How Christopher Grant Turned a $500 Investment Into a Scalable Part-Time Arbitrage Business
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Today's guest on the Niche Pursuit podcast is Christopher Grant from 'OA challenge' and 'Clear The Shelf.' Christopher is here today to talk about arbitrage. It's a popular topic online and a great way to build a side hustle or fully-fledged business.
Arbitrage has been around for a while, and it's a proven method for those looking to earn income online — primarily on Amazon. You can work part-time or full-time, and the investments needed to get started is achievable for most people.
During the interview, Christopher shares the three main models of arbitrage to consider and offers advice on the best software and tools to make the job easier to get started. He talks about the steps involved, what to avoid, and the biggest mistakes to look out for with arbitrage.
In addition, throughout the interview, Christopher talks about various topics of interest that you should pay attention to when doing arbitrage. For example, where to find products, how to limit your chances of losing money, and tactics to get the most from an arbitrage business.
Some Of The Other Things Discussed By Christopher Grant Include:
- The story of how Christopher started with arbitrage as a child in school and earned enough money to take his entire class on a day trip to New York
- How to find and deal with stock
- Is it worth using wholesalers and how to approach doing so
- Inventory & monthly costs
- Break-down of the Investment needed to make a $1k per month working part-time
- The number of hours to expect to work
- Software and tools cost
- Limiting the risks
- Knowing your numbers
- Double dip profits
- Ways to make up for Amazon's reduced affiliate income
- The single biggest mistake you can make in arbitrage
- Growing a brand
- And much more
Christopher has a ton of knowledge and has helped many entrepreneurs with arbitrage. If you're thinking about doing this yourself, you'll love this episode and find a ton of advice and tips from an expert in the field.
As always, make notes, and enjoy the interview.
Links & Resources Mentioned In the Interview:
Watch the full interview:
Read the full transcription:
Jared: Welcome back to the niche pursuits podcast. My name is Jared Bowman. Today. We have Chris grant joining us from mile. Let's see, oh eight challenge.com and clear the shelf.com. Welcome.
Chris: Yeah, thanks for having me, man. I really appreciate it.
Jared:Yeah. So you you're on brand here. You got a shirt with OA challenge on it.
Um, and, uh, I should, I should get a, a shirt with like the niche pursuits brand on it. Uh, you got me thinking here. Um, absolutely. It's it's good looking shirt. We, um, we have a bunch of fun stuff to talk about today and I think really the, the, the bigger topic is arbitrage and online arbitrage. And we haven't talked about this in a while on the podcast, so I'm really excited to hear.
All of your angles and all of your, your, your, kind of your depth of knowledge when it comes to arbitrage, especially in 2022 and even beyond. But, um, before we get into those details, bring this up to speed and tell us about your background and what got you to where you're at right now with, with these websites.
Chris: Sure. So I've always been a, a bit of an entrepreneur maybe had just had the entrepreneur bug. Uh, and I would say that it, it kind of started in, in grade school. I was flipping things like pizza. We would order pizza and, and sell it to our classmates, uh, one day a week. Uh, and you, we ended up making enough that I took my entire eighth grade class on a, on a trip to New York.
You know, from doing that. And then of course, we, we also, uh, we expanded a little bit, uh, outside of just the pizza and we started selling snacks and cookies and crackers and all kind of things. Uh, it was sanctioned by our teachers. So, you know, we weren't running a black market pizza operation or anything.
Uh, and, and then as I got a little bit older, I, you know, I did things like shoveling snow, but I talked my brothers into doing the work and I did the selling. And it just kind of, it went from there. I, I joined as a young adult. I joined my grandfather in his insurance agency and I sold insurance for about 12 years.
Uh, I tried to do a little bit differently than a lot of other insurance agents and education was really the, the mantle piece of my selling process rather than, uh, you know, just pounding the phones or anything like that. And then as I got a little bit older and it was time to start a family. I figured that I really did not want to be out knocking on doors and selling insurance in people's homes, you know, at 6, 7, 8 o'clock at night.
And I wanted to figure out a way to make some money at home so that I could be home with my young son, with my wife, rather than, you know, out working as much as I did. Uh, and I came across arbitrage. Uh, I came across, uh, Jessica arru over on. The FBI podcast. And I came across Chris green and his books and it opened up my eyes.
And after a little stint with drop shipping, I learned pretty quickly that wasn't the way to go. I figured out arbitrage. And then as I grew into that space, I wanted to educate people who wanted to also do this. I, I always kind of, I learned best by doing and then teaching and kind of cements all of that information into your brain long term.
And so I started writing blog posts and, and social media posts and recording YouTube videos. Uh, and then things just kind of organically happened from there.
Jared: And so you have two, uh, two, uh, I say websites, but really they're more like they're bigger than just a website, right? Like they're kind of a branding of themselves.
What's the difference between OA challenge.com and then clear the shelf.com. Why did you end up with two different areas of, of this arbitrage?
Chris: Sure. So clear the shelf.com is, is the blog that I created first. And it was, it was, and is meant just to educate. And now of course, it's, it's monetized through affiliate links and it's a way to, uh, build an email list.
And then we wanted to create kind of the best arbitrage focused course out there. And clear the shelf doesn't really have the ring to it. That OA challenge does. And so we created OA challenge separately, uh, to be able to kind of create a course. We do have a few, uh, blog posts over there that, that get some traffic and things, but it's really just kind of a.
A course website
Jared: mm-hmm , let's maybe set the stage for today. Again, like we haven't really talked about arbitrage a lot recently. There's a, there's a lot of podcast episodes in the bank on niche pursuits about arbitrage, but we haven't talked about it in a while. Maybe. Sorry, if this is kind of boring and basic for you, but set the stage on what arbitrage really is, especially as it relates to today's environ.
I'm sure a lot of people have some ideas, but maybe give us a little bit of an overview on what arbitrage is for those who might be a little fuzzy right now.
Chris: Sure. So arbitrage is essentially buying something in one marketplace and taking it to another, to sell it for a higher price because the, the value is more over there.
Well, you see this in crypto, you'll see people arbitrage. Crypto prices from one exchange to another. You'll see it in financial markets and financial instruments. They'll, you know, they'll do arbitrage, but when it comes to physical products, the exact same thing happens. You have geographical arbitrage.
So, uh, for example, maybe at your local garage sale, you can find a product that goes for more on E. Uh, well, you can do the exact same thing at a larger scale, finding things from Walmart target, uh, you know, in the thousands of other sites that exist and over on Amazon, it ends up going for more because the marketplace is larger.
The number of buyers is larger. Uh, and people are really. They're kind of tuned into the whole, I want to get it in 48 hours or less. And Amazon is still the leader of that. Uh, and so people pay for the convenience and, uh, you know, not having to go to the store and things like that. And so we, we leverage that opportunity.
Jared: Talk about some of your success in arbitrage, maybe, uh, as it leads up to some of the challenges that you're doing now, but like what's your background in arbitrage of late. And what kind of successes are you? Are you having. So
Chris: I try to run a pretty boring arbitrage business. Okay. And, and I know, I know that's not great for a podcast or anything like that, but you know, I look for products that make, you know, three to $5 in profit that I can sell, you know, 10 or 20 times a month.
And once you build up a bank of those, uh, and you have, you know, 50 or a hundred or 200 different skews like that, that you can sell pretty consistently. You have kind of a boring business that you get to make sure is just running, you know, over and over again. Now there are some more exciting times, you know, uh, Q4 and the Christmas and holiday season.
Uh, there will be times when, you know, I kind of forgo all the boring stuff and you look for the items that are selling incredibly. Uh, and you can, you know, sell 'em for big markups. Uh, and then there's been a lot of opportunities over the past two years with supply chain issues. Mm. Yeah. Uh, some people don't particularly care for that, but it's just the, it's just the nature of, uh, of arbitrage.
And, uh, so you can find things that maybe have some supply chain issues, but there's plenty in your local area and you can take it to a much larger marketplace. Um, our last big hit was a. Was an over the counter supplement for, uh, memory. And they were having some supply chain issues. My local marketplace was overstocked because in Florida, what do we have?
We've got a lot of older folks. So they kind of flooded this area with the product, but other parts of the country didn't have it and they wanted it. And so over the course of about three months, we sold about $150,000 worth of just this over the counter supplement. Uh, and it was great profit. It was, uh, Actually kind of fun going down and hunting it locally and, and you know how we could get it online.
Uh, but it was a great, great flip.
Jared: What are some of the maybe unique challenges that people doing arbitrage today face that maybe didn't exist a couple years ago? Five, 10 years ago? You know, what are the, what are the big challenges people have, right.
Chris: I think some of the big challenges are that there is more competition than there was five years ago.
It's, it's also the nature of the business. Amazon, uh, is I like to call them an angsty teen, uh, you know, they're kind of finding their. Uh, they, they know how to walk. They know how to, you know, run and jump, but there's still some growing pains. Uh, and we've seen that, you know, recently with the kind of their overdoing it with warehouse space and things like that.
Uh, and, and that kind of all. Trickles down to the seller and we've gotta figure out, uh, inventory management. We have to, uh, figure out, you know, whether or not Amazon is accepting, um, as much inventory as you wanna send in. And. We also need to, uh, figure out how to make sure that our products are going to sell through and not sit on the shelves because Amazon doesn't want that.
They want your product to turn over as quickly as possible five years ago, that wasn't the case five years ago. You could just send as much of anything as you wanted to Amazon. It could sit there for three years and, you know, if it sold it sold, if it didn't, you know, it could just continue to sit. And so we're learning that you can't just be a reseller anymore.
You have to be a business owner. You need to be, you know, an entrepreneur, you need to have your finger on the pulse of, uh, inventory management and cash flow and all of those things.
Jared: I want to get into some of this stuff you're doing at OA challenge and clear the shelf. I want maybe if I could just ask you a couple more questions about this arbitrage that you are doing right now, uh, before we get into kind of the educating part of it, you talked about Amazon, are you U I mean, I'm guessing yes.
Given what you've said so far, but you're utilizing Amazon to do your arbitrage sales and there's a couple different models, right? Like you can. You can send your product up to Amazon and their warehouse and they'll fulfill it. You know, a lot of people fulfilled by Amazon FBA. You hear that buzzword a lot, obviously because people have these FBA stores and these FBA accounts, there's also, you can just do straight arbitrage where you're selling it, but you don't actually send it to Amazon and fulfill, you're fulfilling it outta your garage.
Right. And shipping it and that sort of stuff. Maybe talk a bit about the different arbitrage models. Um, and then what again, what you see working today and what you talk a lot about, um, in your educational side of things. Sure.
Chris: So there, there are really three different models of arbitrage. There's retail, arbitrage, where you actually go and you pound the pavement.
You go into the Walmarts, the targets, the Kohls, and you buy product. That's sitting on the shelf and you either send it to Amazon FBA, allow them to pick, pack and ship it. Or you can fulfill it yourself. That's called. Merchant fulfilling or Ming. Um, and you chip it from your own home, your own warehouse, things like that.
Mm-hmm then there's online arbitrage. And I, I focus on online arbitrage because I believe that it's a, a model that. Has a higher chance of scaling because I don't have to spend all that time in the car, pounding the pavement and, and that kind of thing. Uh, I can also utilize a prep center rather than having to touch the product myself, send it off to a prep center.
They put it in polybag they put the Amazon stickers on it. Put it in a bag and ship it off to Amazon. But on occasion I will merchant fulfill some items that I buy online. If they're selling really fast, if they're very small and easy to put into, uh, an envelope or a, a padded mailer or something, uh, you know, I'll, I'll do that if necessary or maybe I wanna ship some hazmat products that.
I just don't want Amazon to have to sit on. And then there's wholesale. And a lot of people think it's different than online or retail arbitrage. Uh, but it is arbitrage. You're buying from a distributor you're buying from directly from a brand. And then you're selling that on Amazon for a higher price.
The biggest difference is, is there, you're not necessarily just clicking a mouse. Uh, you need to be able to build relationships with the people on the other end of the phone at distributors and things like that. Uh, but those are really the three models of, of arbitrage that happen right
Jared: now. You're focused mostly on the online arbitrage model because of scale.
And that sort of thing is that, you know, is that generally a good beginner tactic as well? Let's say someone listening is thinking about arbitrage. Is there a better one to start with, or is that something that you land on the online model more after you have experience with the other two?
Chris: I think both retail and online are both the same.
Uh, the, the thing that I experience is a lot of people think that retail arbitrage is easier. And I understand that you can go out, you can touch a physical product, you can scan it, you can look it up on Amazon. Uh, and it feels. Easier. Uh, and what I see happen is that people go to say walmart.com or target.com.
And rather they. I don't know, the brain just stops working. Uh, you know, they don't treat it like they're in an aisle at a grocery store or a retail store, uh, like you should. And, and it feels harder, although it's not. Uh, so if you don't want to have to go driving around all over the place, looking for things and you want to have a much larger pool of sources, I think online arbitrage really is the place to.
Jared: So on clear the shelf.com you have a lot of content on there. I was. Nosing around last night, as I prepared for this, uh, a lot of what, what you're talking about is, you know, the different softwares and tools that are available to help out arbitrages. Um, it sounds, cuz it sounds like a very, you know, manual process.
It sounds like a lot of work. What are some of the tools that you use to make this process easier or more scalable? Um, what are some of your favorites? I mean, I was reading about some last night. I kind of went down the rabbit hole. There's some really cool softwares out there to help people
Chris: out. Yeah, absolutely.
So my absolute favorite is a software called Kea. Uh, and that's a, that's a made by a German company. And what they do is they kind of give you the cheat codes to figuring out what sells well on Amazon. They track bestseller rank, they track variations, um, uh, they track historical price. So using all of this data, we can figure, we can figure out pretty well, whether or not something is going to continue to sell well in the future.
Uh, and whether or not the price is going to hold, or if it's going to, you know, go back to what it was historically. Uh, and so once you learn Kea, uh, kind of Amazon is your oyster. Uh, outside of that, uh, there's tactical arbitrage because sourcing products, it can be a manual and tedious task. Mm-hmm uh, and you can either do it yourself, or you can have a virtual assistant do it, but, you know, looking for that shampoo, uh, on target and comparing it to the one on Amazon, it is.
Uh, so that's where tactical arbitrage comes into play. It will go, and it will look through all of those products at, you know, 400 different stores and it will find the match on Amazon that is profitable, uh, and fits your filters. Uh, and it just allows you to kind leverage automation in your business. Uh, so that one, I think is absolutely huge if people really want to, to scale up and, uh, and use software to do it rather than people.
And then the third, uh, one of my favorite tools is probably rev seller. Uh, it's really a glorified profit calculator. Uh, but it's something that just makes your life so much easier, allows you to, you know, keep a few extra tabs closed, uh, and lets you know, how profitable something is based on your purchase price, you know?
And then it allows you to take it to Google sheets and all kinds of stuff to, to be able to store that information for later. But. Those three things make you extremely dangerous as an arbitrage.
Jared: What kind of, I mean, again, just trying to think through someone who is. Interested in arbitrage. What kind of workload or amount of time does it take for someone to get started in this?
Um, I'm gonna hit you with a couple, what kind of workload, what kind of budget? Um, and then, you know, what can, what can people expect? Um, maybe it's a timeframe and maybe it's a certain amount of money after a period of time. Like, just give people kind of an idea. And again, I, you work with so many people with your resources that I'm guessing you probably have some insights into, into these types of things for people getting started.
Chris: absolutely. So let's talk workload. The workload can, can really vary and it depends, you know, some people really just want this as a, a side hustle, uh, you know, and they wanna spend two hours a day or maybe eight hours over a weekend. Uh, and that's fine, you know, that's, that's absolutely okay. If you can, if you could spend two hours a day or an hour a day and, uh, be able to make an extra thousand dollars a month for, for a lot of folks, that's life changing money.
And I think that's, uh, you know, noble. That's why I kind of love doing this because getting people to that first thousand is, is really gratifying, you know, but then there are folks, I, I know personally who have built eight figure businesses doing online arbitrage. And, you know, they typically run it much more like a, a big operation where they have multiple people sourcing.
They could be virtual assistance or, uh, you know, team members. They have locally, uh, they themselves are putting in 40 to 50 hours a week. Uh, maybe they're running a warehouse where they prep and, and ship their own products. Uh, so. The, the workload can vary greatly just depending on what your goals and, and aspirations.
Now, um, I think the next question was what kind of budget should you
Jared: yeah, I'm thinking of inventory, you know, I mean, it's not a lot of people, listen, you're gonna be familiar with starting a website and a content site or an affiliate marketing website. And one of the best things about that is you really don't have to put any money in except for hosting, you know, and a domain name.
So it's like 20 bucks, you know, 30 bucks a year at its lowest. I imagine there's probably some inventory costs though, going into. Yeah,
Chris: there are. So you're gonna have a $40 a month subscription to Amazon. They do charge, uh, you know, 40 bucks a month. Uh, and then you don't really need anything else other than Kea.
And that's about $20 a month, uh, for inventory. I really like to tell people that, you know, $500 should get you started. Uh, you can start with less if you just wanna. Uh, verify that the model works, uh, or you can start with more, if you have seen enough other people do this and, and you're really ready to get going.
Uh, of course the, the more capital you have, the faster you can scale, uh, especially if you don't need to pull out any profits or anything like that. Mm-hmm , uh, you know, but I would say $500 is really what you need to get going.
Jared: Okay. $500. Um, anything from a couple hours a week, or, sorry, you said a couple hours.
Did you say a couple hours a week or a couple hours a day? I'm sorry. I mean, you
Chris: could do the, if, if it's a, if it's just a true side hustle, if you spent six or eight hours over a weekend, you could, I think you could get to a thousand dollars a month in profit kind of business. Okay. Okay.
Jared: And what kind of timeframe.
Websites, something that we talk about a lot here. You're looking at realistically, nowadays, unless you're really going aggressive probably nine months to a year before you're making, you know, 500, a thousand dollars a month, and these are such wide ranges, but, you know, with an arbitrage type of thing with people putting time in what type of timeframes are there to, to start making.
We'll call it money with air quotes. yeah.
Chris: So I think if you were gonna start with $500 and it was just a, you know, an eight to 10 hour a week side hustle, I think you could be to a thousand dollars in profit within three to six months, depending on how good your sourcing decisions are. Uh, and you know, making sure that your inventory turns over and that you're reinvesting the profits on the front end, right back into inventory.
Jared: That's a great range. I realize don't worry. We're not gonna hold you to that. These, uh, thank you. Wide ranges. These are wide ranges. Um, I think that just gives people a really great idea. I mean, a lot of, um, a lot of people who listen to the, to the, to this podcast are, are trying to find ways to spend some time on the side.
And make, uh, you know, make money. What are, what are some of the maybe success stories you've seen or strategies in successful people that you've seen that you can share? Maybe some, I hate to use the word shortcuts, right. But, but ways to skip failing on some obvious points, maybe you could share a couple of those with us.
Chris: Yeah, absolutely. I think so. I think one of the biggest keys is, uh, actually networking and not being afraid to maybe look a little bit silly on the front end and, and get some questions answered, uh, and pay attention to. What people who are successful are currently doing, uh, the, the Amazon community is fairly large.
You know, we run a Facebook group with about 50,000 people in it. And there are several that are that big, uh, and the Amazon community is also fairly giving they're. They're happy to answer questions and, uh, and kind of let you know maybe where their stumbling blocks were so that you don't have to do the exact same thing.
So if you really spend some time learning on the front end and then two, you, you learn how to use Kea and you learn how to make a proper sourcing decision. Listen that no one bats a thousand, but you could bat 800, 850, uh, you know, selling on Amazon. Uh, and, and that will. That will all come from making proper sourcing decisions.
So learning that up front is probably the biggest key.
Jared: Do you see people end up with like a lot of inventory because they made bad decisions or, um, or also getting the arbitrage portion. Right. And so they end up having to sell at a loss. Like, are these real concerns or are they fairly mitigable? Um, that's probably not a word manageable.
they able to be mitigated how's that? that's
Chris: perfect. Uh, I, they are able to be mitigated. For the most part, in my opinion, uh, you know, I see people end up with, uh, you know, storage containers, worth of inventory more often in the private label space, right? Not that it's a, not that it's a bad space to be in.
It's just, it's more difficult. It's more competitive. Uh, and if you get one thing wrong, well, you know, it, it can be a house of cards. The great thing about arbitrage is that I can take a series of small, be. And so let's say rather than, you know, have all my chips on 21 black. Well, I can, you know, I can have 50 different chips out there and maybe.
Maybe 10 of them don't hit, but the other 40 do. Uh, and so that's what I really like about the arbitrage model. I could buy a single unit of many different skews and test out to see what works and then hopefully kind of manage my losses if there are any mm-hmm mm-hmm
Jared: it makes total sense. It makes total sense.
Let's um, let's transition and talk a bit about what you're doing at OA challenge. Um, mm-hmm I, uh, I'm gonna guess this is more, uh, you know, focused at helping people get started, but tell us what's behind OA challenge and why it's, you know, different than clear the shelf. You talked about how clear the shelf is kind of your more resource section, your blog, where you do the education, but why would I end up over to a challenge instead of clear the shelf.com.
If I'm looking at arbitrage.
Chris: Sure. Uh, the biggest thing about OA challenge is, uh, in it's a 14 day live course is essentially what it is. And the thing that we saw is that people did have trouble sourcing. They, uh, were worried about making mistakes. They were worried. They didn't understand how to interpret a, a, keep a graph.
And I know not everyone knows what that is, but essentially, uh, it's a, it's kinda like a stock market tick. For products on Amazon. Okay. Uh, and it's pretty easy to see, well, heck everyone's looking at their, their crypto charts, you know, all the time. Right. And you can see the ups and downs. Well, Kippa gives us that same information for Amazon products, uh, based on price and how well it sells and things like that.
Uh, and people were. Fully utilizing that. Uh, and it really is the backbone of, of this type of business. So we came up with a 14 day program to help people through all of the hoops that you really need to jump through, to become really good at arbitrage. And, uh, that's why OA challenge was created.
Jared: Okay. Is this a free challenge or is this something where people can, you know, is it like a paid thing?
Chris: It is, it is a paid challenge. Mm-hmm , uh, we keep it fairly inexpensive compared to a lot of courses out there. Uh, and then we do have some offshoots, uh, a lot of free information in other places for people to be able to take advantage of as well. Yeah. Yeah.
Jared: Good. What, um, and at the end people, I mean, is that a kind of course where you, you kind of have all the tools you need to, to understand the mechanisms of what it looks like to be successful in arbitrage?
Chris: Yeah, that was, that was the goal. Uh, be able to help people understand the entire process from tools, uh, knowing what to buy, when to buy, how to buy. Uh, doing it manually, leveraging automation, leveraging tools. Uh, we kind of, that's why it's so long. It is 14 days. Uh, we wanna make sure we cover all of that.
Jared: Let's um, I'm gonna ask what might be a pretty dumb question and I'm gonna kind of fall on the sword here. I'm guessing there's some a, a, a, a section of our listeners that are thinking this. So I'm gonna fall in the sword and ask the question. That, um, perhaps a lot of people who are newer to the podcast might not have I.
Grew up listening to the niche pursuits podcast, believe it or not for a long time and arbitrage for me. Um, I remember Spencer, um, in, uh, interviewing some people about arbitrage. I remember pat Flyn interviewing some people about arbitrage. I remember this was probably 5, 6, 7, 8 years ago. These are the days of jungle scout.
These are the days of, um, walking around grocery stores and Walmarts with scanners. What's different about arbitrage today? What do I need to remove from my mind about what arbitrage used to look like? And you're, cuz you're talking about some really advanced softwares you can utilize now. You're but, but you're still also talking about some of the similar concepts, like for people who've been around arbitrage for a while, but never dove in mm-hmm what do they need to shift their mindset from, from how things maybe used to be or how things were.
Chris: So the way arbitrage used to be is it was really kind of a, it was a big kid, treasure hunt. , uh, you know, you could, uh, you could go to retail stores and, and you could pick up just about any product. And it was probably profitable on Amazon. Uh, the, and that's just because it was new, there weren't as many seller.
Uh, but the marketplace has matured and, uh, and larger businesses, you know, seven figure, eight figure businesses have come in to do this kind of, of model on Amazon. And they realize, well, you know, I don't necessarily need the margins that we used to have. Uh, and Amazon has also realized this and they have, you know, fair pricing.
Policies and things like that, you know, they don't want you taking advantage of, uh, the fact that you can do arbitrage. They understand you have to make a profit, but you know, making $300 on something you buy for $20, just isn't, uh, isn't the case anymore. So you have to make up for that in volume, in, uh, inventory turn.
Uh, and things like that now, now that the market has, has become more mature, but that opportunity is, is really great. Uh, and, and here's why I say that most retail stores, your Walmart, your targets, they aim to turn inventory four times per year. Oh, okay. Well, as an Amazon seller, uh, you can turn your inventory.
Once a month, maybe twice a month, if you're really, really fast or have really fast movers. Uh, and so now you have, uh, you know, being able to turn your inventory 12 times in a year, compared to four times in a year allows you to take those smaller margins, uh, but still be able to build quite a profitable business over time.
Jared: It reminds me of a story. When I was in college, I was waiting tables and, um, our manager was all about the number of times we could turn a table on a night and he would talk about how, Hey, like the difference between two turns and three turns. Is 50% more revenue. The difference between three turns and four turns is 33% more revenue.
And, you know, obviously you're gonna make more tips. And so he is really establishing that value. That's where I first, that was my first analogy to understanding really what inventory management really was about. mm-hmm um, so, okay, well that does help a lot. So you mentioned the. Three models, the three methods with arbitrage, you talked about, you know, hopefully I get this right.
I took notes, the retail model, the online model and the wholesale model. And then we kind of dove more, more in depth into the online model. That's the one that out of all three, you kind of recommend you, you prefer, you spend most of your time in with some similarities to the retail model. Now we didn't really talk about wholesaling much and.
I wanna dovetail it into some of the conversations we have had on the podcast of late, where we have had several people on over the past six months to 12 months. And I've talked about, you know, ranging from creating your own product to wholesaling a product and white, labeling it to developing a product that fits maybe the brand.
You have a website for. So if you could dive a little bit more into wholesale and some of the upsides of going down that road, and also maybe some of the risks that cause you not to recommend it as much. Sure. So
Chris: I do, I think wholesale is great. Uh, I don't know that it's for everybody, because I do believe that to do it properly, you need to be willing to build relationships.
There. There are people who, you know, either run or work for distributors and in it's best not to just cold email folks. It's really best to dial for dollars in that kind of business. Now, the hurdle is usually a little bit higher. Number one, not all distributors want Amazon sellers. Uh, and number two, sometimes you have to buy a little bit larger.
So for example, if, if I'm doing online arbitrage, I could buy one, $5 item from target. Uh, and I wouldn't get free shipping if I just bought one $5 item, but let's say I, I buy it online. I pick it up in store, uh, and I can then send that to Amazon. And I can verify that the model works. It sells, I made a profit and there we go.
But with wholesale working with a distributor, something like that, you typically need to buy some larger quantities, right? Maybe some of them allow you to buy a case at a time. Uh, maybe some of them have a $250 minimum. Some of them, I know have a thousand dollars or a $5,000 minimum. So it just depends where you get in there.
Uh, and so that hurdle can be a little bit more because typically you need a little bit more cash. They're also gonna want things like, uh, a resale certificate, and they're gonna wanna know that you have an LLC and you know that your business is set up properly. Uh, but other than that, it really is a great model because you can go back to the same source over and over and over again.
you know, until the life cycle of a product is, is ended.
Jared: So the risk really is you. I mean, well, at least one of the really big risks is you kind of have to buy in bigger bulk mm-hmm . And so you need to understand, are you gonna be able to move this product or not? otherwise you could end up with a box full of, uh, vacuum cleaners or DVDs out in your garage for a long time.
Chris: Exactly. Yeah. And, and can you move it profitably? Because just because you order from, you know, a distributor does not necessarily mean that the price on Amazon's going to stay the same. Oh,
Jared: distribute. If you don't move it quickly, it could end up, you know, not keeping its price or things like that. Yeah, let's see a couple of years back, Spencer talked on this podcast about how he had a website that was in a certain niche, and then he dovetailed, uh, and I believe I have this right, an Amazon store that holds sale that would wholesale products in the niche, in the same niche.
And so he would basically recommend. His products via his, um, website and then send them over for them to purchase from Amazon. And then I think you would also get an affiliate commission for recommending the Amazon product. Do you see that happening very often nowadays? Is that something that you still think is viable, especially for people who have sites that drive traffic organically, maybe 25,000, 50,000, a hundred thousand visitors, a.
Chris: Yeah. Yeah, I could, I, I can see that still, still working, uh, perfectly, you know, let's, let's say for example, that, uh, you decide to start a, uh, a website in the, uh, in the pet space, you know, or maybe the, the dog space in particular. Okay. If you wrote some really great articles, uh, about things that people with dogs are looking for, you could absolutely then.
You know, byproducts wholesale or byproducts from, uh, Ali express or wherever you might wanna do and have those on Amazon and drive the traffic to Amazon yourself. Um, and you can still use affiliate links and then you kind of get to double dip where you make an affiliate commission and, you know, they're buying your own product.
Uh, but yeah, that would absolutely work. And, and people in like the private label space, uh, you know, they are working on driving their own traffic in a lot of cases. Make sure to get more eyeballs on their products.
Jared: So going down that road, like let's say that we are able to rank for things like dog callers.
Um, I'm imagining you could probably buy dog callers, uh, in the online arbitrage model and then send that to your store on Amazon. Maybe if you can't find it, you just send it to somebody else's product, or you could even wholesale, let's say you, you consistently have enough traffic to where, you know, you're selling, you're recommending enough product to sell.
Like you could even go to the wholesale route and. Line up a distributor through the networking methods you talked about and actually maybe create your own line. Would that, would that be the way to think about it?
Chris: Yeah, I think, I think there is something you could do there. Absolutely.
Jared: Interesting things to think about.
I know a lot of people have a lot of traffic and certainly the the argument these days is that Amazon isn't paying the commissions that they used to. And it can be very frustrating for people. One solution is to go get private affiliate relationships or deals on these products, but another solution could very well be a lot of the things you're talking about here.
Chris: Yeah. If, if you know, so for example, let's say you have a site that's already ha has a lot of traffic and you know, what is where the people are going, where you're sending the folks and, and maybe you even know what is converting well, that would be, uh, a very prime opportunity, in my opinion, to either then have your own product.
So you can drive the traffic to your own product, or, you know, A product that works well and you wholesale it, or even online arbitrage it and be able to push people there. And, you know, you'd be able to make up for those reduced affiliate commissions pretty easily. Yeah.
Jared: That's exciting. and intriguing gets my mind going that's for sure.
I, I personally have a, uh, you know, a website or two that, that kind of drives a lot of traffic, but you know, much of the, um, affiliate income does come from Amazon and it's, it's pretty small, but so definitely a lot of opportunities here. Whew already a lot. We've gone through here. I wanted to ask you about maybe some of the biggest mistakes that you, we, we have touched on this a little bit, but I just wanna give you an opportunity, like, uh, maybe some from your experiences, some of the biggest mistakes or biggest mistake you've made along the way when it comes to, to arbitrage.
Chris: Sure. Uh, the biggest mistakes that, uh, the, I dunno, I have a history of this, so. It's always been going too deep, uh, getting started, you know, uh, the worst mistake I ever made was spending $5,000 on, you know, like one set of products. And then of course, kind of the market for that product, just falling out from under me.
Uh, and then only being able to get 1500 of that back, that one, that one stung quite a bit. Yeah. Um, you know, and, and so I think that that is the single biggest mistake. Uh, you find a product and it looks really good, but you haven't tested it. And you decide to buy 50 or a hundred and then things fall apart and you have to sell it for a loss that really, uh, that's a huge blow to your ego, your confidence, uh, and it kind of makes people wanna quit.
Um, so yeah, uh, that's the biggest mistake in my opinion, I, I really like. The fact that you can take a series of small bets and, you know, as long as long as you hit 70, 80% of 'em, you should have a profitable business.
Jared: Good advice. That's good advice. Well, you, yeah, you said it a number of different ways.
Like that's the big challenge there is, is figuring out what sell and what doesn't learning, how to use some of that software and those tools to understand, wait, understand how not to end up with a lot of, a lot of product that isn't gonna move. Mm-hmm . How have you grown your brands? How have you ended up growing to the number of, uh, people you have going through your, your course, um, and, and visiting clear the shelf.
I mean, let's transition a bit and just talk about how you've grown these brands. We're all, you know, in some way, trying to grow different online resources ourselves, talk about what you've done to grow. Um, uh, and what's worked so well for you. Sure.
Chris: So, and I, I don't think this is necessarily groundbreaking, but the biggest thing is, is being authentic.
Uh, you know, we don't, we don't run ads or anything like that, where we've got a Lambo in the background, or, you know, we're, we're driving down the freeway, you know, in a Tesla and it's driving itself or anything like that. Uh, and we also, I, I try not to sugarcoat, uh, this, you know, you're. You're not one product away from being a millionaire.
Uh, you know, you're not, you know, one more, uh, funnel away from being a millionaire. You know, it's, it's hard work and the hard work compounds over time. Uh, and as long as you kind of put in the reps and, and do the work, it should work out, uh, as long as, you know, you give it enough of a, a time horizon, uh, and.
And that's really about it. And we, we put out a ton of educational content and, uh, answer questions that people are asking. And that's been the way that I've, I've grown, you know, our clear the shelf, our OA challenge, uh, is just by, I don't know, not serving people, a line of bowl just to try to sell something.
Jared: now you have clear the shelf.com so that that's kinda the place for people to go if they just. Maybe, you know, go down the rabbit hole, as I would say. That's definitely what I did last night. You have oh, eight challenge. That's probably more for people who are ready to jump in and ready to try this out.
Uh, you also have, I didn't look, you have a YouTube channel, right? What's um, yeah, what's the YouTube channel. So
Chris: the YouTube channel is really just a, uh I'm so I'm much better at video than I am at writing. Okay. I can, you and me both. So, yeah, so I tend to make more YouTube videos. Um, And, you know, people have questions.
Uh, it's usually much easier for me to be able to share a screen and, and say, you know, here's how to do this, or here's what I think about it. Uh, and so we've made a lot of videos about things like tactical arbitrage. Uh, you know, videos on Keepa, on sourcing, uh, all kinds of stuff that, you know, helps the Amazon seller.
And then we're host, we have a podcast now. And so we're hosting that over on YouTube as well. Uh, and it's been, it's been a fun, uh, learning experience over on YouTube. Yeah,
Jared: YouTube is a whole nother ball game to grow a business on. Right. Yeah. That's great. So, um, what would be, what would you recommend are next steps for people interested in, um, you know, determining if arbitrage is a good side hustle for them?
Uh, you know, walk us through maybe some of the most important considerations, um, to facilitating next steps. Sure.
Chris: So first thing is you should, you should gather some information, uh, whether that's my blog, uh, or my YouTube channel. Uh, there's also a lot of really great communities out there. You're gonna find them on Instagram.
You're gonna find some on TikTok. You're gonna find a lot of Facebook groups. Some of them are not great, but there's several that are, are really good. And you wanna find those ones that are typically a little bit larger, uh, and then go ask questions, read old posts, read blog posts, watch YouTube videos.
See if it's actually for you before, you know, going and taking the next step. Uh, and then if you are ready to take the next step, just, uh, Embrace the suck and, and, and do the work that's required to, to get going. And, uh, and you should see some results.
Jared: That's great. That's great. And again, I mean, like this has been a, a great deep dive, but also a great overview for people who just want to understand what arbitrage looks like in today's, you know, today's environment and, and mm-hmm and, uh, some of it's changed a lot.
Some of it really hasn't changed much at all from what it sounds like. yeah,
Chris: yeah, yeah. A lot of stuff is the same. Arbitrage has been around for a long time. It's gonna be here for a long time. And the principles and strategies that have always worked will always work. Uh, but the marketplaces might change over time.
Jared: Last question from me on this. Again, we, we talk a lot about this on this podcast, in terms of what are future things, future challengers, to the different types of online businesses we're looking at in terms of arbitrage and in terms of. Looking forward. We all know Amazon can be very volatile in general.
Mm-hmm uh, and it seems like a lot of arbitrage lands and rests on Amazon's marketplace. But what are any potential future challengers to the arbitrage model that you, that you might see coming down the, down the pipeline?
Chris: That's a great question. Uh there's there is legislation that could become a challenge down down the road.
Uh, I, I wanna say there's a, there's a piece of legislation. I think it's called fair or online choice act or something like that. Uh, and it's really meant to kind of keep Amazon from competing with their own sellers because they, they do that, you know? Right. uh, and of course, Amazon doesn't want that to happen.
So is it possible that. Amazon is split up into a third party marketplace and then their own, you know, products on another site in the future. It's possible, uh, you know, no way for me to have a crystal ball and know for sure. Uh, and then there is going to be more competition down the road. If, if there's the possibility to make money, there is, I mean, competition finds its way in, you know, no matter what space you're in.
Uh, so. The willingness to grow and mature along with the marketplace and how the marketplace is doing, uh, is something that people I think need to, uh, be ready for. And then finally, you know, maybe we're on the cusp of a recession. Uh, and if that actually comes to fruition, I think people need to be ready to, to pivot.
The nice thing is, is as small business owners, we can usually pivot a little bit quicker than, you know, the, the retail behemoths. Uh, and you might need to focus on, you know, more things like grocery category and things that people need to buy rather than what they want to buy. Right. But there should still be plenty of opportunity there.
Jared: Those are good tips. Yeah. And, and that's, that's, you know, probably true even without a major recession, there's all sorts of different, uh, you know, supply chain issues, for example, mm-hmm, , it might these micro challengers that come up on a, on a yearly basis or a monthly basis. So exactly. Well, Chris, this has been quite the deep dive I have.
Personally, um, just been enthralled with this whole entire, uh, hour we've spent together. So I'm, I, I could, I could ask you a bunch more questions, but they'd be much more personal related in terms of, um, of how to get started in this. It's fascinating. Is there anything I didn't ask you about that you think is really important that people hear about something that I might have glossed over that you, that, that you wanna double down on just before we close here?
Chris: No, no, man. I think you really covered it. I appreciate
Jared: it. We don't have to say that, you know, just cuz um, cause I'm the interviewer
Chris: no, no I, I know. No you didn't. That was
Jared: awesome. No, it's good. So, and, and for people that wanna fall along with what you're doing, obviously we can direct them to clear the shelf.com more of the resource side of what you do.
The blog side, you know, the content side, OHA challenge.com. If people are ready to get going and they want someone to kind of, you know, hold their hand a bit, that's a 14 day challenge that you do that people can sign up for any other places. People can follow along with what you have going on. Uh, yeah,
Chris: my YouTube channel is, is great.
We've, you know, we, we do, uh, release a weekly podcast there, uh, and on, you know, all the major platforms, just like you guys do. Right. Uh, and I'm trying to be more active on Instagram. I know that people prefer pictures and, and short videos, so trying to get a lot better there. And I'm at clear the shelf over on Instagram as well.
Jared: Okay, good. Okay. We'll include all that stuff in the, uh, in the show notes and, uh, Hey, thank you so much for, for joining us today. And. Like I said, loved the conversation about arbitrage and loved getting to hear about where you're succeeding and where you're seeing opportunity for
Chris: people. Yeah. Thanks so much for having me, man.
I really enjoyed it. Yeah. Good.
Jared: Until we talk next time.
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