Retail Arbitrage Calculator
Calculate retail arbitrage profits for Amazon FBA, FBM, and eBay. Input your store purchase price and see instant ROI, fees, and net profit comparisons across all platforms.
Product Details
Purchase Details
Total amount saved from coupons, clearance, etc.
Tax paid when purchasing from retail stores
Selling Platform
Determines Amazon referral fee percentage
Determines FBA fulfillment fee
Check recent sold listings for pricing guidance
Advertising Tracking (Optional)
Calculate advertising profitability metrics
Profit Comparison
Profitable Deal
This retail arbitrage opportunity is projected to generate $0 in net profit with a 0.0% ROI on Amazon FBA.
Profit Status: EXCELLENT
Net Profit
$0
Revenue - Costs - Fees
Return on Investment (ROI)
0.0%
Profit vs. total investment
Profit Margin
0.0%
Profit as % of revenue
Break-Even Sale Price
$0
Minimum price to avoid loss
Cost Breakdown
Purchase Cost
$0
After coupons/discounts
Sales Tax
$0
Tax paid at purchase
Total Cost
$0
All costs including shipping
Total Revenue
$0
Sale price + shipping charged
Amazon FBA Fee Breakdown
Referral Fee
$0
Category-based commission
FBA Fulfillment Fee
$0
Pick, pack, and ship
Total Platform Fees
$0
All Amazon FBA fees combined
Retail Arbitrage Tips
- •Target clearance sections (70-90% off items have best margins)
- •Stack coupons, cashback apps, and credit card rewards for maximum savings
- •Check sold listings to verify actual selling prices, not just current listings
- •Factor in storage costs if inventory sits for months before selling
- •ROI above 100% is excellent, 50-100% is good, below 50% may not be worth the effort
The Complete Guide to Retail Arbitrage: Turn Store Discounts into Online Profits
What is Retail Arbitrage?
Retail arbitrage is the practice of purchasing discounted products from retail stores and reselling them for a profit on online marketplaces like Amazon, eBay, or Mercari. The core concept is simple: exploit price differences between retail and online markets to generate income.
This business model has become increasingly popular because it requires minimal startup capital, no product development, and can be started part-time. Successful retail arbitrage sellers scan clearance aisles with smartphone apps, identify profitable items in seconds, and build sustainable income streams from their local stores.
The key to retail arbitrage is understanding pricing dynamics. Retail stores frequently discount items due to seasonal changes, overstock, damaged packaging, or discontinuation. These same items often sell at full price online because buyers value convenience, selection, or simply cannot access local deals. Your profit comes from bridging this gap.
How Retail Arbitrage Works
The retail arbitrage process follows a straightforward workflow:
- 1.Source Products: Visit retail stores (Target, Walmart, CVS, HomeGoods) and scan clearance sections using apps like Scoutify, Profit Bandit, or Amazon Seller App. These tools instantly show current online selling prices, fees, and estimated profit.
- 2.Verify Profitability: Check that the item meets your minimum profit threshold (most sellers target $5-$10 profit per item or 100%+ ROI). Review sales rank, competition, and selling velocity to ensure items will sell quickly.
- 3.Purchase Inventory: Buy profitable items using cash back credit cards and shopping portal rewards (Rakuten, TopCashback) to maximize returns. Keep receipts for potential returns if items don't sell.
- 4.List on Marketplaces: Create optimized listings on Amazon FBA, eBay, Mercari, or other platforms. For FBA, ship items to Amazon warehouses. For FBM/eBay, store inventory at home.
- 5.Fulfill Orders: With Amazon FBA, they handle storage, packing, shipping, and customer service. With FBM or eBay, you pack and ship orders yourself when items sell.
Best Stores for Retail Arbitrage
Not all retail stores offer equal arbitrage opportunities. These retailers consistently provide the best deals:
Target
Target is the gold standard for retail arbitrage. Their clearance schedule follows predictable markdown cycles, and their generous return policy reduces risk.
- •Best Sections: Toys (post-Christmas), seasonal items, baby products, health & beauty
- •Clearance Schedule: Major markdowns on Mondays and Thursdays
- •Red Card Bonus: 5% discount stacks with clearance prices
- •Pro Tip: Salvage/clearance items (70-90% off) offer highest margins
Walmart
Walmart clearance is less predictable but can yield massive finds, especially in rural locations with less competition.
- •Best Sections: Toys, electronics, seasonal, grocery clearance
- •Hidden Deals: Use Brickseek to find hidden clearance across stores
- •Rollback Strategy: Rollback items sometimes overlap with online price increases
HomeGoods / TJ Maxx / Marshalls
Off-price retailers sell brand-name items at 40-60% below retail, perfect for arbitrage on kitchen goods, home decor, and beauty products.
- •Best Categories: Kitchen gadgets, premium beauty brands, home organization
- •Pro Tip: Compare TJ Maxx prices to Amazon FBA - often 50-70% cheaper in-store
CVS / Walgreens
Drugstores excel at clearance cosmetics, health products, and seasonal items. Coupon stacking can drive costs to near-zero.
- •Coupon Strategy: Stack manufacturer coupons + store coupons + ExtraBucks/Register Rewards
- •Best Finds: Discontinued makeup lines, premium skincare, seasonal candy
Platform Comparison: Amazon FBA vs FBM vs eBay
Amazon FBA (Fulfillment by Amazon)
Pros:
- •Hands-off fulfillment - Amazon handles storage, packing, shipping, returns
- •Prime eligibility dramatically increases conversion rates
- •Faster selling velocity due to Amazon's massive customer base
- •Multi-channel fulfillment available for other platforms
Cons:
- •Higher fees (referral fee + fulfillment fee + storage)
- •Long-term storage fees punish slow-moving inventory
- •Restricted/gated categories require approval
- •Inventory can be lost or damaged in warehouses
Amazon FBM (Fulfillment by Merchant)
Pros:
- •Lower fees - only pay referral fee, not fulfillment
- •Complete control over inventory and shipping
- •No long-term storage fees
- •Good for oversized/heavy items where FBA fees are prohibitive
Cons:
- •No Prime eligibility - lower conversion rates
- •You handle all customer service, returns, shipping
- •Requires shipping supplies, packaging time, post office trips
- •Home storage space needed
eBay
Pros:
- •Lower fees than Amazon (13.6% vs 15-20%)
- •Best for used, vintage, or collectible items
- •Auction format can drive prices above market value
- •Fewer category restrictions than Amazon
Cons:
- •Smaller customer base than Amazon
- •Buyer protection heavily favors customers - easy to lose disputes
- •Must handle shipping, packing, customer service
- •Payment hold periods for new sellers (up to 30 days)
Maximizing Profitability: Advanced Strategies
Coupon Stacking and Rewards
The difference between marginal and excellent ROI often comes down to maximizing discounts:
- •Credit Card Rewards: Use 2% cash back cards (Citi Double Cash, Fidelity) or 5% rotating category cards (Chase Freedom, Discover) to add 2-5% to profits
- •Shopping Portals: Rakuten, TopCashback offer 1-10% cash back at major retailers - stack with clearance
- •Store Loyalty Programs: Target RedCard (5%), CVS ExtraBucks, Walgreens Cash can be applied to future purchases
- •Manufacturer Coupons: Apps like Ibotta, Checkout 51 offer rebates on specific products
Category Selection
Not all product categories offer equal profit potential:
- •Best Categories: Toys (post-holiday), board games, LEGO, collectibles, premium beauty, kitchen gadgets, baby gear
- •Moderate Categories: Books, electronics (verify authenticity), clothing (sizing/returns risky), seasonal decor
- •Avoid: Grocery (expiration dates), media (low margins), heavy/bulky items (shipping costs), easily damaged items
Sales Rank and Velocity
Profitability means nothing if items don't sell. Use sales rank to estimate selling velocity:
- •Fast Sellers (Toys): Sales rank under 20,000 = sells within days. Under 100,000 = sells within weeks.
- •Moderate Sellers (Home & Kitchen): Under 10,000 = fast. Under 50,000 = moderate. Over 100,000 = slow.
- •Inventory Turns: Target 4-8 inventory turns per year (items sell within 1.5-3 months)
Common Retail Arbitrage Mistakes to Avoid
Critical Mistakes
- •Ignoring Fees: New sellers often forget to account for shipping, sales tax, and platform fees, turning profitable-looking deals into losses.
- •Buying Slow Sellers: High sales rank items tie up capital for months. Stick to items that turn quickly.
- •Overbuying: Buying 50 units of an untested item is risky. Start with 1-3 units, verify profitability, then scale.
- •Damaged Packaging: Amazon buyers expect pristine condition. Damaged boxes lead to returns and negative feedback.
- •Category Gating: Verify you can sell in a category BEFORE buying inventory. Beauty, grocery, and toys often require approval.
- •Tax Compliance: Retail arbitrage is a business. Track expenses, sales tax obligations, and income for tax purposes.
Getting Started with Retail Arbitrage
Ready to start your retail arbitrage journey? Follow this step-by-step roadmap:
- 1.Choose Your Platform: Start with Amazon FBA if you want hands-off fulfillment, or eBay/FBM if you want lower fees and more control.
- 2.Download Scanning Apps: Install Amazon Seller App, Scoutify, or Profit Bandit to scan barcodes and check profitability in real-time.
- 3.Visit Clearance Sections: Hit Target, Walmart, CVS on markdown days. Scan everything in clearance aisles to learn what's profitable.
- 4.Start Small: Buy 5-10 profitable items ($50-100 total investment) to learn the process without risking significant capital.
- 5.List and Learn: Create listings, ship to FBA or fulfill yourself, track what sells fastest and generates best margins.
- 6.Reinvest Profits: Use proceeds from first sales to buy more inventory. Scale gradually as you identify winning categories and stores.
- 7.Track Everything: Use spreadsheets or inventory management software to track purchases, sales, fees, and net profit. Know your numbers.
Remember, retail arbitrage is not get-rich-quick. Successful sellers treat it as a real business, consistently sourcing inventory, optimizing pricing, and managing cash flow. Start part-time, learn the fundamentals, and scale as profitability allows.
Final Thoughts
Retail arbitrage offers a low-barrier entry point to e-commerce entrepreneurship. With a smartphone, a credit card, and knowledge of your local stores, you can build a profitable side income or even a full-time business.
The key to success is understanding your numbers. Use this calculator to evaluate every potential purchase before buying. Factor in all costs (purchase price, tax, shipping), all fees (referral, fulfillment, storage), and verify selling prices using recent sold data, not just current listings.
Most importantly, start taking action. Read all the guides you want, but nothing replaces the experience of scanning aisles, making your first purchases, and learning what works in your market. The best retail arbitrage education comes from doing.
Frequently Asked Questions
How much money do I need to start retail arbitrage?
You can start with as little as $50-$100 to purchase your first batch of clearance items. Most successful sellers recommend starting small to learn the process, then reinvesting profits to scale. Plan for additional costs like a smartphone scanning app ($10-40/month), shipping supplies for FBM ($20-50), and potentially an Amazon Professional seller account ($39.99/month if selling 40+ items). A realistic starting budget including tools and initial inventory is $200-500.
What's better for beginners: Amazon FBA or eBay?
eBay is often better for absolute beginners because it has lower fees, no storage costs, and fewer restrictions. You maintain complete control over inventory and shipping. However, Amazon FBA is better if you want hands-off fulfillment, faster selling velocity, and Prime eligibility. Many sellers start with eBay to learn the basics, then transition to FBA once they understand profitability calculations and have more capital. You can also use both platforms simultaneously to maximize sales channels.
How do I know if an item will actually sell?
Check three key metrics: (1) Sales rank - lower is better, under 20,000 in Toys means fast-selling, (2) Number of sellers - fewer than 10 means less competition, (3) Price history - use tools like Keepa or CamelCamelCamel to verify the current price is normal, not temporarily inflated. Also review sold listings on eBay (filter by "Sold Items") to see actual selling prices and velocity. An item with good rank, few sellers, stable pricing, and recent sold listings is likely to sell quickly.
What ROI should I target for retail arbitrage?
Aim for minimum 100% ROI (double your money) or $5-10 profit per item, whichever is higher. Excellent deals offer 200-300% ROI. Lower ROI can work for fast-selling items (high inventory turns), but avoid deals under 50% ROI unless you're buying in huge bulk. Remember that ROI alone doesn't tell the whole story - a $5 profit on a $5 investment (100% ROI) might not be worth your time compared to a $20 profit on a $30 investment (67% ROI) that sells just as fast.
Can I get in trouble for buying retail products and reselling them?
Retail arbitrage is completely legal - the First Sale Doctrine allows you to resell products you lawfully purchased. However, some manufacturers have policies against reselling, and Amazon has restricted certain brands from unauthorized sellers. Always verify you can sell an item in your chosen category before purchasing. Some categories (Beauty, Grocery, Toys) require approval on Amazon. Also respect store purchase limits - buying 100 units of a clearance item may violate store policy and get you banned.
What are the best smartphone apps for scanning products?
For Amazon sellers: Amazon Seller App (free but basic), Scoutify ($44/month, professional features), Profit Bandit ($10-15/month, good for beginners), or InventoryLab ($50/month, includes listing tools). For eBay sellers: eBay Mobile App (free), Sellbrite, or Vendoo. These apps let you scan barcodes in stores to instantly see online selling prices, current fees, estimated profit, sales rank, and competition. Most offer free trials - test several before committing.
How do I handle sales tax when doing retail arbitrage?
Sales tax is complex for arbitrage sellers. You pay sales tax when purchasing inventory at retail stores (include this in cost calculations). When selling, most platforms collect and remit sales tax automatically through Marketplace Facilitator laws. However, you may need to register for sales tax permits in states where you have economic nexus (Amazon FBA warehouses count). Consult a tax professional or use services like TaxJar or Avalara to ensure compliance. Keep all receipts for business expense deductions.
What are Amazon category restrictions and how do I get ungated?
Amazon restricts certain categories (Beauty, Grocery, Toys, Books) to protect customers from counterfeits. To get ungated, you typically need to provide invoices from approved distributors showing you purchased products from legitimate wholesale sources. Some categories require brand approval or specific documentation. Start with unrestricted categories (Home & Kitchen, Sports, Pet Supplies) while building your seller history. After 3-6 months with good metrics, apply for restricted categories through Seller Central with proper documentation.
How much time does retail arbitrage actually take?
Time commitment varies by platform and scale. For Amazon FBA, expect 4-8 hours per week sourcing inventory (visiting stores, scanning items) plus 2-4 hours listing and shipping to Amazon. Once items reach FBA warehouses, fulfillment is hands-off. For eBay or FBM, add 5-10 hours per week for packing and shipping orders. Part-time sellers (10-15 hours/week) can generate $500-2,000/month profit. Full-time sellers (40+ hours) can potentially earn $3,000-10,000+/month, though results vary widely based on experience and local opportunities.
What should I do if items aren't selling?
If items sit for 60+ days: (1) Lower your price by 10-15% to become competitive, (2) Check if other sellers dropped prices - match or beat them, (3) Verify your listing quality - add better photos, optimize title/bullets, (4) Consider running Amazon PPC ads or eBay Promoted Listings, (5) Bundle slow sellers with fast sellers, (6) Return to store if within return window (keep receipts!), or (7) Liquidate via Facebook Marketplace or wholesale lots. Learn from slow sellers - avoid similar products in future sourcing trips.