Is Tactical Arbitrage Worth The Price? : Making Tactical Arbitrage Pay For Itself

I am at heart a RA ( retail arbitrage) kind of guy. I love the thrill of the hunt and high ROIs that I get flipping products that I find locally to Amazon FBA.

With at said, RA has become harder and harder in the last year or so. There is more competition and many retail store have gotten wise to the fact that people are sourcing products to flip to Amazon and aren’t pricing products out at crazy low prices anymore.

I am not saying RA is dead, but what I am saying is that RA needs a little help from OA ( online arbitrage) to help with keeping the bottom line in the black.

With that said, there is only one obvious choice now for finding OA deals and that is the Tactical Arbitrage sourcing software.

For a Tactical Arbitrage review , see my post here

http://www.arbitrage411.com/amazon-fba/how-tactical-arbitrage-killed-oaxray-and-zen-arbitrage-and-why-you-need-tactical-arbitrage-to-do-online-arbitrage/

If you don’t have it, sign up for a free trial here ( do that now so that you can follow along with what I am going to show in this post)

Tactical Arbitrage is a great program to use but it has one big drawback.

It is expensive!

In this post I want to show you how to make enough money to cover the monthly cost in the fastest way possible. You need to understand that it is a tool to help make you money. It cost $99 a month, so it needs to make at least that much for you ( actually more than that) to be worth your while. If you pay $100 a month and make $500 a month, that is good business. If you pay $100 and make $50, that is bad business.

Before we go any farther, sign up for your free trial. If you don’t plan on using it or “don’t have time”, then stop right here. Signing up and half assing it will not do. “ Oh, I tried it and it didn’t work” doesn’t cut it when you logged in only once or don’t follow the steps I am going to lay out for you in this post.

First Step

Tactical Arbitrage is somewhat a geeks program. This is an issue because most of us sort of want simple, easy, push a magic button type software.

So the first step is to watch this video my son made on how to use Tactical Arbitrage’s interface. If you don’t understand how to get around the program, you are destined to fail at finding OA deals.

This takes about 45 minutes to watch and is where most people will get bored and drop off. Just that much better for those that commit to learn how to use the software.

Now that you understand how to use the software, now it is time to find some products.

First we need to think about this realistically.

While people occasionally find products from say Walmart or Target, these are probably the most searched sites. Not that we shouldn’t look at these sites but we need to realize that these sites might be more about timing (basically you get lucky to buy before the website runs out of stock).

Now these sites are great for the stacking of discounts which is one reason they are so popular to source but you will most likely find better products on the lesser known sites.

Next thing to look at is what products you can sell ( ungated in). There no reason to scan categories that you can’t sell. This is an issue if you purchase a bulk list for sites.

These list are great if you can sell everything but many people can’t and there is the fact that you wouldn’t scan every section if you were in the store doing RA. While Tactical arbitage can basically run constantly, having a bunch of stuff show up that you can’t sell will make it hard to weed out the deals ( of course you could do some horse trading with the products leads that you can’t sell)

So where am I going with this?

I might be best to build a bulk list ( and you SHOULD be building bulk lists) that are for multiple, lesser known sites that are in categories that you can and want to sell in ( similar to RA) You should basically run this list over and over because the prices on websites do change all the time ( remember I said timing is important?) Also remember that sales and discounts will play into this.

Now it is possible to get a list too big and it times out before it can run all the way through. The simple fix to have multiple bulk lists and rotate them through.

Now this is one function of Tactical Arbitrage. You can actually run multi functions at once. You want Tactical Arbitrage to be running every single possible scan 24/7. You set it up, check the results daily ( or several times a day) and see if the deals work for you.

I love to sell books on Amazon but I know many people don’t. Well they don’t because many just don’t understand books. I get that but here is a little secret. While books are generally onesy or twoesy type thing, they can total pay for the cost of Tactical Arbitrage with only a few MF to FBA flips each month. ( I actually know a seller that made $13k on just 2 college textbook flips. It was a large purchase but it was a thing of beauty)

Tactical Arbitrage has a book search feature call the the library search and it basically works that same as any other search but it is a separate feature so that you can run it at the same time that you run other searches. ( as you will see by the time we are done, you will have multiple searches running at once)

Just like typical searches, you want to use bulk lists. You can build these yourself very easily. I have a post that shows how to do that.

http://www.arbitrage411.com/amazon-fba/using-and-making-money-with-tactical-arbitrage/

Now since I am a book seller, it was easy for me to make up my own bulk list. I used my knowledge of local book sourcing and just did Amazon searches to find the same kind of books ( MF to AZ flips).

I actually made my list available for sell on Gumroad and if you don’t know how to source books or don’t want to make the list yourself, it is available on the Training & Sourcing page of the website

So now that we have the library search running we will move on to the reverse search.

I have mostly done RA my whole FBA career and love to find discontinued products because they sell for a premium on Amazon. The problem is that once I clean out say all the Walmarts in my area of a product, then I can’t get anymore of it.

Now we have to remember that our local Walmart in this example isn’t that only place that has ever sold this product and there are other retailers, online stores and eBay that are likely to sell this product. Grant it, they might not be selling it at clearance prices but then again, they may be selling at a price that is still profitable if we flip it to Amazon.

Once again we are going to make a bulk list but this time it is of ASIN that you have sold in the past. You will need to go through your inactive inventory to find the ASIN numbers. If you delete your inactive inventory like I do and use Inventory Lab, you can look up old sales and grab the ASINs that way.

While there is a chance to some websites might have these available, the best source will be eBay. Inventory pops up all the time on eBay, so this list should be run daily ( and once again, this can run while other searches are running).

With eBay, you will get a lot of mismatches results due to the titles. ( UPC sites always have better results) but the visual matching makes it easy to see if you should skip over the find or take a closer look.

A side note: You can also scrape other sellers storefronts and use this feature to find out where they are sourcing from.

Next we can use the Amazon flips feature. Now this is a little be more time/knowledge intense. Basically you are looking to find products that Amazon drops the price on and then set alerts to catch them doing it again. Then you buy them and flip them back to Amazon to sell at a profit.

Obviously the more you run this, the bigger you build your alert list, the more future deals might come your way.

This video show how to use this feature.

Next you can actually do RA via Tactical Arbitrage. Now this is very hit or miss but it does work.

We are looking to find products that we can just run and pick up in store to flip to Amazon faster than if we ordered them online and had to wait until they arrived then shipped them to Amazon. Sometime this time frame can make the difference between profit and the race to the bottom.

In store sourcing is my preferred method for souring grocery and HBA products ( anything with an expiration date) . Too many times I have ordered something online and when it gets to me, I can’t send it in because it is too close to expiring.

Also we want to find say a product on the Walmart website, click on it and see that it is out of stock. Then we check to see if it is in stock at our local Walmart.

Here is a video on how to do this

The final feature I am going to show is the geekiest. Tactical Arbitrage uses Xpaths to run the searches.
You can actually create your own ( or pay someone else to do it) to use for website not already on the Tactical Arbitrage list of site.

This is where the real advance users are making the big bucks. They are sourcing where very few people are and using software to make it easier.

This video tells about using Xpaths

Summary

Is Tactical Arbitrage worth the price? Yes if you are willing to actually take the time to learn how to use it and have multiple searches running at once. You should have a constant supply of leads to source from. If you are a person that has bought lists in the past, now is the time to switch over to Tactical Arbitrage. Once you get it set up, there really isn’t much more time involved in using it.

I hope this has helped and make sure to sign up for your free trial. Then take action during your trial period.

Tactical Arbitrage free trial

How To Source RA For Amazon FBA With Little Or No Cell Signal

When you can’t get a signal, you can’t source.

We all have been there before ( some of us more than others) when for whatever reason why, we can’t get a cell signal to run our Amazon sourcing scanning app. This is very frustrating and in this post, I want to show some ways to work around this.

Sourcing FBA RA Fringe Areas

I live in a rural area and a lot of times the cell towers aren’t exactly close to having strong signal. If you go inside some of the steel sided stores around here ( basically pole barns) , there is no signal at all.

This happens at most of the farm stores, Dollar Generals, etc.

There is also a city I go to that has both an Ollies and Rosas that is in an area that has zero cell service for my carrier. I know there is some good stuff to source out of both of these stores but have never been able to source there.

Sourcing Workarounds

There first and easiest fix is to use a different sourcing app, so let’s look at how the apps work.

The Amazon seller app is what I use normally. It requires more cell data because it is a live search. Other scanning apps like Scoutify, Scanpower, Profit Bandit, etc, don’t get to access the same data in the Amazon API. They have to use “old” data and that is why you will see a price difference if compared to the Amazon seller app.

My go to is the Scoutify app. It uses less cell data so it will work better with a weaker/slower signal. ( the bar code reader also works faster too than the Amazon app for less battery drain) .

Don’t get me wrong, I don’t like using Scoutify if I don’t have to. I like the Amazon seller app showing me if it is restricted or not and in general, I find it harder to interpret the data on Scoutify compared to the Amazon seller app, but it is way better than nothing.

The second workaround that I personally don’t use but know several other FBA sellers that do this is to have a second cell phone with a different carrier.

In my case, I am on Verizon but I know another local seller that is on ATT or T Moble and can scan at the Ollies that I can’t get signal from Verizon at.

“I am not going to pay for a second phone” is what some are saying right now. Really? It is a business expense and you can take it off your taxes and secondly, what if you go into that “unscannable “ store and make $2k? That would make it worth it.

The third work around is to hook up to the internet via Infinity. I personally don’t have this service, but one of my sons had access and was able to scan in places that I couldn’t because I didn’t have an cell service.

Many stores have a public wifi signal and you should check to see if you can hook up.  If it is a locked wifi, you might be able to talk an employee or manger into letting you have the password.

The fourth workaround is the many times there is actually an area that does get some signal somewhere in the store.

If you are pretty good at “knowing what is probably worth something”, you can toss stuff in your cart and then head to the signal area to scan.

This is hit or miss but does work. Usually this is upfront near a window or on a side.

Not exactly fun but it will work in a pinch.

Fifth workaround is to carry in the Amazon product database.

Huh?

I do a lot of book sourcing and use a Dell PDA that I have the whole book catalog downloaded on it to scan books faster.

I use a service called Scoutpal ( there are others) that cost me $9.99 a month. Not only does it have the whole book category in the database ( that is what is was primarily set up for in the beginning) it also includes most of the other categories as a freebie.

I can literally scan anyplace without any signal at all.

Now it has drawbacks.

First, you have to update the database which is updated on the website twice a week. So the data is no where current in most cases.

Second, while is says there is the whole database, somethings just aren’t there and you can’t do any source to title search. Basically if someone changed the UPC code, you won’t see the product show up.

Finally, the data is extremely basic. It is just going to get you in the ballpark of basic prices. Many times you have to make some assumptions about MF verses FBA.

Sixth, if it is a chain store like Big Lots, you could source one that has signal and then go to the one that doesn’t and pick up the same products. This means you will probably miss stuff that the non signal store might only have but it is a somewhat workable plan.

You could take this a step farther and buy a sourcing list. Say I could buy a list for the Ollies I can’t get signal in. I would basically just look for the stuff on the list and source that way.

Finally the last case ( and most sucky way to have to do this) would be to snap pictures of products that you thought would be worth money and go back home ( or where you have signal) and look up the products on Amazon. Obviously the more experience with sourcing you are, the better chance you could pick winners.

Summary

While lack of signal when sourcing sucks, it is not the end of the world. Most of the things I listed here, most seller won’t do. This is good for you if you will take the extra steps that others won’t and should help you find profitable produces that other can’t.

FBA Wholesale, Cheap Beer and How Brick & Mortar Sellers Ruined Amazon

With RA and OA getting hard, massive Amazon restrictions, counterfeit claims galore and no invoices to save you, many Amazon FBA sellers are trying to move to sourcing wholesale ASAP.

I personally thought it would be a piece of cake to switch over but then I learned that the brick and mortar sellers that are now flocking to Amazon have a different way of doing stuff and I want to cover what I have been learning in this post.

I have seen Amazon FBA get crowded.  Really crowded in the last year or so. It is very obvious in the price action of products. The “rush to the bottom”  is extremely fast due to more people trying to supply products to Amazon.

This was/is to be expected. It is basic economics.

While I understand it, I don’t have to like it.

I like me some high ROIs and have pretty much lived and died by the 3 x 1 rule  ( sell at 3 times the buy price and that usual makes 100% profit. Buy at $10, sell at $30.  AZ takes $10 and I make $10 profit) when sourcing. I have found that it is very hard to do that anymore.

I always joke around that RA is dead ( or OA is dead) but it will never die because people will always be able to find arbitrage opportunities. With all the software that is constantly scanning websites, people will find that RA gives the best chance of finding arbitrage opportunities.

Basically you never know what someone’s local store will price clearance products at or what discontinued item you will find locally, so RA will never die.

The problem is that while you can still find stuff like this, you may not be able to sell on Amazon because so much stuff is becoming restricted. ( hint, hint: list that stuff on eBay. Despite what many Amazon sellers think, eBay profit spend just as good as Amazon profits. Actually I am doing this a lot more when I find good deals and am restricted from selling or the packaging is not in “new” shape)

The second problem is that there has been a rash of counterfeit claims and Amazon suspensions.

Some may be natural ( honestly I don’t even know how people make the claims. I have never seen that check box on my options when I have returned stuff to Amazon) but it seems that brand owners are filing claims and other Amazon sellers are doing this to get rid of competition ( while some say that it isn’t happening, trust me, it is)

The problem is that Amazon wants sellers to be sourcing from legit sources. While sometimes a Walmart receipt will work to save a seller, Amazon really wants invoices. They are moving to a total invoice system and nobody knows when the Walmart receipts will no longer work.  

So RA is sort of a Russian Roulette type of thing. You may never have an issue but then again, you could be put out of business in an instance.  This is why many Amazon sellers are looking at wholesale ( or private label).

Enter The Traditional Brick & Mortar  ( and cheap beer)

The word is out that Amazon is a good place to sell products on. Tons and tons of retail stores ( brick and mortars) have opened up Amazon seller accounts. They want a piece of the action.  They know people are buying online and they need to make more sales to add to their bottom lines.

Big deal. So what?

Well they play by a different set of rules than I ( or you ) do.

Hold on, here come that cheap beer reference.

The cheapest beer that a college student can buy is Keystone ( think canned piss) . You know beer is cheap when it comes in a 30 pack.

Well in the retail world ( the brick and mortar) there is a term called ‘keystone pricing”.

Simply stated, keystoning is selling at double the wholesale price.

So they buy at $5 wholesale and sell at $10 retail.

Keystoning is what retailers strive to achieve. ( and most fail at it).

If they keystone, that are making a great profit after overhead.

This works great for selling locally in a store. It is actually my 3 x 1 rule that I like to follow. They are getting close to 100% profit this way.

Like I say, they rarely do this good on all products.

Ok, but where is this going?

Well this is the issue.  They generally don’t change how they do business regardless if it is local or online.

So this is the issue. They aren’t playing by my rule of making as much money as possible on every Amazon sell. They list products, keystone the wholesale price and that is what they sell the product for on Amazon.  

They are happy campers. They also don’t understand Amazon and the fees.

So as long as I have sold on Amazon, I have used the amount of $4 as the minimum fees that Amazon charges on every product that I sell.  With the recent changes in Amazon fees,  it would probably be safer to use $5 as the figure. As I say, there is a $4 nut to bust on every product.

For example, I find something on clearance at Walmart for $1,  I probably need to sell it for at least $5 on Amazon to just break even ( more like $6 now).  This is probably something that most sellers know ( if not, now you know why you are losing money)

So let’s run an example.

Joe Blow Brick & Mortar decides to open an Amazon seller account.  They are selling XYZ widget in their local store. They are paying $5 for these wholesale. So they decide to send some into Amazon.

If they follow their normal way of doing business, they will keystone these widgets.

They will price them at $10 ( double the $5 wholesale price)

Now they don’t understand that there is a $4 (or probably $5) nut to bust with the Amazon seller fees.

So if you are following along at home, $10-$5, is $5.  Then you take out $4 or $5 for the Amazon selling fees which leaves either $1 profit ( not counting the inbound shipping fees that need to come off this) or $0.

Joe Blow Brick & Mortar is selling these left and right and pretty happy because they are keystoning them and think this Amazon thing is the best thing since sliced bread.

They aren’t making anything off of these!  If they were doing this locally, they would be killing it.

You or I am on this listing and we are just shaking our head and trying to figure out how to get rid of our stock because they keep sending in stock and we can’t get ours sold at a profit.

So what use is this information?

Well it is about ASP ( average selling price). FBA sellers love to get a high ASP. The higher the selling price, the lower % the Amazon fees are compared to the selling price.

So say the wholesale price is $20.  Joe Blow Brick & Mortar will price at $40. Now the Amazon fees might be $10, so the profit is $10 ( $40-$20-$10= $10)

Now there is a chance to profit on this product if you are selling against Joe Blow Brick & Mortar.

Here is the issue.  Most FBA sellers hate to invest a lot per unit.  I am not a fan of paying $20+ per unit because of Amazon’s return policy.

If I pay $20 per unit and make $10 profit and get a return, I have to sell 2 units to cover it. Actually the $20 isn’t my issue, the low ROI is. The lower the ROI, the more units I have to sell to cover the loss of a return.  

If you make 20% ROI, you have to sell 5 units to cover 1 return. This is no big deal on some products that rarely have returns but some categories have lots of returns.

So now we know how Joe Blow Brick & Mortar is going to price against us. How do we deal with it?

Before we look at that, let’s look at the other big facts.

It is hard to get wholesale accounts if you are an Amazon seller compared to a brick and mortar.

Joe Blow Brick & Mortar can pretty much open a wholesale account at will.  You and I will have problems getting approved.

So I find these widgets at Walmart. They are on clearance. I list them and can make a good profit below Joe Blow Brick & Mortar price because I got them even cheaper than wholesale.

Now Joe Blow Brick & Mortar is used to MAP ( minimum advertised pricing).  They get pissed that I am selling these for less than MAP and they contact the wholesaler or Amazon.

Now I am not an authorized seller of this and get knocked off the listing or a counterfeit claim against my account. Now my account is in limbo and I am hoping my Walmart receipt will get my account out of hot water.

Now if I have a wholesale account for these widgets, I have to play by the wholesale rules ( like MAP). Depending on the wholesale price, map might not even be profitable after fees and Joe Blow Brick & Mortar might not price over that.

Then here is the biggy. Joe Blow Brick & Mortar probably has a relationship with the wholesaler and probably orders more than just this widget. They may be able to get way better pricing than me and if they get it cheaper, they can keystone cheaper (if there is no MAP) and I can’t ever get close to making money on these widgets.

Dealing With Joe Blow Brick & Mortar

First, I want to avoid Joe Blow Brick & Mortar at all possible.  There are ways to detect these type of sellers.

Sometimes they have a sellers name that screams brick and mortar.

Some only sell MF ( merchant fulfilled). Normally we like to get on listings with no FBA sellers until they contact the wholesaler or AZ and get us shut down.

Sellers with massive feedback is a sign of sellers that operate on low margins and while they may not be brick and mortars, they get better wholesale pricing and will under price you 99% of the time. It is also very hard to get the buy box from these sellers even if you price the same.

Second, you need to focus on ASP. Source products that have a higher cost per unit. That gives you more wiggle room and also eliminates most normal 3rd party sellers.  You can still profit is a seller that keystones jumps in the listing.

Third, think about doing something different like bundling  or multipacking your wholesale products.  Most of the time Joe Blow Brick & Mortar won’t mess with you.  They are too busy and probably only scan the UPC code and will never see your listings.

Summary

More and more traditional brick and mortar seller are bring their wholesale to Amazon at the same time many of us RA/OA sellers are trying to get into wholesale to save our business.  They are literally killing  the Amazon as we have known in the past and Amazon wants this. 

Realize that Joe Blow Brick & Mortar plays by a different set of rules and has easier access to products. They can sell safer on Amazon because they are doing what Amazon wants. We are not doing what Amazon wants.

Use your knowledge of how Amazon works, which Joe Blow Brick & Mortar probably has no clue on, to help keep him from ruining your listings.
Finally, it you will have the most success bringing products to Amazon with no other sellers on your listings.  I you do chose to get on a listing with other sellers of wholesale products, you should only get on listings with 1 maybe 2 other sellers ( seller without massive feedback numbers).  If you get on a listing  with 25 other sellers, you general will be toast.

Many people are doing well with wholesale but the high ROI that many of us are used to is not usually possible with wholesale and most of the reason is due to new sellers coming to the platform that play by different rules and has different goals than most old school RA scanners.