I started selling on Amazon back in May of this year. Until recently I’ve been doing mostly what is referred to as “RA” or “Retail Arbitrage”. This involves going to a retail store, scanning items with an app, and purchasing items that were on clearance or selling at a higher price on Amazon. I’ve finally dipped my toe in the OA (online arbitrage) waters and I’m upset I didn’t start sooner.
I’ve been using OAXRay (affiliate link–if you use this link you can get a free trial!) with some success. The process is fairly straight forward. It’s a chrome extension that you install and it will scan web pages of supported websites, and let you know if they can be sold profitably on Amazon. I was doing something similar to this manually in the past, but OAXRay really speeds things up and lets you sort and filter all of its findings. They have an excellent video that breaks down the basics here. It costs $99/mo, but I was able to make that back during the free trial period. By clicking here and using my affiliate link, you can get 10 days for free to see if you can make this extension pay for itself.
Stacking Discounts, Cashback and Rewards
I’ve had a lot of success sourcing Kohls with OAXRay. If you sign up with a Yes2You account, you can earn points for purchases which comes out to $5 in Kohls cash for every $100 you purchase per month. For instance, if you make $1500 of purchase in May, in July your account will be given $75 in Kohls cash. Additionally, Kohls runs promotions where they will give you $10 in Kohls cash for every $50 spent (the equivalent of a 20% cash back). Additionally, it’s very common for eBates to give a 3-6% cash back on Kohls.com. You can sign up with this affiliate link and get $10 just for signing up!
Using Kohls promotions, recently I purchased $600 worth of speakers on Kohls.com. They were selling on Kohls for $49.99 + shipping and selling on Amazon for $69.99. After FBA fees and inbound shipping, this worked out to about a 10% ROI. However, because I used eBates and made the purchase during a Kohls cash promotion, my rewards/cashback worked out like this:
|6% cash back from eBates:||$36|
|Kohls Cash (20%):||$120|
|Credit Card Rewards (1.5%):||$9|
Before the inventory even hit the fulfillment center, I had earned $195 from the purchase alone. Which meant that even if I broke even on Amazon, I would have seen a 32.5% ROI. This was a very fast moving item, but even assuming I had to reduce my margins by 50%, I was still going to see a 37.5% ROI after the sell.
Discounted Gift Cards
You can also purchase discounted gift cards at Raise (affiliate link–you can get $5 for signing up!). Raise is also great because you can ordinarily get eBates cash back from them. I don’t like to purchase Kohls gift cards from them because Kohls won’t allow you to get cash back on the website or give you Kohls cash or Yes2You rewards points when you use a gift card, but you can buy gift cards for practically anywhere on Raise. Walmart, Kohls, CVS, Walgreens, Home Depot… The list goes on. I also use Raise for personal purchases such as discount gift cards for Coldstone Creamery.
I still prefer RA because I find it fun to go out looking for inventory, but I plan to integrate more OA with OAXRay. When done properly, you can make some really great margins, just browsing websites. If you throw in a prep-center and some VAs, you can make this a purely passive way of making money. I’m not quite there yet, but I know several people who have done just that. Thanks the the 10 day free trial there’s very little risk in trying the software out. If you’re using services like eBates and Raise to lower your Cost of Goods Sold, and purchasing decent-moving inventory, it’s easy to make money with this software.