Retail Arbitrage is simply buying a product cheaper than retail price and selling it on to make profit. It's one of the easiest ways to make money online and it also has a very short learning curve. Anyone can do it at any time, and it's made even easier now with the advancements in online shopping in recent times.
It's similar to matched betting in that the more money you have available to spend in your pot, the more profit you can make quicker. So, it's all about gathering momentum in the early stages and increasing your spending power.
Here's 10 easy ways you can find something cheaper than retail price and sell it on for profit:
1 - Google Shopping
Identify an item that is popular at the minute. This might be an item of clothing, trainers, electronics such as Xbox games or TVs. Anything you can think of that is in demand and has a good chance of selling quickly at the right price. For this example I'm going to select a pair of Adidas Running Trainers.
I search for the trainers in Google, Adidas Ultra Boost, then select the shopping tab across the top. From there I filter from "Low-High" in terms of price.
As you can see the regular price for these trainers is around £110. However, they can are sold on the Adidas online store for £150:
The cheapest price they can be found at from a third party store is £72:
You can see where this is going... Simply purchase the trainers at the cheapest price then relist them for sale on websites such as Amazon, eBay and Gumtree. If you list them at around £100-£110 they should be snapped up pretty quickly and after fees you're looking at around £20-30 of profit. If you have a bigger budget then you could purchase 5 pairs for example, leaving you with a profit of £100-£150.
Get creative with where you source your products. eBay has many products listed that are "BNIB" (brand new in box) at cheap prices and the same technique can work well with those too.
2 - Online Sales
With the vast amount of online stores you can find one that's running a sale any time you want. Have a look and see what is discounted the most. Then you can search for that product online to see what it's selling for regularly. If the profit margin is good enough, you can buy up some stock in the sale and sell it on for profit on other online marketplaces.
3 - Used Cars
If you have a look at websites such as AutoTrader and Gumtree you will notice there's often a large pricing difference in similar cars. These lends a perfect opportunity to jump in and buy a car that's maybe selling for below market value.
There's a couple of tips that will help you get more in return for the car than what you paid for it:
- Take better photos - often people will have a few low quality photos up of the car they're selling, they're maybe also not showing the most important bits of the car off well. This means that if you put a bit more effort into taking more, higher quality photos in a good location with good lighting, you will have far more attention when you relist the car.
- Fix any minor scrapes or problems - there's hundreds of tutorials online on how to get rid of small scrapes, dents and scuffs. If you put a few hours of effort in at the weekend to getting rid of these then potential buyers will look more favourably on the car. You can also replace and cheap items that are broken such as wheel trims, interior plastics and door handles. They can all be picked up cheaply from a local scrapyard.
- Give the car a deep wash and interior valet - again, just spend some time bringing the car back to life so that if anyone comes to view the car they are happy with the condition.
The whole premise of this is to buy a car cheap, give it a bit of TLC, and sell it on quickly. It's exactly how used-car dealerships operate but on a smaller scale. If you're doing 2 cars a month and making £200+ profit on each then it won't be long before you're into the big bucks.
4 - Car Boot Sales
This one is all about getting thrifty. You will be searching through a lot of junk but you can find some hidden gems. Old electronics such as Playstation 1s or Nintendo 64s can be picked up cheap from sellers who don't know their worth. Kids toys and furniture are also often a safe bet. Have Gumtree and eBay apps on your phone so that you can contrast prices quickly before you make a decision on what to buy.
5 - Auctions
Auctions work in a similar way to car boot sales - it's all about being able to spot a product that has real worth and then buy it at the right price.
Most auctions will list what they have available for bidding before the auction starts. Have a read through this information and mark a couple of items down that are of interest to you. Do your research and figure out what's the highest price you can bid to in order to still make profit.
It's all about being disciplined here. You can get attached to a product whilst the bidding is going on or let the pressure and excitement get to you. If you go over budget you'll end up with a lot of junk sitting around your house or you'll have to sell it on at a loss.
6 - Closing Down Sales
With the High Street in decline, you'll hear of a lot of stores that are running closing down sales. This is a perfect opportunity for retail arbitrage. Get into the store early so you have the best pick of the bunch and go with your gut on what you think is the best deal. There are massive discounts available so often most products will be able to be sold on for profit. Just don't buy a bespoke egg timer with alarm clock function or anything too specialised as you may find nobody else wants to buy it...