Finding the right products for Amazon arbitrage is a mix of strategy, research, and smart decision-making. The main idea is simple—you buy products at a low price from one source and sell them higher on Amazon. But the real challenge is knowing what to buy, where to buy, and when to sell.
In this guide, I’ll walk you through everything you need to know about sourcing products for Amazon arbitrage. Whether you’re doing it online from your couch or hitting retail stores in person, you’ll learn the tricks, tools, and strategies that actually work.
Types of Arbitrage Sourcing
When it comes to finding products, you’ve got a couple of main routes you can take. They both have their own unique perks and challenges, and many sellers use a mix of both.
Online Arbitrage (OA): This is all about sourcing products from other e-commerce platforms and online stores (like Walmart, Target, Home Depot, Best Buy, etc.) to resell on Amazon. The best part? You can do this from the comfort of your own home, maybe even in your pajamas with a cup of coffee. It’s convenient, and you have a massive number of stores to choose from. You’re essentially looking for online clearance sales, flash deals, or price mistakes.
Retail Arbitrage (RA): This method is a bit more hands-on. You physically go to brick-and-mortar stores, like discount stores, big box retailers, or clearance sections, to find discounted products. You’ll be using a scanning app on your phone to check their profitability on Amazon in real-time. It’s a great way to start because you can see and touch the product, and often, you can find incredible deals that others miss. Plus, there’s something fun about the hunt itself.
Key Criteria for a Profitable Product
Before you get all excited and start buying up everything on clearance, you need to know what makes a product worth your time. Not every deal is a good deal.
Profitability: The first and most important rule. The selling price on Amazon should be high enough to cover your purchase cost, Amazon fees (FBA or FBM), shipping, and any other overhead, while still providing a healthy profit margin. I always aim for a return on investment (ROI) of 10% or more, but the higher, the better! You have to make sure the numbers work for you.
Best Seller Rank (BSR): The BSR is your product’s report card on Amazon. It indicates how well a product is selling. A lower BSR means the product sells faster. I always look for products with a BSR below 30,000 for consistent sales, though this can vary by category. You should also check the BSR history with a tool like Keepa to make sure it’s stable and not just a one-time spike. A steady line is much better than a sudden drop that shoots back up.
Manageable Competition: A listing with too many sellers (e.g., more than 15) can lead to a price war, which erodes your profit. It’s a race to the bottom that no one wins. I look for listings with a moderate number of sellers (3 to 15 is often a good range). Also, be extra cautious of listings where Amazon is a seller. Competing with Amazon is incredibly difficult.
No Restrictions: Some categories, products, or brands may be “gated” by Amazon, meaning you need special approval to sell them. Always, and I mean always, check your eligibility to sell a product before you buy it. You should also avoid products with intellectual property (IP) risks, which can lead to complaints and account suspension. It’s not worth the headache.
Consistent Demand: Don’t get caught up in fads. Avoid products that are extremely seasonal or trendy, unless you are confident you can sell them quickly. I look for items with a consistent sales history. Think about products people need year-round, not just for a holiday or a passing trend.
Sourcing Strategies for Amazon
Now that you know what to look for, let’s talk about how to find these products. There are a few different ways to approach the hunt.
For Online Arbitrage:
Manual Sourcing: This is where you get your hands dirty. You manually browse online retail websites for deals, clearance items, and sales. I often use browser extensions to quickly check a product’s profitability on Amazon. It’s a bit like window shopping, but with a purpose!
Automated Sourcing (Scrapers): This is a more scalable method. You use software that scans thousands of products from a supplier’s website or price list and compares them to Amazon’s listings. This helps you quickly identify profitable opportunities without the manual work. It’s the high-tech way to find deals.
Reverse Sourcing: This is one of my favorite strategies. You start on Amazon. You find a product that is selling well, and then use tools to find out where you can source it for a lower price from a different retailer. It’s like working backward from success.
Storefront Stalking: It might sound creepy, but it’s a completely legitimate strategy. This involves analyzing the inventory of other successful Amazon sellers to see what products they are selling. You can then try to find the same products from a different supplier. It’s a great way to find new niches and ideas.
For Retail Arbitrage:
Scout in Stores: Get out there and visit big-box stores, discount chains (e.g., Walmart, Target, Marshalls, TJ Maxx), or local shops. Look for clearance racks, sales tags, or items with unique packaging. Use a mobile app to scan the barcode and check the Amazon price and profitability. It’s a real-life scavenger hunt!
Use Deal Websites: Websites like Brickseek can help you find in-store deals and clearance items at specific retailers in your area. This is great for saving time and knowing where to go for the best deals.
Essential Tools and Software
Sourcing products manually can be very time-consuming. Utilizing the right tools is crucial for success and scalability. Think of them as your secret weapons.
Product Research/Sourcing Tools:
Keepa: This is an essential tool for both online and retail arbitrage. It provides historical data on a product’s price, BSR, and Buy Box history, allowing you to make data-driven decisions. If you’re serious about arbitrage, you need this tool.
Tactical Arbitrage: This is a powerful scraping tool for online arbitrage. It scans and compares prices from hundreds of online retailers against Amazon’s listings. It can save you an incredible amount of time.
SellerAmp SAS (Sourcing Analysis Simplified): This tool provides a quick analysis of a product’s profitability, competition, and restrictions. I love how it’s available as a web app, mobile app, and Chrome extension, making it super convenient.
SourceMogul: Similar to Tactical Arbitrage, this software scans millions of products from various retailers to find profitable deals. It’s a fantastic tool for finding those hidden gems.
Scanning Apps (for RA):
Amazon Seller App: This free app is where everyone should start. It allows you to scan a product’s barcode and see its price, BSR, and estimated profitability on Amazon. It’s a must-have for retail arbitrage.
Scoutify 2: A popular mobile app for retail arbitrage that integrates with inventory management software. It’s a great tool for sellers who want to get more organized.
Profit Bandit: Another paid app that connects to Amazon’s API for real-time pricing and profitability analysis.
Profit Calculators:
Amazon FBA Revenue Calculator: This free tool from Amazon helps you estimate fulfillment costs and profitability. It’s great for double-checking your numbers.
Many of the sourcing tools I mentioned also have built-in profit calculators, which makes things even easier.
How to Get Started with Your First Sourcing Trip
It’s easy to feel overwhelmed, but the best way to learn is by doing. For your first go-round, I recommend starting small. Choose a method you’re comfortable with, whether it’s checking out a few online stores or hitting up a couple of local shops. Focus on one or two categories you know well. Maybe it’s toys, kitchen gadgets, or home goods. Don’t worry about finding a huge list of products on your first try. The goal is to practice, learn, and get a feel for the process. You’ll make mistakes, and that’s okay! It’s all part of the journey. The more you do it, the better you’ll get. Just remember to check your numbers, stay disciplined, and have fun with the hunt.
Conclusion
I hope this article has given you a clear roadmap for sourcing products for Amazon arbitrage. It might seem like a lot to take in, but remember, every successful seller started right where you are. The key is to be strategic, use the right tools, and never stop learning. Whether you choose online or retail arbitrage, the hunt is a rewarding experience, and with a little practice, you’ll be able to spot profitable products from a mile away. Don’t be discouraged if you don’t find a winner right away. Keep going, keep learning, and trust the process. The world of Amazon arbitrage is full of opportunity, and you’ve got this!
