Today we will be discussing how to avoid five costly mistakes that sellers make when it comes to online arbitrage (OA) in their Amazon FBA business. There are many benefits to online arbitrage, and while tools and extensions do make it simpler, it is by no means super easy. It still requires hard work and dedication, putting in the time to learn and master the skill of online sourcing. As with anything you learn to do in your business, mistakes are bound to happen.
The OA blunders we’re going to talk about today are mistakes that will cost you time, energy, and money that would be better spent growing your Amazon business. While it’s good to learn from your mistakes, it’s even better to learn from the mistakes of others. With that said, Rebecca and Stephen will share with you these five mistakes and how to avoid them in the future. Don’t make the mistake of skipping this episode. Listen today.
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Key points from Episode 150:
- Online arbitrage defined.
- The key benefits of online arbitrage.
- Mistake number one: not using coupons or cash back sites (and Google Chrome).
- Mistake number two: not paying for a tool that can help streamline your sourcing.
- Mistake number three: not checking sales rank or price history with Keepa.
- Mistake number four: not keeping track of receipts and packing slips.
- Mistake number five: having false expectations about the online arbitrage system.
Links and resources mentioned in this episode:
FINALLY MASTER ONLINE ARBITRAGE
If you want to add or improve your existing online arbitrage (OA) sourcing skills, then check out our course: The Reseller’s Guide to Online Arbitrage: Grow Your Amazon FBA Business With Online Sourcing Profits.
The course is a combination video course (5+ hours of OA training) and a 100+ page ebook. The videos and book both share the exact same content (so you can pick the format you most like to learn from). The course also comes with six time-saving and money-making bonuses all at no additional charge!
As a Podcast Perk use the code ONLINE25 and we’ll take $25 off the cost of the OA course (limited-time coupon code).
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Episode 150 Transcript:
[0:00:01.8] ANNOUNCER: Welcome to The Full-Time FBA Show. In each episode, it’s our goal to help you turn part-time hours into a full-time income, selling almost anything on Amazon. Now, your hosts of the show, Stephen and Rebecca Smotherman.
[0:00:21.3] REBECCA: Hello there and welcome to another episode of The Full-time FBA Show. We are on episode number 150 and today, we’re going to be talking about the top online arbitrage mistakes that you want to avoid in your business. Today here with me is my partner in crime, no, my partner in business, Stephen Smotherman.
[0:00:43.3] STEPHEN: Yes, we are partners in business and—
[0:00:46.0] REBECCA: Not in crime.
[0:00:47.5] STEPHEN: Don’t tell anybody about our crime syndicate.
[0:00:48.8] REBECCA: We do not commit crimes, okay.
[0:00:51.1] STEPHEN: No, no but we do make a lot of mistakes, and so we’ve made some online arbitrage mistakes and we want to pass those along to you so you can learn from our mistakes and avoid these online arbitrage mistakes.
[0:01:00.3] REBECCA: I don’t think we should say we make a lot of mistakes.
[0:01:02.6] STEPHEN: No.
[0:01:03.0] REBECCA: We have made mistakes.
[0:01:04.4] STEPHEN: Yes, we’ve made our mistakes one time and one time only and we learned from them.
[0:01:08.2] REBECCA: And never make them again.
[0:01:09.7] STEPHEN: Right, okay, all right. All right, so yeah, let’s get into it on today’s episode of The Full-Time FBA Show.
[0:01:21.0] REBECCA: Before we get started in today’s topic, I want to remind you that we have a weekly newsletter that we send out. Be sure you are subscribed at fulltimefba.com. You can sign up and receive that weekly newsletter with tips and advice about running your FBA business and how to turn part-time hours into a full-time income with Amazon FBA, fulltimefba.com.
So before we get into which online arbitrage mistakes you want to avoid, let’s just cover what is online arbitrage again, just to make sure that we are clear on that. Online arbitrage is when you buy items from an online retail website in order to resell them for a higher cost on the Amazon platform, and the benefits of selling on Amazon via online arbitrage or OA for short are many. I have done online arbitrage as my primary way of sourcing for my Amazon business for years.
I am transitioning into more wholesale as well but I still do online arbitrage because the benefits are wonderful. You can work from home unlike with retail arbitrage, you don’t have to go out and go into stores. You can stay home or work from wherever, coffee shop, hotel room, wherever you are and you just have to have access to the Internet and the ability to buy from an online retailer.
You can ship those items directly to a prep center so that you don’t even have to touch your inventory. Basically, the world is your store. You can have access to inventory that is regionally available in other parts of the country or the world that you could not get to physically but you can purchase from them online. There really are endless possibilities for why online arbitrage is a great way to source for your Amazon business.
[0:03:00.5] STEPHEN: Yeah, we love doing online arbitrage and it’s brought us in a significant amount of income. So let’s get into the mistakes to avoid with OA sourcing. Mistake number one is not using coupons or cashback sites, and this is a really easy mistake to make because we’re so excited we find the inventory, we want to buy it as soon as possible but it’s also an easy mistake to avoid because of Chrome extensions.
If you are using the Google Chrome browser, you can install these Chrome extensions that automatically will look for coupons for you or cashback opportunities for you. We have the Chrome extension called Honey and that searches a large database of coupon codes for different websites, and so you can see how you can save some money by just clicking through Honey and you can find more about that at fulltimefba.com/honey.
It is a sweet opportunity to get some savings with coupons. There is also cashback sites, we mostly use Rakuten, fulltimefba.com/Rakuten, that’s Rakuten and that gives you a percentage of your cashback. You pay nothing more on the website for what you are buying but you can start racking up cashback and sometimes, it’s 1%, 2%, sometimes it’s 10, sometimes it’s up to 15. I know when Valentine’s Day, they did 14% cashback.
That’s just stuff where they send you a quarterly check or a PayPal deposit and you get cashback, and so it’s just more money that you can use on more inventory that you’re not paying an extra dime for but you are getting that savings, and so if you are not using coupons or cashback sites then you are missing out on opportunities and that’s an OA mistake that you can easily mistake.
We’ll put some more links on the show notes on opportunities for you to get some coupon codes and cashback sites.
[0:04:49.8] REBECCA: Then I would say before we go onto the second online arbitrage mistake that we were going to talk about, the mistake number 1.5 would be not using the Chrome browser.
[0:04:58.7] STEPHEN: Right, yes.
[0:04:59.7] REBECCA: Make sure that you are using Google Chrome no matter what kind of operating system, I mean, we both use Macbooks but we absolutely only use Google Chrome when we are sourcing.
Okay, so then the second mistake you want to avoid is not paying for a tool of some sort or a service that can help you streamline your sourcing. It is possible to take hours of time off of your online arbitrage sourcing by paying for a tool that can help you to scan sites or organize the data from these sites in a way that can help you to analyze it better.
It matches with the Amazon catalog and these online retailers. It takes so much time off of your sourcing and the tool that we use most and that we recommend is Tactical Arbitrage. You can go to fulltimefba.com/ta and use the code “fulltime10” to get an extended trial of Tactical Arbitrage to find out if that is going to be a good tool for you to use, where you can quickly find matches between the Amazon catalog and the online retailers that you are interested in sourcing from.
We also recommend if you are going to use the tool like this to get some training on how to use it and to really shorten that learning curve, you can find a really great training for Tactical Arbitrage at Tactical Arbitrage Academy. That is found at fulltimefba.com/taacademy. You can save $50 by using the code, “fulltimefba50.” Again, we’ll have all of these links in the show notes for this episode.
But Tactical Arbitrage and Tactical Arbitrage Academy can really shorten the time that you spend sourcing for online arbitrage finds and really helping you to make more money in the long run, and just remember that you are running a business and that’s going to require you to have some proper systems in place in order to succeed, and Tactical Arbitrage for online arbitrage really is one of those systems that can give your business a really great boost.
[0:07:02.6] STEPHEN: Yeah, it is worth every penny. I mean, imagine turning 10 hours of manual online arbitrage sourcing into what would you say, an hour or two?
[0:07:11.7] REBECCA: Less than.
[0:07:12.9] STEPHEN: Less of that even, yes. And so, when it comes to turning part-time hours into a full-time income, you want to spend as few a number of hours as possible sourcing but still be able to get lots of good inventory to sell on Amazon, and that’s a tool that helps us a lot.
The third mistake when it comes to online arbitrage and honestly, any type of arbitrage but this is just the biggest thing I always want to make sure everyone knows is when you are sourcing, you’re not checking the sales rank or price history with Keepa.
Keepa is a tool that tracks the sales rank history, the pricing history, the buy box price history, so much more information, and part of the information that Keepa offers is free. Part of it comes behind the paywall but if you are not checking the sales rank or the price history of an item, you are going to make sourcing mistakes. Sales rank is updated in Amazon 24 times a day, pricing changes on Amazon all the time.
So you want to make sure that you are not just basing your sourcing decision on one time period, one little snapshot of time, but over the pricing history and the sales history. You can find out more about Keepa at fulltimefba.com/keepa and speaking of Chrome extensions, they have a Chrome extension as well that’s free to download at fulltimefba.com/keepaextension, where it places a Keepa graph that shows you that sales rank history, the pricing history right on the Amazon sales page makes OA so much easier to do.
[0:08:33.3] REBECCA: Yeah and again, when I open up an Amazon page on anything other than the Google Chrome browser now, I’m just always a little bit befuddled at first like, “Where is my Keepa extension?” I am so used to seeing it on pages that I’ve opened up in Chrome and it makes it so much easier to know what’s going on with the Amazon product that you might be researching.
So the fourth thing that we want to make sure that you are avoiding when you are doing online arbitrage is not keeping track of your seats and packing slips. You need to make sure that this is the case with any type of arbitrage that you are doing, retail or whatever, you need to make sure you are keeping—you have a good system for keeping track of your seats but when it comes to online arbitrage, you also want to make sure that you are keeping your packing slips.
You also want to make sure that you have a good system for keeping your emails and the confirmations that you are receiving through your email all organized, so that you can easily access it in the future and there is a few reasons for that. Probably one of the biggest ones is that you need this if you send this inventory into Amazon and something happens either in transit or when it gets to the warehouse and there is a problem where the inventory has been lost or damaged.
Amazon is going to ask for that receipt as a proof of purchase in order for you to get a reimbursement and also, this is necessary if there is any kind of question about an authenticity request from Amazon, that you need to have that on hand to show them that you bought it from a legitimate source and that you bought such and such number of them, to match up with the number of items that Amazon has the issue that’s trying to be reconciled.
This is also important if you have a prep center, you want to make sure that they are keeping track of your seats and your packing slips for you. All of this just so that you can have a way to show where your inventory is coming from, how much you purchase in order to just keep that paper trail all clean so that you are not losing out on money from reimbursements from Amazon.
These systems can be put in place and automated in your email and then just have a place where you take paper packing slips and file them away, and it doesn’t have to be a complicated file system, just put them in order that you are receiving them and then you can cross reference that with the date that a request comes from Amazon if that happens.
[0:10:57.7] STEPHEN: The final mistake, which is mostly a mistake for beginners when it comes to online arbitrage, is having false expectations about the whole online arbitrage system. I mean, a lot of people just assume, “Oh, online arbitrage is going to be easy. I’ll find lots of inventory online. I’m going to use a tool that help saves me a lot of time and it will do all the work for me.” And while using tools can help save a lot of time and can make things easier, online arbitrage, just like any other type of selling on Amazon strategy, it’s not something that is super easy.
It is something that takes hard work, it takes dedication, it is not going to be extremely difficult but it is not going to be simple and like snap a finger and boom, you’re making thousands a day. Online arbitrage, like any other sourcing method, requires a set of skills that takes time to learn, takes time to master, and we’d love to help you with that. We’ve got a course, The Resellers Guide to Online Arbitrage.
We’ve got a podcast perk, a $25 off coupon code if you use the coupon code “online25” with The Resellers Guide to Online Arbitrage course, you can save $25, fulltimefba.com/oacourse, is where you can find this and it teaches you everything from getting started to all the tools. I mean, we just mentioned a few tools in this episode on how to take your online arbitrage sourcing to the next level, how you can outsource it, how you can take your online arbitrage business and really be able to master those skills that you need overtime.
So again, fulltimefba.com/oacourse to learn. So those have been the five biggest mistakes that we’ve experienced with online arbitrage. We want to help you grow your Amazon business with online arbitrage and other aspects as well. So for more information again, fulltimefba.com/oacourse.
[0:12:45.2] REBECCA: Thank you so much for joining us for this episode of The Full-Time FBA Show. We have the shownotes for you at fulltimefba.com/150. Hey, this is our 150th episode.
[0:12:56.1] STEPHEN: Woo-hoo.
[0:12:56.6] REBECCA: That’s exciting, so be sure and check that out if you want to see the transcript or any of the links, we’ve had a lot of links in this I realize and so you want to make sure that you are getting those links for you at fulltimefba.com/150.
[0:13:11.9] STEPHEN: Next week is exciting because we’re going to start talking about Q4. We want to prepare for Q4 and next week we’re going to be talking about the Q4 snowball effect that helps you get massive profits comes Q4. So we’ll see you next week on The Full-Time FBA Show.
[0:13:26.7] REBECCA: I’m ready for a snowball right now.
[0:13:29.4] STEPHEN: Oh yes, it’s only like a hundred plus degrees here where we are, we need a snowball so bad. See you next week.
[0:13:38.3] ANNOUNCER: That is all for this episode of The Full-Time FBA Show. So head over to fulltimefba.com/podcast, where you will find the show notes and links from this episode. While you’re there, subscribe to our newsletter where you’ll get several free downloads of our popular and helpful Amazon FBA resources. Now, take action on what you have learned today so you can find success at turning part-time hours into a full-time income with Amazon FBA.