Retail Arbitrage on Amazon


#1

I’m a new seller on Amazon. I’ve read many forums that have different opinions. Now, my question is Can I sell
on Amazon anything I buy from any retails stores? for example let say I’ve found a product on discount in retail store and then search for the product to list it and the product has no retraction. Is that Ok? I always hear you have to be an authorized seller for that product and have a proof of purchase form distributor ( and amazon will not consider a retail receipt as proof of purchase). So could you please explain that to me in general since I feel that I know nothing about these rules and requirements.

Thank you!!


#2

Even if I list the items as “used” or “like new”?


#3

You will never be able to prove product authenticity


#4

It is not against Amazons rules to practice Retail Arbitration but, RA should only be done by people that know what they are doing. Just because Amazon might let you list the product, that does not mean it is okay for you to sell that here.

Some manufacturers don’t care if you are an authorized seller or not and they don’t care who sells their products on Amazon. Many manufacturers do care and they can make it tough for you to sell here.

Here is a question for you. Did you know that you can almost always buy a product from the manufacturer or their authorized distributor cheaper than you would if you purchased the item from a retail store. If you practice RA and compete against other sellers, since they are buying the item cheaper than you are, they can afford to get into a price war with you. They can still be making money while you are losing money if you try to compete with your competitors pricing.

Why would you want to buy at a retail store at higher prices instead of buying from a manufacturer or their authorized distributor?


#5

The brand owners are raising issues with counterfeit products (and if you did not buy from the distributor, you will not have sufficient proof of authenticity). Their goals are also to protect their authorized dealers from being undercut by potentially liquidation items, but between counterfeit and infringement, that is sufficient to get listings blocked and accounts suspended.

Amazon has enough visibilility that they watch those listings carefully and have hired guns to identify and initiate cease and desist action that usually leads up to legal action. Even if you have done nothing wrong, it costs thousands in legal fees to prove that.

Dave


#6

Its a slippery slope that can result in many problems. It can be done but it ain’t easy or recommended.


#7

Based on this statement, you should NOT do it.

You will most likely end up losing your Amazon selling account for life.

There are can and can’t do, can and can’t sell in that business model.

Amazon won’t accept receipts, but will they ask you one? Depends on what happens. If a buyer complains, or if the brand/manufacturer complains.

It only takes one complain to have you suspended and one lazy agent to ignore your appeals.


#8

Depends on the category.
Depends on the manufacturer.

New means has original manufacturer’s warranty.

Things to avoid

Big brands: Apple, Nike, etc.

Starting out new selling and doing retail arb is a guarantee to be terminated


#9

I do from time to time, however only if
price paid - Net proceeds from selling as Used - Like New> minimum profit I am willing to take.


#10

RA is doable to certian categories and brands but hard to sustain as a business model. Some sellers use RA business model as a springboard and eventually convert to wholesale and to more sustainable business model.


#11

It can be done, but its really a small portion of my sales because the margin just isn’t that great. Even if you can buy an item at the store for 50% off, you’re likely to lose money on the sale

Lets say the item sells for $50 at Walget.

Its on clearance for $25 (plus tax).

Going price on Amazon is $40

Amazon wants $5 in fees

Shipping is $8

You made a whole 50 cents, not including your time/gas/car expenses, etc…

Due to the legwork of what I sell, I need to make a profit of at least what I paid for the item, even more so on items under $40. If you are buying 1,000 widgets and making 20% profit - great - there is a lot less legwork to move 1,000 identical units, than 500 one and two-offs.


#12

If you are not interested in making money or having a real business selling on Amazon long term then you should definitely do it.


#13

It is tough to find products which are on the clearance tables marked down enough to pay Amazon’s fees and leave you a profit it you make a sale.

Many of them are not in NEW condition, even though they may be unused, and more of them will be products the store has discontinued because they do not sell well. Other will be old packaging or manufacturer discontinued items

The manufacturers of those products are under pressure from their authorized resellers to protect them against online sales at prices which are too low, or from unauthorized sources.

There is always pressure on manufacturers to act against unauthorized sellers and more and more are acting.

Amazon reacts to manufacturer complaints, and it reacts to buyer complaints. If what you sell is in old packaging, or appears not to be the latest and greatest, you can get complaints which translate into inauthentic. And if you buy at retail, you have no proof of authenticity.

Many, many Amazon sellers have sourced at retail, and that includes me, and many no longer do so because the time has passed when you can safely make money here doing so.

There is no level of expertise that can keep you from eventually running into problems. New obstacles occur daily, and Amazon reaction is usually to shut down a seller.

When I lived in Chicago in the late 1960’s, the police strategy on the street was “everybody goes when the wagon comes, sort it out at the station”. That’s the way it is here for many types of merchandise bought at retail. Amazon closes the listing, or suspends the seller or both.


#14

I agree RA is a great spring board but it isn’t a sustainable business model if your looking for growth. Focus on acquiring wholesale accounts which will provide you with authorization to sell products and you can also end up shipping directly to amazon or to a prep center so you never have to touch the product.


#15

By the time Amazon takes their cut from each sale, and you are forced to eat losses from occasional buyer fraud (very high on Amazon -vs- any other marketplace), how much net profit is there left? If you want to make money on Amazon, you need to have enough margins to cover these things, and buying discounted retail items from stores to resell just won’t cut it. Anyway, if you are not authorized to sell those items then Amazon will give you the boot.


#16

There is no absolute. You can resell some things and not other things. It’s too complex to explain here, but:
You cannot sell if:

  • if the item has a limited warranty that requires the item to be bought from an authorized dealer
  • the item has been registered on Amazon by the manufacturer not to be sold by 3rd party sellers (Nike, etc.)
  • if the item is in a restricted category (clothing, grocery, auto) that you have not been approved to sell in
    Retail arbitrage has become more difficult over the past few years, but it is possible. It can be a minefield to the newcomer. One good tool to help tell if an item can be sold by you on Amazon is to scan it using Amazon’s Seller App (iOS or Android). That will often tell you if you cannot sell the item, but it is not perfect.

One good clue is to look the item up on Amazon and see how many sellers there are, and if they appear to all be of one type. For example if a knife set is restricted it will usually only be sold by official kitchen stores. If it is not restricted it will be sold by lot’s of different types of sellers. So stick with the herd until you learn the ropes.

The trick is to look closely at any item you intend to sell and evaluate it carefully before you list it for sale.


#17

There is no absolute. You can resell some things and not other things. It’s too complex to explain here, but you cannot sell if:

  • if the item has a limited warranty that requires the item to be bought from an authorized dealer (almost all electronicsfall in this group, but other items can as well).
  • the item has been registered on Amazon by the manufacturer not to be sold by 3rd party sellers (Nike, etc.)
  • if the item is in a restricted category (clothing, grocery, auto) that you have not been approved to sell in
    Retail arbitrage has become more difficult over the past few years, but it is possible. It can be a minefield to the newcomer. One good tool to help tell if an item can be sold by you on Amazon is to scan it using Amazon’s Seller App (iOS or Android). That will often tell you if you cannot sell the item, but it is not perfect.

One good clue is to look the item up on Amazon and see how many sellers there are, and if they appear to all be of one type. For example if a knife set is restricted it will usually only be sold by official kitchen stores. If it is not restricted it will be sold by lots of different types of sellers. So stick with the herd until you learn the ropes.

The trick is to look closely at any item you intend to sell and evaluate it carefully before you list it for sale.


#18

You are asking a very general question that is hard to give a single answer to, but the short answer is YES you can. As many other people have mentioned, it is dependent on the item(s) you are selling, the brand, the condition you wish to sell, AND (I did not see anyone mention it) whether you are using a personal or professional selling platform. You say you are a new seller but not which platform you are selling under. I have a lot of experience in RA, I have millions of dollars of RA in my warehouse, and it is a emerging big business in the online retail world. I have no issues selling my RA on many platforms/sites, HOWEVER, I am a real business, S type Corporation, business license, Fed and State tax numbers, dedicated brick and mortar physical location etc., this makes a big difference as compared to selling the stuff out of your garage as and using your SSN as your business ID. You have to have a GREAT business model, AND it is highly competitive(everyone wants a side deal these days), but done right it can very profitable. Many people or going to either laugh or doubt that it is possible, but to be successful in RA, you have to buy it at 10% OR less on the retail dollar, by the time you pay all the fees, shipping, etc. AND the fact that expect to be competitive pricing online your target selling price is going to be about 50% of MSRP and you are going to be offering free shipping.


#19

Probably not the best forum to get this answer honestly, there are a lot of sellers on Amazon that don’t like that people do this. There have been a few good replies though.
The correct answer is yes you can, but you need to know what your doing and I suggest checking each item with your phone before you buy it. If it isn’t restricted then in most cases your Ok. I would stay away from big brand name appliances and things of that nature. Even if your allowed to sell them some manufactures are watching this and will send you a letter saying your not authorized. If this does happen I would remove listing right away, as they probably won’t accept a retail receipt as proof. They will also probably say that the warranty will not be valid. To be honest there isn’t much they can do about it if Amazon didn’t comply with them as this was ruled on by the Federal Court years ago. It stated that once the item is bought legally the trademark and Patents are no longer valid, but this also means warranty is probably void (so I guess that means you can’t give items as gifts if you want a valid warranty).
To make money you need to be around 70% off original price if you can buy at that price point you will do fine. The nice thing is if it doesn’t sell or the price drops on Amazon you can always return item. Just be careful what you do, as a new seller your leash is very short. Amazon is always watching and looking out for sellers that aren’t legit or don’t have there customers best interests at heart.

Edited by: THE4BAGGER on Nov 2, 2017 11:54 AM


#20

Don’t plan on listing ANYTHING you are doing RA as “New” on Amazon.

“New” and “Unused” are two totally different things.

Amazon’s Condition Guidelines state:
“New:
Just like it sounds. A brand-new, unused, unopened item in its original packaging, with all original packaging materials included. Original protective wrapping, if any, is intact. Original manufacturer’s warranty, if any, still applies, with warranty details included in the listing comments.”

That is one of the big things listing New on Amazon.

Since most warranties are only applicable to the original purchaser or are only valid if purchased from an authorized dealer listing RA items as New is a fast track to account suspension.

Ebay is a much better platform for RA.

They never mention warranty in their Condition Guidelines.
In fact, some of their categories have “Brand New” and “Like New” as options. There is also “New with Tags” and “New without Tags”, “New in Box” and “New without Box” and my personal favorite, “New” and “New-Other” which “may be a factory second or a new, unused item with defects”.

Definitely no defects in New on Amazon.

If you are going to try RA on Amazon don’t list anything as New. Tread lightly and make sure you know what products you can sell before buying anything.

I would strongly suggest using eBay for that sort of endeavor.