Is Amazon Retail Arbitrage Worth It? Or is Arbitrage Dead? 😱

Can you still make money from Amazon Retail Arbitrage in 2024? Or is Amazon Arbitrage dead?

🀠 Short Answer: Although Retail Arbitrage on Amazon is a lot more challenging than it used to be, we believe it can still offer a valuable learning experience for new sellers.

Now let’s look at some of the reasons it’s getting more difficult, the pitfalls to avoid, how you can build a healthy online business, and the tools that can help.

First, let’s explain the difference between Retail Arbitrage and Online Arbitrage:

Retail Arbitrage (RA) is when you buy products from physical stores, like Walmart or Costco, and then sell them for a profit on Amazon.

Online Arbitrage (OA) is when you buy products from online retailers to sell on Amazon for a profit.

The Selling Guys is a reader-supported publication. We may receive a commission when you click on links in this article (at no extra cost to you). Learn more here – Affiliate Disclaimer.


Want to take a shortcut?

We use BuyBotPro to quickly find products we are allowed to sell and get auto-ungated. It is also our favorite tool for product sourcing and analysis.

You can now test out BuyBotPro with their 14-day free trial.

Here are just a few of the awesome features included with BuyBotPro:

  • βœ… AUTO-UNGATING: Want to get ungated? BuyBotPro will apply for auto-ungatings for you and display the result in just SECONDS!
  • βœ… ELIGIBILITY CHECKER: Tells you if YOU can sell the product on your account at a glance!
  • βœ… IP RADAR: Checks for the likelihood of a product causing an Intellectual Property violation on your Amazon account.
  • βœ… PRIVATE LABEL ALERT: These are often the highest-risk brands and you can be alerted to the ones to avoid.

Why is Retail Arbitrage Getting Harder?

Over the last few years, Amazon has moved towards having fewer but higher-quality sellers on its platform. This makes sure Amazon customers are getting the best overall shopping experience.

There are also three big trends that are making retail arbitrage more difficult.

1. Too Many Sellers on Amazon

More and more people are selling on the Amazon marketplace with Amazon FBA becoming very popular about 10 years ago.

Amazon FBA was suddenly one of the top results for people looking to make money online. As a result, there was a huge influx of new sellers making the Amazon marketplace more competitive. This trend shows no sign of slowing down.

There has also been an influx of Chinese sellers using FBA to sell in the US, UK, or European Amazon markets. Often their cost of living is lower than people in the USA or the UK, so they can easily undercut competitors. This makes them almost impossible to compete with.

2. Amazon Brand Gating & Restrictions

More brands and categories are being gated or restricted by Amazon. This means there are fewer products you can legally buy and sell on the Amazon platform without risking suspension. This has resulted in more competition over the remaining products that are safe to sell.

Amazon is also making the application process stricter and will often require written permission from the brand owners for you to sell their products.

πŸ“ We have a full list of brands to avoid here: Current list of Amazon Gated and Restricted Brands.

πŸ“ We also have advice on how to get ungated here: How to get Ungated in Amazon restricted categories.

3. Retail Stores Refusing to Sell in Bulk

Due to the huge increase in people doing Amazon online and retail arbitrage, the retailers themselves are starting to realize this is a problem. Some retail stores are now stopping people from buying toys and other products in bulk.

This makes it harder to get enough stock when you find a great deal. This, in turn, makes it difficult to scale up your Amazon arbitrage business and make a full-time income. Over the next 12 months, restrictions are likely to be rolled out to more stores and retailers.

How Much Can You Make with Amazon Retail Arbitrage?

So should you still try to sell on Amazon FBA with retail arbitrage and is it still profitable?

70% of Amazon retail arbitrage sellers make less than $5,000 per month and 31% make less than $500 per month. 62% of sellers took longer than 6 months to make a profit. However, although it’s getting more competitive, there are still great opportunities to make a full-time salary if done right.

You need to be very careful to avoid risky products (click here for a full list). You will also have to be smarter when buying stock, possibly splitting your orders between different stores or buying only a limited quantity per week.

Is Amazon Retail Arbitrage Worth It?

Traditional Amazon arbitrage may gradually become too difficult as Amazon tightens the rules and competition grows. However, we still recommend either retail or online arbitrage as a great way to get your Amazon business launched and gain experience.

You can also use arbitrage as a springboard to a more robust online business. Many Amazon sellers move into Wholesale or Private Label once they have mastered arbitrage.

Also, remember the last few months before Christmas can be a bonanza for Amazon Retail Arbitrage. Amazon sellers can make a large proportion of their yearly profits in this Q4 period.

You should prepare by ungating as many categories as possible and making sure you have sufficient funds in place ready for Q4. Always check products for any restrictions, using tools like BuyBotPro, before buying in bulk.

Steps to Building a Healthy Online Business?

Selling online is certainly not dead and is not going to die anytime soon, with online retail growing massively each year. Amazon is at the forefront of this growth, so Amazon FBA is still a great place to start.

There is still a huge amount of potential and many great opportunities for sellers who are willing to learn and adapt.

Retail Ecommerce Sales Worldwide Predicted 2022-2032 in USD Trillion by The Selling Guys
Predicted Ecommerce Sales Worldwide 2022-2032 (click image to enlarge)

An Opportunity to Diversify Your Ecommerce Business

We recommend diversifying by building other income streams and strategies so you don’t become over-reliant on any single market.

Don’t be put off by brand gating on Amazon as it can actually be turned to your advantage. If you make the effort to get ungated, you will be protected from account suspension and there’ll be fewer sellers to compete with, therefore, healthier profits. πŸ₯³

Top categories for Amazon Arbitrage
(click image to enlarge)

If you can also get ungated in new categories, then there is an even greater opportunity and you should still be able to build a solid long-term business.

πŸ“ Here is a guide to setting up wholesale and distribution accounts to help get you ungated: Finding Wholesale Suppliers and Distributors for Amazon FBA.

Amazon Arbitrage Tools & Courses

Online Arbitrage Sourcing Tools

If you decide to try Online Arbitrage, we recommend investing in decent arbitrage tools and software.

It’s difficult to do online arbitrage sourcing manually as it’s incredibly time-consuming. Most successful Amazon businesses will use sourcing software to automatically find online arbitrage deals.

Tactical Arbitrage small logo

We use Tactical Arbitrage, which will scan the best websites to highlight the most profitable deals. You can scan over 1000 online stores in 7 different countries on auto-pilot – take a look at the full list of stores here – Tactical Arbitrage Stores.

The Best Free Retail Arbitrage Apps & Tools

Keepa Amazon Price Tracker

Keepa is an essential app for Amazon sellers doing Retail or Online arbitrage. Keepa is a powerful and free Amazon product research tool that will give you all the data you need to make good buying decisions.

Amazon SellerApp

The Amazon Seller App

The Amazon Seller app is free to download and made by Amazon. You can analyze sales, fulfill orders, find products to sell, manage offers, inventory, and returns, and deal with customer queries. You will need an Amazon business account to use it.

The Best Amazon Retail Arbitrage Course

If you want to get started with retail arbitrage but it all seems overwhelming, you can save time and invest in a course. We recommend Proven Amazon Course.

Proven Amazon Courses was created by Jim Cockrum and has been established for over 10 years. They teach you all about arbitrage, private label, and dropshipping strategies.

Is Amazon Retail Arbitrage Worth It?

We feel Amazon retail arbitrage is still viable, particularly for beginners, offering a low-risk entry into e-commerce. It’s an effective strategy if you lack your own products or large-scale buying power. While competition and brand restrictions pose challenges, it remains a profitable option that can be the perfect springboard into wholesale, private label, or dropshipping.

According to a recent study, 25% of Amazon sellers are using Retail Arbitrage, with 30% of sellers making profits of over $50,000. πŸš€

14 years ago, we made most of our profits from selling on eBay with four eBay shops running at the same time. Then the larger companies also started selling on eBay and it became too competitive.

We then switched our focus to Amazon FBA and quickly replaced that income stream. We adapted to survive and have had to do this many times over the last 15 years.

If you are serious about making a living selling online, you will quickly realize that things are constantly changing in 12 to 18-month cycles and you need to stay flexible, creative, and positive.

You might start with retail arbitrage on Amazon and end up dropshipping your own Shopify store. You just have to start your online selling journey and see where it takes you. πŸ€·β€β™‚οΈ

So, is retail arbitrage dead? We feel, although it’s now more difficult, there are still thousands of sellers making a full-time income. If you have the core skills and are willing to take risks and be open-minded, you will always find a way to make money online.

Why don’t you join our friendly and supportive Facebook Group Amazon Selling for Beginners & Pros? Experts and other newbies can help you get up and running successfully.

Let me know whether you think Amazon FBA is still a good option in the comments below.

Good Luck & Happy Selling

James πŸ‘¨

Useful Resources

πŸ“ List of gated and restricted brands to avoid: Current list of Amazon Gated and Restricted Brands.

πŸ“ A guide to getting set up with wholesalers: Online sourcing: Buying from wholesalers and distributors.

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2 thoughts on “Is Amazon Retail Arbitrage Worth It? Or is Arbitrage Dead? 😱”

  1. Muhammad Abbas

    hi friend,
    can i start online arbitrage witj 1k$ ?

    what are the pros and cons of OA ?

    in OA we usually source products from the deal website what will happen if we are out of stock and the deal website doesn’t have the same product?

    will it affect our account health?

    thanks for the article.

    1. Hi Muhammad – yes you can start OA for a lot less than $1000 – you really just need to find a few products to list.
      Online Arbitrage can be easier than retail arbitrage as you don’t need to actually visit the stores. It is also easier to scale up – most people will use software like Tactical Arbitrage, Sourcemogul, or Online Arbitrage Deals to automate the process – this can mean they find potential products almost daily and you can keep sending in stock to FBA and building up the business.
      If one site is out of stock you can quickly check others for a similar price – you can also set alerts so you know as soon as they get more stock.
      If done properly it should not affect your Amazon account health – the main thing to look out for is only selling products you have permission to sell.

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