Gizmodo recently published an article that is bound to annoy retail arbitragers; they baited up the fact that resellers don’t just exist in event ticket world or with trainers, but also homeware. Me drawing yet more attention to it isn’t exactly helping either, but it’s too late now. It’s out there. It’s an opportunity to talk about why Ikea has all the qualities of a near-perfect product source for Amazon FBA sellers.
— Gizmodo (@Gizmodo) 10 October 2017
1. Everyone hates Ikea’s online home delivery
Have you ever made an online order with Ikea? Watch out of a madness of a delivery charge that follows. There’s an expectation with big brands that, at some point, you will qualify for free delivery. Ikea doesn’t see it that way. £35 is apparently the standard for basically everything, and that’s about £25 more than anyone is prepared to get anything delivered to their home.
Imagine the levels of cart abandonment on their site.
As an Amazon Prime subscriber, you know that it’s free to get an item to you in a day. If you can get the same product without that additional charge, why would you not? As a seller, it’s a chance to inflate prices. Test for yourself what people are willing to pay in exchange for convenience.
2. Ikea is a trek for everyone to get to
At the time of writing, there are 24 Ikea stores in the UK. That is not enough. For the majority of people, going to an Ikea is a mission. Most people aren’t in the mood for a mission when they know they’ve got half a day of assembly to do afterwards.
Think of the petrol as well as the hassle. Why bother go to all of that effort when you simply don’t need to. Some people would much prefer to simply pay extra for that convenience than to go out of their way to get to an Ikea, especially when they only want a couple of things.
3. Everyone overspends in Ikea
When you go to Ikea, you tend to go in for inspiration. Over the course of the trip, inspiration for more living room furnishings may have developed into a need to kit out your kitchen too. Many people know that they’re going to be victimised in Ikea, so would prefer not to put themselves through the experience.
When shopping online, you can get the one thing you need and move on, without all of the extra temptation. On Amazon, you may have put a product on your wish list a couple of months back, and now you have the funds to cop it. Simple, grab it right then and there. The same can’t happen if you had to go in-store, because you’ll leave with new cutlery and several hundred mini Daim bars by the end of the day.
As a seller, you can use things like this to act as leverage to up your prices. It’s another reason why people refuse to go to the bricks-and-mortar establishment, and would go to your listings instead.
4. Everyone loves Ikea
I know you anti people will deny it, but Ikea offers great value for money and they have one of the most comprehensive homeware ranges you’ll find anywhere. People want to buy Ikea products, because it’s familiar to them. They know what they’re paying for.
Amazon sellers know the power of brand names. It makes things so much easier to sell when you’ve got that brand equity behind you. Even if you’ve had success selling unbranded home décor items, you will appreciate when you see how quickly you can shift Ikea products.
5. Everyone is too lazy to compare prices
Most people believe that if they see an Ikea product on the Amazon website, they are buying a product that Amazon bought off them wholesale or Ikea is selling as a third party vendor. As a result, they believe that the price is the price they’ll get at Ikea too.
If you know anything about Amazon FBA, you’ll know this is far from the truth.
As an Amazon seller, you have the power to dictate the price. Whether you price it well enough that people will purchase is another story. This dynamic means that people are completely forgetting to shop around, before they add to basket.
6. Few resellers have the time to source from Ikea
There are so many ways to source and so many places to do it from. You could exclusively buy from second-hand places, like charity shops and boot sales. Others may just do it from marketplaces like eBay and Gumtree. There are some that only buy from supermarkets. All of them have amazing arbitrage deals. This being the case, along with all of the other factors earlier, many won’t bother with Ikea.
Competition on Amazon FBA is one of the factors that pushes people out the game early. If you’re able to minimise it, you’re on the path to success. This is just one example of how you can flush out competition; go for products that no one can be bothered to buy. Many aren’t brave enough to try to resell full-priced items like this. If you are, you may just see results from it.
Ikea are planning to sell through third party sites such as Amazon in the future. Take advantage of the arbitrage opportunities while they still exist.::::::::::::: - Chiino I don't do comments around here, so let's keep the conversation going on Twitter. If Twitter's not your thing, give us an email.