If you’re looking for the best retail arbitrage items to sell on amazon, you’ve come to the right place. Here’s a quick list of high-demand categories to help you get started:

Beauty & Personal Care: Makeup, Skincare, Haircare, Fragrances
Clothing, Shoes & Jewelry: Apparel, Footwear, Accessories
Home & Kitchen: Cookware, Small Appliances, Home Decor
Toys & Games: Board Games, Educational Toys, Action Figures
Electronics: Gadgets, Accessories, Consumer Electronics

Retail arbitrage is a business model where you buy products at a discount from physical or online stores and resell them for a profit on Amazon. It’s a low-risk way to dive into e-commerce with minimal startup costs. Thanks to the first-sale doctrine, it’s entirely legal to resell these items as long as they are unaltered.

The real beauty of retail arbitrage lies in its flexibility and potential for quick returns. It allows you to choose what products to sell, adapt to market trends, and scale your business over time. Just be mindful of Amazon’s seller policies and the list of restricted items to avoid any account suspensions.

I’m Will Mitchell, an expert in e-commerce with over 20 years of experience. I’ve helped thousands of entrepreneurs identify the best retail arbitrage items to sell on amazon and build profitable e-commerce businesses.

Glossary for best retail arbitrage items to sell on amazon:
– amazon fba arbitrage
– getting started selling retail arbitrage on amazon
– retail or resell

What is Retail Arbitrage?

Definition

Retail arbitrage involves purchasing products at a lower price from retail stores and selling them at a higher price on platforms like Amazon. The key is to find items that are significantly discounted or on clearance, allowing you to resell them for a profit.

Process

Here’s a simple breakdown of the retail arbitrage process:

Source Products: Visit local stores like Walmart, Target, or even mom-and-pop shops. Look for clearance items or seasonal discounts.
Scan and Research: Use tools like the Amazon Seller App to scan barcodes. Check the sales rank and profitability.
Purchase: Buy the products that have a good profit margin and are in demand.
List on Amazon: Create listings for your products on Amazon. Make sure to write compelling descriptions and use high-quality images.
Sell: Once your product is listed, monitor sales and manage inventory.
Ship: Use Fulfillment by Amazon (FBA) or handle shipping yourself.

Legal Aspects

Retail arbitrage is legal under the first-sale doctrine. This doctrine allows you to resell items you have legally purchased without altering them. However, you must follow Amazon’s seller policies to avoid any issues.

First-sale Doctrine

The first-sale doctrine is a legal principle that allows the resale of legally purchased items. As long as you buy products legally and do not alter them, you can resell them. This is the backbone of retail arbitrage and ensures that the practice is lawful.

It’s crucial to avoid restricted items like hazardous materials, medical devices, and certain electronics. Always check Amazon’s guidelines to stay compliant.

By understanding these basics, you’re well on your way to mastering retail arbitrage. Next, we’ll dive into the best retail arbitrage items to sell on amazon to maximize your profits.

Best Retail Arbitrage Items to Sell on Amazon

When it comes to retail arbitrage, picking the right items to sell is crucial. Here are some of the best retail arbitrage items to sell on Amazon, categorized for your convenience.

Beauty & Personal Care

Popular Categories: Makeup, Skincare, Haircare, Fragrances

Beauty and personal care items are always in demand. The market is projected to grow to $756 billion by 2026. This category includes makeup, skincare, haircare, and fragrances.

High-demand Products:
– Peel-off face masks: These have seen a significant increase in search volume.
– Designer nails: The global nail polish market is expected to reach $15.6 billion by 2024.

Seasonal Items:
– Sunscreen: Peaks in summer.
– Moisturizers: Higher demand in winter.

Discontinued Products: Always check for discontinued beauty products that people love but can’t find anymore. They often sell at premium prices.

Profit Margin: Average is 23%. Walgreen offers a great selection of beauty products on sale.

Clothing, Shoes & Jewelry

Popular Categories: Apparel, Footwear, Accessories

This category is a goldmine. The clothing industry alone is valued at $12 billion. Americans spend over $1,700 on clothes per year on average.

High-demand Products:
– Trendy apparel: Seasonal fashion items.
– Popular footwear: Shoes are in high demand, with nearly half of American consumers purchasing them online.

Seasonal Items:
– Winter coats: High demand in colder months.
– Swimwear: Peaks in summer.

Discontinued Products: Thrift stores like Goodwill can be a treasure trove. Nasty Gal started by reselling thrift store finds and now does $98.8 million a year.

Profit Margin: Average is 20%.

Home & Kitchen

Popular Categories: Cookware, Small Appliances, Home Decor

This is one of the best-selling categories on Amazon, accounting for 35% of sales according to the State of the Seller report. Items like cookware, small appliances, and home decor are always in demand.

High-demand Products:
– Cookware sets: Essential items for any kitchen.
– Home decor: Items like wall art and sculptures.

Seasonal Items:
– Holiday-themed decor: High demand around holidays.
– Grilling accessories: Popular in summer.

Discontinued Products: Look for discontinued small appliances and cookware sets. They often fetch higher prices.

Profit Margin: Average is 23%. Home Depot is a great store to source products from.

Toys & Games

Popular Categories: Board Games, Educational Toys, Action Figures

The toy industry had a revenue of $73 billion last year and is expected to grow. Over 99% of toy sales on Amazon come from third-party brands.

High-demand Products:
– Board games: Increased demand during the pandemic.
– Educational toys: Always popular among parents.

Seasonal Items:
– Holiday toys: High demand during Q4.
– Outdoor games: Popular in summer.

Discontinued Products: Discontinued toys can sell at premium prices, especially collectible items.

Profit Margin: Sales up by 20% from 19% in 2021. Dollar stores, Target, and Walmart are great places to source toys.

Electronics

Popular Categories: Gadgets, Accessories, Consumer Electronics

Electronics is often hailed as the number one category on Amazon. While big brands dominate, there’s ample opportunity for lesser-known products.

High-demand Products:
– Smartphone accessories: Always in demand.
– Consumer gadgets: Items like smart home devices.

Seasonal Items:
– Holiday gifts: Electronics are popular gift items.
– Back-to-school gadgets: High demand in late summer.

Discontinued Products: Discontinued gadgets and accessories can be gold mines.

Profit Margin: Varies by product. Be cautious with returns and warranties.

By focusing on these categories and products, you can maximize your profits in retail arbitrage. Next, we’ll explore how to find these profitable items using various tools and strategies.

How to Find Profitable Retail Arbitrage Items

Finding profitable items for retail arbitrage can be a game-changer. Here’s how to do it effectively using tools, apps, and sourcing strategies.

Using Amazon Seller App

The Amazon Seller App is a must-have for anyone in retail arbitrage. It’s free and provides crucial data with just a barcode scan.

Barcode Scanning: Open the app and scan the product’s barcode. This instantly shows you the product’s details, including its sales rank and current price on Amazon.

Profit Calculation: Enter your purchase price to see your potential profit after Amazon fees. This helps you make quick decisions in-store.

Sales Rank Analysis: Pay attention to the sales rank. Lower ranks mean faster sales. Aim for items with ranks below 250,000 in their category for quicker turnover.

Leveraging Product Research Tools

Product research tools can be powerful for finding profitable products. They offer detailed insights and data that can make your research easier.

Product Research: Use a product research tool’s database to find products with high demand and low competition. This helps you identify potential winners before you even leave your house.

Sales Estimator: This feature estimates monthly sales for any product, giving you a clear idea of its market potential.

Historical Data: Analyze price history and sales trends to make informed decisions. This data helps you understand if a product is consistently profitable.

Sourcing from Big Box Retailers

Big box retailers like Walmart, Target, and Costco are gold mines for retail arbitrage.

Walmart: The clearance aisle at Walmart is a treasure trove. Scan everything to find hidden gems. Walmart often has significant markdowns, making it easier to find profitable items.

Target: Target’s end-of-season sales and clearance sections are excellent for finding discounted items. Look for seasonal items like holiday decor or summer toys.

Costco: Although buying in bulk, Costco offers great deals, especially on electronics and home goods. Split bulk purchases with fellow sellers to minimize risk.

Exploring Discount Stores

Discount stores like TJ Maxx, Ross, Marshalls, and Dollar Stores also offer great opportunities.

TJ Maxx: Known for discounted brand-name items, TJ Maxx is ideal for finding high-quality goods at lower prices. Focus on home goods and kitchen items.

Ross: Similar to TJ Maxx, Ross offers brand-name products at discounted prices. Look for clothing, shoes, and accessories.

Marshalls: Another great store for finding discounted brand-name items. Home decor and kitchenware are often good finds here.

Dollar Stores: Don’t underestimate dollar stores. They are perfect for finding small, lightweight items that are easy to ship, like party supplies and office products.

By using these tools and sourcing strategies, you can find profitable items to sell on Amazon. Next, we’ll dive into tips for successful retail arbitrage.

Tips for Successful Retail Arbitrage

Follow Trends and Sell Seasonal Products

One of the best ways to make money with retail arbitrage is to follow trends and sell seasonal products.

Holiday Items: Think about Christmas decorations, Halloween costumes, and Easter baskets. These items are in high demand during specific times of the year. For example, Halloween decorations start selling well as early as August. Stock up and list these items ahead of the season to capture early buyers.

Summer Products: Items like pool floats, inflatable pools, and outdoor toys sell like hotcakes during the summer. In 2020, an inflatable pool bought for $20 at Walmart was resold on Amazon for $80 due to high demand and low supply.

Back-to-School Supplies: As summer ends, parents and students look for school supplies. Products like notebooks, backpacks, and planners see a spike in sales. According to Jungle Scout, the search volume for “back to school” keywords increased by 32,000% in the last 30 days, making it a lucrative category.

Sell Discontinued Products

Discontinued products can be a goldmine. Consumers are often willing to pay a premium for products they love but can no longer find.

High Demand, Limited Supply: Items that are no longer in production but still have a loyal customer base can fetch high prices. For example, a discontinued beauty product or a rare toy can sell for several times its original price.

Premium Pricing: You might find these items in clearance aisles or discount stores. It’s all about being in the right place at the right time. According to Jungle Scout, some discontinued products still circulate in the market and can be found randomly.

Use Data to Make Informed Decisions

Data is your best friend when it comes to retail arbitrage. Tools like Keepa and CamelCamelCamel can help you make smarter buying decisions.

Keepa: This tool provides price history charts for Amazon products. By looking at historical data, you can see if a product’s price is stable or fluctuates. This helps you avoid bad buys and identify items with consistent demand.

CamelCamelCamel: Similar to Keepa, it tracks the price history of Amazon products. You can set up alerts to notify you when prices drop, making it easier to buy low and sell high.

Customer Reviews: Always check customer reviews before purchasing a product to resell. Reviews can provide insights into the product’s quality and potential issues. Products with positive reviews are more likely to sell quickly.

ROI Calculation: Use the Amazon Seller App or Jungle Scout to calculate your return on investment (ROI). Enter the purchase price, shipping costs, and Amazon fees to determine your potential profit. Aim for a high ROI to ensure your efforts are worthwhile.

By following these tips and leveraging data, you can maximize your chances of success in retail arbitrage. Next, we’ll answer some frequently asked questions about retail arbitrage on Amazon.

Frequently Asked Questions about Retail Arbitrage on Amazon

Is Amazon Retail Arbitrage Profitable?

Profit Margins:

Retail arbitrage can be profitable, but the profit margins vary. Most Amazon sellers typically see profit margins of about 15% to 20%. This means that for every $100 you spend on products, you can expect to make $15 to $20 in profit.

Success Stories:

There are plenty of success stories in retail arbitrage. For example, Sophia Amoruso, founder of Nasty Gal, started by buying items from thrift stores and reselling them online. She transitioned her business into a successful brand that generated millions in revenue. Another example is Ryan Grant, who turned his retail arbitrage hobby into a six-figure business.

Startup Costs:

One of the biggest advantages of retail arbitrage is the low startup cost. According to various sources, 49% of retail arbitrage sellers spend less than $1,000 to get started, with one in three spending less than $500. This makes it an accessible business model for beginners.

Is Retail Arbitrage Legal on Amazon?

First-sale Doctrine:

Retail arbitrage is legal under the first-sale doctrine. This doctrine allows the resale of legally purchased items without alteration. As long as you buy the products legally, you can resell them on Amazon.

Amazon Policies:

However, you must follow Amazon’s seller policies to avoid account suspension. This includes not selling restricted items and ensuring authorization for restricted brands. Amazon has strict guidelines to protect intellectual property rights, so it’s crucial to stay informed and compliant.

Restricted Items:

Some items are restricted on Amazon, such as hazardous materials, medical devices, alcohol, tobacco, and certain electronics. Selling restricted items without proper authorization can lead to account suspension. Always check Amazon’s restricted products list before sourcing items for resale.

How Do I Get Started with Retail Arbitrage?

Amazon Seller Account:

First, you need to create an Amazon seller account. Here’s a quick guide:

Go to sellercentral.amazon.com and sign up.
Provide a valid email address, confirm the password, and verify it using the OTP sent to your email.
Select your account type (Individual or Professional) based on your projected sales volume.
Prepare necessary documents: a government ID, recent bank or credit card statement, a chargeable credit card, and a mobile phone.
Enter your business location, type, and legal name.
Provide your payment details.
Name your store and answer questions about UPCs, manufacturing rights, and brand trademarks.
Upload a scan of both sides of a valid national ID document.

Fulfillment Methods:

Decide whether you want to use Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM).

FBA: Amazon handles storage, packing, and shipping. You send your products to Amazon’s fulfillment centers, and they take care of the rest. This method is convenient but comes with additional fees.
FBM: You handle storage, packing, and shipping. This method gives you more control but requires more effort and time.

Product Listings:

To list your products on Amazon:

Use the Amazon Seller App to scan the product barcode and check eligibility.
Check the sales rank and calculate potential profit using the app.
Create a product listing with clear, high-quality images and detailed descriptions.
Set a competitive price based on market research.

By following these steps, you can start your retail arbitrage journey on Amazon. The next section will dive into more tips and strategies for successful retail arbitrage.

Conclusion

Summary:

Retail arbitrage offers a fantastic opportunity for anyone looking to start an online business with minimal upfront investment. By sourcing discounted products from physical or online stores and reselling them on Amazon, you can turn a profit quickly. This business model is legal under the first-sale doctrine and can be incredibly rewarding with the right strategies.

Final Tips:

Start Small: Begin with a few items to minimize risk and understand the process.
Use Data: Use tools like the Amazon Seller App and Jungle Scout to make informed decisions.
Avoid Restricted Items: Always check Amazon’s restricted items list to avoid account suspension.
Join BOLO Groups: Connect with other sellers to share tips and profitable finds.

Mention StartupBros:

At StartupBros, we specialize in helping entrepreneurs like you kickstart their e-commerce journey. Our expert guidance and comprehensive resources can help you steer the complexities of retail arbitrage. Whether you’re just starting or looking to scale, we provide the support you need to succeed.

Learn more about how we can help you start your Amazon retail arbitrage business.

Encouragement to Start:

Retail arbitrage is a proven way to make money online with low startup costs and minimal risk. With dedication and the right strategies, you can turn your product-finding skills into a thriving business. Don’t wait—take the first step today and start your journey towards financial freedom.

By following these guidelines and leveraging the resources available, you can build a successful retail arbitrage business on Amazon. Happy selling!

Author

Will Mitchell

Will Mitchell is a serial entrepreneur and Founder of StartupBros. You can learn more about him at the Startupbros about page. If you have any questions or comments for him, just send an email or leave a comment!