— Guest post by EcommerceGuider.com’s David De Souza —

We’ve all heard about the power of the internet to transform your working life along with catchphrases like “the laptop lifestyle”.

Trust me you’re not alone if you’ve fantasised about getting your own piece of the pie.

In this article we are going to break down how you can start your own online business selling goods online on sites like Amazon WITHOUT needing to invest thousands and thousands of dollars.

Believe it or not achieving this lifestyle and working from a laptop around the world, on a beach or even just earning an extra £500 a month is a lot easier than you think.

In fact, you can start with as little as a few hundred pounds.

 

How People Make Money Selling On Amazon

Amazon allows third-party sellers to sell their own products on the Amazon website (in return for a sales commission).

Third-party sellers are anyone who has an item for sale and decides to sell it on Amazon.

Now Amazon platform allows for two main types of sales to occur. These are:

➤ Fulfilled by Amazon sales (“FBA”); and

➤ Fulfilled by merchant sales (“FBM”).

The beauty of the Amazon FBA service is that the seller is only responsible for getting the products they want to sell to the Amazon warehouses where Amazon will then store your products until they sell.

Once your item sells Amazon will then dispatch the item to the customer (i.e. your order will be fulfilled by Amazon) and then Amazon will look after any complaints, refunds or after sales customer service.

However, If you choose the fulfilled by merchant option this means that Amazon only provide the platform for you to make your sales and you are responsible for shipping the item and handling any after sales service.

As a first timer we recommend using the fulfilled by Amazon service as it means you do not have to worry about product returns, shipping orders or any of the above cumbersome non-revenue generating activities.

So you’re probably wondering how exactly people are making money? Let me introduce to you Arbitrage Selling.

Retail & Online Arbitrage Selling

 

Online and retail arbitrage is the process of making money by buying products at a lower price and then reselling the same product on Amazon at a higher price for a profit.

For example, sellers would go to Walmart or Tesco and buy a clock selling in Tesco for £5 (perhaps there is a sale on or maybe Tesco bought too much stock and is selling it at a discount) and then resell it on Amazon for £10.

Practically speaking if you enrol in the Fulfilled by Amazon service you would purchase the clock, ship it into Amazon (using discounted UPS shipping negotiated by Amazon) and then list the product on Amazon.

Amazon would then store the products in their warehouses until it sells at which point Amazon would ship it out for you and take care of all payments and after sales customer service.

Retail arbitrage is simply the process of finding these products to resell in physical stores.

While you guessed it: Online arbitrage is simply the process of finding these products online.

When sellers use the online arbitrage method they tend to engage the help of a virtual assistants more to come on this below (often based in the Philippines from sites like Online Jobs) or sourcing software such as FBA Wizard to search the internet to find products to purchase and sell on Amazon FBA UK.

In case you’re wondering if this is possible to make a full time living from Arbitrage? The answer is a firm YES!

There are people making a few hundred pounds a month to people doing hundreds of thousands of pounds a year!

Unlike working for your boss; this truly is a business where the more profitable products you send it to Amazon, the richer you get!

Now you might be thinking this sounds too good to be true huh? Well let me fill you in on some of the Pros and Cons of the system:

Some of the Pros of starting an arbitrage business are:

• Only a low initial investment is required.
• The system is REALLY simple to understand and get the hang of.
• You don’t have to have any previous business experience to get started. You simply just need to know how to check prices!
• You only have to find products to sell – Amazon will look after all customer service, payments and shipping / fulfilment of the order.

Now some of the Cons of this money making system are as follows:

• It can be time-consuming or hard to constantly find products for resale unless you use automate sourcing software and hire virtual assistants.
• Selling on Amazon causes your business to be completely dependant upon Amazon.

Perhaps, one of the most attractive parts of an online business selling on Amazon is that it gives you the flexibility to work whenever you like.

However, more importantly you gain the ability to make money no matter the time of day. You can literally make money when you sleep or on weekends unlike your job!

Why Retail and Online Arbitrage Is the Perfect First Online Business

Retail and online arbitrage reselling through sites like Amazon and eBay provides the perfect low-risk way to understand the fundamentals of selling online.

Selling on sites such as Amazon enables you to experience the power of the Amazon marketplace and just how much money is changing hands online, with a low initial investment and relatively low risk.

Most other online businesses often require a MASSIVE learning curve such as copywriting, marketing and driving website traffic just to get customers to your product or service.

When you’re starting out this can make it an extremely tough, long drawn out process before you even get to make your first dollar.

However, with Amazon retail and online arbitrage selling is a lot simpler and risk free for a beginner as you can literally buy your product today, send it in to Amazon tomorrow and have it sold within a few days.

Arbitrage provides you with the perfect springboard to launch your next business risk free!

You can then build up your profits and then invest this into a private label venture or building your own online Shopify store.

Two of the hidden secrets of  building up a successful Amazon arbitrage business revolves around two key systems which can help you automate your business and keep it running on autopilot.

These are hiring Virtual Assistants and outsourcing your product preparation to Product Preparation centers.

Virtual Assistants

 

A virtual assistant (often abbreviated to VA)  is generally a self-employed individual who provides professional administrative, technical, or creative (social) assistance to clients remotely from a home office.

VA’s are digitally based workers who can be found anywhere in the world and with the steady rise of people working from home or remotely, they’re more available than ever.

They are workers that can perform just about any business task in the world. Especially those that you’d rather not do yourself!

If you can teach it, you can pay someone to do it for you!

VA’s range from stay at home mums in western countries to large sections of an entire country’s workforce! Think like Indian IT/ call centres or like in the Philippines where many banks and companies like Amazon have outsourced large components of their customer service.

You can hire all manner of experts ranging from:

➤ Arbitrage product locator

➤ Audio / Video Editor

➤ SEO / Web Marketer

➤ Product researcher – private label

➤ Social media management

➤ Admin assistant

➤ Content Writer

➤ Graphic / Web Designer

➤ Web Developer

 

As human beings AND entrepreneurs, your most precious resource isn’t money; it’s your time and energy.

What many seasoned entrepreneurs will know and younger entrepreneurs will sometimes struggle to understand, is that sometimes you just can’t do it all.

There just aren’t enough hours in a day, or days in week for you to get the work done! Cliched I know, but definitely true.

Luckily now thanks to the internet you can hire degree qualified professionals from places like the Philippines and pay them as little as $3 an hour to do these tasks for you!

One of the quickest ways to scale your arbitrage business is to have teams of VAs searching the internet for you to find profitable products to buy and sell on Amazon.

Now as your business begins to grow, you will realise that there are not enough hours in a day for you to do it all and even if there was enough time it may be better spent not doing product preparation.

Time that you can better spend making you more money or used to grow your business faster. For me, outsourcing my product preparation was one of these key realisations.

Now I believe in order to really scale your business and be able to run it from anywhere in the world, you need to be using a product preparation centre.

What is a Product Preparation Centre?

 

A product preparation centre or ‘prep centre’ is simply a service where you can order your products online (in the case of arbitrage selling) and get your products delivered to the prep centre’s address.

The centre then receives the goods, remove any labels or stickers, boxes up and forwards your goods onto Amazon.

They are simply a service that can be used to receive, store and then prepare your goods prior to shipping into Amazon.

Why Use a Prep Centre?

The reason why I believe prep centres are so useful is because it enables you to be able to order as many items as you want.

You don’t have to worry about carrying or transporting products, storage space/cluttering up your home or wasting your time preparing products.

Simply get your items delivered to the product preparation centre and then focus on finding more items.

Perhaps though, the biggest reason to use a prep centre is because they are the experts, this means that they can do product prep generally quicker and more efficiently than you can.

This frees up your time to allow you to spend it on finding even more products or doing other revenue generating tasks rather than non-revenue growing tasks.

If you’d like to find out more about selling on Amazon and starting your own Arbitrage business then feel free to check out the FREE Ecommerce Guider Amazon Arbitrage course here.

If starting your own online Shopify store that is free from the restrictions and rules of Amazon and Ebay sounds more like your thing, then feel free to check out the FREE Ecommerce Guider Shopify course here.

Otherwise, feel free to tune into the Ecommerce Guider “Business Hacker Podcast” where you can listen and learn from real entrepreneurs and experts who can help you take start your ecommerce business or take it to the next level here.