The business model.
The Amazon to eBay arbitrage business model uses Amazon as the drop shipper and eBay as the place to sell ‘your’ products.
Drop shipping is a supply chain system where the seller (i.e. you) does not hold any stock of any product. Instead you transfer your customer orders over to Amazon. Amazon will then ship the goods to the customer.
The business model can be broken down into the following steps:
1. You identify a profitable Amazon listed product to sell on eBay.
2. You list this item on eBay as a ‘buy-it-now’ listing.
3. The buyer pays for the item via Paypal. This means you will have the money from the buyer BEFORE you purchase it from Amazon.
4. You purchase the item on Amazon and Amazon will ship it to the buyer.
5. After paying for the item on Amazon and taking eBay and Paypal charges in to account, you will have made a profit.
Hopefully the steps listed above show you how easy this process is to follow. It’s relatively risk-free, as you don’t hold any stock, and only pay for an item once you’ve received payment from the eBay buyer. However, as with any business there are pros and cons to think about.
Pros and Cons of this business model.
- Minimal capital required to start.
- You don’t hold any stock.
- Providing you already have an eBay account in good standing, you can start making money today.
- Can provide a regular income and is open to scaling up.
- Work part-time, at a time and place that suits you.
- Ability to automate or outsource your business.
To get started, all you need is a computer, and as you’re reading this, I assume you have access to one that is able to access all the websites you need.
Whilst you don’t need any money to start, it’s best to start with a small amount of money, this will help you with initial cash flow, and stop you having to wait for money to transfer in and out of Paypal. I’d also recommend you have an Amazon Prime account, this allows you to take advantage of Prime deals as well as shipping benefits.
- If the product on Amazon goes out of stock, you have no product to send to the buyer.
- If the price of the product on Amazon increases and you haven’t adjusted for it, you could be out of pocket with a loss.
- Can be a small profit margin on each item sold.
- Some niche product areas can be competitive.
Hopefully, this has given you an idea on how you’ll be able to make money using this method.
By reading my lessons on this method, you’ll learn how to control and manage any items you list on eBay, in order to minimise your risk and maximise your profit. You’ll also learn how to easily identify profitable arbitrage opportunities between eBay and Amazon.