🔍 Sourcing Models Explained

There are several ways to find products to sell on Amazon FBA. Each has its own pros, cons, and capital requirements. Here’s a breakdown of the main sourcing models so you can figure out which one suits you.

Online Arbitrage (OA)

What it is: You buy discounted products from online retailers (Argos, Boots, Superdrug, supermarket websites, etc.) and resell them on Amazon for a profit.

How it works:

1. Find a product on sale on a retailer’s website
2. Check its price and sales rank on Amazon
3. Calculate if there’s profit after Amazon fees
4. Buy it, have it delivered to you (or your prep centre)
5. Send it into Amazon FBA

Pros:

• Can be done entirely from your laptop — no leaving the house
• Scalable — you can buy large quantities if a deal is good
• Good for beginners with limited time

Cons:

• Competitive — other OA sellers find the same deals
• Prices can change quickly
• Need tools to scan efficiently at scale

Starting capital: £300-500+

Best for: People with limited time who want to work from home

Retail Arbitrage (RA)

What it is: Same concept as OA, but you physically go to shops and scan products on the shelves to find ones selling for more on Amazon.

How it works:

1. Go to a shop with clearance or sale items (B&M, Home Bargains, Tesco, Sainsbury’s)
2. Use a scanning app on your phone to check Amazon prices
3. If the margin is good, buy it
4. Send it to Amazon FBA

Pros:

• Can find deals other online sellers miss
• Satisfying — you’re physically hunting for bargains
• Lower competition on specific local deals

Cons:

• Time-intensive — you’re physically walking around shops
• Limited by what’s in stock near you
• Harder to scale (can’t buy 100 units of a clearance item usually)

Starting capital: £200-400+

Best for: People who enjoy being out and about and have good local shops

Amazon-to-Amazon (A2A)

What it is: You buy products directly from Amazon (or Amazon Warehouse) at a lower price and resell them on the same platform, often by listing on a different Amazon marketplace or waiting for prices to rise.

How it works:

1. Find products on Amazon that are underpriced (often Amazon Warehouse deals, temporary price drops, or multi-buy discounts)
2. Buy them and send to FBA
3. Sell at the regular/higher price

Pros:

• Very easy to get started — you already know how Amazon works
• Products are already proven to sell on Amazon
• Can exploit temporary price drops

Cons:

• Margins can be thin
• Amazon can be unpredictable with their own pricing
• Some consider this a grey area — Amazon doesn’t explicitly ban it but it’s worth being aware

Starting capital: £300-500+

Best for: Beginners wanting the simplest possible start

Wholesale

What it is: You buy products in bulk directly from brands, distributors, or wholesalers at trade prices, then sell them on Amazon at retail prices.

How it works:

1. Find brands/products that sell well on Amazon
2. Contact the brand or their distributor to open a trade account
3. Buy stock in bulk at wholesale prices (usually 40-60% of retail)
4. Send to FBA and sell at retail price

Pros:

• Repeatable — once you have a supplier, you just reorder
• Higher margins than arbitrage (typically)
• More sustainable long-term business
• Brands sometimes give you exclusive terms

Cons:

• Higher upfront investment (minimum order quantities)
• Harder to get started — you need to build supplier relationships
• Ungating can be a barrier for popular brands

Starting capital: £1,000-3,000+

Best for: Sellers ready to build a proper business, not just flip clearance

Private Label

What it is: You create your own branded product — typically manufactured overseas (often China via Alibaba) — and sell it under your own brand on Amazon.

How it works:

1. Research a product niche with demand but room for a new brand
2. Find a manufacturer (usually on Alibaba)
3. Design your branding, packaging, and listing
4. Order a batch of products manufactured with your brand
5. Ship to Amazon FBA and launch with PPC advertising

Pros:

• You own the brand — no competing for the Buy Box
• Highest margins (if done right)
• Can build a real asset you could sell later
• Full control over listing, pricing, branding

Cons:

• Highest risk and upfront investment
• Long lead times (manufacturing + shipping from overseas)
• Need to learn product research, PPC advertising, listing optimisation
• Not beginner-friendly at all

Starting capital: £3,000-10,000+

Best for: Experienced sellers ready to build a brand

Which Should You Start With?

Our recommendation: Start with OA or RA. They have the lowest barrier to entry, the lowest risk, and you’ll learn the fundamentals of Amazon selling without risking thousands of pounds. Once you’ve made consistent profit and understand how Amazon works, then consider Wholesale. Private Label is a big step — save that for when you’ve got real experience and capital.