The no-fluff guide every new Amazon seller should read (from someone who’s made every mistake personally)
Online arbitrage (OA) can feel deceptively simple when you first encounter it. You buy a product from a retail store, send it to Amazon FBA, and sell it for a higher price. That’s the surface-level description. The reality is more nuanced, a bit messy, and definitely more competitive than it was a few years ago.
Every beginner (including the best sellers today) started by making the exact same mistakes:
- buying products with fake margins
- trusting the wrong indicators
- misreading competition
- miscalculating fees
- or assuming “in stock = profitable”
If you catch these mistakes early, you can save a ton of time, money, and frustration — and actually make online arbitrage enjoyable.
This guide goes deep into the 10 most common beginner OA mistakes, why they happen, and exactly how to avoid them.
Along the way, I’ll give examples of how tools like Arbitrage Hero help with verification, numbers, and real-world decision-making — without turning the whole article into a sales pitch.
Let’s jump in.
1. Buying a Product Just Because It “Looks Profitable”
This is the single biggest money-loss path for new sellers.
You find a product:
- Retail price: £10
- Amazon price: £22
- Estimated FBA fee: £5
- Your potential profit: looks like ~£7–£8
And you think, “Great, I’ve found a winner!”
But after a week in Amazon FBA, it becomes clear:
- The Buy Box rotates lower than expected
- Amazon jumps in without warning
- The item hardly sells
- Price tanks because 12 sellers jumped on recently
- Your real ROI drops to 5%, then 0%, then negative
Why does this happen?
Because beginners treat price difference as the only indicator of profitability.
In reality, a product isn’t profitable unless:
- the Buy Box is stable
- Amazon is NOT dominating the listing
- demand is consistent
- seller count isn’t trending upward
- the price has held for at least 90 days
- estimated profit includes placement fees
- the same variation you’re buying is what’s selling
This is why tools like Arbitrage Hero (AH) show true profit including placement fees, real sales estimates, and competition trends — so you don’t buy something just because the maths looked good on your napkin.
2. Ignoring the Buy Box (or Not Understanding How It Works)
Many beginners think the Amazon selling price is the price at the top of the page.
It’s not.
The Buy Box is the real battlefield.
Here’s what beginners often get wrong:
- the Buy Box can suppress
- it can rotate between multiple sellers
- sometimes the Buy Box sits at a price lower than any visible offers
- Amazon often holds the Buy Box even when it’s not the cheapest
- certain conditions like “Like New” never get the Buy Box
I’ve seen new sellers buy items where:
- the Buy Box is £19
- but the lowest FBA seller is actually £14
- and they never notice
That £5 gap is where money disappears.
How to avoid the mistake:
Check Buy Box history on Keepa and any OA tool. Arbitrage Hero’s extension shows:
- Buy Box price
- lowest 5 offers
- Buy Box rotation
- suppressed Buy Box alerts
This lets you understand what price YOU can actually sell at — not what you hope to sell at.
3. Using the Wrong Sales Rank (BSR) Interpretation
BSR is one of the most abused and misunderstood metrics in online arbitrage.
Beginners see:
- BSR 20,000 → “Looks good!”
- BSR 150,000 → “Probably bad.”
But neither statement is meaningful without context.
Here’s what really matters:
✓ BSR must be viewed over time, not today.
A temporarily low BSR can trick you.
A temporarily high BSR might hide a strong product.
✓ Category size matters.
BSR 100k in books is excellent.
BSR 100k in beauty may be slow.
✓ Spikes often correlate with price drops.
Sellers tank the price → item sells faster → BSR improves temporarily.
✓ Averaged BSR over 90 days is more important than daily BSR.
A good rule for beginners:
Focus on products with stable BSR over 90 days, not just a single value.
Arbitrage Hero’s Keepa-like graphs help visualise this immediately, without needing additional tools.
4. Forgetting About Amazon as a Competitor
If Amazon sells on your listing, you’re in trouble.
Not always, but often enough that beginners should assume:
Amazon = avoid unless they go out of stock regularly.
Why?
Because Amazon:
- takes the Buy Box even when they’re not the cheapest
- matches price quickly
- can restock instantly
- never needs ROI
- controls the algorithm
Beginners often think:
“Oh, Amazon is on the listing sometimes, but they’ll rotate the Buy Box.”
No, they usually won’t.
And even when they do share it, your chances are slim.
Avoid Amazon-dominated listings unless:
- Amazon has long, predictable out-of-stock gaps
- the product has high demand
- your price point is favourable
- you’re experienced enough to read those gaps correctly
Arbitrage Hero automatically flags Amazon presence in the extension so you can avoid wishing and guessing.
5. Misreading Competition (Seller Count Doesn’t Mean What You Think)
Most beginners think:
- 3 sellers → too exclusive
- 20 sellers → too competitive
- 8 sellers → looks okay
But raw seller count is misleading.
Not all sellers are:
- FBA
- competitive
- priced correctly
- in stock
- real threats
A listing with 20 sellers might actually have:
- 5 MF sellers you’ll always beat
- 4 sellers who are clearly drop shippers
- 3 overpriced sellers
- 2 sellers at low stock or with high shipping
- 1 seller with terrible reviews
- 1 seller who is OOS
- plus you
Meaning: the real competition is maybe 2–4 people.
Arbitrage Hero’s extension breaks this down by:
- FBA vs MF
- stock estimate
- pricing
- competition health
- shipping differences
This gives you a real picture of competition — not raw numbers that mislead beginners.
6. Failing to Consider Prep, Shipping, and Placement Fees
Beginners often calculate:
Retail price → Amazon price → profit.
And that’s it.
But your actual costs include:
- retail price
- your time
- prep centre fees (if using one)
- polybags, labels, tape
- inbound shipping to Amazon
- placement fees (new and often brutal)
- prep mistakes
- returns
- refunds
- disposal fees
- long-term storage fees
You don’t need to obsess over every penny, but you must include the major fees.
Placement fees in particular can turn a “£4 profit” into “£0.20 profit” instantly.
Arbitrage Hero includes placement fees automatically in calculations so you can see if a deal is actually worth buying.
Many beginners only realise this after their first 20 products show far less profit than expected.
7. Relying on Just One Store (or a Too-Small Store List)
Beginners naturally go to:
- Amazon
- Walmart
- Target
- Boots
- Tesco
- Home Depot
- Walgreens
- Argos
And that’s it.
But everyone else goes there too.
That means:
- fewer profitable deals
- faster price tanking
- thinner margins
- fewer replenishable items
- more competition
The real OA advantage comes from:
- niche stores
- brand websites
- smaller regional chains
- unexpected categories
- clearance pages
- loyalty offers
- seasonal products
- grocery deals
- discount retailers online
Reverse sourcing and storefront analysis are great ways to find those hidden stores.
Arbitrage Hero helps by scanning 100+ stores automatically, which immediately exposes you to opportunities you’d never find manually.
A beginner who uses 8 stores will always lose to someone who uses 100+ efficiently.
8. Buying Too Much of a Product Too Early
The emotional high of finding “a good deal” leads beginners to overbuy:
- “This one looks great — let me get 25 units!”
- “It’s selling 40 a month; I’ll grab 37.”
Then reality sets in:
- sales slow down
- Buy Box rotates at a lower price
- storage fees grow
- other sellers join
- Amazon restocks
As a rule of thumb:
Beginners should NEVER buy more than:
- 3–5 units of a new item, unless it’s completely safe
- or you’ve tested the listing and got real sales
Online arbitrage is not a “go big or go home” game.
It’s a learn, test, scale process.
Professional sellers don’t scale by buying 50 units of one product. They scale by having:
- 100 small, consistent products
- 20 strong replenishable items
- a balanced inventory that sells daily
This is where Arbitrage Hero’s product tracking helps: you can test small batches, monitor how they perform, then scale only what works.
9. Not Knowing When a Deal Is Actually Too Good to Be True
If a product is:
- deeply discounted,
- in a popular category,
- with high demand,
- and with a wide price gap…
…50+ sellers already found it hours or days earlier.
High discounts often lead to:
- price tanking
- suppressed Buy Box
- high competition
- Amazon restocking at a lower price
- returns due to customers buying during discount periods
New sellers get caught in these traps because they assume:
“Wow, 70% off — this must be a secret gem!”
No.
It’s usually the opposite.
A realistic check:
If the deal looks unbelievable:
- check the Keepa graph for past price drops
- check how many sellers jumped in recently
- check the price stability
- check the BSR stability
- check if the category is easily flooded
Arbitrage Hero’s reverse search and storefront insights help identify whether a deal is already saturated before you even consider buying it.
10. Spending Too Much Time Manually Searching Instead of Structuring a Workflow
This is the hidden mistake that destroys beginners:
Searching manually without a workflow is the slowest, hardest, least profitable version of OA.
Most beginners:
- jump between 10 tabs
- search 5 stores manually
- guess variations
- write down ASINs randomly
- revisit the same products
- miscalculate fees
- check the wrong links
- get frustrated
- think OA “doesn’t work”
But the issue isn’t OA — it’s the lack of structure.
A good workflow looks like:
- Start with 10–20 promising ASINs
- Reverse source them
- Scan all store variations
- Filter profitable items
- Double-check fees & competition
- Test-purchase 3–5 units
- Track the results
- Scale successful items
Arbitrage Hero fits into this routine naturally because it:
- scans all stores at once
- checks product variations
- calculates real profit
- overlays competition data
- helps rerun searches quickly
- stores your lists so you’re not repeating tasks
A beginner becomes “intermediate” the moment they stop randomly browsing and start using a real process.
BONUS: The “Mindset Mistake” That Almost Every Beginner Makes
Many beginners think OA success depends on:
- luck
- finding “secret stores”
- having insider knowledge
- chasing big wins
But the truth is:
Online arbitrage is a systems game.
Not a guessing game.
You win by:
- analysing data
- being consistent
- following numbers
- avoiding emotional decisions
- sticking to a process
- building replenishable items slowly
- using tools intelligently
- not overreacting to short-term price changes
The best OA sellers aren’t superhuman.
They’re consistent.
They don’t just “find” deals — they create a workflow where deals appear regularly.
So… How Do You Actually Avoid These Beginner Mistakes?
Here are the practical takeaways:
✔️ Start small and diversify your sourcing
10–20 different products beat 40 units of one item.
✔️ Read Buy Box history, not just current price
Price stability matters more than price today.
✔️ Treat BSR like a trend, not a number
Three months of data beats one day.
✔️ Avoid Amazon competition unless you deeply understand out-of-stock cycles
This alone will save you huge losses.
✔️ Always include placement fees, prep fees, and inbound shipping
Profit ≠ price gap.
✔️ Stop doing everything manually
Use tools to avoid wasting time.
✔️ Stick to a 3–5 unit test rule for new products
Real sales data beats theory.
✔️ Don’t fall for “too good to be true” deals
If it looks amazing, check saturation.
✔️ Build a sourcing routine you repeat daily
Success = consistency × process.
✔️ Use reverse sourcing + storefront analysis
This is where the real winners hide.
Where Arbitrage Hero Naturally Fits Into This
Throughout the article, I’ve mentioned Arbitrage Hero only where it fits logically (as you requested).
In summary, AH prevents beginner mistakes by:
- checking 400+ stores at once
- showing real profit with placement fees
- breaking down competition (FBA vs MF, stock levels, Buy Box rotation)
- verifying variations, multipacks, UPCs, sizes
- letting you test faster with better data
- revealing hidden OA stores
- identifying saturated deals
- tracking ASINs, storefronts, and replenishable items
It doesn’t magically make OA easy.
But it removes the worst parts of it — the parts that cause 90% of beginner mistakes.
