Did you know that you can find products to sell on Amazon FROM Amazon? Yes, you can literally buy a product on Amazon and list the same item right back on Amazon at a higher price and make a profit.
This is a case of "the early bird getting the worm and then selling it to the late birds."
Actually, it's more like the "strategic and resourceful bird getting the worm," since Amazon to Amazon flips exist 24/7 and are ready to be snagged by anyone willing to take the time to find them.
How is this possible? In this article, I'm going to explain why Amazon to Amazon flips exist and the tools that help sellers consistently find these flip opportunities whenever they want.
I'll also answer some frequently asked questions like:
- Does this violate Amazon's seller terms of service?
- Why would someone under price a product?
- What tools do I need to make Amazon flips work?
- Can I use my prime benefits?
The art of Amazon to Amazon flips could be its own book/course so this article isn't going to go into the full process. This article is intended as an overview rather than a complete guide.
If you'd like a complete guide, leave a comment below and let me know!
Sound good? Let's get into it!
Let's start with the why would a seller price their product 'too low' question.
3 Reasons Sellers Price "Too Low"
Amazon flips rely on one thing: a seller pricing their product well below what people are actually willing to pay.
They price the product so low that other sellers can make a profit (typically with margins over 25%) AFTER buying the product and paying all Amazon seller fees.
This seems crazy, I know. You're probably asking yourself
"Why would someone not just raise the price of their product?!?"
The answer isn't so simple.
There are 3 main reasons products may be priced low enough for us to flip.
#1 Seller Intentionally Prices "Too Low" to Liquidate Products
The first reason is a seller intentionally pricing his products lower than the market would pay in order to turn units of product into usable capital.
Maximizing profit isn't as simple as "sell at the highest price possible."
For some sellers, getting their money back to spend on other more profitable leads might be a better long term move for them.
This is a classic example of "opportunity cost," and the seller deciding that having the capital faster with less profits is better than waiting longer for better profits.
For Amazon sellers, the opportunity cost of buying one item is the foregone opportunity of buying a different product with the same money.
Often times, since we lack perfect information and new opportunities come and go, the first purchase ends up being less impactful than we had planned. If the purchase was way less valuable than another purchase we could make, liquidating and using that money on the new opportunity might be a valid option.
Opportunity Cost Example
Here's an example of a case when someone may price a product "too low" on purpose.
Let's say you're looking to find a good price on a pair of headphones. Although you don't have a source for them yet, another seller may have ordered too many of them.
They may have recently found a better use of the money (higher sales velocity and better margins) but they don't have the buying power because they mistakenly tied it up in these headphones.
In this case, they are making money but they are making less money than they could be if they could spend it again differently.
Sales velocity and profit margins need to be considered to get a better understanding of which items are "better" for selling.
In order to maximize profits, they want to recoup this capital quickly. To do that, they need to increase the sales velocity on the headphones. To do THAT they need to drop the price.
For many big name products, dropping the price is often all 3rd party sellers can really do to make an impact on their units sold.
Amazon and the large brands you're selling are doing the marketing for you. Besides hustling and promoting these to friends and family (who have no real incentive to buy from you at full price) you don't have many other ways to increase sales beyond reducing the price.
Let's say that customers are happy to pay the list price of $100 for the headphones but at that price, only 5 are being sold per day.
To the person who bought too many, he may be willing to sell them well below $100 because the capital represents opportunity GREATER than waiting on the headphones to sell out at full price.
Lower Price -> More Sold -> Capital Regained Faster -> Capital Reinvested Faster
#2: Amazon Ignores Demand Caused By Shortages and Sticks to MSRP
Amazon themselves might also price a product so low that it could be flipped.
Why would Amazon price a product "too low?"
They always want to offer the lowest price possible. That is their business model. Amazon has no interest in capitalizing on seasonal price hikes (think Hatchimals at Christmas ). They are going to stick close to the list price most of the time.
However, Amazon doesn't have an infinite supply of all popular products or perfect means for predicting demand.
So, when Amazon goes out of stock on a popular item, it becomes the wild west and savvy sellers swoop in, raise prices and reap profits. During times like Christmas, a 500% price jump on a product when Amazon goes out of stock is not abnormal and it doesn't stop sales.
#3: Uninformed or clumsy Seller Mistakes
The type of seller who creates flip opportunities by underpricing their products are people who simply didn't do their research.
For whatever reason, they weren't paying attention to the market. They didn't analyze or use the available data showing that people are willing to pay more.
This seems reckless but when you're selling a lot of different items, pricing mistakes happen.
In your search for leads, you'll find many people who listed products WAY lower than they should have. Personally, I don't think it's ethical to buy from these sellers and flip the products if it's clear the pricing error was a huge error. Something being priced at $9 instead of $99 for instance.
Is it legal? Absolutely. Ethical? I don't think so. Ethics is relative I suppose so you can make your own calls here.
Don't worry though. There are tools that will help you find enough ethical Amazon flips that you won't feel the need to take advantage of these clumsy sellers.
The Anatomy of an AZ Flip
Now that you know why they exist, let's get into what a flip looks like.
A good flip should have the following...
- A history of Amazon going out of stock (if on listing)
- A current buy box owner with limited stock (if not Amazon)
- A Net ROI of at least 20%
- A realistic re-entry price that will allow us to sell out of inventory before losing the buy box
- A realistic sales rank that will allow us to sell out of inventory before losing the buy box
Amazon is the X-factor in any Amazon to Amazon flip.
If they are the buy box owner (not a 3rd party seller) we'll not be able to sell our products at a profitable price until they run out of stock.
An Amazon flip when Amazon is on the listing is like throwing a house party while your parents are gone. You want to make sure that everyone is gone before they get home or you're in trouble!
If the current buy box owner is showing they aren't going to run out of stock, you don't have a good flip opportunity.
The Tools for Amazon to Amazon Flips
The art of finding AZ flips has changed tremendously since I started selling in 2014. When I started, the only tools that existed were the free websites Keepa.com (which is no longer free) and CamelCamelCamel.com. These were actually plenty back then but with the rise in competition, we will want to utilize a few other tools as well.
Tool #1 Tactical Arbitrage
You could use JUST Tactical Arbitrage and your Amazon flip game wouldn't miss a beat.
Tactical Arbitrage is a robust sourcing tool that scans Amazon in real time and helps you find products that are selling below the average 30 or 90 days sales price. You can also specify what categories you search and set parameters like sales rank and ROI after fees.
TOOL #2 KEEPA
If Tactical Arbitrage is out of your price range, Keepa alone will be a good resource for seeing sales history on Amazon products. Keepa is a web based tool and also offers a Chrome extension that will put sales data directly on Amazon pages as you browse.
Keepa used to be free for causal use but they just started charging for access to the more "reseller" centric data. It's still a steal at $17/month.
Tool #3 How Many App
One of the most important parts of an Amazon flip is understanding how many your competitors have in stock. This will help you time your buys and ensure you don't get stuck holding a bunch of inventory!
Amazon Flips Frequently Asked Questions
"Do Amazon flips violate Amazon terms of service?"
Yes and no. It violates terms of service if you use your Prime benefits to obtain free shipping or other discounts. You will need to open an Amazon Business account to safely buy and sell flips.
I will likely get comments contending that these do in fact violate terms of service but I can speak from personal experience that Amazon does accept invoices from Amazon purchases as evidence in the event that they request proof of where you sourced your items.
Keep in mind, just because something was bought on Amazon, it is still your job to ensure that it is not counterfeit. Many sellers assume that since it was listed on Amazon, it is fine and doesn't need to be inspected. This is where most Amazon flip suspensions come from.
"How can I get an Amazon business account?"
It's free and easy. Click the link below and get started.