Retail Arbitrage is Dead? Really? Maybe so. Wholesaling And private label sourcing may become the only way to go if I, and other eSellers if we want to list items as new, especially on Amazon.
Retail arbitrage is the standard way that most people source for Amazon and eBay. Savvy shoppers have learned that they can resell bargains from local stores for a big profit, especially through Amazon FBA.
However, I am getting more and more interested in wholesale and private label sourcing. There are increasing tales of people losing their accounts because they are selling retail arbitrage items as new. Amazon doesn’t really care, all they want is a profit – but if the company complains that you are selling their items as “new” and you are not a licensed wholesaler for them they can get you shut down.
My business plan for my eBay
and FBA businesses are simple, but I think they will be very effective. If they are not I will really be evaluating my business! As 2016 ends, I am eager to put all that I have learned into full gear.
I am very interested to see what will happen if I:
1. Invest all my profits for a year. Because of the examples of others who are about at my level example, and that of others who have grown faster than I , I have decided to invest all of my profits into FBA and not take any of the profit out to use to pay my own expenses. I will take out my profits from eBay to pay taxes and for programs that I am involved with including Joelister , the software I use to link my FBA to eBay. I really love this program and have come to rely on it as an easy way to get double exposure for my items. I also love it when an item selling on eBay that is listed through Joelister, the item will be automatically fulfilled and I do not have to worry about rushing around the house looking for the item and a fitting box.
So, my goal is to take all of my FBA earnings, as modest as they are now and buy product to send in. People I know that have done that have seen their business mushroom.
2. My business plan is going to involve a promise: I will mail out one box a week regularly, even if it is small. I tend to hold off on mailing out because I want a larger shipment where there is the possibility of saving on shipping – but it is essential to get it out there. If I get more into FBA, I can cross-list more on eBay, which is good. eBay loves daily listing of even one item.
3. Starting after the Christmas holidays – list at least one item a day in ebay.
4. Go heavily into wholesale and online arbitrage as a way of sourcing. I bought through a site called BidonFusion when they had “Hot Boxes” – small boxes of liquidation products from Amazon. It was great while it was working, many of the items could be listed right back to FBA – some in the same boxes they came in. But they have gone to a pallet model and I feel that it is unwise to make such a large purchase unseen, especially since I do not know what the shipping costs are. They show a way to figure out the shipping, but I have never been able to maneuver it.
So I need to locate other wholesalers. There are different ways to do that I need to investigate, including just searching for the products I want and the word wholesale – like “pet supplies wholesale.” You may or may not come up with real wholesalers that way. Many retail businesses put the word “wholesale” in their site so that others will get into it. I have heard that looking on page three or four of the search provides you with smaller businesses that may be more open to working with you. I am going to re-read Vendor Fulfillment Basics: how to use Vendor Fulfillment to source for eBay and Amazon sellers by Melissa Paz. I found that book to be practical, down to earth guide to wholesaling by a trusted seller. She talks about all kinds of ways to find wholesalers, as well as drop-shipping. I would not consider drop-shipping for eBay or FBA – but I would if I decide to develop my own site.
5. Work on getting approved in food, beauty and health – the three areas that I still am not in. I will provide more on that process as I do it, FBA is no longer accepting store receipts, but is requiring that you buy from wholesalers. (I am also not in DVD, but I am not seeking that after the advice of others in the know.) I think I am ready to do that, as I am approved in many areas now and I understand more about what will sell and what will not.
6. My business plan is of course going to have to be a plan for the tedious parts of the business. I want to develop serious bookkeeping, and tax accounting for my business. I am still not squared away with my sales taxes so I am looking into TaxJar as a trusted and easy way to deal with them. Sales taxes can be buggers, and some people do not even get into FBA because they are so afraid of them. I am going to investigate Godaddy Bookkeeping for my daily expenses.
In the meanwhile I will keep sourcing, trying to find those bargains. I know people have done very well with clothing, but I have not made the home runs and I want to have easier ways to make a living. My business plan involves making everything as easy as possible.
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