Amazon online arbitrage is a great sales model because it’s easy to start and scale. Who wouldn’t love the idea of earning cash without an initial investment? That is how online arbitrage works.
Sounds too good to be true, but it worked out for many Amazon sellers.
Interested to know whether online arbitrage is profitable and how it works? Read this post to find out.
What Is Amazon Online Arbitrage?
Online arbitrage is a business model of finding lower-priced products and reselling them on Amazon for profit.
For instance, you can find a product on a discount aggregator like Brickseek, compare its price with the same product on Amazon, check if it’s profitable to sell, and resell that product on Amazon. Your profit comes from the difference between the product price on Amazon and your discounted purchase price minus expenses.
Starting online arbitrage on Amazon as a new seller can be challenging, but it is an excellent way to enter Amazon. It is easy to set up with little investment making it an attractive option for many.
However, with increased competition, it's becoming more difficult for new sellers to start online arbitrage and succeed in this market. Profit margins are becoming thinner, and finding high-profit products to resell on Amazon takes more and more time and effort.
To solve this problem, sellers use Amazon product research tools. These tools help sellers identify profitable online arbitrage products and gain an edge over their competitors.
Is Online Arbitrage Worth It?
Arbitrage on Amazon is a popular business model for reselling products.. Around 21%of Amazon sellers do online arbitrage. Arbitrage grows in popularity as the number of Amazon sellers increases.
That is no wonder because it has low entry barriers and is straightforward to launch. More than 50% of online arbitrage sellers earn monthly around $5,000 with profit margins of 16% and up.
Starting an Amazon business with online arbitrage can be a great way to earn money, as many experienced individuals and businesses have already proved. Their success often stems from conducting extensive product research and sourcing products efficiently. The former involves identifying products with high demand, low competition, and a good sales history, while the latter involves finding discounted products using specialized tools.
However, it's crucial to be realistic about the challenges and level of commitment required to succeed in this business model. To identify profitable opportunities, you need to spend a significant amount of time researching hundreds of products daily and sourcing them efficiently.
Difference between Online and Retail Arbitrage
There are two types of Amazon arbitrage: online and retail. They are different business models.
Both online and retail arbitrage are methods of reselling products on Amazon for a profit, but they differ in where you source the products.
Online arbitrage
Sourcing
You find products online from other e-commerce retailers, discount aggregator websites, or online marketplaces.
Finding deals
Use browser extensions or software tools to scan online stores for profitable deals.
Retail arbitrage
Sourcing
You physically visit brick-and-mortar stores like retail chains or outlet stores.
Finding deals
Look for clearance and liquidation sales, seasonal discounts, or promotions, scan product barcodes and do product research in-store to find products you can resell on Amazon for profit.
Pros
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Low barrier to entry
Online arbitrage is fast, easy, and relatively cheap to start. It requires minimal upfront investment compared to other business models. Many sellers started online arbitrage with $500 and managed to successfully grow their business.
Remote potential
It’s a work-from-home business. Product research and sales can be managed entirely online, offering flexibility and location independence.
Extensive product selection
Online retailers offer a vast range of potential products for sourcing and reselling. You can find a huge amount of product ideas online.
Complementary to other models
Online arbitrage can be integrated with other selling strategies within an Amazon store. It’s a good complement to other business models in your Amazon store, for instance, it can be used with wholesale.
Low-risk learning opportunity
The model allows new sellers to learn how to sell on Amazon without significant risk. You can gain experience with Amazon's platform and selling without risking much money.
Cons
Related: Is Online Arbitrage Dead for New Sellers in 2024?
Product research takes a lot of time
Researching profitable deals requires looking up hundreds of product options daily. Identifying profitable products takes consistent effort and effective research tools.
Price changes
Prices on Amazon change all the time, which makes it challenging to keep sustainable profitability levels.
Low-profit margins after Amazon fees
Amazon is a dynamic pricing environment due to high competition. You must price products competitively, and after accounting for Amazon fees, profit margins may be narrow for some products.
Product restrictions
Selling certain categories or brands may require approval. Some brands may not allow to sell their product and file IP complaints against sellers who resell their products.
Matching products on Amazon
You must make sure that the products on Amazon and at the suppliers are exactly the same. If the items you source are different from what’s listed on Amazon, you can’t add them to the listing.
How Does Amazon Online Arbitrage Work?
Online arbitrage is a process that can be broken down into five major steps. The two most important steps are product research and finding a reliable supplier, as they determine the profitability of your venture.
Online arbitrage steps
Step 1. Product research
Identifying potentially profitable products is crucial. This involves analyzing historical sales data, competition levels, and potential risks like intellectual property complaints or product sourcing flags. Utilizing product research tools can streamline this process.
Step 2. Finding product suppliers
Locating reliable suppliers offering low-cost products suitable for resale on Amazon is essential. Ensure the supplier is reliable and the product's profitability aligns with your expectations.
Step 3. Listing products on Amazon
Add your products to the corresponding listings on Amazon. Make sure that the product, image, and model of the product exactly match the Amazon listing where you add a product.
Step 4. Order fulfillment
Choose between fulfilling orders yourself (storing and shipping products) or using Amazon's Fulfillment by Amazon (FBA) service, which handles pick, pack, ship, and customer service for a fee.
Step 5. Profit & Revenue
As customers purchase your product, you earn profit based on the difference between your buying price, selling price, and Amazon fees/expenses. However, remember that profitability isn't guaranteed and careful cost analysis is crucial.
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Top online arbitrage product categories
When you look for your online arbitrage products, you may look for trendy products in the best-selling categories.
Amazon customers purchase products from various categories. However, some consistently rank high in popularity and profitability, while others may not be as popular. You may select products in one of the categories below.
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How to Find Profitable Products for Amazon Online Arbitrage
10 top online arbitrage product categories
Beauty & Personal Care
This category includes everything from skincare and makeup to haircare and fragrances. Look for trendy items, discontinued favorites, or value packs with the potential for markups.
Examples: Organic serums, cult-favorite lipsticks, travel-size toiletries, bath bomb gift sets.
Clothing, Shoes & Jewelry
With diverse styles and ever-changing trends, this category offers a treasure trove of potential finds. Focus on unique pieces, seasonal must-haves, or comfortable basics with competitive pricing.
Examples: Vintage denim jackets, designer sunglasses (authenticated!), cozy winter scarves, personalized jewelry.
Home & Kitchen
From functional kitchen gadgets to stylish home decor, this category caters to various needs and budgets. Target space-saving solutions, innovative cleaning tools, or trendy kitchenware sets.
Examples: Collapsible dish racks, smart coffee mugs, essential oil diffusers, decorative throw pillows.
Toys & Games
This ever-evolving category presents exciting opportunities. Consider classic toys with enduring popularity, educational games with strong reviews, or seasonal favorites with limited availability.
Examples: Wooden building blocks, STEM learning kits, collectible action figures, outdoor board games.
Sports & Outdoors
With fitness trends and outdoor adventures on the rise, this category offers potential. Look for workout accessories, camping gear, or sports apparel with unique features or competitive pricing.
Examples: Yoga mats with unique designs, portable water bottles with high ratings, affordable hiking backpacks, and fitness trackers with good reviews.
Health, Household & Baby Care
This category encompasses everyday essentials. Look for value packs, discontinued brand-name products, or gentle, natural options with competitive pricing.
Examples: Organic baby wipes, natural cleaning solutions, over-the-counter medications (within compliance), and multivitamin packs.
Cell Phone & Accessories
With ever-evolving technology, this category demands constant research. Focus on compatible chargers, stylish cases, or screen protectors for popular phone models with competitive pricing.
Examples: Wireless chargers for specific phone models, tempered glass screen protectors, phone cases with unique designs, and portable power banks.
Electronics
From headphones and speakers to smart home devices and gaming consoles, this category requires careful research and trend awareness. Look for refurbished models, discontinued gadgets, or bundled electronics with competitive pricing.
Examples: Noise-canceling headphones for popular brands, portable speakers with good reviews, refurbished smartwatches, and video game bundles.
Automotive
This category encompasses a wide range of car care products, accessories, and replacement parts. Conduct thorough research before venturing into this category, as specific regulations and restrictions apply.
Examples: high-quality microfiber cloths, specialty car waxes and polishes, car floor mats, smartphone car mounts, and universal phone chargers.
Grocery & Gourmet Food
This category demands specific knowledge and compliance with Amazon's guidelines. Explore unique regional specialties, gourmet food items with long shelf life, or pantry staples with competitive pricing.
Examples: International spices, gourmet coffee beans, unique candy assortments, shelf-stable nut mixes.
Related: Top Amazon Product Categories
How to find Profitable Products for Amazon Online Arbitrage
How to research products to resell on Amazon
As your main goal as an online arbitrage seller is to sell profitable products on Amazon, it's essential to conduct extensive research to make sure they will bring you money and will not create problems when you sell them. To simplify this challenging task, you can use product sourcing tools.
Related: 10 Reasons Why People Fail With Amazon FBA Online Arbitrage
Among the available options, Seller Assistant App stands out as the best choice for online arbitrage sellers. This tool is designed to help you identify products that have a high potential for generating revenue while also steering clear of any potential selling issues. Moreover, it aids in selecting suppliers that offer competitive pricing to ensure that you can earn a decent profit.
Below is the step-by-step guide on how to do product research and find supplies with Seller Assistant App.
13 steps to finding online arbitrage products with Seller Assistant App
Step 1. Remove referral links to ensure accurate data
Remove "ref=" tags from product links to ensure accurate data analysis.
Step 2. Check for private label brands to avoid potential IP complaints
Steer clear of trademarked products (private labels) to prevent Intellectual Property (IP) issues. Look for products with multiple FBA sellers (over 1) and no IP complaints. Seller Assistant App's IP Alert helps identify them by showing a red triangle icon on the Amazon product and search pages.
Step 3. Analyze FBA seller count for balanced competition
Seller count on the listing shows competition intensity. Aim for balanced competition: 3-15 FBA sellers ideally. Seller Assistant App displays the seller count. The figure on a blue background is the count of all FBA or FBM sellers. The figure on the white background next to it is the count of FBA or FBM sellers offering the Buy Box price +5%.
Step 4. Skip products where Amazon dominates the Buy Box
Avoid competing with Amazon for the Buy Box. Seller Assistant App uses the red Amazon icon on the product pages and the orange Amazon icon on the search pages to signal that Amazon is a seller.
Step 5. Verify listing age for enough sales history
Ensure sufficient sales history (6+ months) and analyze price, sales consistency, and seasonality trends. Use Keepa charts shown by the app to assess listing age.
Step 6. Analyze BSR trends for consistent sales
Look for consistent sales (low rank) and upward trends. Seller Assistant App displays average BSR, trends, drops over various periods, and estimated monthly product sales.
Step 7. Research Buy Box offers for stable pricing trends
Check for stable pricing and avoid intense competition. Analyze Buy Box price trends, average Buy Box price, and minimum FBM Buy Box price provided by Seller Assistant App. Assess Buy Box percentage per seller to identify if there is a dominant seller with whom it’s challenging to compete.
Step 8. Verify variations for compliance and sales potential
Ensure compliance with Amazon's variation rules (same products that differ only by attributes like size, color). Identify the best-selling variation using the Seller Assistant App's Variation Viewer with detailed data. Seller Assistant App’s Variation Viewer displays all product variation data, rating share, total ratings, and the rating percentage per variation. The one with the biggest rating share sells the best.
Step 9. Review product ratings for a 4-5 star average
Aim for a 4-5 star average with minimal negative reviews. Access reviews through the Keepa charts integrated with Seller Assistant App.
Step 10. Check eligibility and restrictions for selling the product
Confirm you can sell the product on your account and ensure the product is not restricted (otherwise you need to get Amazon’s approval to sell it). Seller Assistant App’s Restrictions Checker uses a green open lock icon to show you can sell a product and a red closed lock icon to indicate you can’t sell it.
Step 11. Identify product flags for potential issues
Be aware of potential issues like oversized or hazardous materials. Seller Assistant App uses various icons to flag such products: red lock (restricted), red box (oversized), red glass (fragile), red drop (meltable), hazmat icon, 18+ icon, red Amazon icon, and GB icon (generic brand).
Step 12. Estimate sales potential based on current competition
Understand your sales potential based on current competition. Seller Assistant App's "Est" line shows the estimated sales line if you become one more seller on the listing. That lets you determine if you can sell as many products as you wish.
Step 13. Ensure profitability
Calculate ROI with a target of at least 10%. Seller Assistant App's displays your ROI on each product page.
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Best websites to source online arbitrage products
If you have already researched a product and decided to sell it, the next step is to find a reliable supplier who can provide it at a competitive price to maximize your profit. Below you can find the most effective websites for discovering online arbitrage bargains and how to leverage them to your benefit.
10 Top websites for online arbitrage
Google Shopping
This comparative search engine allows quick identification of potential arbitrage opportunities by displaying product prices across multiple retailers.
eBay
Special promotions and discounts offered on eBay can be leveraged by Amazon sellers to source products at lower prices and achieve higher profit margins.
Walmart
As a leader in competitive pricing, Walmart frequently adjusts prices, presenting arbitrage opportunities for sellers who closely monitor its fluctuations. Its extensive inventory across various categories offers diverse sourcing options.
Target
Known for offering exceptional deals on specific items like baking supplies, toys, and towels, Target can be a valuable source for everyday and popular products for arbitrage listings.
Webstaurant
Catering to both commercial and home chefs, Webstaurant offers a unique product selection not readily available on other platforms, allowing sellers to diversify their portfolios.
KaTom
Frequent clearance sales, discounts, and promotions on restaurant equipment and supplies present opportunities for Amazon sellers to purchase products at lower prices for profitable resale.
The Home Depot
The Home Depot's vast inventory of home improvement and renovation products includes exclusive brands and hard-to-find items, potentially suitable for arbitrage listings. Regular sales can further enhance sourcing opportunities.
Alibaba
This global e-commerce platform connects buyers and sellers worldwide, offering competitive prices on a wide range of products. However, thorough due diligence on suppliers and products is crucial before engaging in transactions.
Kmart
Catering to budget-conscious shoppers, Kmart provides a mix of national brands and exclusive products at competitive prices. Its diverse selection across various categories can be beneficial for sourcing arbitrage listings.
Walgreens
Offering health and wellness items, personal care products, and household essentials at competitive prices, Walgreens can expand an Amazon seller's repertoire with unique product offerings.
Related: Best Online Arbitrage Websites for Lead Sourcing
How to Choose Suppliers with Seller Assistant App?
Finding a reliable supplier is a crucial but challenging step of product sourcing. Fortunately, Seller Assistant App can help you identify potential suppliers. To find an Amazon online arbitrage supplier using the Seller Assistant App, follow these steps.
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Steps to find online arbitrage product suppliers with Seller Assistant App
Step 1: Search for your desired product on Amazon and open the product listing.
Step 2: Click the search icon located in the top left corner of Seller Assistant App. This will display a list of popular suppliers.
Step 3: Choose a supplier that meets your requirements from the dropdown list provided by the app. You can select from options like Google, Google Shopping, eBay, Walmart, Target, Webstaurant, Katom, The Home Depot, or Alibaba.
Step 4: After selecting a supplier from the list, you will be redirected to the search results page for that specific product on the chosen platform. From there, you can explore and choose the supplier that best suits your needs.
How Much Does It Cost to Launch OnlineArbitrage Product?
The online Arbitrage model is relatively fast and inexpensive to start.
You can launch an online arbitrage business for $500 to 2,500. The typical cost of profitable online arbitrage products ranges between $10 and $50.
You can get this business up and running in about six weeks. Also, you can scale it fast as soon as you earn money.
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FAQ
Is Amazon arbitrage free?
No, Amazon arbitrage is not free. It requires investments in the inventory you resell, Amazon fees, product sourcing tools, and potentially paid services like Amazon FBA. Profitability depends on smart sourcing, pricing, and managing fees.
Can you lose money in arbitrage?
Loosing money is possible in any business. Arbitrage carries risks of poor product research, unreliable suppliers, or competition can also lead to losses. However, with the right product soucing tools like Seller Assistant App this risk becomes lower.
Why is arbitrage difficult?
Online arbitrage requires you to reserach hunderds products daily to identify profitable deals. That is challenging and can be overwhelming. However, with the right product soucing tools like Seller Assistant App this task is simplified.
How do I get started in arbitrage?
Research the basics of online arbitrage, understand Amazon seller fees, and explore product research tools like Seller Assistant App. It will help find your first products. Choose a low-risk product, source it at a competitive price, and list it on Amazon to test the waters and gain experience.
Final Thoughts
Online arbitrage is a great sales model because it allows earning money with very little upfront investment. On Amazon, you can start and scale it fast.
However, you’re not the only one who knows it. Due to high competition on Amazon, merchants increasingly use seller tools to win the game from the competition. They help you take care of deal hunting, product research, and the right supplier.
Seller Assistant Аpp is one such tool. It’s an all-in-one app that incorporates the features vital for product research. Advanced IP Alerts can immediately tell you if a product has any sales restrictions or has led to problems with account health in the past. It combines an , Quick View, ASIN Grabber, UPC/ASIN Converter, Stock Checker, and Restrictions Checker in one tool.
Try Seller Assistant Аppnow. Register for our 14-day trial. Grow your Amazon business with confidence.
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