Online arbitrage UK: sourcing stock from your desk
Online arbitrage is retail arbitrage without the driving. You buy from a retailer's website below the price the product sells for on a marketplace, and it is delivered to you rather than carried out of a shop.
It suits people who cannot spend their days in retail parks, and it scales better, because you are not limited to whatever is within driving distance. The catch is that everybody else can reach the same websites, so timing decides most of it.
The basic loop
- Find a product priced below its market value.
- Confirm what it actually sells for, using completed sales rather than asking prices.
- Work out the margin after fees and postage.
- Buy, receive, list, ship.
Steps 2 to 4 are mechanical and you get quicker at them with practice. Step 1 is where the work is.
Four ways people find stock
Clearance sections. Every large retailer has one, and they are worth checking. They are also the first place everyone looks, so the good lines tend to go before your next manual check comes round.
Deal forums and groups. Useful, and genuinely free. The problem is built into how they work: by the time something is posted, voted up and read, the retailer has often sold through.
Paid deal lists. Someone else sources and sends you a daily list. They do work, but you are buying the same list as everyone else on it, and you can see that in how quickly the resale price gets competed down.
Monitoring. Software watches the price and tells you when it changes. This is the only approach where you are early by construction rather than by luck.
The first three are all reactive. SAVR does the fourth: it watches hundreds of UK retailers and alerts on discount depth and pricing errors as they happen, filtered to whatever you have told it you care about.
A worked example
A discontinued board game shows in a retailer's online clearance at £30 with £3.95 delivery, so £33.95 landed. eBay's sold listings show it going for £60 with postage included in the price.
You are buying to sell, so this is a business sale on eBay. Using the same fee rules as our calculator:
- The buyer pays £60.
- eBay's fee is 12.9% of that total, £7.74, plus a £0.30 order charge.
- Posting it costs £3.50 and packaging about £0.60.
- The stock cost £33.95 delivered.
£60 minus £8.04 in fees, £4.10 in postage and packaging, and £33.95 of cost leaves £13.91 profit, about 41% on the money in. Notice how much of the gap between £33.95 and £60 the costs ate. That is normal, and it is why the checking below matters more than the finding.
Tools of the job
None of this needs software you pay for, but five things earn their place.
The sold filter. eBay shows what items actually fetched, free. It settles every argument about what something is worth.
A fee and profit calculator. The arithmetic is fiddly enough to get wrong at speed. Ours is free, and the eBay fee calculator handles the business tiers.
A record of every purchase. A spreadsheet with cost, dates, sale price and fees per unit. It shows which products actually made money, which is rarely the ones that felt best.
Cashback and discounted gift cards. A few percent off the buy price on every order, which adds up. Marginal deals become acceptable ones.
Price monitoring. The one thing here that changes when you find deals rather than how you process them. Software watches retailer prices and flags drops as they go live.
Checking a product properly
Two mistakes account for most losses.
Trusting the RRP. A "was £80, now £24" tells you what the retailer wants you to think. Check what the product actually sells for second hand.
Forgetting the total cost. Purchase price, delivery in, marketplace fee, payment fee, postage out, packaging. Run it through a profit calculator instead of estimating. A deal that looks like 40% often lands nearer 12%.
How much stock to buy
The instinct on a good deal is to buy everything available. Resist it until you know the product sells. Marketplaces are shallower than they look. Ten of something that sells one a week is ten weeks of your money tied up, and the price usually drifts down while you wait, especially if other people bought the same deal.
Buy a small quantity, sell it, then go back if the price holds.
Online arbitrage and Amazon FBA
Online arbitrage describes the buying side. What you do with the stock afterwards is a separate decision.
The simplest route is selling it yourself on eBay or Vinted: no approval needed, and you control the listing. Amazon FBA is the other route. You send stock into Amazon's warehouses and Amazon handles storage, dispatch and returns. That buys reach and takes the packing off your hands, but Amazon restricts who can sell many brands, charges for storage and fulfilment, and can ask for invoices to prove your stock is genuine. Sourcing for Amazon FBA in the UK covers the specifics, because they change which deals are worth buying in the first place.
Plenty of sellers run both: FBA for products they can sell in depth, eBay for everything else.
Common questions
Is online arbitrage worth it in the UK?
Yes, if you treat the maths seriously. The sellers who make it work check sold prices, run every deal through a fee calculator and buy shallow until a product proves itself. The ones who lose money buy on discount percentage and skip the fees.
Is online arbitrage legal?
Yes. Buying genuine goods from a retailer and reselling them is ordinary trading. Once you own an item you may sell it on. You do need to register with HMRC once your sales pass the £1,000 trading allowance, and marketplaces expect a business account once you are buying to sell.
How much money do you need to start online arbitrage?
There is no entry fee beyond your first purchase. A sensible start is a sum you can leave tied up in stock for a month without missing it. Buy one or two units of a few products, sell them, and scale with the proceeds rather than with savings.
Is online arbitrage the same as dropshipping?
No. In online arbitrage you buy the stock, hold it and post it yourself, so you control condition and dispatch. Dropshipping lists items you never touch and forwards orders to a supplier, which most marketplaces restrict and buyers can usually spot.
Do you have to sell on Amazon?
No. Online arbitrage describes the buying side, not the selling side. Plenty of people source online and sell through eBay and Vinted, which have no brand gating and lower barriers. Amazon FBA adds reach and hands-off fulfilment, at the cost of stricter rules and extra fees.
Where this fits
Online arbitrage feeds Vinted and eBay reselling, live selling and Amazon FBA, and it pairs naturally with retail arbitrage, since a national markdown online often means store shelves are clearing too. The tax position is the same as any other reselling: past the £1,000 trading allowance you are a trader, and the details are here.