The ABCs of Amazon online arbitrage


You've just started selling on Amazon as a new seller. Congratulations on your achievement! You've joined Facebook groups and viewed YouTube videos, and now you've discovered that sellers use a lot of terms that you don't understand. Don't worry, we'll explain everything to you.

We have compiled a complete list of all the terms and acronyms you're likely to encounter because understanding these phrases will make it easier to manage your business.

To make it simpler to find what you're looking for, this list is organized alphabetically.

Glossary of terms

A

A-to-Z Guarantee

This is designed by Amazon to ensure that third-party products arrive in good shape and on time. The A-to-Z guarantee allows Amazon customers to file claims against vendors. This can have a significant negative impact on your seller account, so do everything you can to keep your customers pleased.

Account Health

This refers to the performance goals and policies that all Amazon sellers must follow in order to keep selling on the platform. Customer service, product policy compliance, and shipping performance are all indicators of account health. Finally, you want to acquire positive feedback without jeopardizing the health of your account.

Amazon Marketing Services (AMS)

The Advertising Console was another name for it. This is a technique for sellers to stand out and get more people to look at their ads.

Amazon Prime

Amazon Prime is a paid subscription service from Amazon that provides users with premium services for a yearly or monthly fee. Amazon Prime subscribers receive free delivery, Prime Video, Twitch Prime, Amazon Drive, and thirty minutes early access to Lightning Deals.

Amazon Standard Identification Number (ASIN)

A series of digits that is assigned to each product detail page. Every product on Amazon has an identifier like this and you can find products by their ASIN.

Average Selling Price (ASP)

This shows in your Business Reports. It is a chart that indicates the average amount of money you make in sales of an item on Amazon over a period of time. ASP is calculated by dividing the number of sales by the number of items sold.

At Time of Posting (ATOP)

When information is subject to change and may only be accurate at the time it is presented, this is a common phrase to mention. It could be connected to a sale or a new piece of information.

AZ or AMZ

We talk about Amazon a lot on Facebook groups. As a result, it makes sense to use some sort of abbreviation when referring to them.

B

Business to Business (B2B)

This means selling from one business to another. As an Amazon seller, you may qualify to sell products directly to businesses in addition to consumers.

BB (Buy Box)

The Buy Box on Amazon is a section on the right side of the product details page where shoppers can add an item to their cart or buy instantly. For Amazon sellers, getting on the buy box offers more visibility as one product could be sold by several sellers and at varying prices.  

Brand Registry

This is an Amazon tool that assists you in defending your brand against other sellers attempting to sell on your listing. To be Brand Registered, you must have a trademark. You'll be able to use Enhanced Brand Content as well.

Best Seller Rank (BSR)

This is the Amazon ranking for a certain product and could also be referred to as Amazon Sales Rank. This ranking represents a snapshot of how well, or poorly, a product is performing at any given time. The lower the seller rank, the better the product performs.

Use tools like Keepa to find out how well a product sells over time, by looking at how the BSR performs over time.

Back to School (BTS)

When it comes to Amazon selling, there are numerous "seasons." Back to school, Easter, Valentine's Day, New Year's Eve, and, of course, Christmas. Back to school has its own abbreviation, and you don't want to miss this "season."

C

Cashback (CB)

If you're interested in online arbitrage or even retail arbitrage, you should learn about cashback. A good number of websites will pay you a percentage of your checkout  total amount back for clicking through their affiliate link. This is usually between 2-13%.

The easiest way to find out what website offers the highest cashback is to check on CahbackMonitor.com and compare prices while sourcing. There are a lot of cashback websites like TopCashback and Befrugal.

CamelCamelCamel (CCC)

This is a free online Amazon price tracker that provides a price drop alert. It can also be used to track product ranking and price history.

Cost of Goods Sold (COGS)

COGS is the direct expenses incurred as a result of your sales. In the case of e-commerce, this encompasses things like:

  • The amount you paid for your items to the manufacturer or supplier.
  • Expenses connected with making your own items
  • Tariffs and customs duties
  • Costs of obtaining your products, including freight.
  • Other fulfillment costs related to getting your items into the hands of your clients

D

Deals

A  deal is any product sold at a lower price than normal. Amazon Online arbitrage requires you to be able to source products at a lower price than they are currently being sold on Amazon and then sell for a profit on Amazon.

Deal Sheet

This is a sheet that contains a list of online arbitrage deals. An online arbitrage deal sheet takes away the hassle of sourcing for profitable products yourself. A deal sheet would contain the product, product link where it's being sold at a reduced price, product link on Amazon, product category, BSR, ROI and minimum profit. Websites like One Good Deal sell profitable online arbitrage deals.

Delivered Duty Paid (DDP)

The vendor is in charge of arranging carriage and delivering the goods to the specified location, cleared for import, and with all necessary customs and charges paid.

Dropshipping

Dropshipping is a type of third-party retailing in which the vendor takes orders from customers, buys from a third-party, and ships directly to the consumer. In most cases, this is against Amazon's terms of service. Dropshipping to an Amazon consumer from a company like Walmart could get you in trouble.

If you intend to employ this business model, please ensure to read Amazon's terms of service.

E

EFN (European Fulfillment Network)

This is an option for Amazon European sellers who want to sell on other Amazon marketplaces while having their orders fulfilled at fulfilment centres close to their homes.

EIN (Employer Identification Number)

This is a unique number assigned by the IRS to your business in order for it to be easily recognized. It can be used to report taxes and may also be requested when applying for wholesale or trade accounts.

F

Fulfillment by Amazon (FBA)

FBA is an Amazon paid service that provides storage, packaging, and shipping assistance to sellers. Sellers ship their items to Amazon Fulfilment Centre and Amazon stores the items until they are sold. Amazon will also handle returns and exchanges.

Fulfillment by Merchant or Merchant Fulfilled (FBM or MF)

This means that an item sold on Amazon is stored, picked, packed, and shipped to an Amazon customer by the seller.  

Fulfillment Center

These are the warehouses where Amazon sellers send their inventory to be stored. When an item is purchased, it is picked up, packed, and shipped to the customers from these locations.    

Fulfillment Network Stock Keeping Unit (FNSKU)

This set of digits will be what you print and place on your products that allow a scanner to identify your product so that the correct item is pulled when a sale occurs.  These codes will be unique to your inventory so if an item is misplaced or returned the item will trackback to your seller account.

Fulfillment Fee

The cost Amazon charges to pick, pack, and ship your product through its FBA service.

Freight On Board  (FOB)

Also referred to as Free on Board. It is a retail shipping term used to identify the party responsible for shipping charges. If a term sheet includes the phrase "FOB Port of England," it signifies that the factory will cover shipping charges until the products arrive at the Port of England; after that, the buyer assumes custody of the items.

G

Gated Brand

There are different types of gating or restrictions on Amazon. Gated Brand means that some brands cannot be sold on Amazon without going through an approval process. This normally involves getting invoices and written permission from the brand.

Gated Category

This is a limited category of products for which you must first get Amazon's clearance before selling.

Global Trade Identification Number (GTIN)

These are unique numbers that are used to look up product information.– includes UPC, ISBN, and EAN

H

Hazmat

Hazmat simply means Hazardous Materials. For Amazon online arbitrage, hazmats are described as substances or materials that may pose a risk to health, safety, property, or the environment while storing, handling, or transporting because they contain flammable, pressurized, corrosive, or otherwise harmful substances.

To sell hazmats through FBA, you must:

Keep up with current and relevant legislation and regulations.

Make sure your product information is thorough and accurate.

Fill and Upload Safety Data Sheets (SDS) or exemption sheet that is complete, correct, and up to date.

I

International Standard Book Number (ISBN)

This code is used instead of an ASIN to identify books on Amazon.

L

Landed Cost

This is the price of a single item (cost per unit), plus shipping and customs fees.

Lead Magnet

A free or low-cost product is offered in exchange for a potential buyer's contact information, such as an email address or phone number.

Lightning Deals

A promotional offer where a product is promoted on the Amazon Deals page for a limited amount of time.

M

Minimum Advertised Price (MAP)

This refers to the minimum price a manufacturer allows sellers to list their product.

Manufacturer’s Suggested Retail Price (MSRP)

This is the standard price the manufacturer recommends products should be sold at. Also known in the UK as RRP – Recommended Retail Price.

Minimum Order Quantity (MOQ)

The lowest possible order volume allowed by a manufacturer for a particular product.

O

Online Arbitrage (OA)

The process of sourcing products cheaply on one e-commerce platform and then selling them on another e-commerce platform at a higher price.

Original Equipment Manufacturer (OEM)

A company that makes products that can be sold by another manufacturer.

R

Referral fees

Amazon charges a referral fee for each item sold. The amount depends on the product category. Most referral fees are between 8% and 15%. Check here for a list of Amazon referral fees by category.

Return on Investment(ROI)

This is the loss or gains an investment generates relative to the amount of money invested. The typical ROI formula is:

ROI = (Gain from the investment – Cost of investment) / Cost of investment

S

Seller Feedback

This is a rating given to Amazon's third-party sellers by customers who have just made a purchase and want to share their experience with other customers.

Sourcing software

Sourcing software are online tools used to search for profitable products to sell on Amazon. Popular sourcing software include Tactical Arbitrage and Source Mogul

Storefront

This is Amazon's service that allows vendors and sellers to set up their own brand stores on Amazon.com and offer their customers a virtual shopping experience. An effective storefront can help you scale your Amazon business.

T

Third-party Logistics (3PL)

A company that provides outsourced logistics services such as shipments, storage, and fulfillment.

Third-Party Sellers (3PS)

This is a term used to describe merchants unrelated to the “owners” of an e-commerce platform. For example, on Amazon 3P sellers are those who sell FBA or FBM.

V

Virtual Assistant (VA)

A virtual assistant is someone who usually provides administrative help while working remotely.  For Amazon, a virtual assistant can take on tasks like product sourcing, content creation, or bookkeeping.






One Good Deal Team

One Good Deal Team