Looking to profit on Amazon from home? Online arbitrage lets you buy products from online retailers at lower prices and resell them for profit using Amazon FBA. With minimal startup costs and automated fulfillment, it’s an accessible way to start selling online.
Looking for a way to make money on Amazon without leaving your home? Online arbitrage might be your answer. This business model lets you profit from price differences between websites, requiring only an internet connection and some strategic thinking. FBA Lead List supports many successful online arbitrage sellers who have built profitable businesses by identifying underpriced products and reselling them on Amazon.
Unlike retail arbitrage, where you physically hunt for deals in stores, online arbitrage lets you search for profitable items from your computer. This location independence works particularly well for those with limited mobility, busy schedules, or those living in remote areas with few retail options.
First, let's address the legality question. Online arbitrage is completely legal thanks to the first-sale doctrine, which states that once you purchase a product legitimately, you have the right to resell it without permission from the original seller. This fundamental legal principle protects your right to resell items you've purchased, whether from Walmart.com or any other legitimate retailer.
The core concept of online arbitrage is straightforward: find products selling for less on one website than they do on Amazon. For example, you might discover a toy on clearance at Target.com for $10 that consistently sells for $30 on Amazon. After accounting for Amazon's fees and shipping costs, you could potentially make a $10-15 profit per unit.
This price discrepancy creates an opportunity for arbitrage—buying at the lower price and selling at the higher one. Successful arbitrageurs develop systems to find these opportunities consistently.
While you could technically fulfill orders yourself, most successful online arbitrage sellers use Amazon's Fulfillment by Amazon (FBA) service. With FBA, you ship your inventory to Amazon's warehouses, and they handle storage, packaging, shipping, customer service, and returns. This automation allows you to focus solely on finding profitable products rather than order fulfillment.
FBA also makes your products eligible for Prime shipping, significantly increasing their visibility and appeal to customers. The convenience of FBA is a major advantage for scaling an online arbitrage business.
The most obvious difference between online and retail arbitrage is where you source products. Retail arbitrage requires visiting physical stores, scanning items with an Amazon seller app, and purchasing products that show a potential profit. This process consumes significant time and gas money.
In contrast, online arbitrage can be done entirely from home. You can source products at 2 AM in your pajamas if you want to. This flexibility allows you to dedicate more time to product research rather than driving between stores.
Retail stores often limit the quantity of items you can purchase, especially clearance products. Online retailers typically have larger inventories and higher purchase limits, allowing you to buy more units of profitable items. This scalability is crucial for growing your Amazon business.
Additionally, you can often find the same product across multiple online retailers, further increasing your potential inventory. With retail arbitrage, once a local store's inventory is depleted, you're out of luck.
The convenience of online arbitrage comes with a tradeoff: increased competition. Since anyone with an internet connection can access the same online deals, you're competing with more sellers for the same opportunities. Retail arbitrage offers some geographical advantage—deals in your local stores aren't immediately visible to sellers in other regions.
To stay competitive in online arbitrage, you need efficient product research systems and sometimes specialized tools that help you find deals faster than other sellers.
Before purchasing any product for resale, you must calculate your potential profit after all Amazon fees. The free Amazon FBA Revenue Calculator is essential for this analysis. Simply input the product's ASIN (Amazon Standard Identification Number), your purchase cost, and shipping expenses to see your estimated profit margin.
Remember that a product might seem profitable at first glance, but after accounting for Amazon's referral fees, FBA fees, and shipping costs to Amazon's warehouse, the margins might be too slim to justify the purchase.
Finding a product with a good price gap isn't enough—you need to ensure it will actually sell on Amazon. The Jungle Scout Sales Estimator helps you estimate monthly sales volume based on a product's Best Sellers Rank (BSR). This free tool provides crucial insights into how quickly you can expect your inventory to turn over.
A product with a 300% ROI might seem attractive, but if it only sells one unit per month, your capital will be tied up for too long, reducing your overall business growth potential.
Brickseek is a powerful tool that aggregates deals from various retailers. It can show you clearance and discounted items from stores like Walmart, Target, Home Depot, and more, saving you countless hours of manual searching. Many successful online arbitrage sellers consider Brickseek an excellent tool for finding profitable deals quickly.
The first step is identifying potential products to resell. This can be done by browsing clearance sections of retail websites, using deal aggregators like Brickseek, or using specialized online arbitrage software. Focus on retailers known for offering significant discounts, such as Walmart, Target, Best Buy, and other major chains.
Experienced sellers develop a routine of checking specific websites daily for new deals. Some also sign up for retailer newsletters to be notified of sales events and promotions.
Once you find a discounted product, search for it on Amazon using the product's UPC, model number, or exact name. Examine the current selling price, number of sellers, and whether Amazon itself is selling the item (which can make competition difficult).
Check the product's price history using tools like Keepa or CamelCamelCamel to understand its pricing stability. Avoid products with wildly fluctuating prices unless you're confident in your ability to sell quickly.
With your potential product identified, use the Amazon FBA Revenue Calculator to determine your expected profit. Input the item's purchase price, shipping costs to Amazon's warehouse, and any prep expenses. The calculator will show all Amazon fees and your estimated profit per unit.
Once you've identified profitable products, it's time to make your purchase. Create an account with the retailer if you don't already have one, and purchase the items. Consider using a cashback credit card or shopping through cashback portals like Rakuten to increase your margins further.
When your inventory arrives, inspect each item carefully. Check for damage, ensure the products match the online description, and verify they have valid barcodes that can be scanned by Amazon.
With your inventory in hand, log into your Amazon Seller Central account and create shipments to Amazon's fulfillment centers. Since you're selling existing products, you'll use the "Sell a product like this" option rather than creating new listings.
Prepare your inventory according to Amazon's requirements—which may include bagging, labeling, or other prep work—then ship it to the designated fulfillment centers. Once Amazon receives and processes your inventory, your items will be live and ready for sale.
The foundation of successful online arbitrage is finding sufficient price gaps between your purchase cost and the Amazon selling price. As a rule of thumb, many sellers look for a minimum 100% markup—meaning if you buy an item for $10, you want to sell it for at least $20 before fees.
However, the true measure is your net profit after all costs. Here's a simple formula:
For example, if you find a toy on Walmart.com for $15 that sells on Amazon for $39.99, you might calculate:
This represents a 100% ROI ($14.99 profit on $15.00 investment), which would be considered an excellent find.
A great price gap means nothing if the product doesn't sell or faces overwhelming competition. Check the product's Best Sellers Rank (BSR) in its primary category—lower numbers indicate higher sales volume. For example, a toy with a BSR of 5,000 in Toys & Games sells much faster than one ranked 250,000.
Also, assess competition by checking how many sellers are offering the same product and whether Amazon itself is a seller. The ideal scenario is a product with a low BSR (high sales volume) and few competing sellers.
Let's walk through a complete real-world example:
You find a kitchen gadget on Target.com for $12.99 on clearance (originally $29.99). The same product sells on Amazon for $34.95 with a BSR of 8,500 in Kitchen & Dining.
If the Jungle Scout Sales Estimator shows this product sells approximately 300 units per month across all sellers, and there are currently 4 sellers on the listing, you might reasonably expect to sell about 75 units per month (assuming equal distribution of the Buy Box). This could generate over $900 in monthly profit from this single product.
Certain Amazon categories consistently prove profitable for online arbitrage sellers. According to seller surveys, these top categories include:
These categories tend to have higher profit margins, steady demand, and fewer restrictions for new sellers. They also frequently go on sale or clearance at major retailers, creating abundant arbitrage opportunities.
While you can technically source from any online retailer, some consistently provide better opportunities than others:
Profit opportunities often arise during major sales events like Black Friday, Cyber Monday, and end-of-season clearances.
As competition increases among arbitrage sellers, many are finding greater success with specialty websites and less obvious sources:
As online arbitrage grows in popularity, competition for profitable deals intensifies. To stay ahead:
Many successful sellers also diversify their sourcing methods, combining online arbitrage with wholesale, retail arbitrage, or private label strategies.
Product research can consume hours of your day without proper systems. To optimize your time:
Many sellers find that batch processing—dedicating specific time blocks solely to sourcing—improves efficiency compared to sporadic searching throughout the day.
Accurate profit calculation is critical to online arbitrage success. Common mistakes to avoid include:
Conservative profit estimates are always better than optimistic ones. Many experienced sellers add a 10-15% buffer to their cost calculations to account for unexpected expenses.
Online arbitrage offers a flexible, accessible path to Amazon selling success. While it requires diligence in research and analysis, the low startup costs and ability to work from anywhere make it an attractive option for both new and experienced sellers.
Amazon sellers looking for profitable online arbitrage opportunities and staying ahead of the competition can reach out to FBA Lead List for specialized tools and data services.
