Sourcing is the foundation of any FBA business. Where you buy your products determines your margins, your competition level, your startup cost, and how sustainable the business is. Here are the four main sourcing models UK FBA sellers use.
1. Retail Arbitrage
Retail arbitrage means buying discounted or clearance products from physical shops and reselling them on Amazon at a profit. You might buy a toy on clearance at Tesco for £5 and sell it on Amazon for £18 — the FBA fees come out of the difference.
Pros:
- Lowest startup cost (you can begin with £100–£300)
- Learn how Amazon works before committing larger capital
- No minimum order quantities
Cons:
- Very time-intensive (physically scanning shelves in shops)
- Hard to scale beyond a certain point
- Inconsistent supply — a clearance deal does not repeat
Retail arbitrage is the ideal starting point if you want to learn FBA with minimal risk.
2. Online Arbitrage
Online arbitrage follows the same logic as retail arbitrage but you source from online retailers — finding products priced low enough on sites like Argos, The Range, or brand websites to sell profitably on Amazon.
Pros:
- More scalable than retail arbitrage (no driving to shops)
- Software tools can help scan hundreds of products quickly
- Can be done from anywhere
Cons:
- More competition as it is easier to discover the same deals
- Price gaps can close quickly
- Requires good sourcing software to be efficient
3. Wholesale
Wholesale means buying existing branded products in bulk directly from a UK or EU distributor or brand owner, then listing and selling them on Amazon.
Pros:
- Products already have demand and reviews on Amazon
- More predictable supply than arbitrage
- Scalable — you can reorder the same SKUs repeatedly
Cons:
- Higher startup capital (most distributors have minimum order values of £200–£500+)
- You compete with other sellers on the same listing (Buy Box competition)
- Margins are lower than private label
Wholesale is often the step sellers graduate to after arbitrage, once they understand Amazon's fee structure and Buy Box dynamics.
4. Private Label (via Alibaba or manufacturers)
Private label means sourcing a generic product from a manufacturer (most commonly via Alibaba in China), applying your own brand and packaging, and creating a unique listing on Amazon.
Pros:
- You own the listing — no Buy Box competition from other sellers on your ASIN
- Higher margins than wholesale when volume builds
- Build a brand that can have long-term value
Cons:
- Highest upfront capital (typically £1,000–£5,000 for an initial run)
- Longer lead times (4–12 weeks from order to inventory live on Amazon)
- Higher risk if the product does not sell
- Requires product compliance and safety testing for EU/UK markets
Private label is the most popular model among experienced FBA sellers looking to build a brand rather than just resell.
Which sourcing method is right for you?
| Method | Startup cost | Risk level | Scalability |
|---|---|---|---|
| Retail arbitrage | £100–£300 | Low | Limited |
| Online arbitrage | £200–£500 | Low–Medium | Medium |
| Wholesale | £500–£2,000 | Medium | High |
| Private label | £1,000–£5,000+ | High | Very high |
Most successful UK FBA sellers start with retail or online arbitrage to learn the platform, move into wholesale for stability, and eventually launch private label products as their capital and experience grow.
Before ordering from any source, calculate your expected profit margin using an FBA profit calculator to make sure the numbers actually work.