I'm going to share a little secret with you which I am using to make some extra money. Anyone can start doing this today with a bit of effort and dedication. Basically what it entails is drop-shipping items from Amazon which you get at a discount (I will tell you how) to customers from other marketplaces (eBay, Bonanza, OpenBazaar, eCrater, your own website etc).
The short post for the lazy
- Buy Amazon gift cards for a discount (20-30% discount) on LocalBitcoins or Paxful or similar peer-to-peer Bitcoin trading sites. (Read the full post on how to do this safely)
- Advertise Amazon products on eBay, Bonanza and other online marketplaces.
- When you make a sale, ship directly from Amazon to your customer and make 10-20% profit.
The Full Post
What is arbitrage?
Arbitrage is the act of buying something on one market and selling it on another market for a profit and taking advantage of the price difference between the markets.
What is dropshipping?
Dropshipping is when you sell stock which you don't have on hand, the customer places the order with you, and you ship directly from your supplier to the customer.
What you will need
- A merchant account at any of the online marketplaces, eBay charges 15% on overall fee so try find a marketplace with lower fees there are many: Open Bazaar, Bonanza, iOffer, eCrater. If you want to do it professionally, consider getting your own website to sell your products, I use Prestashop for my online stores and it is free an open source.
- A LocalBitcoins account with atleast 0.4 BTC. So that you can purchase Amazon gift cards for Bitcoin. It might be a good idea to have some capital to begin with so you can stock up on gift card balance so that you can ship quickly to your customers.
How to buy discounted Amazon gift cards SAFELY
In order to get your Amazon gift cards safely you need to follow some basic rules. The reason for this is if you are not careful you will be buying Amazon gift cards from credit card fraudsters and this is illegal.
You need to have atleast 0.4 BTC in your LBC account to open trades so you can buy the GC's.
1) Buying Physical Gift Cards
Buying physical gift cards is pretty safe if you follow the process.
When buying physical gift cards make sure the person providing you with the gift card uploads a photo of the gift card as well as a photo of the receipt. The last 4 digits of the card must match the last 4 digits on the receipt, and the receipt must mention that it was purchased with cash or debit card, not credit card. Now you login to your amazon account and redeem the gift card, once redeemed you can release the Bitcoin.
2) Buying eGift Codes (This is more risky)
Because this is more risky for you, you can get a greater discount for eGift codes, you can get as much as 30% off the gift code value!
When buying egift codes on Localbitcoins make sure that the person you are trading with has a high trading volume on the site and good positive feedback. Also make sure there name, phone number and ID has been verified on local bitcoins.
You must also ask them to send you a screenshot of the successful purchase screen on Amazon, this will show the last 4 digits on their card and their real name, this must match the photo of their ID which they must send you.
Once they've sent you their ID and you've traded successfully, you can add them as trusted on LBC and you won't need this again from them in future.
Find your Niche
Find some nice products on Amazon which you'd wish to sell. You must now list them on eBay at the same price as you will get them on Amazon or even 5% cheaper so that you can compete.
When becoming a merchant on a marketplace it's always a good idea to find your niche of product types you will sell. This creates trust from a customer perspective for instance you might call yourself ComputerPartsSuperstore where you will resell computer parts and peripherals.
List Your Products
List all products within your niche on your chosen marketplaces. Always use long titles, good descriptions and big high resolution images, these will help sell your products. Make sure that the prices you are listing them at compete on ebay. Its also possible to find unique products on Amazon which are not on ebay, in this case you can name your price and even sell for more than the Amazon listed price, increasing your profit margins.
This part takes the longest as it's hard to find products which are cheaper on Amazon then on ebay, but they do exist.
Profit
Wait for the sales to roll in. As soon as you get an order, all you need to do is place the order on Amazon. Put in your customers address and use your gift card balance to make the purchase. Amazon will now send the product directly to your customer.
Most marketplaces use Paypal, you can now use this Paypal balance to buy more Bitcoin on Localbitcoins by posting a trade to purchase Bitcoin for Paypal USD, you can normally purchase them at market rate this way. Don't go and find other trades willing to sell Bitcoin for your Paypal, they will charge more for the BTC because it is risky for them(Paypal transfers are reversible), instead post your own trade.
If you have any further questions, comment below and I will be happy to answer them.
Another good way to get discounted items on Amazon using BTC is through purse.io. I've only used it to purchase items for my own use at 15-25% off, but it might work for resale if you can be clever enough about your purchases and minimize all transaction costs.
Problem with Purse is at 15% off on average you don't make a big enough margin to cover the eBay fees. There are other marketplaces though, but I prefer bigger profit margins :P
Grinderman, how can I get in contact with you?
Contact me on Localbitcoins: https://localbitcoins.com/accounts/profile/Grinderman/
Great post, interesting concept and you've circumvented any delivery costs or revenue tied up in stock! Good luck