Welcome To The OA Challenge!
A Few Tips For You To Get The Most Out of The Challenge
#1 Make sure you “whitelist” the email address support@oachallenge.com. It may get marked as spam if you don’t do so. Also, make sure you open all of the emails you see from that address, as we will be sprinkling in some cool promotional stuff that you will definitely want to check out.
#2 Ask questions down in the comments! We answer all of them.
#3 Skim the Q+A and Notes. The notes are specific to the module and the Q+A are questions that were asked after the live show. They may or may not be directly related to that day's lesson. These are below the notes at the end of each session and are not mandatory, but they are helpful. This will give you the full experience that live challengers get. Many of the questions might be things that you didn't know you didn't know either!
What is Online Arbitrage?
So, just what is Arbitrage? It is more than negatively generalized terms like “Scalper” and “Flipper”. It is much more than that!
In simpler terms, Arbitrage is simply the practice of buying a product and then reselling it when & where the value is higher than what you paid for it. Successful arbitrage companies have systems boiled down to an exact science, often generating massive businesses for those who have perfected their business management.
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“Value” is not the same as standard price. Value is what most customers are willing to pay. That is why you will frequently see prices fluctuate on Amazon for hot items: sellers are trying to get the most value out of their inventory. Just look at how much a PS5 is going to cost you on Amazon or eBay back in 2020 (and even today, 3 years later). Most people would say that they won’t pay thousands of dollars for a 500 dollar gaming console, but due to the limited stock, prices skyrocketed because enough people were willing to pay that extra cash. That is how value works.
Arbitrage is an incredibly old institution. While online arbitrage is a relatively new invention, We know of mercantile Arbitrage being practiced by ancient traders and merchants as early as 1700 BC. That was so long ago that even The Code of Hammurabi has rules about Arbitrage.
The Silk Road was a massive avenue for business between Europe and Asia; buying rare and exotic goods, then selling them back home at a high margin of profit. They used Arbitrage when they bought then resold commodities all across the Eurasian land table. The most common types of arbitrage include things such as:
● Wholesale Arbitrage: selling products bought from a corporate distributor. A very great way to upscale your existing business, but rarely a starting point.
● Online Arbitrage: selling products bought from an online storefront. Great for people who are looking for a remote, automated experience.
● Retail Arbitrage: selling products bought from a physical storefront. It is a very common starting point for Amazon Sellers.
● Private Label: selling your own original product for more than the cost of creation.
Some sellers do just one method, others do some hybrid blend of the four. The important thing is that you get started and build a system that is sustainable and trainable.
Is Online Arbitrage Going Anywhere?
One of the biggest rumors you may have heard is that Online Arbitrage is a dying practice. Like most criticisms about this industry, it originates from people who are not in this space.
There are some questions that have permeated and floated about the industry. Questions like “Has the Arbitrage market changed?” The quick answer to this question is yes, It will change, but that is the nature of everything; to constantly adapt and change. Another question may be “How much time is left for amateurs or small scale merchants?” The answer to this is that we will have a place in the market for a very long time, if we are open to adapting.
Thanks to the modern digital age we live in, there will always be a place for independent merchants on the internet. Even if the world ended and every server crashed, you would still see people selling goods on the street corners or kiosks. With the creation of online arbitrage, a booming industry has formed. The rise of Fortune 500 Companies like eBay, WayFair, and Amazon are examples of organized online Arbitrage being incredibly successful. So no, Online Arbitrage is never going away because Arbitrage is never going away.
Amazon Facts
Here are some quick facts about Amazon:
- About 53% of every single household in America has an Amazon Prime account, meaning the customer base isn’t going anywhere! Amazon Prime membership is only growing with each passing year.
- Amazon Controls over 20% of all retail in America. That is a huge share
- 52-60% of Amazon's market is sold by third-party sellers.
- Third-party sellers made a total of $300 Billion in 2020, which is more than Amazon itself earned!
- The Grocery department of Amazon is growing really fast, and soon they will control that market as well! They control 21% Market Share!
- Amazon is bigger than The Home Depot, Target, and even Walmart!
- The US sees the least competition on Amazon because it is such a massive market when looking at the sellers to customers ratio.
- In Q2 2021 last year, Amazon passed $100 Billion for the first time ever, and has done so multiple times since then!
Embrace The Suck!
One thing stands out for all of the people who succeed in this space, they all grind and work relentlessly no matter what! They followed the mantra “Embrace the Suck” and learned to pivot adversity into opportunity.
Online Arbitrage is hard, long work, but it is rewarding and can easily become a well-paying career. Whether you are looking for a side hustle to pay for your groceries or wish to start your own multi-million dollar business; anything is possible in this industry!
Terms to Know
- Amazon Prime: A subscription program that Amazon uses to give subscription holders expedited shipping as well as other perks like discounts, access to their streaming services, Amazon Devices etc.
- FBM & “MFers”: “Fulfilled By Merchants & Merchant Fulfillers”. These terms are interchangeable and are used to describe you, the seller, who are manually fulfilling Amazon orders on your own.
- FBA: “Fulfilled By Amazon”: orders that are fulfilled by Amazon corporate fulfillment centers. This is convenient, but money will take a little while longer to come in compared to FBM.
- Buy Box (BB): The coveted first merchant spot on a product, that box on the right side of the screen on Amazon.com (think of it as the “buy now” button). It should be your goal to control this space, as 80%-85% of sales occur on the Buy Box.
- Suppressed Buy Box: When Amazon has disabled the Buy Box option for your product; Your product only shows the “add to cart” and “Other sellers” button. Typically, this happens when Amazon wants to police an ASIN or want to control it for themselves.
- Regional Buy Box: Buy Boxes vary according to the location of the consumer. A consumer in Columbus may have a different BB than a consumer in Miami.
- BSR: Best Seller Rank. This is a rank given to a product according to how well it does compared to other items in that category. The closer you get to the #1 spot; the better the product. Also, keep in mind that history is the best thing to look at because BSR is subjective to the time it has been on Amazon.
Note: We are gonna make a big focus on BSR on Keepa Day. - ASIN: Amazon Standard Identification Number. This is the code number that Amazon uses to identify products within their site. You will see it in the URL and it starts with a B. Note: Don’t forget that LPC is not the same as an ASIN or UPC.
- UPC: Universal Product Code. This is the code number associated with a product that can be used to find it from any storefront in the world.
- SKU: The Stock Keeping Unit. An automated unit for your stock. You can make custom SKUs which is really helpful for
Live Q+A Recap
- Do Sellers need Amazon Prime? No, but it is good to understand the customer experience. Always remember that it is a big no-no to use Amazon Prime to sell.
- Are you familiar with other website scrapers? Yes, but I don’t mess with many of them because they're hard to teach, let alone master.
- Will you cover best practices to maintain a healthy Seller Central Account? No, but I would be more than happy to dive into that a lil bit on a Q+A day.
- When will we get access to your private group for those who signed up for the add-on bonus? Yes, if you signed up for that, just keep monitoring your inbox, and you should see an invite within the next few days.
- Do I need to sign up for TA now? No, hold on until day #8 when we start Tactical Arbitrage. It will help you get the most out of your 14-day trial.
- What is the formula for finding out required capital for a desired income?
There isn’t a perfect formula, since it varies from seller to seller but we do have a sheet in the Guides called OAC Income Statement that shows you how much you would need to earn on Amazon to replace your income. - Are we gonna go through cash flow strategies? Not really, but let me know personally and I’ll see what I can do.
- Are we gonna talk about creating listings or jumping onto current ones. This course will focus mostly on jumping onto current ones since creating listings is a really difficult process to perfect 100% of the time.
- Will we have access to future OA Challenges too or will we need to re-register?
You won’t need to only if you are a VIP member, which we will discuss closer to the end of this challenge. - Any coverage on sole proprietorship vs LLC when setting up your Amazon
Business? I would recommend bringing that question to your CPA or Attorney. However, don’t let the lack of an LLC prevent you from working on your business. - What other software do I need besides Keepa?
Honestly, Keepa is the only essential in my mind. We will discuss software that will make your life easier but they are things you can live without. - Will we be seeing you work through real lead lists?
Yes! - Is RevROI free?
Yes. - What is the main difference between RA and OA?
RA and OA depends on how you like to work: PC or on the road. - What is the safest ways to get un-gated?
Create an Amazon Business account. If you go into the un-gating guides you will see more details than I can give right now. Getting ungated is the easiest right now that it has ever been. - If we are retaking the OAC, will the free 14-day trial work?
Not if you have already redeemed it. - Are we going to discuss replens? Yes! A lot of people treat replens like this super rare thing. Once you realize how the supply-Demand curve is inversely related to sales, you will be able to find so many replens.
- When looking for profitable products do I have to focus on ROI or the margin? You want to look at both, but ROI is a more efficient data point to read.
- Will we discuss FBM vs FBA? I am a fan of FBM especially during busy seasons. It really depends on what you want to
do. - Should I focus on selling what I can or getting ungated? Sell what you can. You’ll get ungated eventually, but first make sure your business stays
profitable. - Will we look at Chrome Extensions?
Yes, we will have a whole day for that. - How do you find wholesalers?
It is really just the art of mastering google. - Do we talk about VAs and Prep Centers?
We have a guide on Prep Centers, and I am happy to answer any questions you may have over email. - Will we cover the S&L updates?
Yes. The fees aren’t rising, but the price threshold is. - Is there a reverse search feature in Keepa?
Yes and no. There’s a trick to do so that we will show in the next two sessions. - How much inventory/item to send in due to storage and removal fees?
Only sell small batches until you are convinced it is worth the investment. Test a lot of batches that are small quantities and keep track of the winners. - Can we talk about how to reverse search on TA?
Yes, Absolutely