When I have extra spare time, which is rare, I like to jump into projects where I can make a few bucks on the side. Something that I have tried a little on and off over the years is retail arbitrage.
But what is retail arbitrage, and how can you make money doing it? Here’s everything you need to know to get started!
What Exactly is Retail Arbitrage?
The dictionary defines arbitrage as:
“The simultaneous purchase and sale of the same securities, commodities, or foreign exchange in different markets to profit from unequal prices.”
That might be a little dense for most of us, so let me simplify it. The basic idea of arbitrage is finding something you can buy at a lower price and sell elsewhere for more.
This is most commonly seen when people take advantage of a difference in a buy price and sale price of foreign currency or stock prices in a short time period. Currency arbitrage is probably the most popular way to make money fast on a small margin with arbitrage.
Super wealthy investors and professional traders may find an arbitrage opportunity on a currency where they can make a fraction of a cent several billion times in a deal. But 1/10th of a cent a billion times is a 1 million dollar profit.
Unfortunately, most of us don’t have millions of dollars, let alone the ability to quickly make a billion 1/10th pennies. We need to look at smaller markets with less competition where we can buy something at a low price on one website and sell somewhere else for a profit.
This is where retail arbitrage comes in. I like to call it eBaytrage, but you can also call it flipping items. It’s where you find retail items for sale at a low price that you can afford. Then, you resell them for a higher amount.
How To Find Things To Sell Online
When you are searching for things to sell via retail arbitrage, look for a product that is selling super cheap but has a high demand. For example, I have successfully resold digital cameras but have yet to buy a computer with a higher capital investment and less liquidity.
I know people resell more expensive goods and products, but you have to be an expert to know you are not getting ripped off on the buy and won’t get stuck with something you can’t sell.
But where can you find items to sell? These are some of the top places to find low-cost items you can flip to make money.
Craigslist
Craigslist is a popular place for people to unload their junk with little effort, which often translates to free. I once found a desk on Craigslist that I picked up for free. It sat in my garage for a few months before I found a buyer who wanted it for $50.
From start to finish, the whole process took an hour or so of my time. $50 for an hour’s work that I would have probably wasted watching TV is not bad if you ask me.
The tricks to finding items on Craigslist are perseverance, a big truck or van, storage, and patience. I have two full encyclopedias that I have been patiently waiting to resell. Every couple of months, I give it a shot. Maybe I should lower my price, or perhaps I just need to be patient.
eBay
People are always trying to sell collectibles and miscellaneous goods on eBay. If you can find an item that is below the market price, you can likely buy and resell it. Just be careful that the item is in new or excellent condition and well below the market price.
You often have to beat the market to resell, and you need to beware of thin margins. Plus, you don’t want to get stuck with a product you can’t sell or have to sell for less than you paid.
To take advantage of eBay for sourcing when finding products to sell online, you have to be a true expert in the products you are buying.
Woot
If you have never heard of Woot, you are missing out. It is a discounted product website that gives one deal each day, and you can buy up to three of whatever is being sold.
These products often come at a steep discount, but sometimes they do not. You have to do your research.
Every once in a while, you might be lucky enough to see a “Woot Off.” A Woot Off is the equivalent of a Las Vegas casino for online shopping. The site hosts a series of short Woots that last until the item sells out. Once it is sold out, the next item begins.
This can be an opportunity to stock up on products to resell. However, Woot reselling is popular, which means you will have competition and potentially lower profits.
SlickDeals
SlickDeals is one of my favorite deal websites. It is the deal crowd-sourcing home of the Internet and is updated constantly throughout the day with new tips.
Most deals are for some sort of electronic item, but I have seen many exceptions. I once bought a digital camera through a Slick Deals tip and sold it on Craigslist for a profit of about $25.
Garage Sales
One man’s trash can indeed be another man’s treasure, so going to garage sales can be an excellent strategy if you are looking for things to sell online. People who are clearing out their homes are likely willing to part with items for a low cost.
If you find something valuable at a garage sale, you can resell it for much more than you paid for it.
Big Box Retail
Every big store has sales that provide great opportunities to snatch an item quickly. For example, you could consider buying and selling for a profit from Office Depot since they have heavily discounted supplies.
Stores need to sell off inventory to make room for new stuff. If you can time it right, that can turn into money in your pocket.
Reselling Products Online for a Profit
Once you’ve found cheap items to sell, you have to find buyers. The easiest way to do this is to take advantage of selling platforms to promote your items for sale.
These are some of the best sites to use if you want to try your hand at retail arbitrage.
Craigslist
Not only is Craigslist a great place to find items to flip, but it’s also the first place you should list your inventory. Since you can list and sell for free on the site and you can avoid shipping costs because everyone is local, this is the best place to sell items.
Be sure to include a high-quality picture and a great description to increase the odds of a sale. When someone contacts you to buy, you might have to do a little price negotiation, so you may want to increase the price slightly to make up for this.
If you do sell on Craigslist, remember to be safe. Meet at a public place like a coffee shop, only take cash only on delivery, and always avoid giving out your phone number or home address if you can.
Amazon Fulfillment
When you just want to get rid of your retail arbitrage items today and worry about the money later, Fulfillment by Amazon allows you to ship your junk over in a big box all at once. When it sells, Amazon ships it out to the final customer for you.
If you already have an Amazon account, getting started is easy. Sign up as an Amazon seller and add the Fulfillment by Amazon service to the account.
Next, get your boxes and the stuff that you want to sell. Pick your first box (you list items by the box, so it is important to stay organized) and determine what will fit inside. Go to Amazon Seller Central and choose “add a listing” from the inventory menu.
Follow the prompts to add your item, list its condition and selling price, choose to sell it using the Amazon fulfillment service, and where you are sending the box from. You can keep adding as many items as you can fit in the box.
After you are done adding items to your box, choose the option to “work on shipment.” Follow the prompts and make sure your inventory list matches what is in the box. Choose SPD for your shipping option and send it from the Amazon partner carrier.
Print your packing slip, stick it in the box, and seal it. Enter the box size, dimensions, and weight on the next page. You will be charged for shipping, so try to be accurate to ensure you are charged correctly and the carrier accepts your shipment.
Finally, print your label and attach it to the box. From there, schedule a pickup from the carrier or just take the box to a shipping store. Amazon will take care of the rest for you.
eBay
There’s a reason I like to call retail arbitrage “eBaytrage,” and it’s because eBay is an excellent option for both buying and selling items online. The platform makes it easy to list items for sale and is one of the most well-known platforms on the web for shopping.
Keep in mind that with eBay, you will pay a fee when your items sell, which can eat into your profits. Be sure to factor that in when you are determining your pricing.
Strategies to Succeed with Retail Arbitrage
If you want to maximize your success and profits with retail arbitrage, there are some key tricks to follow. Here are some things to remember to make the most money from the items you resell.
Relist Items
Keep relisting items and make them look valuable. By listing your items again, you can get them to the top of the search results and make them look like they haven’t been sitting around for a while.
Older listings will get less interest than newer ones, so relisting is critical.
Take Good Photos
Photos can truly make or break your listings. Having no photos at all will likely prevent you from selling your items, while poorly lit or blurry pictures can also be problematic.
Make sure the photos of your items are clear, well-lit, and show whatever you are selling from multiple angles to ensure buyers know exactly what they are purchasing.
Write Great Descriptions
Writing excellent descriptions of your items can also be critical to selling items. Include everything a potential buyer might want to know in your item’s description, including the brand, size or dimensions, condition, any flaws or defects, color information, and more.
Again, buyers want to know exactly what they are purchasing before they shell out their money. A thorough description lets you find the right buyers and get the best price for your items.
Price Items Competitively
Retail arbitrage can be competitive, and you likely aren’t the only person selling the items you are flipping. As a result, it’s important to do your research so that you can price your products competitively within the market.
Pricing your items too high will send buyers to other sellers. Listing them for a price that’s too low may help you sell them faster, but you will be missing out on potential profits. Do your research to find a happy medium.
Bigger Stuff Can Earn More Money
I have met people who own a large SUV or truck and pick up free or low-cost furniture on Craigslist for resale. You can often find items people are trying to unload on Craigslist due to moves or furniture upgrades.
Check out the “free” section on Craigslist on weekends, and you might be able to find free desks, dressers, tables, and couches. Do a little cleaning and list it again for a fair price.
If you don’t have a truck, maybe you can find a friend to partner with. When you pool your resources, you can make much more together than you could ever make alone.
Clean Up Your Items
No one wants to buy dirty items, so take a few minutes to wash whatever it is you want to sell. Sometimes, they may even need a little polish or even a quick refinish so they can turn a huge profit.
This might not be the most glamorous thing you have to do, but it can increase your profit margins.
The Bottom Line
Have fun buying and selling stuff to make money. I can attest that this is a thrilling and fun hobby, but retail arbitrage takes work and has some risks.
Start small and work up to having a fun business for side income. Don’t expect to make a full-time salary flipping items, but know that this side hustle can help boost your budget so you can achieve your financial goals faster.
