How to Buy from Walmart and Sell on Amazon
1. Understanding Retail Arbitrage
Retail arbitrage is a method of purchasing discounted products from retail stores like Walmart and then reselling them online for a profit. The key to success is finding products that are in demand on Amazon but available at a lower cost elsewhere. This model works because of pricing discrepancies across different marketplaces.
2. Research and Product Selection
Before you start purchasing products from Walmart, it's crucial to conduct thorough research:
Use Amazon's Best Sellers List: Begin by checking Amazon’s best sellers in various categories. This will give you an idea of what products are currently in demand.
Use Scanning Apps: Tools like Scoutify, Profit Bandit, or the Amazon Seller App allow you to scan barcodes of products in Walmart. These apps will show you how much the product is selling for on Amazon, including the fees, so you can calculate your potential profit.
Consider Seasonality: Some products may sell well during certain times of the year. Plan your purchases according to seasonal trends to maximize sales.
3. Sourcing Products from Walmart
Once you've identified profitable products, it’s time to source them from Walmart:
Clearance Sections: Walmart's clearance sections often have significantly discounted items. This is where you can find products that have a high potential for resale at a profit.
Online and In-Store: Don't limit yourself to physical Walmart stores. Walmart’s website often has exclusive online deals that can be just as profitable. Use tools like BrickSeek to find specific inventory and pricing in your local Walmart stores.
Bulk Buying: Consider buying in bulk if you find a product that’s highly profitable. This can help reduce costs and increase your profit margin.
4. Listing Products on Amazon
After sourcing your products, the next step is to list them on Amazon:
Create an Amazon Seller Account: If you don't already have one, you'll need to sign up for an Amazon Seller account. There are two types: Individual (which charges a fee per item sold) and Professional (which charges a monthly fee). Choose the one that best fits your expected sales volume.
Product Listing: Use the product's UPC to find it on Amazon and list it. Make sure to use high-quality images and write detailed, accurate descriptions. Price your item competitively by checking other sellers' prices on Amazon.
Fulfillment by Amazon (FBA): Consider using FBA, where Amazon stores your products, handles shipping, and provides customer service. Although FBA comes with fees, it can significantly increase your sales because Amazon Prime members prefer items with Prime shipping.
5. Managing Inventory and Sales
Effective inventory and sales management are crucial to maintaining profitability:
Track Inventory: Ensure you always know how much inventory you have. This prevents overselling and running out of stock, which can harm your seller rating.
Monitor Pricing: Amazon's pricing is dynamic, and prices can fluctuate frequently. Use repricing tools like RepricerExpress to automatically adjust your prices and stay competitive.
Customer Service: Provide excellent customer service to maintain high ratings. Respond promptly to customer inquiries and handle any issues swiftly.
6. Understanding Fees and Profit Margins
Understanding Amazon’s fee structure is critical to ensuring your business is profitable:
Referral Fees: Amazon charges a percentage of each sale, which varies by category.
FBA Fees: If you use FBA, be aware of the storage and fulfillment fees associated with it.
Cost of Goods Sold (COGS): Always consider the total cost of purchasing the product from Walmart, including any shipping or taxes, when calculating your profit margins.
A simple breakdown of how to calculate your profit margins:
| Cost Element | Cost ($) |
|---|---|
| Walmart Purchase Price | 10.00 |
| Shipping to Amazon | 2.00 |
| Amazon Referral Fee | 1.50 |
| FBA Fulfillment Fee | 3.00 |
| Total Cost | 16.50 |
| Selling Price on Amazon | 25.00 |
| Net Profit | 8.50 |
7. Scaling Your Business
Once you've mastered the basics, consider scaling your business:
Automate Processes: Use software tools to automate listing, repricing, and inventory management. This frees up your time to focus on sourcing new products.
Expand Product Range: As you gain more experience, start exploring new categories or niches on Amazon. Diversifying your product range can reduce risk and increase profitability.
Reinvest Profits: Use your profits to reinvest in more inventory or to try new business strategies, such as private labeling your own products.
8. Legal and Tax Considerations
It’s important to understand the legal and tax implications of your business:
Sales Tax: Depending on your location, you may need to collect sales tax on your Amazon sales. Use Amazon’s Tax Collection Service to automate this process.
Business Structure: Consider forming a legal entity, such as an LLC, to protect your personal assets and possibly gain tax advantages.
Accounting: Keep detailed records of all your sales and expenses. Consider hiring an accountant or using accounting software to manage your finances.
Conclusion
Buying from Walmart and selling on Amazon can be a lucrative venture if done correctly. Thorough research, careful product selection, and efficient management of your sales and inventory are key to success. By understanding the intricacies of both Walmart and Amazon’s systems, you can maximize your profits and build a sustainable business.
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