Retail Arbitrage – The ONLY Guide for Buying Retail and Reselling on Amazon

Retail Arbitrage will never go away!!

It’s Friday night. I just put my son to sleep and sat down to write this blog.

As I think about the weekend, one thought keeps coming to mind.

Most of us can’t wait for the weekend to roll around—to celebrate the short-lived freedom you get for a day and a half.

And while you’re at it, why not stack up a little more debt so you have a good reason to drag yourself back to “reality” on Monday morning?

I’ve been there. I know exactly how it feels. It’s uncomfortable. It probably makes you frustrated right now!

Good!!!

I want you to feel that. Because the truth is, no one is going to change your life for you. That’s your job.

Sometimes you need to hear it—because real change only happens when you get that punch-in-the-gut moment.

So today, let’s do something about it.

 

What if I told you, there is a way to make extra cash without flipping your entire life upside down? No drastic changes—just small tweaks here and there, a sprinkle of discipline, and the will to do more.

Think about it. If you’re like me and most families, your Saturday routine looks something like this:

You start at Costco or Walmart, then swing by Target, HomeGoods, or TJ Maxx, picking up a little more stuff before heading home.

But what if, in between those stops, you could set yourself up for something bigger?

This routine is already a part of your weekly chores, nothing is different. Why not optimize your day and make it work for you, yeah? Why not make it fun? 

What if these same trips can become your cash cow? And the same exact stores you spend money at, turn into where you make extra cash. 

So imagine when you are done shopping for your home stuff, you pull up your phone and start scanning some items on the shelves to determine if these items are cheaper in the store than on amazon.com. 

Yes that’s a thing…

Imagine finding an item you buy from the store, and sell it online for a higher price. Well today we will dig into this side hustle, which we ,amazon sellers, call it the retail arbitrage. 

So What Is Retail Arbitrage?

Retail arbitrage is buying items, any items, from a retail store and then selling them to someone at a higher price on a different marketplace or in person, but typically online in our case.

The difference between the cost and sale price is your profit.
It’s as simple as finding a product and selling it on Amazon.

But it has to be the right product for the right price. Trust me it’s as simple as that.

Learning how to find the right items is not hard, you just need to understand the tricks and techniques of identifying the right items in retail stores you’re familiar with, and sell them online for a higher price.

This strategy I just explained to you above is called Retail Arbitrage, and yes it’s completely legal to find things at lower prices and sell them on Amazon for a higher price. The trick is finding the right stuff for the right price.

Is Retail Arbitrage legal?

Yes! Retail arbitrage is legal. The act of buying low and selling high (the basic premise of retail arbitrage) is legal. 

It works the same way with wholesale, wholesalers buy low and sell at profit they deem appropriate, same with brands. 

I’ve been selling on amazon since 2011 and I started out selling Nike shoes, by buying them from the outlets and listing them on amazon for a higher price.

Step By Step How Retail Arbitrage Works

Have you ever walked into a garage sale and found a unique item, and bought it   for $2, and sold it for $30 or $40?

I used to scout garage sales on weekends, It made me money but it was inconsistent and sometimes risky.

There was no way of knowing if items I bought had steady demand and if people would pay top dollar for them. Even if they were highly desired items, it was hard to find multiples. So scaling this business model was very hard, and time consuming.

By now, and if you read through here, you have a general idea of what Retail Arbitrage is, and how money is made with this side hustle.

Okay! Let’s get a little deeper in the topic and talk about finding the right products, listing and selling them on amazon using Fulfillment By Amazon (FBA). This is an acronym that you will see and hear over and over again. But don’t worry, I created a list of all the amazon acronyms you will need to be successful on amazon

 Retail arbitrage is very simple model broken down into these steps

1. Buy products/ Items from a retail store [ we will talk about picking the right items later]
2. Send them to amazon fulfillment center 
3. And amazon will ship to the customers who purchase your items.

There are 3 main ways to sell on amazon. Retail arbitrage, Wholesale, and white label, also known as private label. 

If you’re just starting out, and on a strict budget, then retail arbitrage is the best way to start. If you want to learn more about the other options. Check out my guide on how to start selling on amazon. 

But for now  I’m going to dig deeper into the retail arbitrage and cover all the steps from A-Z. And like I said, if you are just starting out, and on a strict budget this will be your best guide to understand how to sell on amazon using retail arbitrage. 

Retail arbitrage was my first venture to sell on amazon. I learned Retail arbitrage and was able to double my income within the first 2 months, I found success in doing it over the weekend. 

And honestly, If I lost everything I have today, the first thing I would pick up is retail arbitrage to build back my wealth. This is ultimately my fallback plan for income. 

I’m happy that you’re reading this today because you’re here to improve your life and want more from it. With little investment in your time and self, guidance, and the right tools, you will be successful on amazon.

How Do You Start Selling On Amazon With Retail Arbitrage?

Before we get deep into finding the right items to sell, we need to cover the basics here.

 

If you haven’t already, you need to set up an Amazon seller Account. 

 

If you already have an amazon prime or a buying account, that’s not enough. You still need to apply for a selling account in order for you to sell products on amazon.

 

To set up a seller account on amazon you can sign up for one here. 

 

There are 2 levels of sellers: 

1. Individual seller [ free plan ]
2. Professional Seller ( Paid plan)

For now I would just get the free account and get familiar with it, and if you decide to upgrade you can always upgrade or downgrade. But for now just create the account for free. 

Once you’ve created your seller account. Make sure you download the app on your phone. The app is available on both IOS and Android. Having a smartphone is a must for this business model. 

You will be spending so much time on your phone. (you can find the app App Store or Google Play Store.)

Having the app on your phone is super important for succeeding on Amazon. It lets you scan items in stores to see if they’re selling and how much they’re going for. Plus, it has a handy Amazon revenue calculator that breaks down the fees. 

By getting to know all the costs involved, you’ll have a clear idea of how much money you can make from selling items on Amazon.We will get very familiar with all the costs and fees so that you can have a clear picture of how much money you would make from an Item you sell on amazon.  

Without tools and some basic supplies, you won’t be able to find the right products. Some of these supplies you will need to have first,I’m talking about 

• A smartphone, 
• and an active account to start scouting for items to sell.  

Essential supplies before you make your first FBA shipment, but you do not need to buy any of them before you start exploring retail arbitrage

How To Make Money With Retail Arbitrage:

We’ve covered the what and the where—now let’s talk about the how. So, how do you make money with retail arbitrage? And by making money, I mean, can you profitably make money doing retail arbitrage? 

Like any business, RA requires time, research, and a bit of trial and error. Sometimes, you’ll get lucky and land a product that sells like crazy. Other times, it takes patience to find the right item that moves.

That’s why research is critical. When you’re just starting out, you’re likely working with a limited budget and testing the waters. Every dollar counts, so knowing what to buy before you invest is key to maximizing profits and avoiding costly mistakes.

• Research: Before diving in, research items that are in demand, have limited availability, or are offered at a significant discount.
• Source Products: Look for clearance sales, closeout deals, or special promotions in stores or online. Big-box retailers, clearance stores, and even thrift shops can be gold mines. You can make some good money from thrift shops. 

Use Tools and Apps: Tools like Keepa or the Amazon Seller App can help you scan product barcodes to check potential profitability on platforms like Amazon.

Consider These Items

The fourth quarter of the year is prime time for holiday shopping. This is when people are spending big, making it the perfect opportunity to capitalize on seasonal demand. 

Some products—especially holiday-themed or seasonal items—can be purchased off-season at steep discounts and resold for a solid profit when demand surges.

One of my long-term strategies has always been to take advantage of these post-holiday discounts or markdowns. Right after Halloween, Thanksgiving, and Christmas, retailers slash prices to clear out inventory. That’s your chance to stock up at a fraction of the cost.

From there, you have two options: hold onto these items until next year when prices rebound or flip them immediately to catch last-minute shoppers still looking.

It’s a simple but highly effective strategy—if you time it right

Things to Keep In Mind when Selling Arbitrage

• Fees and Costs:  Selling on Amazon comes with fees, so always factor those in along with shipping and packing costs when figuring out your profit. It’s easy to overlook these expenses, but they can quickly eat into your margins if you’re not careful.
• Return Policy It’s always a good idea to buy from stores with solid return policies—just in case your items don’t sell or the price suddenly drops. That said, I’ve personally never had to return anything, but it’s nice to have that safety net.
• Brand Restrictions Before listing a product, double-check that you’re actually allowed to sell it. Some brands have restrictions or require approval before you can resell their items. It’s frustrating to buy inventory only to find out later that you can’t list it on your platform of choice.
• Taxes I’m not a tax expert, but just a heads-up—your earnings from retail arbitrage are taxable. Keep track of all your purchases and sales, and consider talking to a tax professional to make sure you’re handling everything properly.
• Storage If you’re not using Amazon FBA (Fulfillment by Amazon), you’ll need to figure out where to store your inventory. It’s easy to underestimate how much space you’ll need, so plan ahead before your living room turns into a mini warehouse!
• You will have 2 options, either to use amazon warehouses, or your own place to store your inventory. But If you’re not using Amazon FBA (Fulfillment by Amazon), you might need to consider getting a storage unit to store your inventory. 

  It’s easy to underestimate how much space you’ll need, so plan ahead before your living room turns into a mini warehouse!

Can You Really Make Money With Retail Arbitrage?

Understanding The Amazon FBA Fees

I want you to understand how the fees work when you actually buy and sell a product so Let’s break it down.

Let’s say you buy an item for $5 from a garage sale,  and sell it directly—whether in person or on Facebook Marketplace—for $20, you’d make a $15 profit. The cost here was just the cost of buying the item and the remainder was your actual profit.

However, if you sell that same item on Amazon for $20, your profit will likely drop to around $9 after Amazon’s selling fees. This difference  covers selling fees, shipping, and fulfillment as well as referral fees. That’s why it’s important to understand how much it will cost you to sell an item on amazon. Because after all we are in the business of making money .

You might think it’s not worth selling on amazon, because they charge so high, but convenience has a price.

 And amazon gives you convenience to just list and send inventory to their warehouses, and they will do the rest. That’s why it’s crucial in this business to understand your margins correctly. 

But Benifits of Using FBA Are as Follows:

✅ Instead of shipping items one by one to customers, you let amazon handel shipping to customers, all you need to do is ship all your item at once to amazon.

✅ Amazon takes care of prepping, packaging, and shipping your products.

✅ Amazon acts as your customer service, and will work with all buyers that buy your products.

✅ you are in no way attached to the operation of the business, so you are free to be anywhere anytime.

✅ amazon brings you customers, their customers are massive audience

So, while Amazon takes a cut, what you’re really paying for is time, automation, and scale. And that’s what makes retail arbitrage on Amazon a game-changer.

You also have to remember the only reason retail arbitrage even makes sense, it’s because of all the buyers that are ready to buy on amazon.  Amazon has changed the shopping experience with their prime now and 2 day prime.

And allowed all kinds of products to be there. So for you to scale you need lots of traffic and that’s why amazon is the best place for it. You just need to find the right product to sell.

The 3X Rule Of Amazon Arbitrage Every Seller Must Know

Imagine we do all the work—learning every step to buy and ship products to Amazon—only to find that we’ve made just $1 or $2 after everything is said and done. Worse yet, we might even end up with a loss, meaning we spent more than we earned. Yes, it happens.

To avoid this scenario, you will need to follow the 3X rule. By doing so, we can consistently make money on Amazon, generate enough profit to scale our business, and even live off it. It all comes down to mastering your profit formula!

 let’s dive into the formula:

Selling Price – (Referral Fee + Fulfillment Fee + Storage Fee) – Your cost = Profit

When you go to the store, the first thing you will know right off the bat, is your cost, which is the cost of the product you will resell. And you will most definitely have a good idea about the selling price on amazon. Because you have already seen how much it’s selling on amazon. 

The Amazon fees aren’t set in stone as a single percentage, but let me  break them down into 3 parts.

• Referral Fee: This is a percentage of your sale price. For most categories, it’s around 15%, though it can vary depending on the product.

   

• FBA Fulfillment Fee: This fee depends on the size and weight of your product and covers picking, packing, and shipping.

   

• Storage Fees: These are based on how long your product sits in Amazon’s warehouse.

The fees are the biggest variable, and may seem like they are a lot, which I agree they can be, but typically from my experience of selling on amazon, they are one third of the selling price. So if an item sells for $20, the fees will be about ~$7

So for that $5 item  you’ve found in a garage sale, your profit would look something like this:  $20 (selling price) – $6.8 (Amazon’s fees) – $5 (the price you paid to buy it)  –Shipping to amazon = $6 profit

Now that you understand the concept of profit, and how the selling price is broken down to what you take home it’s important to implement what am about to tell you, which is the #X rule for retail arbitrage 

Your mission is to find products that are selling on amazon for at least 3X the amount you will buy them for or willing to buy them for.

This is an effective filter for you. It will save you time, and money. And will help you make quick decisions about which items are worth considering for retail arbitrage.

There are exceptions. Typically when you are selling on amazon you want the price of the product to be at least $15-$20 or even higher, but definitely not below $15. 

Because it simply wouldn’t work in your favor. Amazon fees become fixed at some point to cover their fixed costs, so you need to consider this as a precondition for the 3X rule to actually work. 

So when you’re out in the stores, hunting for products to use the 3x rule as a guide. And in no way is a profit guarantee. But to know the exact profit, you will need to scan the item on your amazon seller scanning app to know the fees and the selling price. 

How to Spot a Profitable Product

Here is a question I get a lot of  “Which products should I sell?”

This is the part that you need to pay attention to. It’s important that you don’t just buy any random item and expect it to sell for profit on amazon.

Sometimes you will encounter great deals on products, but those products could be selling for less on amazon. Or if you found a product for $4 but listed on amazon for $8. Those are traps. 

Just Stick with the min $15 products, and use the 3x rule.  

I know you’re here to make money, so it’s crucial to pinpoint those items that will actually earn you a profit with Amazon arbitrage.

Thankfully, the free Amazon Seller app gives you all the info you need to make smart buying decisions. While there are other scanning apps out there, starting with Amazon’s own app is a great move.

Retail arbitrage is straightforward : all you need to do is  find products that are priced low enough so that they are listed on amazon for 3X or more, so that even after Amazon takes its cut, you still come out ahead.

When you arrive at a store, You will simply open the amazon scanning app, scan the product.

Few years back we used to have to scan the barcode, now all you have to do is point at the product with your phone and camera and the scanner will recognize the brand and pull all the information on it.

This shows us at a glance how much the item is selling for and what the FBA fees are. 

You’ll see that the FBA fees are $5.53, or about one-third of the selling price as we discussed earlier.

Then, to get our profit, we need to subtract the cost of the item itself (what we’re paying for it at the store.) To do that, click on the “Gross Proceeds” to get to a second screen with more details

This scan shows a product I actually just sourced from Good well. 

The selling price was $3.40, and when I scanned it it shows that it currently sells at $29.94, and the amazon fee is $4.49 It also shows that the gross proceed is $25.45

following our rule of 3X,  29.94 – $4.45- $3.40 = $22 net profit. 

There are few things to consider when you look at a product like this. 

while you see the margins are super healthy you have to make sure you understand the full picture. 

This product is sold by amazon.com, which means there might be a very low chance that they will run out of inventory. 

This matters because amazon will always win the buy box. We will talk about the buy box in depth later. 

but what I mean here, you might encounter a challenge selling this item because you’re competing against amazon. 

it doesn’t mean it will not sell, but you might need to drop the price enough to win the buy box. 

Now that we have a solid understanding of how to scan a product and what to look for in the app. I want to create a quick check list of what I consider a good product candidate:

• 
  Must Follow The 3X rule

• 
  Not Sold By Amazon

• 
  Does not require Approval [ at least to start with]

You might want to run to your neighborhood store to get used to the scanning app, do some practice scans of items in your home or at the store. Maybe starting home first to get comfortable scanning will help a ton. Start with anything, books cloths, anything you see in front of you scan it

The # 1 Tip To Know If Something Will Sell On Amazon

Amazon, doesn’t give us direct information about products sales. But does provide key indicators of how well the products are doing on the market place like the Amazon Best Seller Ranking. We refer to them as BSR. and how it works is simple, the lower the BSR the better the product is 

In our Amazon Boot Camp, we will thorughly discuss the ranking guidelines  for each category. But for now all you need to look for is benchmark of 120,000. BSR or lower. If an item’s rank is more than that number, I would move on to the next item. 

Take the product we highlighted earlier, for example. 19,000 in the baby category. Many new sellers overlook the importance of this ranking and later regret it, because focusing solely on profit can leave you with inventory that sits unsold for far too long.

What Are the Best Stores for Retail Arbitrage?

lets talk actions. We spent enough time talking about the process, you’re probably itching to get up and go to the stores to source your products. But then you need to go to the right stores so you can have the most success. at least for beginners you would want to start with something less intimidating and easy to find a win fast 

The best stores to start with are those closest to you, such as CVS, Walgreens, and Rite Aid they are a perfect place to start because, typically they are smaller and less overwhelming. They have numerous locations, so if you discover a great item in one store, you can easily check other same stores different locations. 

Their clearance sections often feature items at discounts of 75% or more. great place to start

Once you’re comfortable with drugstores, you could always branch out into other major  retailers. Here are some popular choices among Amazon sellers:

• Target
• Best Buy
• Lowe’s
• Home Depot
• Trader Joe’s

• Family Dollar
• Buckies
• Walmart
• Ross
• Safeway

• Kroger
• Ollie’s
• TJ Maxx
• Dollar General
• Kohl’s

Once you get the hang of finding the rigt product, you will feel much better venturing in the new shops. 

It’s normal to feel a bit nervous during your first scans. With time, you’ll get faster and realize that no one is really watching you. 

If you think its easy money, then everyone else would be doing it. Remember this is the hardest part, many people give up when they don’t find a product the first week. But for those that keep on going and finding the winner products, it feels like you just hit the lottery. 

You will also feel a bit weird walking into the stores and scanning products. Ive been doing this since 2012, so i’m used to this. But fir the most part no one cares. take your time and get used to scanning, the store. 

Want to Start your Retail Arbitrage Business on Amazon?

Ive added all the  basic information you need to start your Amazon retail arbitrage business Today.  All you need is your phone and the free amazon seller app.  

There shouldn’t be anything holding you back from going right this moment and find your first item to sell on amazon. IF you haven’t created your amazon seller account, and needing a more in depth step by step from A to Z How to Sell on Amazon FBA. 

If you need the guidance to get your Amazon business up and running fast, you should signup here for the short list To get my Amazon retail Arbitrage course 

First Name *

Last Name *

Email *

RIGESTER TO BE ON THE SHORT LIST TODAY

This course is made for you so that you don’t have to go thru what I went thru when I first started. Yes there are 100s of courses out there, But most of them teach you what I have already provided in this Post.  Sourcing products and selling them on Amazon requires strategy, and guidance. This course will do exactly that for you. 

When I started my amazon journey, this is how I started. I spent many hours from one shop to another. And I have always said, if I loose everything I have and have to start from the ground up, I would start with Retail Arbitrage. And so this course is really focusing on starting and building your amazon arbitrage business. 

I  will guide you through every step—from buying your first products and setting up your initial FBA shipment to making your very first sale.

In addition,  you will be invited to an exclusive private Facebook group, where you can connect with fellow Boot Camp students and receive direct support from me and my team.

If you’re ready to launch your Amazon business, Go ahead and submit your information and we will let you know when there is a spot available 

I’d love to hear your thoughts and questions about starting a retail arbitrage business on Amazon. And if you’re already on this path, please share your experiences and any tips for newcomers.

Like what you read? please share it with everyone wanting to start their Amazon Journey 

Facebook

Twitter

LinkedIn

Pinterest

Reddit

WhatsApp

Feras

Hi, I’m Feras, and I’ve been selling on Amazon since 2014. My journey started back when I was a banker making almost nothing. My wife and I could barely afford one car between us. We both worked as bankers, and by the end of each month, half our paycheck went just to rent. Things were tough, and I knew I had to find a way to make some extra cash.

That’s when I discovered retail arbitrage. With just a $300 secured credit card, I began buying products from local stores and reselling them online. It wasn’t glamorous, but it worked—I kept reinvesting my earnings, and before I knew it, that tiny $300 grew into over $300,000 in revolving credit in less than five years. Honestly, when I started, I never imagined things would take off like this.

Retail arbitrage gave me incredible returns, especially in the beginning. It taught me how to hustle, spot deals, and master the art of buying low and selling high. Once I gained confidence, I expanded into wholesale, allowing me to grow my business even faster. Eventually, I took things to the next level by creating my own brand and diving into private labeling. This gave me total control over my business and significantly boosted my success.

What I’ve learned through this process is that anyone can change their life if they’re willing to put in the work, take some risks, and stay consistent. With my background in software product management, I developed strategies that helped me make smarter decisions every step of the way.

Today, I enjoy teaching and sharing my experiences through this blog. My goal is to help you spot the opportunities around you and teach you how to use platforms like Amazon to build something amazing for yourself. Feel free to drop a hello—I’d love to connect and support you on your journey!

Outside of work, you’ll usually find me spending time with my family or out hiking and exploring new trails.

From the Blog

Read Now

Read Now

Read Now