Want to know where you can find products (known as product “sourcing”) today to re-sell on Amazon FBA? These are all “retail arbitrage” locations—I previously covered the basics of retail arbitrage in this post. Also, these are all locations I’ve used in the past and have had success with, so I know they work.
While each of these is worth a visit for a newcomer to Amazon FBA and retail arbitrage, the profit potential of each of these sources will vary based on several factors. For example, the size of these stores/sales, or if you live in an urban versus rural area, and how much local competition you have, can all affect whether or not these will prove profitable to you. The only way to know for sure is to visit them yourself to see what you can find.
In general, what you’re looking for in a potentially-profitable sourcing location are low-priced items when compared to their regular retail price. This means finding the clearance sections in stores, or finding a store where the items are all priced at clearance-level prices. Let’s talk about where you can find items like this now.
Retail Arbitrage Sourcing Location #1: National Chain Retail Stores
I start with this source because of how prevalent national-chain retail stores, or “big box” stores, are: these are the big national retailers that most people live near such as Wal-Mart or Target or any other large retailer. Specifically, you’re interested in their clearance aisles, because that’s where the biggest discounts are found, and allow for the highest profit potential per item.
In some stores, the clearance section is multiple aisles wide, so there will be a lot of potentially profitable product to buy. Watch out for broken or incomplete products, and make sure you know the price of the item you scan, so you can accurately determine your profit margin.
Competition is one of the downsides of sourcing at big-box stores. Since these stores are all across the country, your competition (other Amazon FBA sellers) are also visiting their local Wal-Mart or Target to source items. It’s common to scan an item at Wal-Mart and find there are 100 or more other FBA sellers already selling the same item. That’s a lot of competition.
For me personally, I’ve had a lot of luck in Staples stores. The clearance section is usually located in the rear of the store, and there will be quite a few items on sale. I’ve done well purchasing various brands of pens in large quantities; say 50 or even 100 packages, and re-selling them for more than 100% profit. I’ve also had luck with address labels for use in a laser or ink-jet printers. I’ve gotten them at 80% off retail and sold them on Amazon for a nice profit.
Retail Arbitrage Sourcing Location #2: Overstock/Surplus/Salvage/Liquidation Stores
My second source, the overstock/surplus/salvage/liquidation store, (from here on, I’ll refer to them as OSSL stores), is a source you don’t want to miss! It’s been far and away my most profitable source over the years, and if you’re lucky enough to live within driving distance of one or more of these stores, it’s definitely worth checking out.
As their name implies, the OSSL store carries items that are surplus or have been liquidated from other retailers, or they carry items known as “salvage”. An example of salvage product could be when a major store suffers a fire and has to get rid of all the merchandise in the store, regardless if it was damaged by the fire or not. An OSSL store buys all the merchandise from the store that had the fire, and sells everything at a greatly-reduced price when compared to retail.
Speaking of their prices, the prices in OSSL stores are usually way below retail, and I’ve even found items that, after I personally checked with the original manufacturer or distributor, are selling below the wholesale cost!
In fact, one of the most profitable items I ever bought from an OSSL store was boxed mixed greeting cards. The particular OSSL store is a chain in my area, and every store I visited had dozens of these boxed cards in stock. They were selling them for $4.99 per box, and I could re-sell them on Amazon for $25 per box! I actually contacted the manufacturer of these cards, and found that to buy them wholesale, you would have to pay $7.50 per box, a full 50% higher than the selling price at the OSSL store!
You won’t always find that kind of deal at an OSSL store, but if you take the time to scan the household goods, office supplies, toys, and other packaged consumer product, you’re likely to find something you can profit on.
Retail Arbitrage Sourcing Location #3: Thrift Stores
My third source, the thrift store, is more of a single-item sourcing destination, and that single item is used books. I first started selling on Amazon by finding used books anywhere I could find them, and thrift stores have a pretty high probability of having books of value.
There are several advantages starting your Amazon FBA selling with books: books are easy to source compared to other items, ship well, are less seasonal than other items, and most importantly, have a large market on Amazon.
Back to thrift stores—thrift stores almost always have several bookshelves stocked with all manner of books. A lot of them will be old paperback fiction, or old travel or cook books with no value. However, you can often find a used textbook or some other non-fiction book that will sell for $15 or $20 or more on Amazon. If you can find just 4 or 5 books selling for $15 each in 30 minutes of scanning, that’s a pretty good return on your investment.
Some people also find old board games or other used items at thrift stores, but I’ve personally never had much luck with those. Board games are often missing parts and pieces, and other used items don’t seem to have a large market on Amazon like used books do. However, you may be lucky enough to have a local thrift store with some great used items. When in doubt, always look up the item on Amazon, because you never know what the next profitable item will be!
Key to Sourcing Success: Frequency
One of the key ingredients to sourcing success is frequency. You don’t just visit a store once and never go back. You have to go on a regular basis! Retail stores move stock through as quickly as they can, which means constantly-changing items for you to source. They key is finding the right balance between going too often and not going often enough.
For large retail stores, they typically have a weekly schedule, usually one particular day, when they move items to the clearance aisle and mark them down. Therefore at these stores, you can go as often as once per week to see what is newly on clearance.
For OSSL stores, like the ones near me, they receive new product every week, but the rest of the store doesn’t change. So for me a weekly visit to these stores is too frequent. I’ve found a monthly visit allows enough new inventory to be stocked to make it worth the driving and scanning time to visit these stores.
Sourcing frequency for thrift stores is a bit of a wild card because they add stock based on random donations. I would recommend visiting a smaller store every 4 to 6 weeks and a larger store possibly every 3 to 4 weeks. These are just general guidelines, however, and you should tweak your timing based on your own experiences as you visit a given thrift store.
Wrapping it Up
While there are other types of stores where you can find items at clearance-level prices, the 3 categories I’ve covered are the stores that have had the greatest impact on my own success with Amazon FBA over the years.
Want to read about how my FBA journey has evolved since I started selling on Amazon? Check out this post.