Anyone with internet access and a small amount of cash can buy products from 3rd party sites that are priced lower than the same items on Amazon, sell them on Amazon, and pocket the profit.
When someone does this and reinvests the profits, they can create a full-scale business.
I've met many Amazon sellers who focus only on online arbitrage and sell well over 7 figures a year!
These results are certainly not typical, but they are absolutely possible.
By buying, selling, and investing, you can quickly turn a few hundred dollars into a few thousand dollars (and so on and so forth).
This article will tell you everything you need to know to get started.
What Is Amazon Online Arbitrage?
Buying products from 3rd party websites and selling them at a higher price on Amazon and keeping the difference (after fees) as a profit.
Online arbitrage on Amazon is like Retail Arbitrage on Amazon. The terms both refer to buying things low and selling them high.
With retail arbitrage, we are buying from physical retail stores like Target or Walmart. With online arbitrage, we are buying from 3rd party websites. A generic example would be sourcing from Target.com or Walmart.com.
The beautiful thing is that there is no rule that says we can't do both! Many of us practice something we call hybrid arbitrage, which involves ordering items from websites and picking them up from retail stores.
What Online Arbitrage Looks Like (Diagram)
The flow of online arbitrage on Amazon looks like this.
Step #1 Create an Amazon Seller Account - You will register for an account here. You will need a pro seller account, which will cost $39.99 per month. It is well worth it.
Step #2 Find and Buy Products Online That Sell for Higher Prices on Amazon- We will get more into the tools that make this possible soon.
Step #3 Prep and Ship Your Items - Most sellers prefer to ship their items to Amazon fulfillment centers and let Amazon fulfill their orders for them. However, you can also sell your items and ship them directly to customers yourself with the Amazon merchant fulfilled option.
Another option that removes the need to handle the items all together is to send items to a 3rd party Amazon prep and ship company. You'll have all items you order shipped to one of these centers and they will charge a fee for prepping and shipping the items to Amazon FBA centers for you.
You'll need a few items like a tape gun, boxes of various sizes and a thermal printer. This article will go into deeper detail of the entire prepping and shipping process.
Don't worry though, Amazon provides a bunch of great training resources to help you get your first shipments sent correctly.
Step #4 Reinvest, Repeat, and Scale! The business model works when you grow your capital and reinvest it. You can earn as much as you want, but you need to continually reinvest your profits.
There you have it.
How Is Online Arbitrage Possible?
Online arbitrage sellers know people are often confused about how it works. Here are some answers to the common questions about online arbitrage and why it's possible.
"Why would a store price their product lower than I could resell it for?"
I get asked about this a lot. People think this model seems impossible and illogical because online retailers should know they could sell their items at higher prices if they wanted to.
This same argument is made about retail arbitrage. People think, "why wouldn't they just sell the underpriced items on Amazon?"
Well, it's unreasonable to think that every online retailer monitors Amazon and other online retailers to make sure that they are priced the same. Tools like Tactical Arbitrage (the #1 tool on my list below) allow you to scan over 900+ online sites, so it's an inevitability that some of them will have items priced low enough below Amazon (or eBay) that you can make a profit.
We all have the same limitations: time and information. While we can always get more information, it still takes time. This means that pricing items perfectly in a world of constantly changing inventory (different models, variations, etc) is impossible.
The opportunities to buy low and sell high happen all day, every day, and as long as we buy and sell goods online, this opportunity will never go away.
Quote me on that if you'd like.
Now, online arbitrage isn’t easy, but there are plenty of high quality tools that will help you find more product opportunities and make more money on Amazon.
As far as online sourcing goes, the world is your oyster.
What Websites Can I Use for Online Arbitrage?
The great news is that you can use any website that sells products you're able to sell on Amazon.
Many online arbitrage sellers start with the popular, big name sites like Target.com and Walmart.com, but they eventually learn to branch out to smaller, lesser known stores.
I've made a list of 1,000+ websites you can use for online arbitrage here.
Tools: The Key to Successful Online Arbitrage
Online arbitrage is a numbers game. Most products you view online will not be profitable. That's expected.
The more data you can sort through, the more leads you will find, and the more money you will make.
To do that, you need the right tools. Tools will help us analyze data faster and better.
There is a lot of data out there. There is money in making sense of it.
Tools like Tactical Arbitrage can scour the internet for leads for you while you're sleeping. Once a scan is complete, you'll have a list of results to choose from. They look like this.
You can set a process and get an alert sent to your phone or email when it is finished running!
Even newer sellers can find tons of products to sell, even though they will be gated in many things at first.
Deals are everywhere, but they are buried and need to be found.
Like an archeologist unearthing a stegosaurus skeleton or a tourist scouring the beach with a metal detector, we are merely working to bring out what is already there. We use tools to find these items before our competitors.
You aren't the only person looking for these leads. If you have the tools in place to help you find them sooner than your competitors, you will win.
"Man is a tool-using animal. Without tools, he is nothing, with tools, he is all." -
With the arbitrage software/tools I am going to share with you, you can now…
- Collect data that helps estimate profitability and sales velocity
- Pull massive amounts of data from hundreds of stores in minutes
- Store, filter, and refine huge selections of data
- Set price alerts to help you find leads "passively"
- Find more arbitrage opportunities in less time
- Use fewer tabs and save tons of time when doing online arbitrage
- Go far beyond basic clearance shopping to find products to buy over and over
We will go through them one by one, but let me single out the most recommended of all the tools.
Please keep in mind one thing as you're going through these tools... you don't need them all. Some of them even overlap with each other
Best Online Arbitrage Tools
Yes, you can technically sell on Amazon with just a seller's account and the free Amazon seller's app, but that's not going to get you where you really want to go.
If you're serious about your success, these tools are what I recommend to every online arbitrage seller at every level.
This is the most powerful tool for online arbitrage ever created.
With Tactical Arbitrage, you can search for products to resell from over 400 sites. Easily set your own parameters for ROI, Sales Rank and other key metrics, and Tactical Arbitrage will help you find products to sell fast.
Again, I did NOT put this tool at the top of this list by chance. It is the most important tool for online sourcing. The only comparable tool to Tactical Arbitrage is OAXray (#5 on this list). While OAXray is awesome as well, Tactical Arbitrage is more powerful (and better overall) than OAXray.
- Source from over 900+ 3rd party websites. Find products to buy low and sell at higher prices on Amazon.
- "Reverse Search" Amazon products and find where you can buy them. Start with the product in mind, and then find locations you can buy it from that match your parameters (ROI, Sales Rank, etc).
- Analyze wholesale lists. Tactical Arbitrage is far from limited to just online arbitrage. It is now the premier tool for analyzing wholesale lists from suppliers and comparing their offerings to pricing on Amazon.
- Find Books to Resell with "The Library." Flipping books on Amazon is a very popular practice, and for good reason. It's wildly profitable. There are other tools like EFlip that can help you find books, but I prefer Tactical Arbitrage's library feature.
- Find Amazon to Amazon Flips. These are items you can buy from Amazon and sell BACK on Amazon at a profit. Yes, it's a thing and, and it works really well. Read my blog post here to learn more about Amazon to Amazon flips.
- ASIN Variation Analysis. Easily see which variations of an item are actually selling. This is valuable when analyzing products like clothing and shoes.
Tactical Arbitrage Example in 10 Steps
Here's how Tactical Arbitrage works from beginning to end.
Step #1 Create Criteria for a Search and Run It
I know that is very vague. There are at least 4 types of scans you could run here (Library, Amazon to Amazon, Reverse Search or basic Product Search). For now, just know that Tactical Arbitrage can help you find products to sell on Amazon with these searches.
Step #2 Run Scan
These can take a few minutes or a few hours depending on the size of the scan and how much data is involved.
Step #3 Review the View Data Page
Once your scan (search) is complete, you'll have access to the results in Tactical Arbitrage's view data page.
It will look like this.
I've labeled the 7 most important data columns. They are...
- Source URL - This is the website that has a product that can be sold on Amazon at a profit.
- Title and Product Image - This is the name of the product (clicking it will take us to the page to purchase the item) and an image of the item. We need the image so we can ensure it matches Amazon's image.
- Price - This is how much the item costs. Also, adjusted price can calculate the item plus miscellaneous taxes and costs.
- Amazon Buy Box Price - This is the price of the item on Amazon that is showcased in the buy box (default purchasing option). We will usually price our product at or below this number.
- Amazon Return After Fees - The amount you'd get paid after selling the item after paying Amazon fees. This doesn't remove buy costs yet.
- Gross Profit and Gross ROI - The profit and ROI in dollars (or whatever currency you choose). This assumes you're selling one unit. This column is wildly gratifying. Most online arbitrage sellers aim for a minimum of $3 net profit and 20% ROIs, but that number is up to you.
- Sales Rank - Sales rank is a good measurement to help us understand the estimated sales velocity of an item. This can help us decide how many units to buy. However, sales rank is wildly incomplete on its own. This is just a nice data point to have when scouring your results.
Step #4 Buy Leads
Deciding how many units to purchase takes practice. When you start, you'll want to avoid going too deep. This means buying 1 or 2 of an item and seeing what happens instead of 10-20. You can scale up when you get more confident and comfortable.
Also, most sellers use cashback credit cards to make these purchases. It's basically an extra couple of percentages to your net profit doing nothing.
Step #5 The Boring Stuff
This is your prepping, packing, shipping, waiting and reinvesting. We covered this already, so I won't repeat it all again in detail.
Price: Tactical Arbitrage has monthly and yearly plans ranging from $50 per month to $95 per month when paid annually. Each plan has a scan limit and you will pay more if you go over the limits. However, you will always have to approve of the overages (no mystery charges) and about 80% of users do not go over the data limit.
USE CODE ER10 AT CHECKOUT AND RECEIVE A FREE 10 DAY TRIAL
Ok, let's move on to the next tool!
Keepa is an Amazon price tracking tool that can be set to send alerts notifying the user of price drops. It goes much further than just helping people find great prices on Amazon.
Keepa can show us...
- If an item is selling. This can help us decide how many to buy. We can see sales rank history and current sales rank in main and subcategories.
- How much an item is selling for. This will help us decide how to price our items. Keepa shows us not just the current buy box price, but the entire price history for an ASIN (product).
- Who else is selling the item. This will help us understand the risk of prices tanking. The most important thing we want to knsow is whether Amazon is on the listing. Keepa will show us that.
Keepa does this in several ways, but at the heart of most features are history graphs that look like the one below. Fair warning, this will appear daunting. Don't worry, if you decide to go into online arbitrage, it will make sense with practice.
In early 2019, Keepa shook the Amazon selling world by introducing a subscription plan that replaced a lot of the previously free Keepa features.
It is 100% worth the small monthly fee (not affiliated).
Price: $17/month or $169/Year
RevSeller is a Chrome extension that will appear on Amazon.com web pages when your sourcing products.
It allows you to see valuable data and plug in your buy costs to calculate estimated profits after Amazon's fees.
Price: RevSeller costs $99/year (my readers get $20 off their first year with Revseller coupon code FBAT20 at checkout). A 30-day free trial is available and doesn’t require a credit card.
Starting in early 2018, there was a drastic spike in intellectual property claims.
IP Alert is a Chrome extension that notifies you if you're on an Amazon page for a brand that has been reported to file IP Complaints against third party sellers.
Price: $199/Lifetime Access or $99/Year
Tools That Are Very Nice to Have
Popular online arbitrage tools that aren't mandatory, but they can provide a massive ROI if you're really using the tools mentioned above.
Tactical Expander and Tactical Expander Lite
Formerly Storefront Stalker Pro, Tactical Expander Lite is a tool that allows you to pull pages of ASINs from nearly any Amazon page or competitor’s storefront. Works seamlessly with a tool like Tactical Arbitrage, but the data can also be used with tools like OA X-Ray, Price Checker 2, or any software that analyzes Amazon ASINs.
This is a must have for Tactical Arbitrage users looking to take their sourcing to the next level.
- Spy on Competitors and Hot brands.
- Turn Any Amazon Page into a .CSV file of ASINs. You can then upload these .CSVs into 3rd party tools.
- Works on All Amazon Marketplaces.
The full version of Tactical Expander brings all the features of the Lite version but also allows you to source from over 260+ 3rd party websites that aren't supported by Tactical Arbitrage natively.
Big name sites like Nike and Adidas.
Check out the full list of supported sites here.
Once you've gotten started with Tactical Expander or Tactical Expander Lite, check out my full quick start training here.
How Many Extension
This extension will show you the quantity in stock of any Amazon product for each seller. There are limitations (merchant fulfilled sellers and sellers with quantity limits are not going to have helpful data), but it is an awesome tool, so you can decide how deep to go on a product. There is also a free 7 day trial offer available. How Many now have an iOS app.
Price: The How Many extension costs $8.95 per month.
Tactical Bucket is hard to summarize in a paragraph or two. It is a tool that helps you get WAY MORE out of Tactical Arbitrage. Like several of the tools mentioned, it gets most of its utility from Tactical Arbitrage.
- Generate bulk lists
- Get premium and exclusive X-paths
- Download huge lists of top ASINs for reverse search
- and much more!
Price: Tactical Bucket costs between $39 and $99 per month. It is for advanced online arbitrage sellers who are already leveraging Tactical Arbitrage.
Helpful Online Arbitrage Tools to Have
These tools are great, but you don't need them to succeed. Several of them do similar things, and many are free.
OAXray is a Tactical Arbitrage alternative that came out in 2015. It changed the way sellers sourced online at the time. It immediately gave users an advantage and the ability to source far more than ever before.
However, it lost its market share quickly once Tactical Arbitrage expanded. Currently, it's a nice to have software as it functions a little differently than Tactical Arbitrage, but it's far from a staple of the industry like it was in 2015.
Price: OA Xray costs $99/Month
1,000+ Online Sourcing Sites [Free]
This is one of my personal creations. It is a collection of 1,000 websites that you can source online. Download for free, and you will store these links in an easy to access bookmark folder right on your Google Chrome dashboard.
Price: Free. You can get those websites here.
Bring your cash back and gift card sites directly to your Chrome browser. This makes couponing look like child splay.
Online arbitrage + Cashback + Discounted Giftcards = Winning.
Price: RevROI costs $4.95/month or $44.95/year
Brick Seek Add-On
Sometimes online arbitrage and retail arbitrage collide. I mentioned "hybrid arbitrage' earlier and the BrickSeek add-on is a tool that facilitates that. The Brick Seek Add-on facilitates this by allowing sellers to see if they can buy a product at a brick and mortar store in their area.
Price: The BrickSeek Add-On costs $29.95 for a lifetime access
This tool launched in 2022 and quickly became extremely popular in the online arbitrage seller community. It solves one big problem: websites blocking resellers. Some websites don't like resellers. Well really, they don't like bots that buy them out. Online arbitrage can look like that at times, though.
OA Buddy stores data on 240+ different 3rd party websites that we source from and it tells us what to do to avoid triggering bans.
It shows insights like...
- Number of orders we can place in 24 hours
- Quantities we can purchase per order
- Whether a site is friendly to resellers and doesn't have limits
You'll want OABuddy once you get blocked from your first website. Don't worry if you do, it's a badge of honor in our community.
Price: OABuddy Costs $99 per year or $199 for lifetime access. Readers of EntreResource.com get $20 off with code ER20 at checkout.
The tools I've just shared with you are great, but without practice and application, they are nothing more than worthless lines of code.
There is no substitute for learning to sell on Amazon by trial and error. Try out these tools if you think they will benefit your business. I believe strongly that they will.
Online Arbitrage FAQs
To really make this article helpful and complete, I want to wrap it up with some answers to the questions I've seen repeated over my 8+ years of doing online arbitrage.
Is Online Arbitrage Legal?
Absolutely, online arbitrage is completely legal.
There is nothing against the law about buying and selling things for a profit. The things you need to be careful, though, are things like violating Amazon's terms of service and losing your selling privileges.
Does Amazon Ban Online Arbitrage?
Nope. Amazon accepts receipts from 3rd party websites as proof of authenticity. This means that they recognize their sellers are purchasing items from 3rd party websites and they don't care.
Amazon does, however, prohibit dropshipping.
Online Arbitrage vs. Dropshipping
Online arbitrage is NOT the same thing as drop shipping. Conventional drop shipping is against Amazon's terms of service and involves listing products for sale before you have them in your possession. It is different and not the method for Amazon product sourcing that I recommend.
How Much Money Can You Make with Online Arbitrage?
Don't let anyone tell you online arbitrage doesn't work. It's not for everyone, but anyone who has time, capital and commitment to the process can earn at least a part-time income of $1,000/month in profit with online arbitrage.
You can easily earn much more than that, though. Many members of our Facebook group FBA Today are 7 figure sellers who are entirely online arbitrage based.
The biggest thing is growing your capital, so you can buy more inventory. You can't make $1,000 per month, for instance, if you only have $200/month to invest in inventory. To make $1,000 per month, assuming an average of 25% ROI, you'd need to spend $4,000 in inventory each month. Get the picture?
Realistically, you can replace most full-time jobs with online arbitrage if you do it at a high level.
How Much Do You Need to Start Online Arbitrage?
You'll have two types of costs. Fixed and variable.
Fixed costs will be things like your $39.99/month Amazon seller account fee. Variable costs will be things like inventory and shipping materials.
Considering these things, I recommend that you have at least $1,000 to spend to do online arbitrage correctly. More is better, but less will be difficult to offset your fixed costs.
What Types of Products Can I Sell on Amazon?
It's important to understand what brands and categories you can sell on Amazon. One of big mistake new sellers make is purchasing items they are prohibited from selling or are gated in.
Gated categories refer to categories that require approval from Amazon before you can sell them.
Prohibited categories are things that no one can sell on Amazon, ever.
Both lists are rather long and they change, so instead of telling you what you can and can't sell, I'll direct you to use a tool like the free Amazon seller app or a paid tool like RevSeller to verify if an item may be sold from your account.
Online Arbitrage Business Learning Resources
I can only cover so much in one article. So, I'll leave you with some additional free and paid resources for learning more about online arbitrage.
- @CleartheShelf with Chris Grant
- @FullTimeFBA with Stephen Smotherman
- @FieldsofProfit with Warner Fields