It seems like an inconceivable dream – turning £200 into £100k, but that’s the challenge a civil servant from Brighton set himself in a bid to beat the price of living.
Dez, 43, and a father of 4, was frustrated that despite he and his wife having above average salaries, they were still struggling to pay for the occasional meal out or a family holiday so he decided to tackle a second job.
Like lots of us who’ve used Amazon, the world’s biggest shop, he decided to spend his spare time searching for bargains after which sell them for a profit on the positioning.
He’s coy about his figures but in an interview last October he admitted that since he began in September 2022, he’s made well over £17,000.
Calling himself goodbyepoor_hellorich he began charting his success on Tik Tok `and has greater than 70,000 followers. Others have gone on to do the identical and are calling it the “£200 to £100K challenge”. So how is he doing it and will you do the identical?
Dez uses Amazon arbitrage, a selling method where you source products from different market places to sell on the positioning. For instance finding a t-shirt for £10 in an area store that sells for £20 on Amazon. You purchase the product, sell it on Amazon and keep the difference as profit, that is referred to as retail arbitrage.
The opposite method is online arbitrage, sourcing products from sites like marketplace, ebay and facebook.
The skill is in analysing demand and finding items for lower than the Amazon price. The benefits, especially if it’s a second job, are that with online you’ll be able to source products from home in your spare time. It’s a low price strategy to sell. The items will arrive to you safely packaged and you’ll be able to then re-use them to sell on to your Amazon buyer.
There are millions of online retail stores where you could find profitable inventory and in the event you find an awesome deal online you could, if you could have enough financial resources, have the option to purchase in larger quantities and potentially make greater profits.
You should use Fulfilment by Amazon (FBA) to handle packaging, shipping and customer support.
The downside of arbitrage is that there may be lots of competition with more resellers online than shopping at physical retail stores. It might probably be time-consuming and it may possibly be hard to calculate profit.
For retail arbitrage there are Amazon seller scanner apps you’ll be able to download to your smartphone to assist find profitable products to resell. The Amazon seller app is free in the event you are a registered seller.
In accordance with a JungleScout survey, in2021, 52% of sellers reported profit margins of between 16-50% which worked out at between £2000 – £5000, annually.
It’s perfectly legal to resell a product so long as it’s unchanged and sold in its recent condition. Nonetheless, some brands may prohibit you from selling their products on Amazon with online arbitrage – Nike and Lego don’t allow third party sellers on the platform.
What other methods are there for retail arbitrage?
Private Label – that is whenever you create your personal product label or brand, normally by modifying an existing product. It’s probably the most common approach to selling on amazon and will be incredibly profitable but you have to really know your markets and experts suggest you have to be willing to risk as much as £5,000 because you would possibly not get it right first time.
Wholesale – Buying products in bulk directly from a brand or from distributors to sell on Amazon. this, like private labelling, requires begin money. As a business model it’s more sustainable because you’ll be able to replace orders every month and also you aren’t searching masses of web sites searching for products. But demand for products can change and you could possibly be left with an investment which you can’t shift. There’s also the matter of storage. Unless you could have masses of spare space at home, you could possibly end up over-run with boxes.
Dropshipping – In 2023, about 23% of all online sales were fulfilled via dropshipping and the figure looks set to grow since it is considered one of the simplest and quickest ways to start out a business,
You list products in your site or storefront but don’t even have them in your possession. You act because the middleman between the customer and the supplier, which suggests you don’t have the headache of finding cupboard space and keeping on top of your inventory management.
The client makes a purchase order, you process the order and transfer it to a third-party supplier (either a wholesaler or manufacturer). The third party then prepares and ships the order in your behalf and the client receives their order.
It’s easy to run, there are low begin and overhead costs, you could have a versatile work location and there are multiple selling opportunities from establishing our own domain to opening a storefront on places like Amazon and Etsy.
To start find a number of products from an industry and position yourself as an authority in a specialised area. Do loads of market research to gauge the competition, find a high quality supplier with a superb fame, discover where your target market is and select your selling platform accordingly.
You will have to adapt your sales approach and never be afraid to vary products that aren’t working.
It’s also necessary to do not forget that with low overheads and costs comes low returns. Experts suggest a profit margin of 15-20% is absolutely the maximum you’ll be able to achieve with dropshipping.
Dez admits he tried several things before choosing Amazon arbitrage, and has diversified along the best way.
‘I began making videos about my progress and realised that individuals were regarding what I used to be doing. it isn’t a get wealthy quick scheme, you could have to construct it slowly’.
He also hopes that as he builds his media presence, he’ll receives a commission more by platforms like YouTube.
So in the event you fancy a side hustle in 2024, give it a go and allow us to understand how you get on. Read our guide to other lucrative side hustles here.