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Welcome to the sixth and final part of the complete guide to online arbitrage for beginners (you can find a list of all the articles in the series at the end of this one). By now, you’ve learned what online arbitrage is, how to start selling, and how to grow beyond your initial setup. Next up are the common challenges new sellers face and how to overcome them.
What you’ll find in this article:
This part will tackle new sellers' common mistakes and tips for long-term success. You'll learn the importance of market research, managing inventory efficiently, providing excellent customer service, and staying informed about industry trends.
It's normal to feel nervous when starting an online arbitrage business. You'll inevitably face challenges. That's okay. Every new seller faces hurdles—it's not just you.
What's unique to you is how you ride the ups and downs of the process.
Here are the things you should avoid at all costs:
A critical mistake in online arbitrage is not doing proper market research. It’s tempting to jump on a good price, but you could lose money if you don’t check all the details. Always verify product info and prices on both the source store and Amazon (or wherever you plan to sell) before purchasing.
Even a small price change or listing error can turn a good deal into a costly mistake. Use sourcing automation software, like Tactical Arbitrage, or check manually to make sure the listing is correct, the product matches, and your profit margin is safe. This extra step helps protect your investment and sets you up for success.
Many new sellers focus on the cost of the product and leave the shipping fees as an afterthought. Then they wonder why their profit is so low.
High shipping fees will cut a chunk of your profit, so you must prioritize it in your pricing strategy. If you’re using Tactical Arbitrage to automate your cost and profit calculations, this user guide will help you set everything up for the most accurate results.
In online arbitrage, most purchases are one-time affairs—you buy a product while it’s discounted and sell all your stock for a higher price.
That’s because maintaining stock of a product for a long time is tricky. If you have too much of an item, you're paying more for storage without making more sales. And if you run out of that item, marketplaces like Amazon will charge you.
The key is to find a balance: keep your inventory small to avoid storage fees and frozen capital, but have enough stock to keep profits coming in. An inventory management tool can help you assess your stock conveniently so you don't waste opportunities.
Being tone-deaf to your customers is a one-way ticket to a failed online arbitrage business. No matter how frustrated you feel, you must never ignore customer complaints.
One bad rating, even if it’s uncalled for, can stain a seller’s reputation and affect future sales. So, regularly review your customers' feedback, fix what can be fixed, and answer professionally.
If you’re selling at high enough volumes that you can’t keep up with customer feedback, try FeedbackWhiz Emails. Their feedback repair management tools can take a lot of the weight off your shoulders.
Returns and complaints are normal parts of the arbitrage process. Here are some ways you can turn things around for unhappy customers.
If you sell on Amazon, you can usually run with their default policy. But you can also create your own (as long as you follow Amazon’s rules and any applicable consumer protection laws).
Either way, make sure the return policy is visible on your storefront, package slip, website, or social platforms. The policy should highlight the conditions and timeframe under which a product return is acceptable.
Buyers are often in a bad mood when they return a product, especially if they’re returning because of a problem rather than just changing their mind. The frustration can build up if you don't communicate with them promptly.
Even when you're not at fault, don't dismiss their dissatisfaction. Instead, respond quickly and professionally. If the fault is on your end, addressing their concerns is even more important. Offer solutions and let them know that you’re making sure it won’t happen again.
Maintaining a good seller standing is crucial, whatever marketplace you’re selling through. Here are some of the most important factors to remember for Amazon, but they’ll also be relevant to all your sales channels.
Stick to the platform's policies to avoid legal issues. Breaking the rules can lead to account suspension, so you must familiarize yourself with Amazon policies. Amazon will let you know about any policy changes through various channels, including email, so it should be easy to keep up to date.
Use Amazon's native features to check the health of your Amazon seller account. Go to your dashboard to check for any performance issues or warnings. If there are concerns, resolve them quickly.
Your Amazon seller account is the equivalent of a physical store. You wouldn’t leave a shop open and unattended, so don’t skip anything that can make your account more secure.
Use a strong, unique password and enable two-factor authentication to keep it safe. And don't blindly verify or give access to third-party tools—make sure they're reputable and have solid security measures themselves.
Make sure you keep detailed records of all your transactions, both buying and selling. If you're more comfortable doing it the old-fashioned way—like using spreadsheets—do so. If you want a more streamlined process, use advanced software like InventoryLab or FeedbackWhiz Profits. The point is that you must maintain detailed records so you can answer any questions, whether from the tax man, Amazon, or anyone else.
While online arbitrage is a great business for quick wins, your aim should be longevity. Here’s how you can boost your chances of thriving in the long term.
One thing you can always count on in ecommerce is that it will keep changing. So, stay updated with the latest industry trends to ensure your online arbitrage business succeeds.
Stay on top of policy and algorithm changes. Join forums and attend webinars, such as Threecolt’s Customer Coaching courses, for ecommerce software. Subscribe to industry blogs. Follow industry leaders and experts on their socials to keep your knowledge current.
Respond promptly to customer inquiries and address any issues professionally. Positive feedback is crucial for building your reputation, so always maintain a courteous and helpful tone—even when dealing with tough situations. This builds trust and confidence in your brand.
In online arbitrage, time is money. Manual tasks like product research, repricing, and managing orders take a lot of time and can lead to mistakes. So, invest in automation tools that can help speed up the processes. This gives you more time to focus on growing your business.
If you want to earn money, online arbitrage is a smart route. Even as a beginner, you can tap into a great opportunity to earn extra cash. Follow this guide to online arbitrage for beginners to feel the thrill of starting your own money-making machine.
Bookmark this guide. It's a complete, easy-to-follow resource for learning about online arbitrage. Even if you have zero knowledge about it, we'll walk you through everything.
[Part 5] Scaling Your Business
> [Part 6] Overcoming New Seller Challenges
