Amazon Returns vs. Retail Arbitrage: Which Is Better?
Two of the most popular reselling source channels compared: bin store sourcing vs. retail arbitrage. Which delivers better margins, scalability, and sustainability?
Two Proven Reselling Models
The reselling world has many sourcing channels, but two consistently rise to the top for accessibility, scalability, and income potential: bin store sourcing (buying from Amazon return stores and liquidation shops) and retail arbitrage (buying discounted items from traditional retail stores for resale at a higher price).
Both work. Both have passionate advocates. And the right choice depends on your situation, skills, and goals. This comparison will help you decide where to focus your sourcing energy.
What Is Retail Arbitrage?
Retail arbitrage (RA) involves buying items from traditional retail stores — Walmart, Target, Home Depot, Big Lots, Ross, TJ Maxx, clearance sections anywhere — and reselling them at a higher price, typically through Amazon FBA or eBay.
The logic: retail stores price items based on local market conditions and their own margin requirements. Those prices don't always reflect national demand on platforms like Amazon. A clearance item at Walmart for $5 might sell on Amazon for $18. That spread, multiplied across many items, generates reseller income.
What Is Bin Store Sourcing?
Bin store sourcing involves purchasing individual items from Amazon return stores and liquidation shops. Items are priced using a flat daily rate, and the sourcer selects items with known resale value. Items are then sold through eBay, Facebook Marketplace, Amazon FBA, or other platforms.
The logic: bin stores purchase liquidation merchandise for a fraction of retail value. Individual items that retail for $40–$100 might be purchased for $3–$10 at a bin store. That spread is the reseller's opportunity.
Head-to-Head Comparison
Margin Potential
Retail Arbitrage: Margins are typically moderate. Finding an item for 50–70% below retail requires luck and systematic clearance hunting. Standard clearance at major retailers is 30–50% off, which after RA sourcing costs, fees, and shipping, often yields thin margins.
Typical RA margin: 50–100% ROI (buy for $8, sell for $14–$18)
Bin Stores: Margin potential is higher on average. Items are priced at 5–15% of retail, and even at mid-cycle prices, resellers are buying at 10–20% of retail.
Typical bin store margin: 200–500% ROI on successful finds (buy for $5, sell for $15–$30)
Winner: Bin Stores for raw margin potential
Item Condition
Retail Arbitrage: Items from retail stores are new (or at worst, shelf-pulled from clearly intact packaging). Condition is essentially guaranteed. This makes listing, buyer communication, and returns much simpler.
Bin Stores: Condition is variable and uncertain. Items may be functional, non-functional, or anywhere between. Every bin store purchase carries condition risk.
Winner: Retail Arbitrage for condition certainty
Scalability
Retail Arbitrage: Scales somewhat linearly with time invested in store visits and sourcing. Finding enough supply of items at the right clearance price is the bottleneck. "Sourcing trips" to multiple stores can become time-consuming. Amazon's gating policies (requiring approval to sell in certain categories) can limit scale.
Bin Stores: Scale is limited by visit frequency and bin store inventory quality. The randomness of inventory means you can't reliably source specific items in volume. For FBA specifically, bin stores rarely provide the volume of identical units that Amazon's algorithms favor.
Winner: Slight edge to Retail Arbitrage for FBA scaling, bin stores better for eBay/Marketplace individual item reselling
Consistency of Supply
Retail Arbitrage: Clearance sections change regularly. A great clearance deal from last month is gone this month. Successful RA requires continuous sourcing — ongoing store visits across many retail locations.
Bin Stores: Restocked on a predictable weekly cycle. A regular visit schedule reliably produces sourcing opportunities. The inventory is always different, but the availability of inventory is predictable.
Winner: Bin Stores for predictable sourcing rhythm
Time Required
Retail Arbitrage: Can be more time-intensive depending on how many stores you visit. Driving between multiple retail locations, scanning clearance sections, checking prices — these activities add up.
Bin Stores: One location, everything in one visit. Efficient for the experienced shopper who knows what they're looking for.
Winner: Bin Stores for time efficiency per sourcing session
Learning Curve
Retail Arbitrage: Requires knowledge of Amazon's gating policies, FBA requirements, scanning apps (like Scoutify or AZInsight), and category profitability.
Bin Stores: Requires knowledge of condition assessment, resale platforms (eBay, Facebook), and retail values across many categories.
Both have real learning curves. Neither is significantly harder than the other.
The Combined Approach
The most successful resellers often use both channels:
Retail arbitrage for consistent FBA inventory in known categories with reliable margins
Bin stores for high-margin individual finds, category variety, and opportunistic sourcing
These channels complement each other rather than competing. RA gives you predictable category depth; bin stores give you unexpected value and variety.
Which Should You Start With?
Start with bin stores if:
You have minimal startup capital
You want to learn reselling with minimal financial risk
You prefer flexibility over systematic approaches
eBay and Facebook Marketplace are your intended platforms
Start with retail arbitrage if:
You intend to sell primarily through Amazon FBA
You prefer known, consistent inventory sourcing
You're comfortable with systematic category research
You have capital to invest in quality scanning tools