What Is Retail Arbitrage Using eBay?

Using eBay for retail arbitrage is one of the best side hustles to make money in 2020!  I’ve sold random stuff on eBay in the past, mostly to clear up space in the garage or my closet.  Recently, a few of my friends have gone all in on eBay and retail arbitrage making $1,000 profit weeks repeatedly.  I just decided to go ahead and give it a go during this off-season.  Rummaging through my closet I found a spearfishing wet-suit, a brand new pair of UGG slippers, and a new pair of Nike baseball sunglasses.  I quickly took some pictures on my sweet new iPhone 11, wrote a compelling description for each, and listed them this morning.  After I had lunch with one of my buddies, I stopped by the Ross to see if they had any shoes I could flip.  I quickly found a pair of Adidas football cleats that were selling on eBay for $60 listed in Ross for $16.  I scooped them up, listed them on my eBay, and sold them within 4 hours!

What is Retail Arbitrage?

Basically, it’s buying a product at a cheap price and selling it for more.  Yep, it’s that simple…turning a dollar into two.  The key is to understand the current market and how to calculate your profit margins given some of the different fees you’ll have to pay to eBay and PayPal.

The easiest way to test the current market is to download the eBay app and use the camera to scan the barcodes of items.  Once the item you’re looking for pops up, filter the search results by those recently sold.  You will then see a list of those same items which have recently sold and the price they were sold for.  If you know you can make a decent profit margin after calculating out shipping costs and other fees, go ahead and purchase that item to resell.  Listing products using this method is very easy, just click the option to sell a similar item and eBay will generate a listing that’s practically done for you.  I usually like to rewrite the listing to make it more compelling while providing a more accurate description of the item.

What Fees are Included in Retail Arbitrage with eBay?

eBay will take a 10% cut from your selling price.  So, if you sell an item for $60 eBay will charge a $6 fee for using their platform.  You will get paid via PayPal, which takes another 3% from your profit.  With the $54 going into your account from this sale, PayPal will charge $1.62 making your current profits $52.38.

Now shipping will probably be the most expensive fee you will incur from retail arbitrage, but there are several methods to go about this.  Depending on the size of the item, the box, and the shipping destination your shipping rates will vary.  On average, shipping a shirt will be around $5 and shipping a pair of shoes will be $10.  You can decide to let the customer pay for the shipping, charge a flat fee, or include free shipping paying for it yourself.  Obviously, the customers don’t like paying high shipping rates.  One thing you could do is include the shipping price into the sales price and offer free shipping.  Or, you could charge a low fixed cost for the shipping so that you are splitting the fees with your customer.

Finding Items to Flip on eBay

You can find items to sell on eBay literally anywhere you see a sales sign.  Some great places to checkout are discount stores and thrift shops like Goodwill, Ross, Marshals, and Walmart.  You can almost always find items that are cheaper than what people are willing to pay for them online.  My favorite retail arbitrage items to sell on eBay are sports shoes, toys, electronics, and vintage clothing.

You can find some truly amazing items at Goodwill for extremely cheap.  If you visit their major sites you can purchase items in bulk for $1 per pound.  YES!  You can literally buy 4 or 5 items for a measly dollar.

Let’s do some math…say you find 10 vintage clothing items and you pay $3.  You sell all 10 items for $300 (and that’s a low estimate) than you make $297 in eBay profits before fees!  I don’t believe there is an easier online business model than retail arbitrage on eBay. 

Cleaning Your Closet by Reselling on eBay

Do you have a bunch of random crap laying around the house?  Maybe you have six hockey sticks you haven’t touched in years laying around the garage.  You probably have at least a few shirts, hoodies, and shoes that you haven’t worn in months taking up space in your closet.  Why not turn all that extra clutter into cash?

I’ve cleaned out my house by selling items that I haven’t touched in years.  You’d actually be surprised how much money you can resell used items for on eBay.  Here’s a list of some items I’ve sold with zero eBay experience:

The list goes on and on.  The money is deposited directly into my PayPal account, but you usually must wait to get the money until you’ve shipped out the product. 

Using Retail Arbitrage to Fund Other Online Businesses

The money I made through eBay played a huge role in funding my dropshipping business when I first started.  I used most of it to pay Instagram influencers to run ads on their accounts.  PayPal is usually the only method of payment influencers accept, so it works out great.

Don’t have enough money to start a dropshipping business?   Hit up the garage sales in your neighborhood for items you know you can flip online.  It all boils down to buying something and selling it for a higher price.

I’m currently selling all kinds of different items to learn which ones sell the fastest on eBay.  With this business model it’s all about turning your money over as quickly as possible.  I’d rather sell an item with a $20 profit margin that sells within 24 hours than a product with a $40 profit margin that sells in a week.  Once I know which items sell the fastest, I’ll keep a closer eye out for them when I’m shopping at Goodwill, Ross, or garage sales. 

Ralli Roots is a YouTube channel that provides awesome content related to flipping items on eBay. Check this video out to see 30 items you can start selling right now on eBay for guaranteed big profit:

Also, checkout this article from The Entrepreneur Magazine that talks about how people are using retail arbitrage on eBay & Amazon to take advantage of price differences and make hefty profits.

I’m excited to continue to grow with this side hustle, there is limitless potential reselling items for a profit.

Do you have any experience with retail arbitrage using eBay? Please comment below!