Amazon Retail Arbitrage: The 2025 Guide for Professionals
How much money can you make flipping products on Amazon through retail arbitrage?
Quite a lot – if you know what you’re doing. But you’re not alone in this realization. In the past year alone, Amazon added nearly 1 million new sellers worldwide – a roughly 10% increase, bringing its total registered seller base to ~9.7 million, with about 2–2.5 million actively selling on the platform.
That level of growth means competition is fierce – and exactly why mastering every model of Amazon selling matters. While many sellers are familiar with private label, wholesale, or dropshipping, there’s a lesser-known fourth model that fewer sellers pursue: Amazon retail arbitrage.
Retail arbitrage means that you buy products at a lower price from retail stores or online marketplaces and resell them on different platforms, such as Amazon, at a profit.
This model is known as a low-risk, practical way to increase your revenue – investing in branding, bulk inventory, or complex logistics is helpful, but not needed. We wrote this guide to walk you through the process – from sourcing to profits – with tools, tips, and up-to-date strategies for 2025. You’ll not only learn how Amazon arbitrage works, what to watch out for, but also whether it’s legal (or rather, at what point it becomes illegal).
What Is Amazon Retail Arbitrage?
As an Amazon seller, retail arbitrage may also be known to you as online arbitrage. It’s a method used in retail and e-commerce where sellers take advantage of price differences between two or more markets to generate profit.
Simply put, you find a source where a product is being sold at a lower price than usual (through clearance, bulk discounts, or special offers), purchase it, and then resell it at a higher price on another platform.
Example: A tent from a popular brand is discounted at a local retailer for $499. The same model is listed on Amazon for $575. Buying it at your retailer and reselling it on Amazon results in a profit of $76 due to the price gap between the two marketplaces.
Does Retail Arbitrage Still Work in 2025?
The short answer is yes. However – as we mentioned above – the competition expands and grows more fierce with every year. This means that you have to be more informed and strategic than ever before if you want to dominate against the other sellers.
What Does the Data Say?
Over 25% of Amazon sellers use retail or online arbitrage, and 58% of new sellers manage to become profitable in their first year (source: JungleScout State of the Amazon Seller report 2025) – many are able to do this because the startup costs of arbitrage are low. With nearly 1 million new sellers joining in 2024, competition is rising, but so is demand. Success comes down to very smart sourcing and using the right tools to cut down the time spent on repetitive tasks and to use this time smartly.
What to Expect: Margins, Volume, and Scaling
Retail arbitrage typically yields 20–50% profit margins, with occasional spikes above 100% on fast-moving items – though that’s rare. It’s a volume game, not a high-ticket one. To scale, you’ll need smart systems for sourcing, pricing, and prep.
Why It Still Makes Sense
Retail arbitrage has one of the lowest-barrier entry points into selling on Amazon, for several reasons:
And because of that, it’s still a favorite for beginners, side hustlers, and advanced sellers looking to expand their sourcing and revenue.
Pros and Cons of Retail Arbitrage
| ✅ Pros | ❌ Cons |
| Beginner-friendly: Low entry barrier. All you need is a seller account, sourcing skills, and a registered business. | Time-consuming: Be ready to continuously research products and monitor prices. |
| Strong profit potential: High profits if demand and pricing are researched properly. | Hard to scale: Market shifts frequently, you have little to no control over supply or availability. |
| Low costs: No need for marketing, product development, or large inventory. Your Overhead stays low. | Legal risks: Unauthorized or grey market sourcing may lead to account suspension. |
| High flexibility: Work from anywhere, anytime – ideal for part-time sellers. | High competition: Branded products face intense competition. Optimize metrics constantly to win the Buy Box. |
| Unstable supply: Availability and price gaps fluctuate, so your income is unpredictable. |
Different Business Models in Direct Comparison
Amazon retail arbitrage offers a lot of benefits but also one or the other pitfall in comparison with other major business models on the world’s largest e-commerce platform. Here’s an overview of differences you have to be familiar with as a seller.
| Criteria | Retail Arbitrage | Wholesale | Private Label | Dropshipping |
| Inventory Source | Branded products bought from retailers (e.g., clearance sales, outlets) | Branded products bought in bulk from manufacturers or distributors | Custom-manufactured or rebranded products sold under your own brand | Products supplied and shipped directly by the manufacturer or supplier |
| Upfront Investment | Low | High | High | Very Low |
| Profit Margins | Moderate (depends on sourcing skills) | Moderate to High | High (especially once brand is established) | Low to Moderate |
| Control Over Product | None | Limited | Full control (design, branding, packaging, etc.) | None |
| Risk Level | Low | Moderate (due to large orders) | High (complex logistics, legal issues, brand investment) | Low to Moderate (supplier-dependent) |
| Scalability | Limited | Moderate | High (with strong brand and supply chain) | High (if reliable suppliers are in place) |
| Time to Launch | Very Fast | Medium | Slow (product development + branding) | Fast |
| Dependence on Suppliers | Low (you’re sourcing from various retail outlets) | Medium | High (manufacturer reliability is key) | Very High (product quality, availability, and shipping depend entirely on supplier) |
| Storage/Logistics | Seller handles inventory and shipping | Seller stores and ships bulk inventory | Seller arranges storage/shipping (often uses 3PL or Amazon FBA) | No storage or shipping needed by seller |
| Typical Tools Used | Sourcing apps, scanning tools, pricing research | Repricing tools, inventory management | Product research tools, branding services, marketing platforms | E-commerce platforms, automation tools, supplier directories |
| Brand Building Potential | None | None or limited | High | None |
Amazon Arbitrage – Step-by-Step Guide
1. Create Your Amazon Seller Account (FBA vs. FBM)
Get your Amazon Seller account set up and decide whether Amazon FBM or FBA is going to be your fulfillment method of choice.
2. Know What’s Allowed: Restricted & Gated Categories
Before buying your products, inform yourself about gated and ungated categories – not adhering to these restrictions will get you banned from Amazon very quickly.
3. Find Products in Stores and Online
Look for deals in brick and mortar stores and online, anywhere where you can find a good margin – clearance sections are especially worth a closer look to find hidden gems.
4. Use Product Scanning Tools (List + screenshots)
Scanning tools like Scoutify, SellerAmp or Amazon Seller App help you check rank, price and eligibility on the go – life savers when sourcing.
5. Check Profitability (Calculator + fees breakdown)
Always run the numbers through a profit calculator to see how much you’ll actually make after Amazon’s fees, shipping and taxes.
6. Buy Smart: Analyze Sales Rank, Buy Box, Stock Levels
Apart from only looking at the price, don’t forget to check the sales rank, who has the Buy Box and how much competition you’re up against in this particular category.
7. List, Label and Ship
Once you’ve sourced successfully, list the items in Seller Central, label them and ship them.
8. Track Sales & Use Repricers
Keep an eye on your sales and use an AI-driven Repricer if needed to stay competitive.
Amazon (Retail) Arbitrage: Product Sourcing
Finding and selecting the right products is the core skill for any retail arbitrage seller. But as the saying goes, “no one becomes an expert overnight.” Especially in the early days of building your business, expect to make mistakes – and learn from them. That includes picking the wrong products from time to time.
To make your start a little easier, we’ve gathered some tips on where to look for profitable products – both online and in-store.
Online Marketplaces and Stores
Let’s start with the obvious. The internet is full of platforms that make discovering new product ideas incredibly convenient. Contrary to popular belief, Amazon isn’t always the cheapest marketplace, which makes online sourcing a great opportunity for arbitrage sellers.
Here are some online platforms worth checking out:
eBay: Like Amazon, retail arbitrage on eBay is possible because of the high competitiveness of the platform. Third-party sellers often push prices down, making it a good hunting ground. Just be careful not to source used items by mistake.
Alibaba & AliExpress: Both platforms are popular among Amazon sellers. Alibaba focuses on B2B buyers and often offers bulk deals from Chinese manufacturers, while AliExpress is more suited for smaller quantities and test orders.
Walmart: Walmart’s broad inventory often includes lower prices than Amazon, especially during clearance sales or special promotions. It’s worth monitoring for bargain finds.
Amazon: Yes, even Amazon itself can be a sourcing channel. Known as “Amazon-to-Amazon” arbitrage, this involves buying discounted products (like daily deals or clearance items) and reselling them – sometimes even on another Amazon marketplace, such as Amazon UK or Italy. Also worth a look: the Amazon B2B marketplace.
Etsy: While Etsy typically isn’t cheaper than Amazon, unique or handmade items can be resold at a premium. Amazon customers often pay more for one-of-a-kind products.
Deal websites: Sites like Groupon, MyDealz, Slickdeals, or RetailMeNot often offer discount codes and flash deals you won’t find elsewhere.
Brick-and-Mortar Stores
You can still find very good deals in physical stores, although the selection is naturally more limited. Focus your efforts on the following:
Discount retailers: Stores like TJ Maxx often sell branded products at heavily discounted prices.
Supermarkets and drugstores: Big box retailers like Walmart often run promotions or clearance events where products are sold well below their usual market price.
Specialty Stores
Liquidation stores: These shops specialize in overstock, closeouts, or discontinued items – and they’re often a goldmine for low-cost products, including popular brands.
Outlet stores: Outlet malls and factory stores often sell branded goods at a discount, giving you room to resell them for a profit online.
Pro Tip: Use Price Comparison Tools
Platforms like Google Shopping, Keepa, or CamelCamelCamel can help you quickly compare prices across multiple stores. These tools make it easy to spot profitable price differences and find the best deals – essential for any successful arbitrage strategy.
Useful Software and Tools for Retail Arbitrage
Tools are an important topic for every Amazon seller, whether selling over arbitrage or not. In the initial phase, your business may still be able to manage without external software, but as soon as it becomes more professional, there are simply too many tedious tasks to perform profitably without helpful tools. Here are the most important tools in the field of retail arbitrage on Amazon .
Tactical Arbitrage
Tactical Arbitrage is a sourcing software that specializes in – you might have guessed it – arbitrage. What it does is scan shops and websites and automatically compares product prices with those on Amazon. If a shop is not yet included, it can be added. Tactical Arbitrage also covers so-called replenishables (deals that are not based on special offers and are therefore regularly available). Retailers can then order such replenishables again and again, thereby earning a basic recurring income.
However, Tactical Arbitrage is not exactly self-explanatory. Therefore, newcomers should first learn the basics of sourcing in order to be able to use this software effectively.
Business Analytics
SELLERLOGIC Business Analytics is a professional profit dashboard tailored to the needs of Amazon sellers ranging from beginner to professional level. In your role as retailer, you can use it to monitor your business figures in real time, gaining a comprehensive overview of your business performance – on a global level as well as at the account, marketplace, and product level.
Business Analytics takes a data-driven approach to provide an in-depth, realistic picture of all business results, enabling informed analysis. With this service, you can reliably identify bestsellers, but also the profit killers that are reducing the profitability of your business. This precise overview of all income and expenses, including all Amazon fees, forms the basis for all important strategic adjustments.
Price Optimization
If your pricing strategies on Amazon are dynamic, you’re already standing in the Buy Box with one foot. For professional sellers, dynamic repricing is as necessary as a good product. The SELLERLOGIC Repricer stands out for its deep AI-driven repricing intelligence, seamless Buy Box-first strategy, and flexibility across both B2C and B2B segments. Striking an excellent balance between ease of setup and advanced strategic options – you can set it to perform sales-driven pushes to time-based campaigns. Coupled with real-time analytics and global scale, it is the best option for growing Amazon businesses that want to dominate both volume and margin.
Final Thoughts
Amazon (retail) arbitrage offers beginners an attractive opportunity to gain initial experience without having to make a large initial investment. It also offers experienced sellers a broader revenue stream without unnecessary hassle. This business model exploits price differences between different sales platforms to generate profits, which can be quite lucrative when applied correctly.
However, the advantages, such as low barriers to entry, flexible working hours, and low storage costs, are offset by challenges. Time-consuming product research, difficult scalability, and potential legal risks, especially when using gray market suppliers, must be considered.
For newcomers, Amazon arbitrage nevertheless offers an interesting opportunity to try their hand at e-commerce before considering more complex business models such as private label or wholesale.
FAQ
Try SellerAmp SAS or Scoutify 2 for in-store product scanning and profit analysis. For beginners, the free Amazon Seller App is a great start. Serious sellers benefit from tools like BuyBotPro or Tactical Arbitrage to find, analyze, and flip products with confidence.
Yes, there are many allowed methods of selling on Amazon, including retail arbitrage. As long as the products are genuine, new, and you follow Amazon’s selling policies. Be aware of restricted (gated) brands or categories – you may need approval to sell certain items.
Yes, retail arbitrage with Amazon FBA is absolutely possible – and it’s a common strategy for many sellers. You can source discounted products from retail or online stores, then send them to Amazon’s fulfillment centers. Amazon handles storage, shipping, and customer service, while you focus on sourcing and profits.
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