I was introduced to Amazon arbitrage by my wife. She would go to closeouts, discount stores, and places like Goodwill and Salvation Army. She started reselling the things she bought on Instagram and eBay. We realized that we could do this on Amazon as well. I’ll never forget the time we found a t-shirt at a discount rack, bought a bunch of the same design, sent them into Amazon, and watched them sell very quickly. We found a manufacturer in China, they branded it for us, we put on our own logo and material, and we private labeled this shirt. It does very well and continues to sell daily. This was a cool example of transitioning from arbitrage to private label.
Because you’re making a smaller upfront investment, the risk for arbitrage is much lower. You get a return on your investment much faster. The disadvantage is it’s very hard to scale. You can't grow bigger without using up your time and killing your freedom. The whole point of working for yourself is so that you have the time to do the things you love with the people you love.
Today I’m going to give you seven categories to start selling in that I know have a high chance of doing well with Amazon arbitrage. This will help you invest your money in something that will make your money back.
Toys are a very good category: most of the time, it’s already ungated for you and you don’t have to get approval. You can start selling right away.
Toys are very themed: so when the next Star Wars film is about to come out and you find a bunch of Star Wars themed discount toys, you have a massive opportunity. People will buy them up like crazy because the kids love them when the new movies come out.
Keep in mind that if you sell very small item that a child could potentially put in their mouth, or something with sharp edges, Amazon might make you go through certain steps and get approval to sell it. So try to stick to generic, innocuous, and large, safer items you can make a fast return on.
Home and Kitchen
This is a massive growing industry on Amazon: there’s no end to the new products people are coming out with.There are so many things you can do to your home and kitchen; people like to spend money on their homes. I took a bunch of money and turned a bedroom into a studio, with green walls, and studio equipment and everything. Since there are so many different kinds of products, you can have a decent BSR and still sell really well.
Sports and Outdoors
There are plenty of shops that have discounts during different seasons: hunting season, football season, swimming for summer. You can easily find discounted items online or in stores, send it in, and start selling with no approval needed.
Baby and Nursery
This is actually a subcategory of the Toys and Games category. The nice thing about this one is that parents, moms especially, are very into protecting their child and buying the best of the best for their new baby. They’re going to spend money to protect, take care of, nurture, feed, train, and raise up that child. So when you think like a parent, you also know how to sell a product to a parent.
When you go into a store like Toys R Us, Walmart, Target, or any other store that sells nursery items, make sure it is not small, ingestible, or have sharp edges. That way, you don’t have to go through the approval process with Amazon. But this category is a massive opportunity to make money.
I give this category with a little hesitation. Books can be a great category. They were one of the first things I sold on Amazon. I had a wall of over 2,000 books, and I sent in and sold most of them and made very decent money. One person who joined our Just One Dime program took $50 and turned it into $1,000 through selling books. If you go to Half-Price Books or a discount area in Barnes & Noble, you can check your Amazon app and see what the books are selling for. If you know you can make at least a 33% profit on that, I’d definitely buy it.