- I'm gonna be honest with you guys.
Amazon FBA arbitrage is not as great
as what people make it out to be.
Now, don't get me wrong,
it is a great way to make money online
and a great way to start as a beginner on Amazon,
and it's changed my life in many ways,
but the business model is just not sustainable
in the long term.
However, by just approaching this business model
in a slightly different way,
I have been able to generate over 65,000 pounds in sales
on one of my accounts,
and that is without Amazon FBA arbitrage.
In this video, I'll be exposing the raw truth
about Amazon FBA arbitrage and why I moved on.
I'll be also sharing my exact approach,
which has been generating me
five figures a month consistently,
and I'll also be talking to one of my friend
who has made over half a million pounds
in less than two years of starting Amazon FBA
to get his opinion on this.
If you're new around here, my name is Jatin
and I'm documenting my entire journey
of growing my online business
with as much detail as possible
to help you start a business this year,
so hit that subscribe button to take your first step
into starting your business journey,
and please leave a like if you find any value in this video.
So let me start off by breaking down three problems
with Amazon FBA arbitrage.
Problem number one is the product quantity.
The first problem is the main reason
why Amazon FBA arbitrage don't succeed in the long term.
When doing Amazon FBA arbitrage,
you're simply buying products from retail store
or online websites of the retail stores
and simply reselling them on Amazon.
However, with this, you're limited
to the number of quantity you can buy from a retailer,
and on most retail websites,
you can't buy more than 10 units, like this one right here.
As you can see, I cannot buy more than 10 units.
Now, this means I cannot send enough units of a product
which can last me for a month or a week
or sometimes even a day.
Having low stock means you will sell out quick,
and that means you have to keep looking
for arbitrage opportunities,
and this isn't ideal if you have a full time job,
just like how I did when I first started Amazon FBA.
But it's not all bad.
If your goal is to make few hundred pounds every month,
then with Amazon FBA arbitrage, you can easily do that,
even with a nine to five, by finding few deals every week.
Now, talking about nine to five,
running an online business is great
and you can make a lot of money.
However, keeping your books up to date
can take a lot of time and sometimes even be confusing,
especially with a business like Amazon FBA.
That's the reason why I use Osome
to help me with all my Amazon FBA bookkeeping and taxes.
Osome's a dedicated e-commerce accounting company
who helps with all your bookkeeping and taxes.
Now, if you run any online business,
such as drop shipping, Etsy, eBay, or Amazon FBA,
just like me, then I highly recommend you use them,
because they will save you a lot of money and a lot of time.
And the best part is,
if you use the link in the prescription,
you will get 110 pounds off when signing up.
Now, let's move on to problem number two, the supplier.
Having a good supplier is a key
to building a successful Amazon FBA business.
Now, as you know, with Amazon FBA arbitrage,
you're buying products from a retailer,
and their day to day customers
are just normal, working class people,
so they don't really work with businesses
or care about the business, or care about any businesses,
which is why you can't really build
a relationship with them
which can benefit you in the future,
benefits such as negotiating, buying products in bulk,
or even being notified when a product comes in stock first.
And now, problem number three is scaling.
Now, don't get me wrong,
you can definitely scale a Amazon FBA arbitrage business,
but it requires a team and a good system in place,
which isn't suitable for most people like you,
who has a nine to five and bills to pay.
If you're a one man band,
then trying to scale Amazon FBA arbitrage business,
even five figures a month is a bit tough,
because you can't really spend your whole day
looking for deals, as you have other things
going on in your life, like your job.
In addition to that,
due to you sending less units to Amazon,
your cash flow will take a while to build up
until you can start recycling the money
by buying higher quantity.
So when doing arbitrage by yourself,
it can definitely take a while to scale the business.
To overcome these three problems,
I still decided to continue reselling products on Amazon.
However, I started doing something
called Amazon FBA wholesale,
which is where I simply buy products in high quantity
from a wholesaler or the brand directly.
When I come across a good product
after doing my product research
and my bullet proof analysis,
which I teach my students
in the 50 Day FBA Mentoring program,
and if you want to join,
you can fill the Google Form link in the description,
once I've found the product,
I then contact the brand of the product.
For example, let's say I want to resell Prime Hydration
on Amazon FBA.
Then what I would do is go to the Prime Hydration website,
go to the contact page, and simply email them,
saying, Hey, I would like to buy your product
in bulk or high quantity,
and if they're willing to allow me to resell the product,
they will simply send me the application
to open a trade account with them,
and then I can simply go ahead
and order as many quantities as I want.
Now, the good thing about ordering in bulk
is that I can get this Prime bottle at a lower price
than a normal customer would,
and I can simply then resell it at a higher price on Amazon,
allowing me to make higher profit margins.
However, there might be a case that Prime Hydration
might not allow me to buy the products directly to them,
and they will direct me to their best
or the main distributor or wholesaler,
and this is when I can create an account
with that wholesaler and simply buy Prime Hydration
and resell it on Amazon as well.
So this is basically how Amazon FBA wholesale works.
Now, the best thing about buying products in bulk
is that, if I send enough quantity to Amazon,
then I don't have to constantly
keep looking for different products,
as I know that this product is gonna continue selling
for a month or two until it runs out of stock,
and then I can reorder it and resend it to Amazon.
This way, I can create a sustainable, long-lasting business.
And if I want to go on a holiday,
I can simply go on a holiday
and keep making money while I'm on a holiday.
This is why I call Amazon FBA semi-passive.
And here's the crazy thing,
if you can just find 15 wholesale products
which can make you 25 pounds profit a day,
that's over 10,000 pound in profit in a month.
And I'm sure that's an amount
which will make you live your life a lot comfortably,
help you live your life comfortably.
And also another great thing
about buying products from a wholesaler
is that they're business to business,
which means you're able to build relationship,
trust, and loyalty, because on Amazon,
there might be other sellers selling the exact same product,
and if they're able to get it quicker than you,
then they will make more money.
However, if you have that good, trusted relationship
with that wholesaler, they might contact you
to let you know that this product is back in stock,
even before they list it on their website.
And reliable suppliers deliver goods on time
and they reply to you quick.
And here's the key tip I'll give you from experience,
is that always call your supplier.
Don't email them.
It allows you to build the rapport a lot,
and you are able to build that relationship quicker.
And the best part about Amazon FBA wholesale
is that not only you can start the business
with around $2,000 or 1500 pounds,
but is how quick you can scale the business.
And talking about scaling,
let's jump on a call with my friend,
who scaled his business to over half a million
in less than two years.
All right, guys, so, as you can see,
I've got my friend on a call now.
His name is Adam.
I'm gonna let him introduce,
and then we'll ask him simple five questions
which are something you need to hear right now.
So, Adam, go ahead, introduce yourself to the people.
- Hey, hey, so, yeah, my name's Adam.
I've been selling on Amazon for the past
around one and a half years now.
I've been doing the wholesale method
over arbitrage and private label due to many reasons,
which we're gonna get onto in this video.
Things have gone very well.
Started from my own home, into some shipping containers.
Now here, all the way into my 1200-square foot warehouse.
Things are just going very, very well.
- That's great to hear.
Thank you so much.
And there was an important thing you said
which is that Amazon wholesale over arbitrage.
So what do you think of Amazon FBA arbitrage itself?
- I think it can be okay for some people.
It depends what situation that you are in, ultimately.
The barrier to entry is very, very low.
You don't need much money to get started at all.
And what does that mean?
That ultimately means that everyone can do it,
whereas I do wholesale.
You know, to get some accounts open,
I may need to be spending
upwards of 10,000 pounds per month,
and not lot people have 10,000 pounds per month,
let alone 10,000 pounds at all.
But don't get me wrong,
maybe a thousand pounds, minimum order and stuff.
- 100%, and I think that's a key,
because, yes, you can make money with arbitrage,
and a lot of people make a good amount as well.
But I think it does require systems and teams in place.
Now, talking about arbitrage, we both do wholesale,
so why is arbitrage harder to scale, in your opinion?
- So that's a tougher one.
So, with arbitrage, like I said,
the barrier to entry is so low,
and the other thing is the products that you source,
it's not sustainable.
So if you go upwards, like in a chain,
it goes arbitrage, wholesale,
and can have exclusive brand deals,
and then private label.
That's the end thing.
Private label, if you get it going,
it's the most sustainable.
It's your own brands, you know?
Not a lot can go wrong there
once you've got it all established.
Now, if you go to the opposite end of the spectrum,
which is actually arbitrage,
you're gonna have to keep constantly finding products
all the time, and if it's just you doing that,
that's gonna require a lot of time from you,
hours and hours of searching for products, one.
Two, loads of products in your inventory,
loads of different ones,
and you've gotta be purchasing loads of different things.
You can have things coming back to you,
and so it is,
there's just a lot of moving pieces in that puzzle.
But if you scale things right, get the systems right,
get the teams together, I do know people
that have created seven figure businesses doing this,
but it does require a lot of hard work
and it is just not as sustainable as the other methods.
- 100%.
I mean, that's a great way to put it as well,
'cause I think that's something
which people don't understand when it comes to arbitrage,
whereas, on the opposite side, wholesale, it's low,
I wouldn't say low barrier
or like low amount you can get started with,
but it's the scalability with even you as a solo man.
So, from everything you describe about arbitrage,
what would you say is the biggest problem with arbitrage?
- There are a few.
I'd say the biggest problem is just the competition,
like I said, because of the barrier to entry.
There can be upwards of 15, 20,
even 30 FBA sellers alone,
all competing with each other,
probably all getting it from the same store
or something like that.
- 100%.
- Yeah, yeah, the competition 100%,
but also, you're getting it from a retail store, ultimately,
and you can come into other problems,
like they may not let you order so much.
- I think that's one of,
that's probably the biggest reason why we do wholesale.
So I think the next question, you answered it,
but I will let you answer it
if you have anything different,
is that why do you do wholesale over arbitrage?
Is it mainly for the purpose of you're able to do stuff,
which, in your own time, while you're product selling,
like the peace of mind, I would say?
- Yeah, so it is much more consistent for me.
The consistency is key.
Much more scalable as well,
and it also, I'm here building relationships
with suppliers and stuff like that.
I'm potentially getting better prices from them,
which you can't negotiate prices from a retailer.
They're selling at that price and that's that.
The scalability side of things
and the consistency side of things is absolutely fantastic.
You know, I've scaled to a very good business here,
and I'm in a warehouse.
- Half a million in less than two years
is not bad, for sure.
Perfect, thank you so much for that.
And to everyone seeing you and want to learn from you,
where can they find you on the internet?
- So if you type in on TikTok Adam, two underscores, FBA,
or it might be three under scores, I'm not sure.
Or you can do the exact same on Instagram,
it's the same name on Instagram,
and they're the two places you can find me.
- So, hopefully, at this point, you understand
why Amazon FBA arbitrage is a great way to get started,
but it's not something you can rely on
if you're looking to build a long term business,
unless you have the money to build a team
and have the systems in place.
If you want to learn the easiest way to start Amazon FBA
from scratch, then go watch this video,
and you will find a lot of value in there.
However, before clicking away,
don't forget to leave a like if you found any value in this
and subscribe for a new video every single week.
Have an amazing day, take care, and peace.