How to Start and Grow an Amazon Online Arbitrage Business: A Step-by-Step Guide

So, you want to learn how to start an Amazon business? Great choice. Whether you're looking for a side hustle or hoping to scale it into an empire, selling name-brand products on Amazon can be a game-changer. And don’t worry, you don’t need tens of thousands of dollars or tons of business experience to get started. We’re here to walk you through each step—from getting set up, to finding products, and scaling your biz.

Ready to dive in? Let’s get you on the fast track to making sales!

1. Why Selling on Amazon is a Great Side Hustle

So, here’s the thing: most people think starting a business means dealing with customers, shipping products, and handling all that boring stuff. Not with Amazon. Amazon FBA (Fulfilled by Amazon) handles the heavy lifting like packing, shipping, and customer service. You? Your job is simply to find products that can sell at a profit. And the best part? You can run this business from anywhere. Don’t get it wrong, selling on Amazon DOES take hard work. But it’s one of the best ways to generate cash flow in a way that simply works.

Sound good? Let’s break it down.

2. What Is Online Arbitrage?

Online arbitrage (OA) is finding products on retail websites (like Walmart, Target, or smaller sites like Vitacost) at a discount and sell them on Amazon for a higher price. It’s all about spotting deals and flipping them for profit. Basically extreme couponing turned into a profession…

Example Time: One of our founders found this early on as a product that made a couple thousand dollars in profit. It was selling on Vitacost for super cheap, and on Amazon, it was flipping for a solid profit. Here’s how it worked:

• Product: Herbal Tea 2 Pack
• Source Site: Vitacost
• Purchase Price: $6.79
• Amazon Price: $16.32
• Profit: $3.51/unit

The beauty of OA is you don’t need to know everything about a product. As long as you understand the data (sales rank, price history, etc.), you can flip almost anything. We’re gonna break down everything you need to find more items like this

3. Why FBA is a Game-Changer

Here’s where it gets fun. Amazon’s FBA program makes running a business way easier. Once you buy your products, you ship them to Amazon’s warehouses using Boxem. Amazon stores the products, handles customer service, and ships the items when they sell. You’re not packing boxes every day, so you can spend that time growing your business further or getting some extra free time with friends and family.

4. Why Online Arbitrage Over Other Business Models?

Alright, there are other Amazon business models you might have heard of, like Private Label or Dropshipping. But OA is the quickest and easiest way to start, especially if you're new to this game. Here’s why:

• Private Label: While it is a great model, it’s SUPER risky for your first business. You’re creating your own products, dealing with manufacturers in China, and competing against established brands. It’s a long process, and you could end up losing money if you don’t know anything about Amazon yet.
• Wholesale: This is cool but requires a lot of upfront investment. Plus, you have to negotiate with suppliers and buy in bulk. It’s something to explore once you’ve got some experience under your belt.
• Drop Shipping: Honestly, stay away from it. It’s risky because you’re technically breaking Amazon’s rules if you do it from retail sites like Walmart or Target. Stick to OA—it’s more straightforward and less likely to get you banned.

5. Setting Up Your Amazon Seller Account

Step one: get your seller account up and running. Head over to Sell.Amazon.com and sign up for a professional seller account. It’s $40/month, but you’ll make that back after selling just 40 items. This account will also let you integrate software that make your life a whole lot easier, make sales easier, and get brand approvals.

While we can’t make legal recommendations for you, you do not need an LLC to start the business. It is a good idea if you have any significant personal assets you’d want protected in a worst case scenario, but lots of Amazon sellers start as a sole proprietor. You’ll also want a bank account and a credit card.

6. How to Get Approved to Sell Big Brands (Ungating)

Selling big-name brands like LEGO  or even that herbal tea pack we mentioned earlier can make a massive difference in your profits. But to do this, you’ll need to get ungated (aka approved) to sell these products on Amazon. Here’s how:

1. Buy 10 units of the product from a legit wholesaler or online retailer.
2. Submit your invoice to Amazon, making sure all your details match what’s in your Amazon account (name, address, etc.).
3. If Amazon denies your application (and they sometimes do), just resubmit. It happens, but keep at it.

Once you’re ungated, you can sell popular brands and take your business to the next level.

7. Essential Tools for Your Amazon Business

You don’t need a ton of stuff to get started, but here are a few must-haves:

• Boxes: Get these from Walmart, Lowe’s, or Home Depot. Just keep them under 25 inches on all sides to avoid extra fees.
• Shipping Scale: You’ll need a decent scale that can weigh packages up to 100 lbs. You can get one on Amazon for about $40.
• SKU Labels: 2x1 inch labels to pair with a laser printer like a Rollo or Zebra, you’ll need this to tell Amazon which items are yours essentially
• Boxem: This is a must-have tool as your business grows. Boxem helps you create shipments, track your inventory and sales analytics, and helps you make sales faster using things like 2D barcodes (which are added by Boxem with no extra work)some text
  • You can try it out at boxem.com and see how it makes your shipping process faster and more efficient

• SellerAmp: This tool is your go-to for analyzing products. You can check how much something costs to sell on Amazon and whether it’s worth your time.
• Keepa: Another must-have for checking the sales history of a product. It shows price drops, spikes, and sales rank trends, so you can figure out if a product is a good buy.

Plus, everyone loves saving money, right? Make sure you’re using cashback tools:

• Rakuten or Top Cashback: These platforms give you cashback on tons of purchases. For example, you might get 5-10% back when buying from places like Target or Vitacost.
• CardBear: This site tells you who sells the cheapest discounted gift cards. Let’s say you buy a $100 Vitacost gift card for $90—that’s an instant 10% off before you even apply coupons or cashback.

8. How Much Money Do You Need to Start?

The great thing about online arbitrage is that you can start with as little or as much as you want. Ideally, if you have $1,000–$3,000, you’re in a great position to make things happen quickly. If you have less, you might want to consider starting with retail arbitrage or selling used books from local thrift stores and yard sales for a month or two to get your funds up.

9. Product Sourcing Strategies That Actually Work

Now let’s talk about where to find products. Here are some tips for finding profitable deals:

1. Reverse Sourcing: Essentially copying the homework of successful Amazon sellers. You can look directly at the products they already found profitably to get some ideas for your store
2. Manual Sourcing: If you know a bit about certain brands, you can jump straight into a big sale or clearance section that sells that brand cheaply. Compare those prices back to Amazon 

Use SellerAmp to check if the product is profitable. Plug in the price you’re buying at and see what the profit margins look like after Amazon’s fees. Then, double-check it with Keepa to make sure the product has consistent sales. Once you have some profitable items, you’ll list them and ship them to Amazon using Boxem following the next step!

10. Sending Items to Amazon

Once you have profitable items, you’ll ship them to Amazon FBA so you can start making actual sales! The process of creating a shipment is a simple step by step that Boxem will walk you through, here’s how it works though:

1. Choose your shipping method: Choose either small parcel delivery (SPD) or sending pallets via LTL (Less-than-Truckload), if you’re new it will most likely be SPD
2. Review your shipment details: List all the items you want to send to Amazon on step 1 of Boxem, recording your cost and any other data you want to remember for later 
3. Print the SKU labels: After you tell Boxem what you are listing, you’ll print SKU labels on step 3. These will need to cover the barcode of your product so that Amazon credits you when you make a sale
4. Print the Box labels: You’ll need FBA box labels that go on the outside for them to scam when the box arrives, and if you’re using 2D barcodes for faster check-ins, Boxem will automatically include those on your FBA labels. Then you’ll print your UPS labels
5. Send the shipment to Amazon: Once your items are labeled and the box has a UPS and FBA label, drop them off at UPS or schedule them to pick it up for you
6. Monitor the shipment status: After shipping, Boxem will track your packages and keep you updated when Amazon checks them in.

This makes sure that your inventory reaches Amazon's fulfillment centers smoothly and reduces delays in check-in times, especially using those 2D barcodes!

11. Scaling Your Business

Once you start making sales, reinvest your profits to grow your inventory. Over time, you can diversify into different categories and even hire a virtual assistant to help you source more products. You can also hire third-party services called prep centers to use your Boxem account for you to ship items to Amazon on your behalf.

And there you have it! You’re now ready to kick off your Amazon business.

Selling on Amazon genuinely isn’t as hard as a lot of people make it out to be. The challenge is in staying motivated in the early days when learning the business feels difficult.

One major tip here at the end for those of you who are serious is to make a social media for you to talk to other Amazon sellers. Running the business gets way more fun if you can find 2-4 other sellers at your same experience level to find products with, tackle challenges, and have someone to help you stay motivated when you run into roadblocks.

We love boosting the Boxem community out there as well, so tag @boxem in any of your posts and we would love to get you in front of the Amazon community!

Hope this article helps you get serious about making money on Amazon, let’s make today great!