Amazon arbitrage: The best categories to sell in & how to know if it will sell

Seven categories that will put you on the fast track to cash
Seth Kniep
October 10, 2017
Amazon arbitrage
Today I’m going to share with you the seven best categories to sell in with Amazon arbitrage. I’ll also share how to know if your product will sell so you don’t waste your money at Walmart or Target or a discount store on inventory and make nothing back. I’m going to show you how to de-risk yourself as much as possible.

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

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.

Books

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.

Clothing and Shoes

This is a gated category, so keep in mind you won’t get approval automatically. You have to be selling for a while, apply to Amazon, and get approved before you can sell in this category. But once you are, you are in a smaller group of sellers. There’s fewer people to compete with. If you find clothing that has a high brand value, you can make an absolute killing. There are brands that can sell for $70 retail. If you get it for $15-20 and sell it on Amazon for $40-50, you’re making money very quickly. Then while it’s sitting in Amazon’s warehouse, you can go out and find more items.

Handbags

Last but not least, we have handbags. This is a unique category because there are some very high-end items you can buy and sell: Coach purses have a very pretty price. If you find one at a discount, even if it’s used, if it’s in good condition, you can sell it on Amazon and make really, really good money.

When it comes to clothing, fashion, handbags, purses, and shoes, you need to understand the brands. The brands are where the value is at. That’s where you’re going to make a ton of money. My wife is very, very good at this. We private-label the majority of our clothing, but she still goes out, finds deals, and makes money on the side just for fun.

Here’s a tip that we actually teach in our Arbitrage class at Just One Dime: Look for gift items. These will give you massive opportunity over the competition. You should also check the best sellers rank of an item to quickly tell what its chances of selling are. As a general rule of thumb, don’t sell anything with a BSR greater than 100,000.

Let’s say you’re selling a rock on Amazon. If it’s doing really well and selling many times every day, the BSR is going to be on the lower end. The higher the BSR, the slower it’s selling. So you want to look for products with a low BSR, whether you’re selling on Amazon for private label or arbitrage.

If your BSR is 100,000, you should expect your item to be sold once a day.

If your BSR is 50,000, you should expect it to sell twice a day.

If the BSR is 25,000, you should expect it to sell three times a day, and so on.

This will vary based on category: we actually took a list of 22 categories in the US, Canada, and the UK, where you can look at the BSR and find out what the sales rates expectations should be based on that category. You can find that resource for free at the bottom of this page.

Let’s say you’re at the store, scanning, you find a purse, and you think, “Should I buy it?” How do you know it won’t sit in Amazon’s warehouse for three weeks. Find the listing on amazon.com, look at the BSR, and from there, you can quickly decide what the chances are of it selling.

100,000-250,000: Be very careful and put a lot of thought into it.

50,000-100,000: Do some research, really make sure the chances of selling it are strong.

25,000-50,000: Definitely get it, that’s a no-brainer.

Under 25,000: Why are you not buying the item already?

As long as the price is low for you to buy and you make a minimum of 33% profit on the item, and the BSR is good, get it.

The list helps because it lets you see quickly how many sales a day you should expect, which lets you gauge how many you should buy, how quickly they’ll sell, and how soon you’ll get your money back.

 

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Seth Kniep

Married a pearl. Fathered 4 miracles. Fired his boss. Turned a single dime into $104,857. Today, a self-made millionaire, Seth and his team of 8 badass coaches teach entrepreneurs how to build passive income on Amazon.

Dead serious about building income on Amazon with eight successful coaches in a community of badass Amazon sellers? Join the Amazon FBA Mastery membership.

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