Retail Arbitrage: Your Competition is Bad at It, Which is Good for You

I recently went on a retail arbitrage sourcing trip to do an experiment.  I wanted to see how much product would be available in a store that I knew, from experience, was typically the most “picked over” by my former competition, meaning it was the store most visited by competing retail arbitrage Amazon sellers, and therefore the hardest to find profitable products to buy.

I did this for 3 reasons:

1. In the past, I knew my competition was either lazy, bad at retail arbitrage, or both, and I wanted to see if that was still the case by looking for product in a store that shouldn’t have anything profitable left to buy
2. I haven’t been on a retail arbitrage sourcing trip in a long time, and I genuinely missed the experience of wandering through this particular store looking for products to sell on Amazon
3. Since I make my living selling on Amazon, rather than working at a job I don’t like, I had free time on a weekday to do whatever I wanted, so I chose to do this

I haven’t been active in retail arbitrage for some time, as I changed my business model to mostly wholesale sourcing a couple of years ago.  That doesn’t mean there isn’t money still to be made using retail arbitrage as a sourcing method, just that I’ve grown to where I need a more consistent source of inventory to resell.  In fact, I think retail arbitrage sourcing is the best way to start selling on Amazon, in part because of how bad your competition is at it.  Let me show you just how bad they are.

I started with retail arbitrage in 2015, and some of my first sourcing trips were to the store I mentioned above.  This particular store is an overstock/liquidation store, which I’ve written about in a previous post.  For those that don’t know, these kinds of stores have products that other retailers had to get rid of (liquidate) and then sell them for a big discount, sometimes at or even below the original wholesale cost.  This is what makes this store so good as a source for products to resell, which is why I went there to shop.

However, this store is also close to the largest population center in my state, which makes it a heavily trafficked store, and also the most visited by my competition.  In the past, this made it one of the hardest locations to find good products for resale, as other sellers would buy up most (but not all) of the profitable products, before I had a chance to do the same.

The Challenge

Despite knowing this store should have no profitable products because other sellers should have bought them already, I had a feeling that in less than 1 hour, I could find at least $500 worth of products that I could resell on Amazon for a profit.

Now, if my competition was good at sourcing, I shouldn’t have been able to find anything profitable, since they should have bought all the good stuff already.  I knew I hadn’t visited this store in nearly a year, which should be plenty of time for others to buy out the store of anything profitable, right?

Since I knew the store so well, I went to the aisles that held profitable products in the past, and started to scan items with the Amazon Seller app on my phone.  Within minutes, I found bottles of a cleaning product I had sold before, that you could still make more than double your money on today!  I shook my head and chuckled to myself, not believing people had left these behind.  This was easy money sitting right in the open, and no one had bought them!

I kept on scanning, making my way through kitchen and home supplies, toys, office supplies, whatever looked like it could make money.  After almost an hour, I had found several profitable, good-ranking items others had somehow missed! 

I’ll break down the cost and profit for just 2 of the items to give you an idea of what I found:

Breakdown of the Competition’s Failures

In total, I bought nearly $500 worth of product, and I know I could have found more if I gave myself more than an hour.

More importantly, I confirmed 2 things:

1. My (and your) competition is bad at retail arbitrage, and that’s good for anyone who wants to try it out
2. Retail arbitrage continues to be a profitable sourcing strategy for finding products to sell on Amazon

Hopefully, this post will convince at least one person that if they want to try selling on Amazon, they should give retail arbitrage a try.

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Read more about your unfortunate retail arbitrage competition sourcing product at library book sales here.

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