Today’s edition of FBA Friday focuses on sales that I made from retail arbitrage. If you’ve been a reader of this blog for any length of time, then you may know that I am not partial to retail arbitrage. I prefer thrifting to retail arbitrage but I do believe that retail arbitrage has a place in my reselling ventures, but only when the profit justifies the work I put in scanning, etc. This month, I made an exception.

I purchased all of the items that you will read about below at the end of March. In fact, it was part of a personal challenge that I set for myself in order to reinvest some of last month’s earnings. I did not publicly reveal the $500 challenge that I set for myself, but during the last week of March I took $500 $538 and invested it into merchandise bought from retail stores only. I went in knowing that my ROI wouldn’t be as large as what I get from thrifted merchandise, however, I also knew that I could buy in volume as a trade off.

This post will only focus on items that were purchased on clearance or special markdown. I didn’t limit myself to only buying this type of merchandise, however, I will never publicly “out” products on retail shelves that can be purchased at regular price and flipped for more Amazon. I believe that not only destroys the marketplace, but it also carries other negative consequences. Clearance items, on the other hand, are fair game in my opinion.

With that in mind, I set strict criteria for this personal challenge:

  • All items had to be in NEW condition; no used merchandise was allowed
  • No item could be ranked higher than 60k (at the time of scanning)
  • Items had to be purchased in multiple quantities; no single item purchases
  • I would not purchase an item whose return was less than my purchase price

This personal challenge caused me to step out of my comfort zone and seek out products that I would normally overlook.

Here are some of the items that sold:

#1: Five Star Notebook~ I must be honest and say that I would never think to scan “school supplies” for FBA — at least not this time of year anyway. However, these notepads were on clearance and I was able to more than make back my initial investment.

I paid $3.19 per item. After Amazon fees and the initial cost of the item, I profited $4.07. My ROI was 227%.

#2: No-Ad SPF#30 Sunscreen ~ These bottles of sunscreen were by far the *best* sellers out of all my retail arbitrage purchases for this challenge. When I say “best seller,” I am not referring to the profit I made, but rather how quickly they flew off the shelf. I purchased these (and another SPF version) on clearance and within a few days of hitting the warehouse, I was sold out. I didn’t expect them to sell out so fast and I’m not sure if I could find them again for the price I paid. Believe me…I tried! I had no clue how expensive sunscreen is. Maybe its because I have a natural tan so I don’t require it. 🙂

I will definitely be on the lookout for these more often, but only if the price is right. Given the weight and selling price, there wasn’t much room in there for a great deal of profit, but I did manage to make a 236% ROI and bought enough in bulk to make up for the low profit per item.

I paid $2.50 per item. After Amazon fees and the initial cost of the item, I profited $3.42 per bottle.

#3: Playtex Natural Shape Nipples ~ I never would have given any thought to scanning nipples if it weren’t for finding these on clearance at two different stores, one of which was Babies ‘R Us. I bought all that I could at Babies R Us and when I went to another store on my list, I headed over to the baby aisle to see if maybe they had any deals going on. It turns out they were discontinuing these same nipples as well. I drove to several different stores and bought all of the remaining stock. It took less than a week for me to sell everything I purchased.

I paid an average of $1.60 per item since the price varied at each store. This item is sold as a 2-pack. After Amazon fees and the initial cost of the item, I profited $5.23 for every unit I sold.  My ROI was 264%.

#4: Winnie the Pooh Sippy Cup ~ On that same baby aisle, I found a ton of sippy cups on clearance. I took a gamble with this cup and a few others. The sales rank was decent, but since I don’t have much experience in the baby category, I didn’t go too deep purchasing everything on the shelves. It turns out that these are actually pretty good sellers. I sold approximately 2-3 per week.

I paid $3.27 per item. After Amazon fees and the initial cost of the item, I profited $4.86. My ROI was 248%.

Was this challenge worth it?

The profit per item certainly does not compare to thrifting, however, I was able to purchase 10, 20, and sometimes 30 of an item at one time and this more than made up for that.

I ran a few calculations 2 weeks ago and I already made back my initial investment and some profit, but the ROI will take some getting used to. I don’t want to speak too soon since the month isn’t up yet, so I will reveal the final numbers and additional thoughts in a later blog post which will most likely be included in my monthly income report.

Hopefully these items opened your eyes to new things to scan when you’re out sourcing. They may seem minuscule, but each item had a 100% or greater ROI. For the record, I steer clear of anything that won’t produce at least a 100% return (e.g. I need to at least make back in profit what I spend). I rarely make exceptions to this rule (especially with retail arbitrage) *unless* the rank is so low that it wouldn’t make sense not to take advantage of a deal.

Moving Forward…

Unfortunately, because I have no way to measure if these weekly roundup posts are actually helping anyone, this may be the last one for a while in this format.

I hope you have a profitable remainder of the week (as well as the weekend) sourcing!

~ Yolanda

10 Thoughts on “#FBA Friday: This Week’s Sales from Retail Arbitrage

  1. Angela on June 1, 2014 at 6:27 pm said:

    How do you find the sales ranking for the item you are researching.

  2. Leigh on June 2, 2014 at 6:55 am said:

    I really enjoy your posts. Please keep them coming!

    • Yolanda on June 3, 2014 at 10:39 pm said:

      Leigh,

      Thanks for dropping by and commenting! I will certainly keep your comment in mind as I come to a decision. 🙂

  3. You hit it on the head- the margins are distinctly lower with retail arbitrage. But the convenience of being able to source 10 items at a time once you find something profitable? That’s invaluable.
    Alex recently posted…“Rich People Have No Morals” – A RantMy Profile

    • Yolanda on June 3, 2014 at 10:47 pm said:

      Alex,

      Thanks for dropping by! Another benefit that I didn’t highlight with retail arbitrage is the ability to process items much faster than if they’re used. No detailed descriptions and no prep work. That’s also invaluable! 🙂

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  6. Jeremy on October 27, 2014 at 6:57 pm said:

    I wanted to check with you and see how you went about getting approved to sell sunscreen on Amazon? I purchased some on clearance today and when I tried to add it to my inventory it was listed as a restricted item. I checked out the requirement to get approved and it requires documentation I didn’t have outside of my sales receipt. Any help would he much appreciated. Thank you!

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