Episode #2 - Retail arbitrage; the fastest way to make money online

Hey. Welcome to the second episode of the E Commerce Freedom Podcast. Welcome to the E Commerce Freedom Podcast with your host, Oliver Denier. Learn the practical steps you need to take to build a business you can run on your own terms, escape the 9 to 5 and work from anywhere in the world. In this episode, we're going to be going through some specifics. Okay? I want to give you some tips you can actually take away and use to begin making some money online. Right? I don't just want to be giving you, you know, philosophy and theory and inspiration only. I want to be giving you things you can actually implement. Right? I want people to go away, use the things I teach them about on this podcast and actually come back to me saying, you know, Ollie, I've actually started to make money, I've started my journey, my business is moving and there's nothing that motivates me more than than seeing people get results with the stuff I teach. So one thing I'd really like you to do, actually, before we go on to the main bulk of the stuff I want to teach you in this episode is why don't you connect with me on Facebook? I have a Facebook group called Automate Amazon uk. So just go to Facebook and type in Automate Amazon UK and request to join the group. Now, in that group, there's a load of bonuses there for you. And it's a community of Amazon sellers, basically newbies, experienced people, people who have sort of been doing the journey for, you know, a little while. And it's just a great place to hang out and see loads of other people who are doing the exact same thing. Right? We've had loads of success stories posted in there, loads of questions. If you want any questions answered, then the community are really helpful. And I think one of the most important things to have on your side when you're going through journey and starting your new business is actually a bunch of people who are doing the same thing with the similar goals, similar mindset, similar ambitions. And Automate Amazon UK is a really, really great place to be. So jump on Facebook, definitely find that group and I'm hanging out in there. Sometimes I'm posting links to a few my resources and answering questions and sometimes I do like Facebook Live broadcasts as well. So I'd really recommend you join that group. It's a great place to be. So let's get started. So today, today I want to tell you about probably one of the most profitable methods that you're ever going to be able to use if you want to start selling on Amazon, okay? If you want to start making profit and use a method that gives you the largest return on investment in terms of money, then what we're talking about today is definitely the best place to go. Okay? Now, it's known as retail arbitrage. Okay? It's just a fancy way of saying, basically you're buying stuff from retail stores. That's where you're sourcing products from. You're gonna be looking around clearance stores. If anyone's got a sale on any, any store that sells things for buy one, get one free or three for two, or whatever deals they have, you're gonna be able to use that, right? Because you're gonna be getting stock for cheap. So then you can go and sell it on Amazon for a profit. And I actually want to tell you a quick story about something that happened to me whilst I was doing retail arbitrage. In the beginning. Now, I didn't have much knowledge, okay. I didn't really understand exactly how everything on Amazon worked. And, you know, you don't really need to. As long as you understand that a low best seller rating means it's going to sell fast and you need to be making a profit, then you can basically get going, start scanning stuff, start seeing some results. So very, very early on, I actually started going to brick and mortar stores, having a look around towns and trying to find stuff to sell in my account. In the first week of implementing this retail arbitrage strategy, I stumbled across this little product called a call blocker. Now, it was selling in a little shop called Robert Dyer's, which is like a DIY store in the uk and it was on the clearance section and it had a little yellow sticker on it and it was selling for five pounds. Now, I scanned the product with Profit bandit on my phone, pulled it up and had a look at the information. It was selling on Amazon for 39, 99 and the best seller rating was about 6. So insanely hot seller, giving me 28 pounds clean profit with every sale. Now, I was a little bit skeptical and I was also completely broke at this point. So I didn't want to blow all my capital on this one product, have it not sell or something go wrong if I'd made a mistake or to be honest with you, it looked a little bit too good to be true. So basically I just bought four of these, these call blockers and sent them into my account. Now, within one hour of sending these things into my account, three of these products had already sold. Okay? I had just made £90 clean profit in my first week of selling on Amazon, with three units I sent into my account, right, that's probably about 13 hours work at my bar that I used to work at, right? So this was absolutely unbelievable. So what I did is I went around and called every single Robert Dyer store that I could possibly find the number for and asked them to seek out all the rest of these call blockers they had. In the first week I actually grabbed a Hun £150 worth of stock, right? I bought 26 of these call blockers, went round all around London going on trains, buying all of the last remaining ones from the stores, and I turn £150 into £950 in my first week selling on Amazon. Okay? So when I say retail arbitrage is really profitable, you can get great return on investment, believe me, okay, this stuff can actually change your life. If you're really broke right now, you need somewhere to start get going. If you've got money, you want to get into E commerce, but you just want an intro. You just want to put a few pounds into this and actually see if it can work for you. I really, really recommend you try out this strategy. Now, I wanted to answer a few kind of myths that people think about retail arbitrage. And just before we talk about exactly how to do it, I just wanted to clear up a few things. I know I do get asked these things quite often. I do live masterclasses quite often. And I get asked these questions also in the groups that I run on Facebook and some of my students have asked me these questions. So I just wanted to clear up a couple of things and obliterate a couple of myths, just in case you were worried. Okay? So number one, quite a lot of people ask me, well, why would people buy things on Amazon if they could get them for cheaper in stores, right? If they could just go to a clearance section of a store and buy something for cheaper, then why would they bother buying it on Amazon? And this is the same for any arbitrage. If you're doing online arbitrage, retail arbitrage, wherever it is, why would customers buy things on Amazon if they're, you know, having to pay more money? Well, there's actually quite a few reasons why. Okay, now, not reason, just before we even get into the reasons, actually, if you've ever bought anything on Amazon and it wasn't being bought directly from Amazon themselves, or if it was being bought by a third party seller, there's quite a good chance that they actually sourced it from a retail store or from an online store, right? They will have bought it cheaper anyway. So you've probably actually bought something that could have been bought cheaper somewhere else, right? Also, I mean the whole process of retail implies that the person selling it to you got it cheaper somewhere else anyway, even if it wasn't retail arbitrage, right? So I mean, no matter what happens, if you're buying something from someone, they've bought it from someone else at a cheaper price anyway, right? So it doesn't really matter. But I'm gonna go through a couple of reasons now as to why it's, you know, it's fine to be buying things for more expensive price, okay? And customers don't mind. So reason number one is convenience, okay? It's so easy just to log into Amazon where all your credit card details are already stored. Maybe you've got a prime membership as well on the site. It's so easy just to browse through the things on Amazon, add whatever you want to your car and ship it to your house, right? And that's even easier than comparing the prices across other online e commerce stores or having to run around the country looking for the cheapest deal. I mean, if you're buying something simple like a toy or like something for your house or a pot or a pan or something for your pets, saving £10 isn't always your priority, right? I mean the main thing is to get what you want sent to your house as quickly as possible so you can actually have the product in your hands. Alright? So reason number one, it's convenient to buy things from Amazon. Sometimes they are a bit more expensive than they would be on other sites, but it's just easier. Amazon's customer service is just so good, right? And if it's being sold with fulfillment by Amazon, if you've been sending the stuff into the warehouse, then you're using Amazon's customer service, which is just so reliable and it's great and people love it, okay? So that's reason number one. Reason number two is that actually if you were to look for a product online, if you type in the name of any product on Google right now, you'll actually see that it's being sold across loads of different e commerce websites, all for different prices, okay? So you could maybe you have a look at something on Tesco's and it's £20. You have a look at something on Walmart and it's double the price. You have a look at something on Amazon and it's half the price and you look at an ebay it's a different price. And look on, you know, a different bunch of other different smaller e commerce websites and selling for all different prices. Now, do you honestly think that only the E commerce store that's selling it for the cheapest price makes sales? Of course not. Because customers don't really shop around very much. They really, they really can't be bothered to shop around very much because again, they want this convenience, right? So stuff is priced all over the Internet and all over the world at different prices and different marketplaces. So you don't really need to worry about customers getting annoyed that they bought something for more expensive or feeling ripped off, okay. Because it's kind of actually a whole imaginary thing. Things are different prices over place. And also, you know, we love convenience. So another myth that circulates around with newbies when they're thinking about doing a bit of arbitrage, thinking about buying things in one marketplace and selling them on another, is that it's illegal or that you need a license to buy things from certain places and resell. And this is absolutely not true. Okay? There's, there's no, no, no where in the law does it state that you need a license to resell anybody's stock? Okay. Most of Amazon is actually made up of third party sellers who are reselling stock and they usually don't have the manufacturer's permission. Sometimes the manufacturer will actually not want certain people to resell their products and they'll control who is selling their products. And what they'll do is they'll put a restriction on the listing on Amazon. They won't let you list the things that you want to sell if it's been sold by that particular manufacturer. Now there's a few, few manufacturers who do do this. I think a few companies who sell like toothbrush heads or random things like that, or I think Belkin do it. I think beats by Dr. Dre don't want you to resell their things. There's a few companies who will not let you resell their stuff because they want to control who is supplying it to. You know, it's all sorts of reasons. They want to make sure you're not buying fakes or selling fakes or, you know, anything like that or stolen goods as well. And that's why in the Fast Start guide, I really make it clear that if you want to resell anything, it's best to check that. You can do that by trying to create the listing on Amazon, try and add the product to your inventory and see if Amazon allows you If Amazon allows you to do it, then it's legal. So please don't be concerned about retail arbitrage or any arbitrage for that matter, being illegal. And one thing actually I'd like you to, to remember is that arbitrage has been going on for hundreds, if not thousands of years, right? The, the confidence you can have is this isn't a new strategy by any means, okay? Now in biblical times, you know, in sort of 200 AD or ever since then, traders have been moving around buying things from certain markets, right? They go to a market, buy some textiles or some, some food products, some spices or something from, from a market, they buy a load of them, travel down a trade route and sell them for more expensive in a different town to customers, right? So this is exactly the same thing. You're buying things from a retailer and selling them to customers. So arbitrage has been going on for thousands of years. So guys, the point I'm trying to make here is don't, don't ever hesitate to actually implement this strategy, okay? This stuff works really, really well. So what I'm going to do now is maybe take you through a step by step process of how you start to make money with this stuff. Okay? How do you take a little bunch of money that you have right now? Doesn't have to be much, any amount of money really. You can do this with. If you don't have any money, then maybe go out and work for someone for a few hours, wash some dishes or whatever it is, or just use a bit of your pocket money, buy a few products and sell them for a profit. But we want to make sure we're being methodical with this process, okay? Don't just buy any old random stuff that looks cheap and try to resell it. You got to be careful. You don't want to be reselling things that aren't going to make you a profit or things that are going to sit around in Amazon's warehouse for months and months and months on end and never sell. So it's really, really important that you get some tools on your side and some resources that you can actually use to do a bit of analysis on the products that you want to buy, to resell. Now I think the best software you can actually get is some scanning software, right? There's one called Profit Bandit, okay? If you go to the App Store or Google Play store and you download Profit Bandit, this app actually allows you to scan barcodes of products and you can get from those, when you scan these, you can actually get information about how these products are performing on Amazon, right? It will tell you the price they're selling for. It will tell you the best sellers rank, which is something I'll talk to you about in a little bit. And it will show you how many other sellers are selling the product and whether Amazon is selling the product themselves. And also they'll tell you exactly how much money you're going to make if you sell the product after all of Amazon's fees, right? If you use FBA fulfillment by Amazon, it will tell you exactly how much profit you'll make after all of those fees. So I really recommend you do that. First thing, you should actually do it right now, download Profit Bandit or download the Amazon Seller app. And these, these resources will actually give you a lot of information about the products that you want to buy. Okay? And then once you've got that on your phone, but you download it to your smartphone, you can use the camera to take barcodes of pictures of barcodes of stuff you want to buy and then you just head out. Go to any store where you think you can find relatively cheap stock. Now this could be a toy shop, right? If they've got a clearance aisle, it could definitely be some things to buy on there. From there I also find like big supermarket chains like big, big shops like Asda, Tesco, Sainsbury's, places like that always have great clearance stock. If you're in the, in the US Then places like Walmart, Target, Coles, Sears, places like that where they have big, big, big sales. And you know, sometimes though they'll reach the end of a season or for some reason a lot of stock just won't be moving. They'll have to discount it, take it by 90% off and sell it, right? It's cheaper for them to do that than it is to ship this stuff to another store where it is selling. They just want to get rid of it to make room for new stock. So you can take advantage of this, right? This is like a gold mine for us Amazon sellers and this is where you get that ridiculous return on investment. So head down to a big store near you. It could be a high street, could be a supermarket, could be, you know, any store that you visit regularly, go in there and start scanning stuff and I recommend you just scan everything, anything that looks cheap, just scan it and see if you can make a profit with it on Amazon. Even if you've got quite a lot of money right now, I mean, to be honest with you, you shouldn't be building a long term Business out of retail arbitrage, I don't think, because it's not very leverageable. You can't really hire people to go to stores, find stock and send it into your account because to be honest with you, I think, why wouldn't they do it themselves? Right. I think this is something you should start off with and this is a great way to actually understand how Amazon works. Even if you've got a few thousand pounds, you want to start importing shipments from China. Why not try about a bit of retail arbitrage first? Just so you can understand how the Amazon process works, how to send stuff into your account, how to do a quick analysis of products and understand what kind of products will sell and, you know, see some stuff move through your account. This is a great way to actually really believe that this process can work a little bit more. Once you see those sales happening, you'll just receive an email and it will say, Amazon has fulfilled the order you sold or Amazon has shipped the order you sold and that's it. These sales can go through whilst you're asleep, whilst you're out for dinner, whilst you're at work. If you, if you still have to work, then, you know, it feels so nice that Amazon's actually doing all this work for you whilst you're getting on with your life. And, you know, you can make this into a more regular, regular occurrence. Get to the point where you're having hundreds of these things happening for your account later stage. So head down to a store, scan a load of products and what we want to do here is we want to just do a quick analysis of each product that we get scanned using Profit Bandit and actually figure out two things. Okay? There's two qualities any stock that you send into your account should always have. Very, very, very simple. Number one, should make you a profit. Okay, so Profit Bandit will tell you whether each product is actually going to make you any money. After all of Amazon's fees, if you just type in the price you're buying it for, then Profit Bandit will calculate it for you, calculate Amazon's fees for the product and let you know how much money you'll have in your pocket after all that. And number two is you want any product you send into your account, you want it to sell quickly, right? You don't want it to be sitting around for ages. You want it to be a dud, you want it to be a relatively hot seller. Okay, so here's where I introduced something which is going to be so incredibly valuable for you on your Amazon Journey, and it's known as the best sellers rank. Now, if you imagine every single category in Amazon has their own ranking system, right? And this is based on sales volume in the short term, right? So these sales ranks and these ranking places, products move up and down the charts every hour based on how well they're selling. And there's a few complicated algorithms which actually calculate a product, certain place in the ranking system. But basically, the higher the product is in the ranking system, right, the more sales it's making at the moment. So ranking number one, the best seller in any category, so you have, say, ranking number one in health and beauty or in toys and games, will probably be selling several hundred times a day. Okay? So if you imagine you had a product that was best seller ranking number one, you're absolutely laughing. Now, you're not gonna be in that position until you've got a huge amount of capital to import loads of products and do incredible marketing campaigns. I mean, these guys are usually the biggest, big, big guys, big companies that we know already selling their products on Amazon. For example, the card game Cards Against Humanity has been number one in toys and games for many months now. And that's a big company produced that card game, right? So we're not really ever going to have that opportunity. However, we'll definitely be able to sell things that sell 10 times a day, 20 times a day, even 50 times a day, will be able to sell products that have great bestseller ratings. Okay? So this is a really, really, really powerful tool. And the reason why is because you can actually get an idea of exactly how your product is going to perform before you even send it into the warehouse. Just imagine how much confidence you will have if you find a product with a great best seller rating. You know it's making you profit. And you know when you sell it into your account, you're going to be making an income. What you can actually do with the best seller rating is if you learn a little bit about how to interpret it. And we can go really deep into this, you can actually figure out how many sales any product is going to get per day. So you could say, right, If I buy 100 of these units, I know they're going to move within 10 days time because they're selling 10 times a day. And then you can make buying decisions based on sales volume, right? You can say, well, if this thing's going to sell 10 times a day, I don't mind buying 100. They're going to be gone in just over a week. However, if a product is you know, gonna only sell once a month. Then I'd only want to buy one or two because I want to get my investment back with profit as soon as possible. So the best seller rating is really, really, really powerful. By the way, if you want to find the best seller rating on any normal Amazon product, right, Any on like a normal Amazon listing on the web page, then just type in any product on Amazon and scroll down to where it says additional information and you'll see best seller rating, you'll see tag and you'll see a number. Okay? So some products have say a hundred thousand bestseller rating. And that, that means they'll sell, you know, once every couple of days or once a week maybe, depending on the category. Each category bestseller rating is going to be different. But what I want you to do right now is grab a pen and paper or get a, maybe a phone and write this down, okay? This is how you tell whether a product is going to be a hot seller or not. It's if the best seller rating is under 30,000, you know your product is going to sell pretty quick. Okay? So rather than going really in detail about how this stuff works, how to interpret the best seller rating, and going really in depth about it, let's just get you started, okay? Anything under 30,000 in best seller rating is going to be a good product. Now mark my words, okay? If you could, you could just send in five of these things and they will sell within maximum a week. Okay? Now this is great knowledge to have. This means you can just run around stores, scan stuff. If the best seller is under 100, under under 30,000, you know it's going to sell quick. If you're making profit, then buy a few of them, right? Buy a few of these products and send them into your account. Now obviously as your business evolves, you have to go a little bit deeper into bestseller rating. We're going to talking about this, we're going to be talking about this in a few, few of the later episodes because I really want you guys to understand just how powerful this piece of information actually is. And you know, when you start building up your business, you're not only going to have products with less than 30,000 bestseller rating. In fact, there's loads of different strategies. You could just buy products that have a couple hundred thousand bestseller rating if you wanted to just buy less of each one, right? Buy 10 products. They all have bestseller rating, say a few hundred thousand. They're all going to sell once a month. That's 10 sales a month. If you had a Thousand products, all different products, a couple of each, and they all were going to sell once a month. That's a thousand sales a month. Or you could say, buy a load of products that have a really good bestseller rating and just buy a load of one product. So maybe a thousand units of one product, but it sells say 30 times a day. Right. It's going to make you a lot of sales, say 900 sales in a month. So you can basically build your business however you like and just use the best seller rating as a tool to help you with buying decisions. And it can get really, really in depth. But for now, just remember, anything under 30,000, you know, you've got something which is worth sending into your account and it's going to sell relatively quickly. Okay, so this is really, really, really exciting. I really, really recommend you go out there, if you haven't done already, definitely grab my Fast Start Guide. Okay. This is, this is your ticket to start growing whatever money you have into more money. And we're gonna be going into some of the other strategies you can use if you've got more money to invest. But I recommend you start with this because you know you will get some results with it and you'll get to understand how the platform works. Maybe just send in a box of stuff into your account and see those sales moving through. So if you want to get that Fast Start Guide, go to ecommerce freedom.com forward/2 if you want to get it. And you'll get all this show notes from this episode as well. And also you'll get a few other resources and you'll get the link to the Fast Start Guide. And I'll put some other things in there for you as well. Some other free stuff. This is all free goodies for you. You can get access to it right now. So go out there, start doing a bit of retail arbitrage. This is really, really, really powerful stuff. I've got several people who I teach who are implementing this method and getting some really crazy results. In fact, one guy, I'm going to call him out, actually, his name is Steve Gowdy. He's one of my best students. He's been really implementing all the things I teach and absolutely going at it. He started with £200 in capital about nine weeks ago at the time recording this. And he has been focusing on buying products that are really cheap, like 1 or 2 pounds, and just buying loads of them. His return on investment has been usually between 100 to 400%. Right. So he buys something for a pound and he'll make one to four pounds in profit. And now he's got to the point where he's recently had a week where he did a thousand pounds in sales, right? So he did about 3,000 pounds last month in sales. So he's gone from just having 200 pounds to actually starting to build up a really significant income, right? He's going to be on a thousand pounds a month very soon. He might already be on that income as I'm recording this. So this stuff can really, really start to help you if you don't have much capital right now. This is how I started. I went absolutely crazy with it. So it's been an absolute pleasure having you join me for another episode of the E Commerce Freedom Podcast. If you want to get the show notes for this and get a few resources, get a link for Profit Bandit and also have another look at the Fast Start Guide that teaches you exactly everything you need to know to get up and running with your Amazon business sending stuff in making profit. Then go to ecommercefreedom.com 2 that's the number two ecommercefreedom.com forward/two and you'll get all the details and all the show notes from this episode. So it's been really, really fun chatting to you for the past few minutes. I really hope some of the stuff I've said has inspired you. Implement the things I say, okay? This is how I've managed to completely transform my life and find whole new levels of freedom. This is why I wanted to pass it along. So use the things I say. I hope this has been really, really helpful for you. And whatever you do guys, keep believing. Awesome. See you in the next episode.