Retail arbitrage could be the tactic for you if you want to make some extra cash online. It’s relatively easy, and the profits can be very rewarding, especially if you’ve got an eye for a great bargain and are good at predicting trends. But just what is retail arbitrage? And more importantly, how does it work? Check out our informative piece on retail arbitrage here at OddsMonkey and learn how to sell items for a profit!
In this guide, we’ll look at:
- What is retail arbitrage?
- How retail arbitrage works
- Is retail arbitrage legal?
- Is retail arbitrage dead? (2025)
- How to do online retail arbitrage
- Advantages and disadvantages of retail arbitrage
- Dropshipping vs retail arbitrage
- How to do online retail arbitrage on Amazon
- 5 tips for retail arbitrage success
What Is Retail Arbitrage?
Retail arbitrage (also known as arbing) is the practice of buying and selling items to make a profit. It’s a little different from normal retail because you normally find products in a store sale and bulk buy them. The idea is that you then sell them online in order to make a profit and pocket the difference.
It’s very much in line with the cash for clothes side hustle which is an extremely popular method of earning some extra cash. With the advanced opportunities available online, it’s very different from Del boy’s market stall.
The main difference between retail arbitrage and traditional retailing is that the items aren’t sourced from a wholesaler or manufacturer. Instead, they’re bought from other retailers, usually from a clearance stand.
How Retail Arbitrage Works
The concept of retail arbitrage is pretty straight-forward. Most retailers have a clearance section or carry out bulk discounts. It usually happens when they are looking to offload old stock.
As an example, let’s say you find an item that was originally priced at £30 but has been reduced to £10. It may well be old stock but it’s still in fashion so it should sell. You should then consider buying as many of the item(s) as possible. Once you have your products, you need to sell them less than the RRP but with enough of an increase on what you paid to make a profit.
The most popular platform to resell on is Amazon. One of the main draws is their in-house fulfilment service. We’ll cover this in more detail further on in the guide.
Is Retail Arbitrage Legal?
Retail arbitrage as a concept is legal. It’s been around for years. Think of all those weekends you’ve spent traipsing around car boot sales or trawling through charity shops. If you’ve ever bought something and flipped it, even on a small scale, that’s technically retail arbitrage.
However, there are some things that you should be aware of when sourcing products to resell.
Where you get the item from is important. In terms of the brand and the guidelines surrounding its sale. For example, if you buy a six-pack of Coca-Cola which says “not for individual resale” on the box, you can’t resell the individual cans. Also, some brands only allow their products to be sold through authorised resellers, so you should check first and avoid these items.
On a small scale, it’s unlikely that you’ll face legal prosecution if you sell items like these, but it’s still a good idea to avoid them. Please be aware that you could be banned from some online selling platforms if you sell unauthorised items. If you are hoping to learn more about selling sites, check out our How to Sell on Etsy post!
Is Retail Arbitrage Dead? (2025)
Retail arbitrage is a popular way to make money online. Especially in the UK, where Google Trends indicate it has been a highly-searched term over the last five years. In fact, the search term reached a peak in August 2020, perhaps due to the effects of lockdown restrictions and more people setting up home businesses. People searching for retail arbitrage has dropped since that peak but make no mistake, it’s not dead.
In fact, it’s more competitive than ever which also means it’s more difficult to succeed. The landscape has changed significantly in the last 5 years with increased competition and stricter policies from firms such as Amazon. However, with the right approach and product sourcing software, it can still be well paid. Once you’re making a decent profit from retail arbitrage, consider hiring a virtual assistant to do the product research for you.
Retail Arbitrage For Beginners
Now, as with most money-making methods, this isn’t necessarily a get-rich-quick scheme or something to jump straight into without properly preparing beforehand. Let’s take a look at some of the advantages and disadvantages of retail arbitrage using Amazon as your resale platform. This is Fulfilment by Amazon (FBA).
Advantages And Disadvantages Of Retail Arbitrage
Advantages of Retail Arbitrage
Low Overheads
- With retail arbitrage, there are a few upfront costs, but they’re nothing in comparison to setting up a traditional online business. You’ll need to have enough money to buy the items you want to resell, and if you choose to use Amazon FBA (Fulfilment by Amazon), you won’t need to pay to store numerous items until they’re sold. Instead, you can ship them directly to Amazon to take care of. If you want to sell a skill instead of products, check out our guide on how to sell on Fiverr, which is a much more cost-effective side hustle.
- Also, until you’re making a certain number of sales per month, you’ll get away with having a basic Amazon plan. An Individual Seller Plan offers a pay-as-you-go fee per order. However, if you go over 35 sales per month, it might make sense to upgrade to a Professional Seller Account.
Access To Reputable Marketplaces
- Using big names platforms such as Amazon and eBay, gives you access to millions of customers.
- You can take advantage of their traffic and use order processing services like Amazon FBA.
Profit Potential
- Buying the right discounted or clearance products can provide the potential for massive markups. There’s sellers that regularly sell items with up to 300% return on investment.
Flexible
- You can do retail arbitrage full-time or part-time as a side hustle. It’s also easy to scale the business up or down.
Gateway
- Retail arbitrage is a great first step towards starting your own online business. You can learn the tricks of the trade in terms of reselling and then move on to learn more about private labelling. We’ll look at private labelling in more detail in a bit, but for now, it’s a more scalable business model than arbitrage allows.
Learn valuable business skills
- Obviously, retail arbitrage isn’t the only way to sell on Amazon. But it is a good way to learn how to get started. And you’ll learn some valuable online business skills along the way. For example, you’ll need to set up an Amazon Seller Account and soon learn how to find your way around the dashboard. If you choose to get Amazon to ship your items, you’ll learn all about their fulfilment centres and how to get the items to them so they can get them to the customer. As well as this, you’ll learn how to label products properly and how to link your bank account to their seller account so that you can accept payments and make money!
Disadvantages of Retail Arbitrage
Did you make the right decision?
- Even though you don’t have to pay out massive amounts to purchase items to resell, you still risk losing money if your inventory isn’t what people want. It pays to do your research into what’s currently selling well and what is old news. Just because something looks like a good deal when sitting on those clearance shelves doesn’t necessarily mean it is.
- Damage, defects or recall issues will greatly impact your chances of resale success. Also, if a new version of an item is due to be released, people may not be as interested in buying something that is now considered outdated. With regards to selling clothes online, we have a useful page based around selling t-shirts online with print on demand; this method also leaves no room for stock waste.
Hidden Costs
- If you find an item that sells well for you, you’ll probably want to stock up. This might involve visiting numerous stores in order to source more products. This could cost you more in petrol, time and effort than you originally budgeted for.
Access Denied
- Remember, you have to be careful when choosing which items to sell. Some brands gate their products, which means that only authorised sellers can resell them. Sellers who already have a brand’s permission can report unauthorised sellers to Amazon, which usually results in the reseller’s Amazon account being flagged and/or closed. It pays to stay away from gated brands.
No Quality Control
- You’ll have no control over the quality of the goods you’re selling as they are produced by other companies.
- You also have no control over impactful changes such as rebrands, price changes or discontinued products.
Dropshipping Vs Retail Arbitrage
Dropshipping is one technique that bears many similarities to retail arbitrage, where retailers sell and deliver goods to the end consumer using a supply chain rather than direct retailer-to-customer shipping. However, there are a few key differences: with dropshipping, the seller never handles the goods they sell but instead sources them from a third-party supplier. The goods are then packaged and sent straight to the customer. The profits come from the margin between the wholesale and resale price.
Both strategies have pros and cons, so the technique which will be most suitable and lucrative for you will depend on your circumstances. To learn more about this, take a look at our guide to making money online with dropshipping.
How To Sell On Amazon
Now that we’ve looked at what retail arbitrage is and what you need to get started, it’s time to jump into exactly how to make money selling on Amazon.
Amazon is probably the most popular online platform for people doing retail arbitrage. And because it’s been used for this purpose for a while, there’s loads of information out there on what you need to do. We’ll take a look at some of the platform-specifics you’ll need to start making money through Amazon.
- Open a Seller Account
- The Amazon Seller app
- Fulfilment by Amazon (FBA)
- Private labelling
Open A Seller Account
- The first thing to do is open an Amazon seller account. There’s two types of seller plans, ‘Individual’ and ‘Professional’. The individual seller account will always be your starting point. Should you get close to selling 35 items a month, you’ll need to upgrade to a professional plan.
The Amazon Seller App
- Once you’ve opened your Amazon account, downloading their app specifically for sellers is the next step. This free app lets you see what items are currently being sold on Amazon. Amazon also provides the Product Opportunity Explorer which uses up-to-date data to identify new growth opportunities and unmet demand.
Fulfilment by Amazon (FBA)
- Fulfilment by Amazon is an order fulfilment service offered to anyone selling through the platform. FBA can handle your inventory, shipping, and returns, amongst other things. It was originally created so that Amazon could keep some control over their customer service and levels of satisfaction, even with other sellers involved.
- Amazon FBA offers a simpler way to fulfil orders for people who want to keep a relatively hands-off approach to selling (such as in retail arbitrage), and it can be quite cost-effective. For more information, check out our What is Amazon FBA? guide at OddsMonkey.
Private labelling
- This is the next stage up from retail arbitrage in terms of ‘having’ a business and selling on Amazon. There’s a higher up-front cost involved with private labelling, but it gives you a much higher level of control over your products, business and brand. With this method, sellers buy directly from manufacturers and then market and sell them on a private label.
- Private labelling gives you more control over your pricing strategy and makes your business easier to scale if that’s something you want to do in the future. However, it isn’t without its downsides too. For example, the manufacturer you deal with may require you to place a minimum order quantity, which means that you’ll need to pay out a higher cost upfront than with retail arbitrage.
Tips For Retail Arbitrage Success
Whether you’re considering starting a brand new business venture, generating income alongside your normal job or trying to make money whilst on maternity leave, retail arbitrage has great potential.
Be open-minded
- Don’t go into the store looking for one thing and not open to considering buying anything else. You’re not your target audience. Just because you like something doesn’t mean it will sell well. Conversely, if you think something is rubbish and won’t sell, you might miss out on a fantastic profit-making opportunity.
Utilise Scanning Apps
- Apps such as Amazon Seller App, Keepa and Scoutify allow you to scan barcodes in retail stores to find out the selling price on Amazon, sales ranks and profit margins.
Buy Cheap
- Know what you’re looking for and where to find the best price. Most stores have a clearance section; it’s just about finding the store closing deals and end of season sales.
- Best stores for this include Home Bargains, TK Maxx, Home Bargains, Argos, Poundland, Tesco.
Use Online Arbitrage Opportunities
- Don’t limit yourself to in-store finds. Search online retailers for deals and get the items shipped directly to your house or Amazon FBA.
- Use tools like SourceMogul, FBA Wizard and Tactical Arbitrage.
Avoid Gated Brands
- Some brands have selling restrictions (e.g. Nike, Adidas, LEGO) which need approval (especially on Amazon). Always check if there’s any restrictions before making purchases.
Condition
- Make sure you check that the items are in good condition. There could be any number of reasons why things end up in the clearance section. Sometimes, the item or packaging is damaged. That could harm your chances of resale success, so make sure you look before you buy. It’s worth keeping the condition of the item in mind, especially if you’re planning to resell on Amazon. Products with damaged packaging are not classed as ‘new products’, so you won’t be able to sell them as such.
- While it’s pretty simple as a concept, quite a bit goes into retail arbitrage. Rather than thinking of it as starting your own business, it’s a great way to get to grips with a business model and the right tools for the job.
- Success depends on things that are sometimes out of your control, like current trends and pricing options. It can help to work with people who or gain a large online following; check out our interview with an Instagram influencer to find out more about building a presence online. Because of that, it’s better to think of retail arbitrage as a side hustle rather than making it your main job. At least when you’re starting out, it’s not easy to scale up and is more suited to those who want to keep their business small.
- Now you know how to do online retail arbitrage, you’re ready to get out there and start scouting for products that you think will net you a tidy profit online.
Start Small
- Don’t invest too much in one product. Start with 5 to 10 units to see if the demand is there. Also avoid items with short expiry dates or damaged packaging.
Other Ways To Make Money Online
If you’re interested in starting a side hustle to earn some extra cash, then you might want to take a look at our selection of Side Hustle Guides on how to make money online.
Here at OddsMonkey, we have loads of tips and tricks you can use to generate additional income, including guides to dropshipping, making money on YouTube, freelancing, and completing online surveys. You could also try your hand at matched betting, where you can use the promotional free bets offered by bookmakers to make money — to learn more about how this works, read our matched betting guide.
