All the talk is about Retail Arbitrage! What the heck is it anyway?
The shorthand way of describing it is “Amazon FBA Retail Arbitrage”. Based on the confused looks I’ve received from friends and family when I use that term, I think it’s worth clarifying what I mean by that.
First, here’s my definition of retail arbitrage. And, backing up from there, here’s a definition of arbitrage: “The simultaneous purchase and sale of an asset in order to profit from a difference in the price.” Arbitrage is all about finding price differences other people haven’t identified and profiting from that knowledge.
Retail arbitrage, as defined here, is applying that definition to what one retailer is charging for a product vs. what that product is selling for on Amazon. There are numerous reasons why a product might sell for more on Amazon vs. other retailers. A savvy shopper can often find opportunities to act as a matchmaker between what a seller is willing to part with an item for and what a buyer is willing to pay for the same item.
Arbitrage is capitalism at it’s finest. It cuts to the point and gets straight to the art of deal-making. I have an item I was able to negotiate for a certain price and you are willing to pay my price because it’s fair to you as well. We both come away, winners. It’s a beautiful thing. It’s supply and demand in it’s simplest form.
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