Amazon Arbitrage vs Wholesale vs Private Label
Online arbitrage, retail arbitrage, wholesale and private label compared: how each Amazon selling model works, what it needs, its risks and how to research it.
There are four common ways to sell on Amazon. Retail and online arbitrage mean buying products cheaper in shops or online and reselling them. Wholesale means buying a brand’s products from the brand or its distributor and reselling them. Private label means selling products under your own brand. Arbitrage needs the least money and the most hunting; private label needs the most money and time but builds an asset you own.
The four models at a glance
| Retail arbitrage | Online arbitrage | Wholesale | Private label | |
|---|---|---|---|---|
| Where stock comes from | Physical shops | Online shops | Brands and distributors | A manufacturer you choose |
| Product pages | Existing ASINs | Existing ASINs | Existing ASINs | Your own new ASINs |
| You compete on | The Featured Offer | The Featured Offer | The Featured Offer | Your brand and your page |
| Starting money | Lowest | Low | Medium | Highest |
| Repeatable | Hard: deals run out | Medium | Yes: reorder what sells | Yes, once the product works |
| Main research | Deals and resale price | Deals and resale price | Brands, sellers, demand | Niches, demand, reviews |
Seller guides generally rank the starting money in this order. The real amount depends on your products and marketplace.
Retail arbitrage
You buy discounted products in physical shops, such as clearance items, and resell them on Amazon.
- Good for: learning how Amazon works with little money.
- Watch out for: the time spent visiting shops, deals that cannot be repeated, and brands or categories that need Amazon’s approval. Receipts from shops are usually not accepted as proof for gated brands.
Online arbitrage
The same idea, but you buy from online shops. You compare online prices with Amazon prices, often with the help of tools.
- Good for: working from home and checking many products quickly.
- Watch out for: thin margins once Amazon’s fees and shipping are counted, prices that change fast and, again, restrictions.
A note on drop shipping: Amazon’s drop shipping policy does not allow buying from another online retailer and having it ship directly to your customer if the shipment does not identify you as the seller. Arbitrage means buying the stock first, then sending it to Amazon or to your buyers yourself. More in Amazon dropshipping: rules, risks and how it works.
Wholesale
You open accounts with brands or authorized distributors and buy in bulk, with invoices. You resell on the products’ existing pages, usually with FBA.
- Good for: a business you can repeat and grow, with proper supplier documents.
- Watch out for: minimum orders, brands that refuse resellers, price wars on crowded listings and Amazon selling the same product.
The full method is in Amazon wholesale: how to find brands to sell.
Private label
You choose a product, have it made under your brand and create your own product pages. Sellers often register their brand with Amazon’s Brand Registry to protect it.
- Good for: building an asset: your own brand and pages, with no other sellers on your listing.
- Watch out for: the largest upfront cost, the time until the first sale, product quality, and competition from established brands with many reviews.
Which model should you choose?
- Little money and want to learn: start with arbitrage, and keep it small.
- Want something repeatable with existing products: wholesale.
- Want to own a brand and have time and capital: private label.
Many sellers combine models: they learn with arbitrage, move to wholesale, and later add their own brand.
How research differs by model
- Arbitrage and wholesale: you research existing ASINs and their sellers: Sales Rank, number of sellers, the Featured Offer, FBA or FBM, and whether Amazon sells it (Amazon product research, how to find who sells a product).
- Private label: you research niches and categories: how well the leading products sell, how many reviews they have and what buyers complain about (ASIN research: how to find related products).
The faster way: research any model with ENSKOM
ENSKOM is a Chrome extension that reads public Amazon pages in your own browser:
- For wholesale and arbitrage: Store Researcher finds the sellers behind your ASINs and collects their storefronts category by category; Detailed Research collects price, sellers, Featured Offer, FBA or FBM and Sales Rank.
- For private label: ASIN Researcher starts from products in your niche and finds the products in their exact categories, graded Very Strong, Strong or Related.
- For all: copy the ASINs or export them to CSV or Excel.
The Free plan includes every research feature.
Guides: Getting started · Seller Discovery · Start a new research
FAQ
What is the easiest way to start selling on Amazon?
Retail or online arbitrage usually needs the least money and no supplier accounts. It is also the hardest to repeat, so many sellers move on to wholesale.
Is arbitrage allowed on Amazon?
Reselling genuine products you bought is common, but some brands and categories need Amazon’s approval (Apply to sell), and shop receipts are often not enough for it. Drop shipping from another retailer is not allowed unless you are the seller of record on the shipment.
Is wholesale better than private label?
Neither is better for everyone. Wholesale needs less money and time to start; private label needs more but gives you your own brand and listings.
Can I do more than one model?
Yes. Many sellers combine them, for example wholesale for steady sales and private label for their own products.
What is Brand Registry?
Amazon’s program for brand owners. It helps protect a brand and gives the owner more control over its product pages.