Retail arbitrage sounds fancy, but the concept is simple: buy products at retail stores for less than you can sell them online. Find a clearance item at Target for $15, sell it on eBay for $40, pocket the difference.
People have been doing this for years. Some make a few hundred bucks a month as a side hustle. Others turn it into a full time income. And with the right approach, it’s still a viable way to make money in 2025.
Here’s everything you need to know to get started.
What Is Retail Arbitrage
Retail arbitrage is buying products from retail stores and reselling them at a higher price, usually online.
The price difference exists for a few reasons:
Clearance and markdowns. Stores need to move old inventory. They’d rather sell it cheap than throw it away. You can buy it cheap and sell it to someone who actually wants it.
Regional pricing differences. A product might be $30 at your local Walmart but sells for $50 online because it’s not available everywhere.
Retail vs resale demand. Stores price items to move volume. Online marketplaces have buyers willing to pay more for convenience or because they can’t find it locally.
Limited availability. Discontinued items, exclusive releases, and out of stock products all create arbitrage opportunities.
Where to Source for Retail Arbitrage
The best stores for retail arbitrage have deep clearance sections, frequent markdowns, and products with resale demand.
Walmart
Walmart is the king of clearance. Their markdown system is predictable, and clearance prices can go extremely low.
Where to look:
- End caps with yellow clearance tags
- Back corners of departments
- Seasonal items after holidays
- Electronics clearance section
Walmart’s app shows clearance prices and inventory at nearby stores. Use it to find deals before driving there.
Target
Target has some of the best clearance for resellers. Their 30, 50, 70 percent off cycles are predictable, and brand quality is generally higher than Walmart.
Where to look:
- End caps throughout the store
- Back endcaps especially
- Seasonal section during transitions
- Bullseye section for small items
Target Circle deals can stack with clearance for extra savings. The Target app shows what’s on clearance at your store.
Home Goods, TJ Maxx, Marshalls
These stores sell overstock and closeout merchandise from major brands. Prices are already below retail, and clearance goes even lower.
Where to look:
- Yellow and red clearance tags
- End of aisles
- Anywhere items look jumbled or picked over
Brand name items from these stores can have excellent margins. Designer goods, kitchen items, and home decor do well.
CVS and Walgreens
Drugstores have surprisingly good clearance. Health, beauty, and seasonal items can go 75 percent off or more.
Where to look:
- Clearance endcaps
- Seasonal aisles after holidays
- Back of store markdown sections
Smaller items mean lower shipping costs and easier storage.
Office Supply Stores
Staples and Office Depot run heavy clearance, especially on tech accessories, school supplies, and office equipment.
Where to look:
- Clearance sections (usually clearly marked)
- End of season school supplies
- Discontinued tech items
Back to school and end of year transitions create the best opportunities.
How to Evaluate a Product for Arbitrage
Finding clearance items is easy. Finding ones that actually make money requires a system.
Step 1: Check the Current Selling Price
Before you buy anything, check what it sells for online.
On your phone:
- Open the eBay app
- Search the exact product (use barcode scanner or type the name)
- Filter to sold listings
- See what it’s actually selling for
If the clearance price is $12 and the item sells for $35 on eBay, you might have something. If it sells for $15, put it back.
Step 2: Calculate Your Real Profit
This is where beginners mess up. They see a $20 spread and think that’s their profit. It’s not.
Real profit calculation:
Sale price: $35 Minus eBay fees (13 percent): $4.55 Minus shipping: $6 Minus PayPal or payment processing (3 percent): $1.05 Minus purchase price: $12 Actual profit: $11.40
Still good, but different from the $23 you might have guessed.
Quick rule of thumb: you generally need to sell for at least 2.5 to 3 times your purchase price to have worthwhile margins after all costs.
Step 3: Check Sales Velocity
A product that sells for $50 but only sells once every three months isn’t as good as one that sells for $30 but moves weekly.
Look at how many have sold in the last 30 days. More sales means faster turnover, which means your money isn’t tied up in inventory.
Step 4: Consider Condition and Packaging
Retail arbitrage items should be new. But check:
- Is the packaging intact?
- Are there any shelf wear marks on the box?
- Is everything sealed that should be sealed?
Damaged packaging lowers value. Sometimes significantly.
Product Categories That Work for Arbitrage
Some categories consistently have good arbitrage opportunities:
Toys
Toys are a classic arbitrage category. Clearance toys can have huge margins, especially:
- LEGO sets (hold value extremely well)
- Brand name action figures and dolls
- Board games from popular franchises
- Anything discontinued or exclusive
Holiday toy clearance in January and post summer clearance in September are prime times.
Health and Beauty
Personal care items, skincare, haircare, and cosmetics. People are loyal to specific products and will pay for convenience.
Good margins on:
- Brand name skincare
- Discontinued makeup
- Premium haircare
- Supplements and vitamins
Small and lightweight means cheap shipping.
Electronics and Accessories
Tech clearance can be hit or miss, but winners have big margins:
- Headphones and earbuds
- Phone cases and accessories
- Cables and chargers
- Smart home devices
- Video game accessories
Avoid opened items or anything that might be returned.
Home Goods
Kitchen gadgets, small appliances, storage solutions, and decor:
- Popular kitchen brands (KitchenAid, Cuisinart)
- Trendy home decor items
- Storage and organization
- Bedding and bath (brand names)
Heavier items have higher shipping costs. Factor that into your math.
Sports and Outdoors
Sporting goods clearance can be excellent:
- Brand name athletic apparel
- Fitness equipment and accessories
- Camping and outdoor gear
- Sports equipment
Seasonal items (winter gear in spring, summer gear in fall) go on deep clearance.
Categories to Avoid
Some things rarely work for retail arbitrage:
Groceries and consumables. Low margins, expiration dates, shipping issues.
Heavy furniture. Shipping costs kill margins.
Generic items with tons of competition. If 50 people are selling the same thing, prices race to the bottom.
Items you can’t easily verify authenticity. Designer goods without proper documentation.
Extremely fragile items. Returns and damage claims eat profits.
The Scanning Process
When you’re in a store, you need to move efficiently. Here’s a typical process:
- Head to clearance sections first
- Look for brand name items with deep discounts
- Scan or search each item on your phone
- Check eBay sold listings
- Do quick profit math
- Buy it or move on
With practice, you can evaluate an item in 30 to 60 seconds. Speed matters because the best deals don’t last.
Some resellers use dedicated scanning apps that pull up pricing faster than manual searching. For higher volume, this can be worth it.
Where to Sell Your Finds
eBay
Best for most retail arbitrage items. Largest buyer pool, buyers expect to pay fair prices, strong seller protection.
Fees: About 13 percent total after final value fee and payment processing.
Amazon (FBA or FBM)
Can work for retail arbitrage, but has more restrictions. Some brands are gated (you need approval to sell them). Some items require invoices proving authenticity.
Amazon FBA means you ship inventory to Amazon and they handle storage, shipping, and customer service. Higher fees but less work per sale.
Fees: 15 percent referral plus FBA fees if applicable.
Facebook Marketplace
Good for local sales of larger items where shipping would eat margins. No fees on local pickup.
Mercari
Solid alternative to eBay. Slightly lower fees, decent buyer pool, easy listing process.
Fees: About 13 percent total.
Managing Your Retail Arbitrage Business
Track Everything
From day one, track:
- What you bought and where
- What you paid
- What you sold it for
- Your actual profit after all costs
A simple spreadsheet works. You need to know your numbers to know if you’re actually making money.
Storage and Organization
Retail arbitrage requires space. You need somewhere to:
- Store unsold inventory
- Stage items for photography
- Pack and ship orders
Start small. A closet or spare room works. Only expand storage as your sales justify it.
Shipping Efficiently
Shipping eats into profits. Get efficient:
- Buy supplies in bulk (poly mailers, boxes, tape)
- Use the cheapest shipping option that makes sense
- Batch your shipping trips
- Consider pickup services if available
Know your shipping costs before you buy inventory. A heavy item might look profitable until you realize shipping is $15.
Dealing with Returns and Problems
Returns happen. Build it into your expectations:
- Some items will come back
- Some buyers will claim problems that aren’t real
- Some shipments will get lost or damaged
Price with enough margin to absorb occasional issues. If your margins are razor thin, one return wrecks your profit.
Is Retail Arbitrage Still Worth It in 2025
Yes, but it’s more competitive than it used to be.
The advantages:
- Low startup cost (just buy inventory)
- No need to create products or brands
- Immediate inventory (no waiting on manufacturers)
- Learn reselling skills with low risk
The challenges:
- Competition from other resellers
- Stores getting wise to clearance hunters
- Online prices sometimes matching retail
- Time intensive sourcing process
Retail arbitrage works best as:
- A side hustle for extra income
- A way to learn reselling before scaling to other models
- A complement to other sourcing methods (thrift stores, estate sales)
It’s harder to build a full time income purely on retail arbitrage than it was five years ago. But for making a few hundred to a few thousand dollars per month with flexible hours, it still works.
Getting Started This Week
Here’s a simple plan to try retail arbitrage:
Day 1: Download the eBay app. Learn how to search items and filter to sold listings.
Day 2: Visit one or two stores with good clearance (Walmart, Target). Don’t buy anything yet. Just practice scanning items and checking prices.
Day 3: Go back and buy three to five items where the math clearly works. Spend under $50 total.
Day 4 to 5: List those items on eBay. Take good photos, write accurate descriptions, price based on sold listings.
Week 2 and beyond: See what sells. Learn from what doesn’t. Reinvest profits into more inventory. Scale what works.
Start small. Learn the process. Then decide if it’s worth scaling up.
The Bottom Line
Retail arbitrage is straightforward: find products cheaper in stores than they sell online, buy them, and resell for profit.
Success comes from:
- Knowing where to find clearance
- Quickly evaluating profit potential
- Understanding real costs (fees, shipping, returns)
- Moving inventory efficiently
It won’t make you rich overnight. But it’s a legitimate way to make extra money, learn how reselling works, and potentially build something bigger.
The best time to start is now. Hit a clearance section this weekend and see what you find.