Amazon BOLO groups have been around for as long as Amazon groups have been on Facebook. Some are free, and some have a paid membership. Amazon BOLO groups, in many cases, have received bad reputations, whether deserved or not.

Be On The Lookout – or BOLO as it is commonly called – is a way to identify something that is supposed to be worth finding, and in the case of Amazon, worth buying to resell on Amazon for a profit. This term BOLO usually refers to finding the item in a retail store setting as opposed to buying it online. Retail Arbitrage is the business model, and finding BOLOs are what makes an Amazon seller’s heart beat fast!

Race to the Bottom

One complaint often heard about Amazon BOLO groups is that they are responsible for the “Race to the Bottom”, where sellers are all lowering their price in order to get the next sale, and as a result, the price erodes away to the point where it is no longer profitable.

Brand New Sellers are Expected to Provide the BOLOs

Some Amazon BOLO groups require members to share BOLOs in order to remain in the group. There are potential problems with this model that newer sellers need to be aware of. Amazon BOLO groups tend to attract newer sellers, many of whom have not yet learned to properly research a product to determine if it is, in fact, something worth buying to resell. They may not be using tools like Keepa or AZInsight, or they may have the tools but be inexperienced at interpreting the data. These inexperienced sellers are providing “BOLOs” to the group as a requirement for membership, and other inexperienced sellers are purchasing these items, not realizing that they may be buying items that are not profitable.

Experienced Sellers Reap the Benefits

Another potential problem is the fact that experienced sellers, ones who can recognize a profitable item and who are able to purchase larger quantities of these items, will many times be the ones who benefit the most when an inexperienced seller does actually post a good BOLO. These experienced sellers are able to move quickly, have their shoppers buy up all of the inventory in the areas where they shop, and can order additional quantities online. They have systems in place to benefit from finding these deals and can quickly and efficiently buy up large quantities of an item, preventing smaller sellers from getting much time in the Buy-Box. Smaller sellers wind up dropping the price in order to sell out and recoup some of their money (Race to the Bottom), while the larger seller can hold out and reap the higher profits when the other sellers are gone from the listing.

Lastly – the experienced seller will NEVER give up one of their real money-makers. They will toss an occasional bone into the group, but don’t expect to join an Amazon BOLO group and have high-level sellers providing great deals for you to find. They have no financial incentive to give away their bread and butter and no desire to have lots of additional sellers competing with them on their best products.

Should You Beware of Amazon BOLO Groups?

So are all Amazon BOLO groups bad? Absolutely not. But there are better models, in my opinion. For example, a better model is a group where experienced sellers (the group owners) are paid to provide the product leads. They have a financial incentive to do a good job for the members, and their reputation is on the line. If they don’t produce, word will get around and they will quickly find themselves without a group. These groups generally charge a monthly membership fee.

Another would be a group where members are encouraged to post BOLOs, but it is not a requirement. The group should be open for discussion where each BOLO is critiqued by others in the group. That way, if the item is not a good buy, members can be warned before making a purchase. Still, there is no incentive for an experienced seller to post their best finds, but at least the risk of an inexperienced seller making a bad purchase is lower. These groups can be free or paid membership.

Generally, the lower number of members in an Amazon BOLO group, the better, but most newer sellers are not buying hundreds of different items every month, so you may only have a couple of other sellers from your BOLO group actually buying the same items as you.

An Inch Deep and a Mile Wide

The thing to remember is that if your BOLO group found the item, other people or groups have likely found it as well. Minimize your exposure by sourcing from as many stores as possible, and don’t go deep on an item unless you have fully researched it, and preferably already sold it to be sure it will sell well. Buying limited quantities of inventory is your best protection against the Race to the Bottom.

Another Type of Group

Essential Daily Deals is not a BOLO group. It is a list of products that can be purchased online for resale on Amazon for a profit. We look for sales, coupon codes, and rebates that can turn an unprofitable item into a profitable one. The extra work that we do behind the scenes can produce some great product finds that other deals groups are missing. Essential Daily Deals has been producing deals lists every Monday through Friday since 2015. Every deal is fully researched and vetted by our team of professional product sourcers and sellers. For more information check out EssentialDailyDeals.com

Want some great TIPS for doing Arbitrage from your computer? Check out our Advanced Online Arbitrage Tips post.

About the Author

Greg Purdy is the founder and co-owner of Seller Essentials, the resource website for all things Ecommerce. He lives in Maryland with his wife and children.