that Chris Green fellow LITERALLY wrote the book on Online Arbitrage, it has been all the rage.  The last 18 months has seen an explosion of tools available for online product sourcers, from tracking sites like Keepa and Traktor to a myriad of other services to help sellers source more products online.

But through it all, one thing remained clear and clean; retail arbitrage is often times the one thing that can bring a reseller to the next level.

Here are 7 tips on how to improve the opportunities you can find in your own retail arbitrage sourcing model.

1. Scan for more than the moment

When I first started, I simply scanned for products to fill my shopping cart.  Once I realized that model could be capped based on local inventory levels, I began to view things differently.  

Now when scanning I keep wholesale and private label in the back of my mind.  Twice I’ve successfully completed wholesale applications on items that were sourced at Wal-Mart clearance aisles, and both have become staple items for me.  I am currently in the waiting period for approval on a wholesale application that could potentially be a game changer for me, and it was another Wal-Mart item.  It was not on clearance, and it is an item I’ve sold for years and only recently realized I was a fool for not trying to go direct to the wholesaler sooner.

2. Ask and you shall receive

There is a fun saying I’ve heard used repeatedly : “A closed mouth won’t get fed.”

FBA Master Image 1

Basically, if you never ask the question, how can you get the answer?  

There are many ways to implement this strategy.  For example, my local Wal-Mart (can you tell how I feel about sourcing there, every supercenter is a gold pile in my eyes) brings in an item for me direct, saving me hours of driving to a dozen spots to get 10-20 boxes at a time.  Additionally, I ask for discounts on clearance items constantly; I probably get turned down 90% of the time, but that means 10% of the time I get an additional discount from an already discounted price.  

Just the other day, my brother-in-law, who has learned to use their inventory tracking gun from his sourcing excursions, found 2000 units of an item we had been searching for by simply asking.  They had to move 40 pallets to get to them, but we will net profit somewhere between 9-15k on him asking this one single question.  

Ask for help.  Some places frown on resellers.  But enough are willing to help you help them.  Open your mouth.  Otherwise you will sit and wonder while I clear the shelves.

3. Escape your comfort zone

Over the course of time, I’ve developed routines that I stick to for the most part.  They work, so why change?

Well because of money of course!

If I only go to the same spots each week, by definition I am leaving money on the table.  Therefore I now schedule time to go to new places.  Not often, once a month, but every time has been a success.  As a result of stepping outside my comfort zone for a few minutes, my profit has increased.  When I only go to the same places, I am capping the amount of money I can make simply because I am capping my creativity.  I scan the same shelves, buy the same things.  

But with new places, I open new doors.  With new doors comes new opportunity and new products.  

Do not get stuck in one spot., like this guy:

FBA Master Image 2

4. Oversize items are not scary

It is surprising how many people overlook oversize items simply because the fee’s are higher.  If there is profit to be made, what’s the real difference?  It all factors in the bottom line, and if you have your shipping estimates entered accurately into your scanner of choice, it really doesn’t matter as long as there is profit within your parameters.  

I look for larger profit margins on larger items, simply because I get to send less in each box.  But to ignore them is a mistake.

Especially when sourcing locally, because many times with toys for example, big box retailers get exclusive playsets and such that are oversize and limited.  Or, free money, as I like to call it.

5. Be nice   

This should basically go without saying, but it is not always the case.

Store managers often wield power!  

If you are rude or inconsiderate or leave a swath of scanned but unprofitable items behind you, it is likely that you will not be given “consideration.”  

Consideration means many things, but I’ve had managers special order me limited product, check the stock room for other items, sell me stuff the night BEFORE Black Friday, give me additional discounts without asking, or price match clearance items from competitors when it is not the norm.

Simply because I am nice to them, and make my bed when I wake up (if you are bad at innuendo, what I mean is that I leave an aisle nicer than it was before I arrived).

6. Look at the overlooked

This is easiest explained when sourcing books, but applies more often than you think.  Sometimes when scanning barcodes, a book will pop up without one.  Lazy scanners put it right back.  

But readers of this blog put in the ISBN, and collect extra winners that other people set down.

I had a story not too long ago where I skipped over an item because its bar code did not scan for me.  So I ignored it for 6 months.  Once I finally decided to just enter the numbers into my phone, it had ROI over 200% and rank under 10k.  It has become a steady replenishable seller for me, simply because I took an extra step after much trepidation.  And laziness.

7. Source late at night

This is a unique way of gleaming extra information from doing the exact same thing you are already doing.  

If you go at night, before the shelves get stocked for the following day, you will be able to see what sells out.  The empty spots on the shelves are where the stuffing to fill your wallet comes from.

Because it is likely that these items are better sellers than shelves that are stuffed with product, and should be noted for future sourcing trips.  Or, go back to tips #2 and #5 and perhaps you can get some assistance from a friend at the store, to help you get that item right now if it is a solid lead.

So that’s it.  Those are 7 tips that I have implemented in my routine to help make me a better Retail Arbitrage Ninja.  There are plenty more of course, and we talk about them all the time in our growing community over at www.fbamaster.com/rg.  If you get a chance, stop by and say hi.  We would love the chance to get to know you a little better, and see if we can learn from each other.  

Thank you to John for doing this post, and sharing some of his strategies!

I personally use several of these strategies, and recommend that if you are reading this that you put them into action in your own business.  If you have any questions, or have a retail arbitrage tip of your own to share, please put it in the comments below!

Update 9/15: There’s a thread going in the Online Selling Experiment Facebook group with quite a few more tips on retail arbitrage.  Join in on that conversation HERE.

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7 responses to “7 Tips to Push Your Retail Arbitrage Sourcing Over the Edge”

  1. Doug short says:

    I’ve had some good success with RA and these are some great tips. Lately I keep reading that items not bought through wholesale cannot be listed as new, which makes me wonder if this sourcing method opens me up to a lot of risk. Any opinions on this?

    • Ryan Grant says:

      Hi Doug,

      Thanks for the comment, and glad you enjoyed the tips. There is likely some risk, but so far I haven’t had any issues, and haven’t heard of anyone else having issues related to your question.

      Best Regards,
      Ryan

  2. Marie says:

    Thank you Ryan and John.

  3. Adam says:

    Networking with store managers and letting family and friends know that I’ll pay them a commission on sales that’ll net me a profit has really helped me expand in my FBA business.

    I just picked up 4 very large boxes of summer dresses and T-Shirts for $20 bucks because the store manager needed them gone. The dresses go anywhere from $10 to $24/pc.

    I’m heading back tomorrow to clean up his clearance aisle so they can get fall/winter stuff out.

    This will be my first Q4 and hopefully my last year of working for someone else.

  4. Hazem says:

    Can you provide more information on how to become a wholesaler. I am in the process of obtaining my resale license, which I have found out helps a great deal. Thanks for the info.

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