Amazon Online Arbitrage: How to Resell Products in 2025

Online arbitrage is a popular way to sell on Amazon, with about 25% of sellers using this business model. Out of the 9.7 million Amazon sellers worldwide, around 2.3 million are actively selling, meaning hundreds of thousands are likely involved in online arbitrage.

This approach is attractive to entrepreneurs because it takes advantage of price differences between products in physical retail stores and the online marketplace. Alongside wholesale (26%) and online arbitrage (24%), online arbitrage remains one of the top strategies for Amazon sellers, proving its value in the e-commerce world.

While 76% of Amazon sellers become profitable overall, the success rate for online arbitrage specifically varies. Approximately 62% of sellers involved in online arbitrage reported making nearly $5,000 per month. If you want to explore this new ecommerce strategy in 2025, we’ve got you covered with a breakdown of how it works.

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Table of Contents 

• What Is Online Arbitrage on Amazon?
• How Does Online Arbitrage Work?
• Online Arbitrage vs. Other Amazon Selling Models
• Getting Started with Online Arbitrage
• Where to Source Products for Online Arbitrage?
• Understand Amazon Fees
• Tools and Software to Streamline Operations

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What Is Online Arbitrage on Amazon?

Online arbitrage is the process of buying products at a lower price from physical or online retail stores and reselling them at a profit on platforms like Amazon. It’s like being a modern treasure hunter—spotting deals and turning them into dollars.

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How Does Online Arbitrage Work?

Online arbitrage on Amazon operates on a simple principle: buy low, sell high. Sellers purchase products from brick-and-mortar stores or online retailers at discounted prices and resell them on Amazon for a profit. The process typically involves:

• Sourcing: Scanning products in stores using the Amazon Seller app to identify items with potential profit margins.
• Purchasing: Buying products at clearance or discounted prices from retailers like Walmart, Target, or online marketplaces.
• Listing: Creating or updating product listings on Amazon, ensuring competitive pricing and accurate descriptions.
• Fulfillment: Choosing between Fulfillment by Amazon (FBA) or self-fulfillment (FBM) to store and ship products to customers.
• Profit Calculation: Factoring in all costs, including purchase price, Amazon fees, and shipping, to determine the final profit margin.

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Online Arbitrage vs. Other Amazon Selling Models

Online arbitrage is one of several popular business models for selling on Amazon, each with its own advantages and challenges. Here's a comparison of online arbitrage with other common Amazon selling models:

Online arbitrage offers a low barrier to entry, with 33% of arbitrage sellers starting their businesses with less than $500. This makes it an attractive option for beginners. However, it faces limitations in scalability due to inconsistent inventory and supply chain difficulties.

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Private label selling requires a higher initial investment but offers greater control over branding and potentially higher profit margins. According to a study, 75% of private label merchants spent more than $1,000 to launch their businesses. This model allows for better scalability and long-term growth potential.

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Wholesale selling strikes a balance between online arbitrage and private label. It offers more stable inventory than online arbitrage and allows for bulk purchasing, which can lead to more predictable profit margins. However, it requires more capital than online arbitrage and less brand control compared to private labels.

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Dropshipping has the lowest barrier to entry but often comes with slim profit margins and intense competition. It's highly scalable but offers no control over product quality or branding.

While online arbitrage can be a quick way to start selling on Amazon, it's often viewed as a stepping stone to other models. Many sellers use the experience and capital gained from online arbitrage to transition into wholesale or private label selling, which offer more sustainable long-term growth potential.

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Getting Started with Online Arbitrage

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Set Up Amazon Seller Account

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To begin your online arbitrage journey on Amazon, you'll need to create a Seller Account. There are two options available:

• Individual Seller Account: This free option charges $0.99 per sale and limits you to 40 product listings.
• Professional Account: Priced at $39.99 monthly, it offers unlimited listings without per-sale fees.

After setting up your account, install the Amazon Seller App, which is essential for scanning product barcodes, monitoring sales, managing customer service, and browsing Amazon product listings. This app will be your primary tool for identifying profitable online arbitrage opportunities and managing your business on the go.

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Where to Source Products for Online Arbitrage?

Several online marketplaces offer excellent opportunities for online arbitrage on Amazon. Here are the most profitable platforms to source products from:

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Major Online Retailers

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Walmart

Walmart's online marketplace offers competitive prices and extensive product selection, with frequent clearance items and special offers. Their flexible fulfillment options allow for in-store pickup to take advantage of additional store promotions.

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Target

Target provides affordable prices across various categories, with particularly good opportunities in their clearance section and weekly deals. Their exclusive brands can offer unique arbitrage opportunities not readily available on Amazon.

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Kohl's

This retailer offers additional savings through their Kohl's Cash rewards program, which can help increase profit margins. They frequently run promotions across various departments including clothing, accessories, and home goods.

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Discount Retailers

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Big Lots

Specializing in closeout and overstock items, Big Lots offers deeply discounted products across various categories. Their focus on liquidation merchandise provides unique opportunities for finding profitable items.

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Vitacost

This platform specializes in health and wellness products, offering regular promotions and clearance sales. It's particularly valuable for sourcing vitamins, supplements, and organic foods.

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International Marketplaces

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AliExpress and Alibaba

These platforms offer competitive pricing, with AliExpress catering to individual buyers and Alibaba focusing on B2B bulk purchases. While delivery times may be longer due to shipping from China, the price advantages can make up for the wait.

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Read more: How to Sell on Amazon From Alibaba

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eBay

The competitive nature of eBay's marketplace often results in lower prices as sellers compete for buyers. The platform features products across numerous categories and can be an excellent source for finding onlinearbitrage opportunities.

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Understand Online Arbitrage Fees on Amazon

Amazon's fee structure is an essential aspect of selling on the platform, directly impacting a seller's profitability. Here's a breakdown of the primary fees Amazon sellers encounter:

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Referral fees, the most significant for most sellers, vary by product category. For example, electronics typically incur a 8% fee, while jewelry can be as high as 20%. These fees are deducted from the sale price before Amazon transfers the balance to the seller's account.

FBA sellers face additional costs. FBA fees cover picking, packing, shipping, customer service, and returns processing. These fees are based on the product's size and weight, with larger and heavier items incurring higher fees.

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What is the minimum cost to start Amazon FBA?

Starting Amazon FBA can cost as little as $500-$1,000, covering initial inventory, Amazon fees, shipping, and other startup expenses. Costs vary depending on product choice and scale.

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Tools and Software to Streamline Operations

To streamline online arbitrage operations on Amazon, sellers can leverage various tools and software solutions:

• Inventory Management: Tools like Sellbrite and Veeqo help manage inventory across multiple channels, automate order syncing, and provide real-time stock updates. These systems can significantly reduce overselling and stockouts.
• Price Tracking: Keepa offers a powerful Chrome extension that provides historical price data and alerts for price changes on Amazon products. This helps sellers identify profitable opportunities and optimize pricing strategies.
• Product Sourcing: Tactical Arbitrage and SourceMogul scan multiple online retailers to find online arbitrage opportunities, allowing sellers to compare prices and calculate potential profits quickly. These tools can save significant time in product research.
• Profit Calculation: BuyBotPro offers a mobile app for scanning products in-store, providing instant profitability analysis and helping sellers make informed purchasing decisions
• Amazon advertising: m19’s advanced AI technology ensures your ads are optimized for maximum ROI. Whether you're running Sponsored Products, Brands, or Display campaigns, m19 automates keyword bidding and targeting strategies to save you time and improve performance.

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FAQs

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Is online arbitrage allowed on Amazon?

Yes, online arbitrage is allowed on Amazon, provided you adhere to their policies. Sellers must ensure the products they list are authentic and comply with Amazon's terms, including restrictions on specific brands or categories.

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What is the average profit margin for online arbitrage?

Profit margins typically range from 10% to 30%, depending on product sourcing and Amazon fees.

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Can I do online arbitrage without using Fulfillment by Amazon (FBA)?

Yes, you can use the Merchant Fulfilled Network (MFN), where you handle storage and shipping, but FBA offers better convenience and customer trust.

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How do I get ungated for restricted categories on Amazon?

To get ungated, submit invoices from approved distributors, or meet sales thresholds and performance criteria set by Amazon.

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Is online arbitrage legal in the UK?

Yes, online arbitrage is legal in the UK. However, sellers should comply with consumer protection laws, avoid counterfeit products, and respect brand restrictions that may apply.

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What is the minimum cost to start online Arbitrage?

Starting online Arbitrage can cost as little as $500-$1,000, covering initial inventory, Amazon fees, shipping, and other startup expenses. Costs vary depending on product choice and scale.

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Are there any alternatives to online arbitrage?

Yes, you can explore private label, dropshipping, or wholesale selling models, depending on your goals and resources.

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Is online Arbitrage Worth It?

While 76% of Amazon sellers become profitable overall, the success rate for online arbitrage specifically varies. Approximately 62% of sellers involved in online arbitrage reported making nearly $5,000 per month.