Overview

Retail arbitrage enables Amazon sellers to purchase items from physical discount aisles or online clearance outlets and resell them on Amazon for a profit. The model gained traction because it requires little upfront inventory and leverages Amazon’s fulfillment network. Sellers who master sourcing, pricing, and compliance can turn a simple side hustle into a scalable revenue stream.

Key Points

• Low entry barrier — A seller can begin with just a handful of discounted products and list them on Amazon without renting warehouse space.
• Price‑difference focus — Profitability depends on finding items that sell for more on Amazon than the total cost of purchase, fees, and shipping.
• Amazon fulfillment tools — Features like the Buy Box and Fulfilled by Amazon (FBA) automate order processing and increase product visibility.
• Compliance requirements — Some brands prohibit resale; checking Amazon’s restricted‑product database avoids account warnings or suspensions.
• Data‑driven sourcing — Scanning apps and profit calculators let sellers verify margins before committing capital.

How Retail Arbitrage Works

1. Product scouting — The seller walks through clearance sections, discount retailers, or flash‑sale websites while running a barcode scanner app that pulls Amazon’s current price, sales rank, and estimated fees. Example: Scanning a silicone spatula in a grocery store reveals a $14 Amazon price, a sales rank of 4,200, and a projected fee structure.
2. Profit validation — The purchase cost is entered into a profit calculator that subtracts referral fees, FBA fulfillment charges, and shipping costs, then displays the net margin. Example: An $6 purchase price yields a $5 net profit after fees, meeting the seller’s 45% margin target.
3. Listing creation — If the margin is acceptable, the seller either matches an existing Amazon listing or creates a new one, uploading clear photos and crafting a keyword‑rich title and bullet points that follow Amazon’s style rules.