While most books and articles will tell you just how profitable of an industry this Retail Arbitrage could be, in the end, there are many different factors that you must consider if you intend on taking it up as a real business. Yes, you could earn big margins on all the merchandise you sell, and indeed it’s a tested way of earning some extra cash here and there, but Retail Arbitrage isn’t a long term approach to build a sustainable business… It will provide short-term results, yes, but those results will be short lived. So before you dive in with both feet, make sure you’ve done your homework.
The best place to start your investigation into retail arbitrage as a business model is with private labels. Private labels are products that are uniquely owned by a company, or sometimes a group of companies, instead of by a single manufacturer. They offer some advantages over established brand names, and the whole concept is based on providing customers with what they want at a better price. Many private brands have been on the market for quite some time, which is something you’ll find very attractive when you’re trying to get a piece of this huge niche market.
To sell private labels, however, you need to have a wholesale and drop shipping supplier. How do you find reputable suppliers for wholesale and drop shipping products at lower prices than you would get retail? You do it by becoming an affiliate. There are many companies that offer programs for retailers who wish to become affiliates. One of those programs is the Retail Entrepreneurs Alliance (REF) which was created by Retail Entrepreneurs Inc. (REF) is one of the best programs available today.
Retail arbitrage may sound great, but it has some challenges that may seem a little confusing at first. For one thing, a retailer does not make any product. Rather, the manufacturer does all of the work in creating and marketing the product. That makes it easier to get into the business model since there’s no need to create the product at all.
There are some things that you do need to do to get started with retail arbitrage. The first is to find the right products to sell. One of the biggest problems that retailers face is finding the right products to sell at a lower price, especially in today’s economic climate. If you’re willing to invest the time and energy to research some niche markets, or to start selling third-party products, you may find the right products to sell at a great bargain.
Once you have found some niche products or third-party sellers, you’ll want to look into buying wholesale or clearance products to put up for retail arbitrage. Most people who are looking to get into retail arbitrage, or who have tried it and found it to be successful, will opt to buy large lots of merchandise rather than single products. This allows them to take advantage of clearance sales or overstocks. Sometimes these products will even be on sale as part of storewide promotions. Regardless, if you don’t have the inventory to support that, you could find yourself with an empty warehouse.
Getting the inventory you need to start retail arbitrage is much easier if you buy your inventory directly from the manufacturer representative. One of the advantages of purchasing clearance items directly from the manufacturer is that you can assure that you are getting the best price possible. However, not all manufacturers or manufacturer representatives are necessarily easy to contact. Some may not be available during normal business hours, or they may be booked all the time.
In either way, you should find a resource online or off that has some information about the company you are buying from. If you have questions, or you need more help, the best thing you can do is take the time to find answers before you purchase stock levels. Make sure that the company you are buying from has excellent customer service, and that the staff is available to address your concerns in a timely manner. By following this simple process, you’ll be well on your way to being able to retail arbitrage and make profits.