Amazon Online Arbitrage is a lucrative e-commerce model that allows sellers to buy discounted or underpriced products from online retailers and resell them at a higher price on Amazon. This strategy leverages price differences across marketplaces to generate profit. Here’s everything you need to know to get started.
What is Online Arbitrage?
Online Arbitrage (OA) involves purchasing products from one online retailer and reselling them on Amazon at a higher price. Unlike Retail Arbitrage, which requires physically visiting stores, OA allows you to source products from the comfort of your home.
Why Choose Online Arbitrage?
No Need for a Physical Store – Everything is done online.
Scalable Business Model – Start small and expand over time.
No Inventory Needed – Use Amazon FBA for storage and fulfillment.
Lower Risk than Private Label – No need to create a brand or develop products.
Step 1: Set Up Your Amazon Seller Account
To sell on Amazon, you need a Professional Seller Account ($39.99/month). Sign up on Amazon Seller Central and provide:
Personal or Business Information
Valid ID (Passport or Driver’s License)
U.S. Bank Account (Use Payoneer or Wise if you’re overseas)
EIN or ITIN for Tax Purposes (if applicable)
FBA (Fulfillment by Amazon) is recommended to automate shipping and returns.
Step 2: Find Profitable Products
Use tools like Tactical Arbitrage, Keepa, or SellerAmp to identify profitable products with:
High demand and low competition
A minimum 30% profit margin
A sales rank below 100,000 in its category
Price stability over time
Where to Source Products?
Retail Websites – Walmart, Target, Best Buy, Home Depot
Wholesale Suppliers – Alibaba, DHGate, CJ Dropshipping
Discount Stores – eBay, Overstock, Clearance Sales
Avoid restricted or gated products to prevent listing issues.
Step 3: Analyze Profit Margins & Fees
Use Amazon’s FBA Revenue Calculator to estimate your profits. Factor in:
Product Cost – Purchase price from supplier.
Amazon Fees – Referral fee (8-15%) & FBA fees.
Shipping Costs – From supplier to Amazon warehouse.
Taxes & Import Duties – If sourcing internationally.
A ROI (Return on Investment) of at least 50% is ideal.
Step 4: Purchase & Prepare Inventory
Once you find a profitable product, buy it in small quantities for testing. Ship the items to:
Your Address – If you want to inspect before sending to Amazon.
A Prep Center – If you’re overseas, use a third-party prep service to handle packaging and FBA shipments.
Ensure products are new, undamaged, and properly labeled before sending to Amazon.
Step 5: List Your Product on Amazon
Log in to Seller Central
Click “Add a Product”
Enter Product Details (Title, Description, Keywords)
Set a Competitive Price (Check other sellers)
Choose Fulfillment Method (FBA recommended)
Use Repricer Tools to automatically adjust your pricing for better Buy Box chances.
Step 6: Fulfill Orders via Amazon FBA
FBA (Fulfillment by Amazon) allows you to ship your products directly to Amazon warehouses. Once received, Amazon handles:
Storage & Warehousing
Order Packing & Shipping
Customer Service & Returns
If selling FBM (Fulfilled by Merchant), you’ll need to manage shipping yourself.
Step 7: Optimize & Scale Your Business
To grow your Amazon Online Arbitrage business:
Use Amazon PPC Ads – Boost product visibility and sales.
Expand Your Product Range – Source more profitable items.
Outsource Tasks – Hire virtual assistants for sourcing and listing.
Join Gated Categories – Unlock more profitable niches.
Use cashback sites like Rakuten to maximize profits when purchasing inventory.
Final Thoughts
Amazon Online Arbitrage is an excellent way to build a profitable e-commerce business without major upfront investment. With the right research tools, sourcing strategies, and fulfillment setup, you can generate consistent income and scale over time.
Ready to start? Begin sourcing today and launch your Amazon OA business.
