Online arbitrage sourcing is crucial for if you want to make money with an arbitrage business on Amazon.
It takes several steps to locate and analyze a lead for resale potential within an online arbitrage business. In this article, we break down a few simple methods for locating online arbitrage products to resell.
There are many technical aspects to the Amazon FBA Online Arbitrage business model, but without being able to regularly locate and uncover flippable leads, you will most likely lose your money. Fortunately, there are many different options for online arbitrage sourcing, including lead services, scraper software, and the original gangster method: manual sourcing.
Each of these methods has its pros and cons. Within our company, 90% of our sourcing actually comes from manual sourcing. We use scrapers to compile information, but it takes a manual eye to really analyze and sort a proper lead.
The cool part is that it’s intellectually simple to learn and implement, but you have to do the work. You must be willing to spend the time searching through retail websites and Amazon, understanding tools, analyzing metrics, finding sales, and checking coupons among other things in order to understand the economics of a resale business.
As you grow within the system, you will become an expert on catching trends and patterns that emerge when searching for items. You’ll also become a master at identifying what price points items are valued at, what types of products sell really fast, and how you can best locate the winning buys.
Once you understand these aspects yourself, you can train virtual assistants to do this for you over and over, creating an endless supply of leads and growth. If you don’t understand the system yourself, you’ll have a really hard time delegating tasks to others.
Overview of the Online Arbitrage Sourcing Process
Remember, the entire point of an online arbitrage business is to buy products for a low cost and sell them for a higher price, making a profit on the resale. The goal of online arbitrage sourcing is to locate products on retail websites that are selling for a much higher price on Amazon.com. Many times, this involves identifying flash sales, clearance items, promotional items, and other discounts so that you can buy an item at a really low cost.
As mentioned above, there are several different methods of online arbitrage sourcing:
- Manual Sourcing
- Hiring Lead Services / Buying Lead Lists
- Using Automated Scraper Software
Within our team, we have used all three because they all scrape leads in a different way, usually resulting in unique leads from each method. Nowadays, most of our systems are based on full internal teams we have built to manually source.
Below is a breakdown of each method so you can get a feel for how they work.
Manual Online Arbitrage Sourcing
Manual sourcing takes patience and practice, but the education is invaluable. Plus, becoming a guru of manual sourcing will also help you maximize leads when you are using lead scraping software and lead services. It will help you determine the right places on the deep web to run your automated software and find the most fruit.
Once you are dialed into finding leads yourself, you can then hire assistants and automate the tasks so that you can scale your sales and business. Without leads you have no business, so don’t take any shortcuts here. If you truly want to be successful in building out your own machine, you and your team have to become a pro at sourcing and metrics.
When manually sourcing, you are basically following these direct steps:
- Browsing retail websites, especially those with sales and clearance promotions
- Cross-checking leads (usually discounted leads) with the sale price on Amazon.com
- Evaluating the resale potential of a lead by analyzing metrics (discussed in the next section about metrics)
- Buying a lead at the lowest possible buy cost to resell on Amazon.com (discussed after metrics section)
Let’s start by looking at how to find products on retail and wholesale websites that are likely to be sellable for profit on Amazon.
How to Find Product Leads on Retail and Wholesale Websites
Begin by searching through the clearance and sale sections of these websites. This is much like treasure hunting or mining a website to find the best deals. Familiarize yourself with all of these different websites and try to start identifying when they have sales.
Using Promotional and Coupon Sites to Find Sales
Some good places to begin your hunt are sites like rakuten.com or retailmenot.com that scour the web for big sales to see what companies are having sales or offering discount codes. Once you find a coupon or sale, navigate to that website and start looking for leads that are on sale or clearance. Once you identify some potential leads, check if the leads are selling for higher prices on Amazon.com. Remember, there needs to be a significant markup on Amazon’s price to make a profit by reselling.
Do you need to be only searching through sales and clearance? The answer is most definitely no. In reality, we know some teams who only source directly from Walmart.com. Walmart doesn’t run sales, but they generally have extremely low prices. Try to get really good at using a handful of sites, and then start expanding from there.
Create an Updated Daily Sale List to Source From
When we started, we couldn’t find a service that scraped all the sales and promo codes into one easy place for our sourcing team to quickly find the Easter egg leads that we wanted. So, we created a system to compile the best sales and promo codes each day into one simple spreadsheet.
To this day, some of our sourcing teams start by searching sites through this sheet. When you figure out where to find your daily sales and promotions, create a ‘how-to’ document to delegate out this process to a member of your team each day. The sourcing can begin from this sheet. If you are a solo operation, it’s probably easier to just start sourcing directly through the sales sites that you find.
Sign Up for Site Sales & Promotion Email Lists for Notifications
Create a new Gmail account to prevent your regular one from being flooded, and start signing up for all the website sales and promotion email lists that you can find. Soon enough, you’ll be getting promotional emails every day with sales information, coupons, flash sale notifications, and special discount codes. We know it’s basic, but it’s a solid way to find hidden areas of the net where leads are popping up to party.
Once you find a sale and identify a product that seems to have a low buy price, search for it on Amazon to see what it’s selling for.
Cross Checking the Resale Potential of a Lead on Amazon.com
Once you find a product and you want to check the resale potential on Amazon.com, there are a few ways to do this. The obvious way is to manually copy and paste the title of the product from the retail website and paste it into Amazon’s search bar and look for the correct product. This can be a little time-consuming.
To speed this up, there is a nifty free tool called Context Menu Search that allows you to highlight text and immediately search for the highlighted text on Amazon, Google, and more:
Installing and Using Context Menu Search:
The video walks you through how to install Context Menu Search and select the correct settings so that Amazon, eBay, and CamelCamelCamel or whatever other tools you use are present on the search menu. Google is another great option for cross-searching products and prices on other retailer websites to find the best deal.
The search link to add in order to search CamelCamelCamel is:
How to Use Context Menu Search
Here is the basic scenario: You find a product on a retail website (say Walmart) and you want to see what price the item is selling for on Amazon.
Highlight a word or phrase, right-click the highlighted text, then select the place you would like to search such as Amazon, eBay, or Google. Context Menu Search allows for much quicker searching from site to site for comparison and buy evaluation.
Going Through the Product Matching Protocol
Before you analyze a lead, it’s important to verify that you have found the current match on Amazon’s marketplace. There are a couple of things you can do to verify this information:
- Do the pictures match?
- Are the quantities in the offer the same? Often times on Amazon it may say “2-Pack” or more in the details section, so be careful to make sure the item count is correct.
- Do all of the titles, descriptions, model numbers and UPC’s match? You can view this in the details section on any Amazon listing.
- Lastly, are you approved to sell the product brand, and is it free from hazmat restriction?
Evaluating an Online Arbitrage Lead
If you find a product and the buy cost is lower than the Amazon sale price, it’s time to evaluate the lead’s resale potential. We cover this process extensively in our article on evaluating metrics.
Finding a Product with Resale Potential
After you identify a good flip, you are going to want to either buy it immediately or save it in a spreadsheet to buy or re-analyze later. If you want to quickly copy the information over to a spreadsheet, AMZ Quick Copy is a great tool to help.
AMZ Quick Copy
If you are sourcing leads and want to quickly save information, or you have a VA sourcing for you to put together a buyer spreadsheet, there is a great chrome extension for you to use called AMZ QUICK COPY. This extension installs a one-click button on the Amazon home page for you and allows you to copy all of the relevant data from RevSeller into a spreadsheet. This saves massive amounts of time when sourcing products at a high level.
Purchasing the Online Arbitrage Lead
If a lead passes all metric analysis, then it’s time to purchase it. When purchasing, the most important thing is to verify you are getting the lowest possible buy cost. We cover the buying process in this article.
Online Arbitrage Sourcing List Services
If you have no interest in sourcing yourself and are looking for direct leads, there are plenty of services that will provide leads for you. Our team used lead lists heavily when getting started in OA, and now we run our own list. These services provide you with a list of leads to simply re-analyze and buy from. Most of them operate Monday-Friday and you receive one spreadsheet full of leads (generally 5-10 leads) every morning.
By using lead lists, you can gain a great understanding of retail economics and product evaluation because you still have to evaluate the metrics and make sure the lead is something you want to buy. Because sourcing is the most time-consuming part of any arbitrage business, it makes sense to skip the line and sign up for these services if you have the funds available.
When using a lead service, you are essentially following these direct steps:
- Paying a certain amount of money for a daily spreadsheet full of leads to prevent the time it takes to source products yourself.
- Evaluating the resale potential of the leads by analyzing the metrics presented from the lead service.
- Buying a lead at the lowest possible buy cost to resell on Amazon.com.
The truth is that lead lists can be hit or miss. If you are going to go this route, make sure you are signing up for a list with credibility. Most of the great lists are sold out with waiting lists because there are limited spots available on each list to protect the integrity of the leads.
Services usually cost anywhere from $50-$300/month.
Join our Online Arbitrage Leads List: FBALEADLIST.COM
Since we are running multiple sourcing teams now, we generally have way more leads than we can purchase ourselves. We decided to package the exact leads that we use into a list to help you if you want an honest service.
If you have questions about the list, please email us at firstname.lastname@example.org and we will be in touch!
Lead Scrapers for Online Arbitrage Sourcing
The last way to uncover leads when online arbitrage sourcing is by running software-based systems (lead scrapers) to scan websites for leads. These softwares run scripts that pull the lead data from the retail website, match the product to the amazon pages, then bring all of the data into a condensed view on one screen so you can quickly evaluate its resale potential. Some of the most notable products right now are OAXRAY and Tactical Arbitrage. Each of these companies has documentation on how to use and profit with each of the systems.
Free 10-Day Trials for Online Arbitrage Sourcing Software
If you want to try either one of these scrapers, you can claim a free 10-day trial to each through the following links: Tactical Arbitrage: http://sellerspaceship.com/tactical OaxRay: http://sellerspaceship.com/oax When using a lead scraper for basic research, you are following these steps:
- Paying money for software that scrapes websites for leads and compiles the information for you.
- Analyzing the results of the software for potential leads to purchase.
- Buying a lead at the lowest possible buy cost to resell on Amazon.com.
Over the years, these scrapers have increased in accuracy for matching products, but they are not without error. Sometimes products are matched incorrectly or missed completely. This is why manual sourcing still holds so much value, especially within our team. The repetition and experience helps find all the leads that other methods leave out.
Sometimes with automatic scrapers, it isn’t picking up promo prices or sales, so you still have to look closely and evaluate the leads it finds manually to see if it’s a good value or not. If you can learn how to combine the software with a solid education for manual sourcing, your team will be unstoppable. Your goal in this business is probably to make as much money as possible, so we recommend employing all of these tactics.
Learn sourcing for yourself, develop a team to help you manually, then implement software to scrape for leads. Also, consider joining a few quality online arbitrage lead lists to help too in order to maximize your exposure to potentially profitable inventory. The best problem to run into is having more leads available than you can afford to buy.
A Few Extra Tips for Online Arbitrage Sourcing
Stacking Coupons with Sales
Generally, the idea of this is to find site-wide sales and stack coupons within those sales to get multiple discounts on a product. It may be as simple as finding a site-wide coupon that discounts an entire product line, and then finding other coupons from the same site in sub-categories and combining the two to discount a single lead. Example: Sometimes a site may let you use two coupon codes at checkout, like a sitewide coupon for 10% off and another that gives you 15% off a certain category, like sports equipment.
Other times, you can use a sitewide coupon code on a category that is discounted pre-checkout. For example, let’s say Kohl’s runs a 10% off sale for their entire website with a coupon code and also a 15% off sale on baby apparel. The baby category shows 15% off the original price on the product page, then when you apply the sitewide coupon at checkout you get an additional 10% off. Stacking coupons in either of these scenarios can be a big win if the website allows it.
Many leads that appear on paid lead lists often have good margins because they are accompanied by product promo codes stacked within a site-wide sale.
Reverse Online Arbitrage Sourcing & “Customers Also Purchased X”
Another strategy that yields great results is called reverse sourcing. This is the process of collecting data on other online arbitrage sellers and regularly tracing their new products (and products alike) back to other suppliers that may be offering them on the internet for cheaper.
If you have a seller you regularly are selling against on listings, chances are they are buying leads from similar sources as you. If you click into their storefront on Amazon, you can browse the seller’s in-stock products.
After you find a lead that looks good in their storefront, look to see what other leads customers bought on Amazon. On any given listing page, there is a section that is titled “Customers Who Bought This Item Also Bought.” You can follow these leads and sometimes find gold mines.
There is an infinite rabbit hole of products and sellers on Amazon to reverse source. If you are looking at a few products that you found, start by asking a few questions: Who is selling this product? Why are they selling it?
Everyone who is selling the product most likely bought it for a lower unit cost than they are selling it for. Obviously, you want to do the same. Use the reverse searching method above to see if this seller has other items that are also profitable, maybe even from the same store! Open up one of the items in the section and locate the seller name:
Click the seller name, then click the storefront link under their name.
Now you can see everything the seller has in their storefront.
If the seller has a wide variety of different products, chances are they are a reseller. This means they are buying the products for a low cost and reselling them at a high cost. If you can locate where they are buying the products from, you may be able to get a good deal on the same product and resell it.
*Quick Note – If you click a product through a seller’s storefront, it will open up the product listing with ONLY their selling price, even though there might be other sellers on the same listing. To view all of the sellers, you must do the following:
When you click the listing through a seller storefront, you need to erase all the URL text to the right of the ASIN in the menu bar, and then press enter. It will go from the seller’s solo listing to the official listing with the correct current price.
If you don’t, you will only see the seller’s price, and that may not necessarily be the current sale price.
After deleting the unique seller URL to the right of the ASIN, we can see the buy box for this item is actually only at $12.99, as opposed to the $24.99 that the seller we identified was selling the product for.
In this case, Amazon.com itself is a seller at a much cheaper price, which is a sign that you should probably stay away. However, many times there may be excellent resale potential. For the sake of this guide, we will proceed as if Amazon isn’t on the listing and the sale price is actually $24.99 and not $12.99.
The next step is to see if you can locate where the seller sourced this product. To do this, use the context menu sourcing plugin mentioned previously in this article to search Google for the product title.
Notice the top listing has this item at 9.99, and the seller on Amazon was selling it for 24.99 (remember we are ignoring Amazon as a seller at 12.99 just for this example). This is a lead with resale potential. After you go to a seller and look at all the items — BOOKMARK them.
You can go back every two weeks and hit all of their new products. And, you will eventually find other awesome sellers to track, so save them all. You will then have a constant growing list of great sellers to reverse source. This process allows you to uncover products that you normally wouldn’t think of sourcing from places that you normally probably don’t source.
Try to Source in the Top 1% Sales Rank for Any Given Category (But Don’t Marry the Idea)
Our team usually only sources products ranked within the top 1% of products in its category, but this is also a widespread rule that has been crammed down all online arbitrage seller throats throughout the internet. In reality, there are great leads that slip into the 2-3% range as well, and a massive amount of good leads that fluctuate between 1-3%.
For now, don’t assume a product is a great seller because it is ranked low, or a terrible seller because it is ranked high (remember, the closer to rank #1, the better). Sales ranks and prices on Amazon fluctuate at very fast speeds, so what is good today might be bad tomorrow. Always evaluate a lead based upon what it does over an extended period of time, if the information is available. This allows you to estimate what it will do in the future and make an educated guess on how many to buy.
We hope this general overview of online arbitrage sourcing styles and techniques have helped give you a better understanding of how to find online arbitrage product leads.