We are continuing to introduce you to the most popular Amazon business models and how prone they are to suspensions. Today we are going to talk about Retail Arbitrage on Amazon.
The main idea of this method is to find low-cost products from closeout companies or brick and mortar retailer stores and reselling them on the Amazon. The main profit from this method is the difference between the two prices.
If you are a beginner, this method is the best for you, since it requires fewer money costs. In most cases, sellers spend less than $ 1,000 on launching their business on Amazon. But this business method is not without its risks. Selling closeout products and sourcing products from retail stores can have dire consequences for your business, and you can easily have your seller account suspended if you don’t stick to Amazon’s regulations. More on that later! First, let’s see how profitable this model actually is.
Profitability of Retailer Arbitrage
Unfortunately, compared to other methods, this method is the least profitable for selling on Amazon. However, there are sellers who really succeed by doing Retailer Arbitrage on Amazon’s platform. According to these sellers, it takes roughly 6 months to make the first profit using this model, and as we said, it’s very risky and is prone to Amazon seller suspensions. If you have chosen this method of selling, you should learn the ropes well.
The most reliable stores for sourcing products are Walmart, Target, and Home Depot.
As a beginner, one of the hardest parts for you is to find the right products. Many sellers do not see a profit since they choose the wrong products for selling. You should concentrate on the products with big profit margins. By doing this method, you should be ready that the main part of your profit will depend on how much money you are going to invest in your business. The more money you invest, the more you can sell.
You should gain some experience in understanding which products are more profitable for selling on Amazon. Be patient in learning the process of sourcing products. As per usual, choosing the wrong products can also lead to you receiving an email that Amazon has suspended your seller account.
Why Can Your Account Be Suspended Under This Model?
Keep in mind that this model of business is a perfect storm for being suspended since many sellers do not pay due attention to their research. As a result, they do not know how to act after being suspended. The usual suspension type resulting from this model is an inauthentic suspension. After getting hit with an inauthentic suspension, first of all, try to provide Amazon with the invoices, proving the authenticity of your products.
Here comes the tricky part. How you can provide invoices when all you have are just the store receipts? Secrets of the trade, which we at Got Suspended Clients can assist you with!
Always be honest with Amazon. It is better to provide what you have and try to explain the whole situation in your POA.
An early bird gets the worm. In order to avoid such kind of issues, it is better to prevent a suspension before it hits you.
Pay careful attention to customer complaints and negative feedback. Be in touch with your buyers, and do your best for them. You can avoid serious issues by working with your customers. Put extra effort in this phase of your operation. All notices and warnings should be addressed immediately. Also, do not forget to monitor your Account Health on a daily basis. Unfortunately, most sellers do not pay due attention to the above-mentioned aspects and lose their seller privileges. And owing to having less experience, they are not able to write a proper POA to Amazon.
For such kind of situation, you can always contact our Got Suspended Clients team, and we will help you reinstate your seller account and give you proper guidelines on how to operate your business on Amazon. Behind our shoulder stand hundreds of satisfied sellers, who got their accounts back and continue their successful business on Amazon to this day.