In the ever-expanding world of eCommerce, entrepreneurs are constantly seeking profitable and scalable methods to build online businesses. One such method that continues to grow in popularity is Amazon retail arbitrage. This business model allows individuals to capitalize on market inefficiencies by purchasing discounted products from retail stores and reselling them on Amazon for a profit.
Retail arbitrage has become especially relevant in 2025, as inflation, supply chain fluctuations, and changing consumer behavior have created new gaps in pricing across different marketplaces. Whether you’re an aspiring seller looking to break into eCommerce or an established business owner exploring additional income streams, retail arbitrage offers a low-barrier, high-potential entry point into Amazon selling.
This guide will break down the ins and outs of retail arbitrage on Amazon, including how to get started, where to find profitable products, and how to navigate Amazon’s policies and tools. We’ll also cover common challenges, expert tips for success, and whether this model is the right fit for your business goals.
What is Amazon Retail Arbitrage?
Amazon retail arbitrage is the process of buying products from brick-and-mortar retail stores or online retailers at a lower price and reselling them on Amazon for a profit. It’s one of the simplest ways to start selling on Amazon without manufacturing your own products or investing in private label branding.
The business model revolves around price disparities between retailers and Amazon’s marketplace. Sellers who engage in retail arbitrage typically scour clearance racks, discount stores, and big-box retailers like Walmart, Target, Walgreens, or TJ Maxx, looking for brand-name products being sold at steep discounts. These items are then listed on Amazon—where demand is higher or supply is limited—at a marked-up price.
For example, a seller may find a popular toy on clearance at Walmart for $10, scan it using the Amazon Seller App, and discover it sells for $25 on Amazon. After deducting Amazon fees and shipping costs, there’s a margin to make a profit.
Why is it Called “Arbitrage”?
The term “arbitrage” comes from the financial world and refers to taking advantage of price differences between markets. In this case, the two markets are the retail store and Amazon’s online marketplace.
Is Retail Arbitrage Legal?
Yes, retail arbitrage is completely legal. As long as you are selling authentic, non-restricted products and comply with Amazon’s seller policies, you are within your rights to resell retail goods.
Retail arbitrage offers a great entry point for beginners because it requires minimal upfront investment, no need for a supplier relationship, and can start generating cash flow quickly. However, it also requires hustle, research, and smart decision-making to succeed in a competitive marketplace.
Why Should You Use Retail Arbitrage?
Retail arbitrage on Amazon continues to be a go-to strategy for both new and experienced sellers—and for good reason. It offers a blend of flexibility, low startup costs, and real profit potential without needing to create or manufacture your own products.
Here’s why it’s worth considering:
1. Low Barrier to Entry
You don’t need a large investment to get started. Many sellers begin with as little as $100–$200, purchasing discounted or clearance products from local stores. There’s no need for a website, private label, or warehouse—just a seller account and some good sourcing instincts.
2. Quick Cash Flow
Unlike models like private label or wholesale that can take weeks or months to generate income, retail arbitrage lets you see returns faster. You can buy inventory today, list it on Amazon, and potentially start selling within days.
3. No Need to Build a Brand
If brand-building feels overwhelming or time-consuming, arbitrage may be ideal. You’re reselling well-known, established brands with existing demand and customer trust. You don’t need to spend on logos, packaging, or product development.
4. Leverage Amazon’s Massive Traffic
Amazon sees over 2 billion monthly visitors. By listing products already in demand, you tap into this existing traffic stream without spending a dime on marketing. If your product is priced right and well-ranked, sales can come organically.
5. Test Products Without Big Risk
Retail arbitrage allows sellers to test various categories—such as toys, electronics, or household items—before committing to a specific niche. It’s an excellent way to explore what sells well on Amazon without buying in bulk or investing heavily.
6. Learn the Amazon Ecosystem
For beginners, arbitrage is an excellent introduction to Amazon’s selling platform. You’ll become familiar with FBA (Fulfillment by Amazon), fee structures, pricing strategies, sales rank, and listing optimization—all of which are useful if you later scale into private label or wholesale.
Arbitrage for Beginners: Getting Started
Retail arbitrage on Amazon is one of the most beginner-friendly eCommerce business models. It allows new sellers to dive into online selling without manufacturing products or building a brand. Instead, you buy discounted or clearance products from retail stores and resell them on Amazon at a profit. Here’s your detailed step-by-step guide to getting started in 2025.
Set Up an Amazon Seller Account
To sell on Amazon, your first move is to create a Seller Central account.
Types of Accounts:
Individual Seller Account: No monthly subscription fee; pay $0.99 per sale. Ideal for beginners who are just testing the waters.
Professional Seller Account: $39.99/month flat fee. Includes bulk listing tools, access to ads, and eligibility for the Buy Box.
What You’ll Need:
Government-issued ID (passport or driver’s license)
Tax information (SSN or EIN)
Credit card and bank account
Business name and address (optional for individuals)
Pro Tip: Go with a Professional Account if you’re serious and plan to sell more than 40 items/month—it saves money in the long run.
Understand Gated Categories and Brand Restrictions
Amazon protects certain product categories and brands to ensure quality and reduce counterfeits.
Gated Categories (require approval):
Grocery & Gourmet Food
Health & Personal Care
Beauty
Toys (during holiday seasons)
Jewelry, Automotive, and more
Brand Restrictions:
Some brands, like Nike, Apple, or Lego, don’t allow third-party sellers without approval. Others may allow selling only used or collectible items.
Check Before You Buy: Use the Amazon Seller App or Seller Central to confirm if you’re eligible to sell a product before sourcing it.
Learn the Metrics
Before diving into stores, understand key terms and metrics used in arbitrage:
Sales Rank: Indicates how well an item is selling. Lower numbers mean higher sales velocity.
ROI (Return on Investment): Your profit divided by the product cost.
Break-even Price: The price you need to sell at to cover fees and costs.
Buy Box: The default seller from whom customers buy. Winning the Buy Box boosts your sales.
Aim for at least 40–100% ROI when starting, and target products with a sales rank under 100,000 in their category.
Start Sourcing Products Locally
Retail arbitrage begins with physically visiting stores to find underpriced products that can sell for more on Amazon.
Best Stores for RA in 2025:
Walmart – Massive clearance sections, everyday low prices.
Target – End-of-season markdowns and regional price drops.
Dollar Tree – Great for low-cost, high-margin items.
TJ Maxx / Marshalls / Ross – Branded fashion and home goods at discount prices.
Walgreens / CVS – Regularly rotate inventory and offer coupon deals.
Big Lots, Burlington, Five Below – Hidden gems in niche categories.
Tip: Walk every aisle and check for clearance tags, discount stickers, and manager specials. Use the Amazon app to scan every promising product.
Scan and Analyze Before Purchasing
Don’t buy based on gut feeling. Always scan and assess:
Amazon Price vs. Store Price
Sales Rank and Velocity
Amazon Selling Fees
Profit Margin and ROI
Number of Competing Sellers
Avoid items where Amazon itself is the seller—they usually dominate the Buy Box. Only buy items that will net you at least $3–$5 profit and have a steady sales history.
List Your Products on Amazon
Once you’ve sourced your inventory:
Log into Seller Central
Click “Add a Product”
Search or scan your item
Input product condition, price, quantity, and fulfillment method
You can choose between:
FBA (Fulfilled by Amazon): Ship your products to Amazon’s warehouse; they store, pick, pack, and ship.
FBM (Fulfilled by Merchant): You ship products directly to customers.
FBA is ideal for new sellers—Prime shipping boosts visibility and trust.
Pack, Label, and Ship
For FBA:
Label each item with an Amazon barcode (FNSKU)
Pack according to Amazon’s prep requirements
Ship using discounted Amazon-partnered carriers (UPS, FedEx)
Use tools like InventoryLab or Amazon’s Send to Amazon workflow for streamlined prep and shipping.
Monitor Performance and Reinvest
Once live, keep checking your sales, restock hot products, and reinvest profits.
Track:
Units sold
Profit margins
Inventory levels
Customer reviews
Retail arbitrage success is in repetition. Source regularly, analyze your wins, and double down on what works.
Where to Source Arbitrage Products in 2025?
Once you’ve identified promising arbitrage opportunities, the next step is to make sure you can actually source those products at a price that leaves room for profit. It’s not just about the product cost — you also need to factor in Amazon’s referral fees, fulfillment fees (if you’re using FBA), shipping costs, taxes, and any prepping materials you may need.
Now, let’s explore the top places to find arbitrage products in 2025 — both online and in-store — with sourcing strategies that align with how experienced sellers are profiting today.
Online Marketplaces
Online marketplaces offer a huge advantage: they’re accessible from anywhere. You can scout deals while sitting at home and compare prices instantly with Amazon listings using tools like Keepa, RevSeller, or SellerAmp. And since many platforms ship globally, you’re not limited by geography.
Top online marketplaces to source arbitrage products include:
eBay – Known for seller-driven discounts and auctions. Many resellers list products below retail to move inventory quickly.
Walmart.com – With its aggressive pricing, rollback deals, and increasing third-party seller base, you can find many items cheaper than on Amazon.
Target.com – Offers regular clearance and loyalty discounts via Circle Rewards and RedCard.
BestBuy.com – Flash sales and open-box items can present solid profit margins, especially in electronics.
AliExpress & Alibaba – If you’re okay with longer delivery times, these platforms are ideal for bulk buying at wholesale rates (note: watch for brand restrictions and counterfeit risks).
Pro Tip: Use extensions like Honey or Rakuten for additional cashback and coupon savings during checkout.
eBay
eBay is not just a marketplace for collectibles — it’s an arbitrage opportunity waiting to be tapped. Because of its auction-based model and the number of casual sellers, products are often underpriced compared to Amazon.
Popular arbitrage categories on eBay include:
Electronics & accessories
Books and DVDs
Branded apparel
Used/refurbished items (be careful with Amazon’s used condition policy)
Use filters to find new/sealed items and track listings where sellers are motivated to offload inventory.
Walmart
Walmart has emerged as one of the top sources for retail arbitrage in 2025. Not only does it have a massive catalog of low-priced items, but its frequent rollbacks, clearance shelves, and buy-one-get-one promotions create consistent arbitrage potential.
Many products are available for in-store pickup, allowing sellers to combine online sourcing with local promotions. Walmart also price matches with its own online store, which is useful when deals differ by location.
Look for deals in:
Toys & games
Home goods
Baby products
Seasonal clearance
Many arbitrageurs use BrickSeek to monitor Walmart clearance stock levels at specific locations.
AliExpress & Alibaba
If you’re looking to test out bulk purchases or niche products with high demand and low competition, these two Chinese-based marketplaces are strong candidates.
AliExpress is consumer-focused, allowing smaller orders (even one item).
Alibaba is for B2B orders and requires larger quantities but offers better margins.
Keep in mind:
Long shipping times (often 2-4 weeks)
You’ll need to ensure compliance with Amazon’s product safety and authenticity rules
Not ideal for branded or restricted categories
Still, for unbranded items and bundles, many arbitrage sellers make solid profits sourcing from these platforms.
Physical Retail Stores
In-store retail arbitrage remains one of the most consistent and controllable sourcing methods. Unlike online-only deals, in-store clearance or regional discounts are not visible to most sellers, giving you a competitive edge.
Some of the best stores to find arbitrage deals include:
Walmart – The best for local sourcing due to its breadth of inventory and in-store-only deals
Target – Often pricier than Walmart, but Target Circle and seasonal markdowns can make it profitable
Kohl’s – Kohl’s Cash + clearance racks = big margin potential
Dollar Tree / Family Dollar – Great for bundling small items
Marshalls, Ross, TJ Maxx – Apparel, home goods, toys, and name-brand overstock at steep discounts
Home Depot / Lowe’s – Excellent for seasonal decor, tools, and outdoor products
Staples / Office Depot – Look during back-to-school or clearance season
Local shopping malls – Especially outlets and clearance racks for name-brand apparel and shoes
Many of these stores also offer loyalty programs or apps with extra discounts — leverage them to improve your ROI.
How to Sell Amazon Arbitrage Products
Create or Upgrade to an Amazon Seller Account
To sell on Amazon, you need a seller account. If you don’t already have one, head to Amazon Seller Central and register.
You’ll need to choose between two types of accounts:
Individual – No monthly fee, but Amazon charges $0.99 per item sold.
Professional – $39.99/month flat fee, with access to more selling tools and the Buy Box.
Tip: Most arbitrage sellers go with the Professional account to scale and access full features.
Decide Your Fulfillment Method: FBA vs. FBM
Amazon offers two main fulfillment options:
FBA (Fulfilled by Amazon) – You ship your products to Amazon’s warehouse, and they handle packing, shipping, and customer service.
Pros: Access to Prime customers, better chance at the Buy Box, hands-off shipping.
Cons: FBA fees, storage fees, and potential for stranded inventory.
FBM (Fulfilled by Merchant) – You handle storage, shipping, and returns yourself.
Pros: Lower fees, more control.
Cons: Requires time and resources for shipping and handling.
Tip: Many retail arbitrage sellers start with FBA for scale and convenience.
List Your Product on Amazon
If the product already exists on Amazon (which is common in arbitrage), you can list it under the existing ASIN:
Search the product in Seller Central
Choose “Sell This Product”
Enter your price, condition (New or Used), and quantity
Select your fulfillment method (FBA or FBM)
If the product is not yet listed on Amazon (rare for arbitrage), you’ll need to create a new listing with:
Product title
Brand
Description
Bullet points
Images (must meet Amazon image guidelines)
Set Competitive Pricing
Your pricing should consider:
Amazon fees (referral + fulfillment)
Cost of goods
Desired profit margin
Competitive landscape
Use repricing tools like Bqool, RepricerExpress, or Aura to automatically stay competitive.
Pros and Cons of Retail Arbitrage
Pros:
Low Barrier to Entry: Retail arbitrage doesn’t require a business license or massive startup capital. Anyone can begin by sourcing discounted products from local or online stores.
Quick Start-Up Time: You can start sourcing and listing products on Amazon almost immediately after account setup.
High ROI Potential: With the right finds, arbitrage can yield high profit margins, especially on clearance or limited-stock items.
Learning Opportunity: It’s a great way for beginners to understand how Amazon’s marketplace, FBA, and product demand work.
Flexible Work Model: You control your sourcing schedule, inventory volume, and how much you want to scale.
Cons:
Limited Scalability: It’s hard to scale retail arbitrage due to inconsistent inventory availability and manual sourcing.
Time-Intensive: Scanning, traveling, and sourcing require significant time and effort—especially for part-timers.
Price Volatility: Prices and competition can fluctuate rapidly on Amazon, impacting your profit margins.
Amazon Restrictions: Some brands and product categories are gated or restricted, which can block your listings.
Short Product Lifespan: Arbitraged items may go out of stock quickly, making it difficult to build a sustainable product portfolio.
Tips for Success in Retail Arbitrage on Amazon
Pick the Right Products
Finding the right product is the foundation of success in retail arbitrage. It’s not just about spotting a deal — it’s about choosing items that will actually sell and generate profit.
However, arbitrage sourcing requires more diligence. Before committing to a product, make sure there’s enough of a price difference between your sourcing cost and the current Amazon price. Watch for price shifts at retail stores—clearance and seasonal markdowns can offer great opportunities. While quick flips are tempting, focus on finding products with long-term potential to build a sustainable business. Proven categories for arbitrage include home and kitchen, toys and games, and books.
Price Your Products Competitively
One of the biggest hurdles in retail arbitrage is winning the Buy Box. Since you’re often reselling products alongside multiple sellers, competitive pricing becomes your strongest weapon.
To improve your chances, aim to offer one of the best prices without slashing your profits. Use repricing tools to automatically adjust your pricing based on market trends and competitor behavior. Keep an eye on what others are charging and make strategic moves—not just the cheapest, but the best balance between price and profitability.
Keep Stock Available
Even with the best product and pricing strategy, you can’t make sales if your product goes out of stock. Inventory management is key to maintaining momentum and keeping your spot in the Buy Box.
Monitor your sales velocity and reorder popular items before they run out. Consider using Amazon’s inventory alerts or third-party tools to track your stock levels. Consistent availability not only leads to more sales—it also signals reliability to Amazon, which can boost your seller metrics and visibility.
Conclusion
Amazon retail arbitrage remains a powerful, low-barrier way for entrepreneurs to tap into the eCommerce boom in 2025. With minimal upfront investment, access to Amazon’s massive customer base, and the ability to resell trusted, branded products, it’s a smart entry point for new and seasoned sellers alike. By understanding Amazon’s rules, leveraging tools like Keepa and the Seller App, and sourcing strategically from discount retailers or online marketplaces, sellers can turn small finds into consistent profits. While it requires effort and learning, the scalability and cash flow potential make retail arbitrage a compelling path to Amazon selling success.
FAQ's
What's retail arbitrage on Amazon
Retail arbitrage is a business model where you buy discounted or clearance products from local retail stores (like Walmart, Target, Ross, or TJ Maxx) and resell them online — most commonly on Amazon — at a higher price to make a profit.
For example, if you find a toy on sale at Walmart for $10 and that same toy is selling on Amazon for $25, you can buy it, list it on Amazon, and make money after fees and shipping.
Is retail arbitrage on Amazon legal?
Yes, retail arbitrage is legal as long as you sell authentic products and comply with Amazon’s seller policies.
How much money do I need to start retail arbitrage?
Many beginners start with as little as $100–$200 by sourcing clearance or discounted items from local stores.
Should I choose FBA or FBM as a beginner?
FBA is recommended for beginners since it boosts visibility through Prime shipping and simplifies storage, packing, and shipping.
What is the main difference between retail and online arbitrage?
Retail arbitrage involves buying discounted products from physical retail stores and reselling them on Amazon. Online arbitrage, in contrast, is done entirely online — you purchase items from eCommerce stores and have them shipped to your home or prep center.
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