Here's How To Do Online Arbitrage Like A Boss with BowTiedMahi
Online arbitrage is the practice of buying low and selling higher online.
It's called "arbitrage" because it involves buying and selling the same item at different prices in different places. You can do this with physical products or digital ones, and @BowTiedMahi is the expert.
Make sure to follow him on Twitter and subscribe to his Substack!
Continue reading to learn top-notch Alfa on how he got started and how you can do the same.
Hi, I’m BowTiedMahi. I run a business that specializes in Online Arbitrage - the process of buying items from everyday retail stores like Walmart and reselling them on other marketplaces like Amazon for a profit.
While that might sound crazy, you have to remember that we live in a world where people pay $50 to have McDonald’s dropped off at their door. There are over 100 million Amazon Prime members in the US, and many of them will happily pay 2-3x the retail price of their favorite products in order to get them delivered in 1-2 days. Opportunity in this space is everywhere, but you need to know where to look.
I wasn’t exactly interested in being an entrepreneur as a teenager, but I also didn’t like the idea of having a proper job with set hours. I did lots of side jobs that allowed me to make money on my own time and set my own schedule like being a soccer referee, delivering for Doordash and writing video scripts for YouTube channels.
I got started selling on Amazon when I saw a Twitter thread by Jarek Lewis about flipping textbooks. I was very skeptical of making money online, but after some digging I found out that I had a mutual connection with this person so I took the plunge.
The process of selling on Amazon is very straightforward - you buy the product, put a sticker on it and ship it to an Amazon fulfillment center. Once the Amazon employees check in your inventory, it will be available for purchase and shipped with Prime when a customer buys it. There’s a lot of fees involved with this process, but for the amount of work you have to do it’s definitely worth it.
I spent 6 months buying used textbooks from eBay and reselling them on Amazon with Prime shipping, which got me to around $15,000 in revenue. I didn’t make very much money doing this, but I learned a lot about the process of selling on Amazon and how to analyze products.
At the end of 2021, I learned that you could do the exact same thing but with everyday products - once I figured everything out and got the necessary software, I was off to the races.
It started with just buying some basic grocery items from Walmart - rice noodles, cake mix, soup cans, and anything else that I could sell for a profit. As I gained more experience, I started branching out into other categories like beauty and supplements where the average sale price was much higher.
Throughout the year I kept scaling, buying more inventory and hiring virtual assistants to help me source more inventory. By the end of the year, I did over $700,000 in revenue.
Today, I have a team of 4 virtual assistants from the Philippines who help me source products to resell on Amazon. On average, they find enough items to hit our daily spend goal of ~$1500-$2000 which means I’m now at a point where I only have to work on the business for 1-2 hours per day.
While that sounds really nice (and it is), it took a lot of work to get to this point and is anything but a way to get rich quick. I’ve learned a lot this past year and a half, and I wanted to give you some insight on what I would do if I had to start over tomorrow as a brand new Amazon seller.
Consume Lots of Content
Like any new skill or business, you should spend the early days learning as much as you can. Whenever you aren’t actively sourcing products, you should be watching every YouTube video, listening to every podcast, and reading every article you can find about selling on Amazon.
There’s plenty of people in this space that all have their own unique perspective on how you should run your business, and by listening to them you’ll absorb a lot of valuable information.
Here’s a short list of people you should check out. There’s a lot of people providing value in this space, but if you follow these guys the algorithms should take you to everyone else:
YouTube / Podcasts
There’s probably more out there but I haven’t seen enough to recommend them
Master The Fundamentals
Don’t get any of the fancy software. Don’t subscribe to a bunch of lead groups or lists. Don’t start hiring VAs when you don’t know how to source items yourself. Even if you want to create a business that runs without you, it is essential to master every workflow in your business so you’re able to instruct someone else how to replicate them (or make sure that they know what they’re doing in the case of getting a prep center).
Get the two essential softwares for sourcing products (Keepa and SellerAmp), and just grind away for 3-6 months - the highest ROI task in your business is finding profitable inventory.
The better you get at sourcing, the more money you’ll make.
Be Willing to Reinvest Everything
Selling on Amazon is anything but “passive”. It’s a capital intensive business that is driven by the systems you create and your ability to maintain them. If you take too much money out of the business, you won’t be able to grow.
Most of your profit in the first 6-12 months should be used towards buying more inventory, paying for software that will make your business more efficient, and outsourcing the low ROI tasks in your business. If you can go a year without paying yourself, you can easily build a six or seven figure store.
The concept of arbitrage is very simple, but there’s so many complex topics that I couldn’t possibly explain in one post. If you’re interested in learning more, my Substack and the content creators I listed earlier in this post should help you get started.
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I would like to thank Mahi for the great insight he shared on online arbitrage!
It's great to know that there are so many opportunities for people to make money outside of the traditional 9-to-5 job.
Until next time frens, keep making WiFi money 🤝.