Once you start looking at the actual numbers it becomes pretty clear that most of these arbitrage sellers could give every customer $20 and still make money.
For example, the top search result for “webcam” on Amazon.com right now usually sells for $35[0]. Its wholesale price on Alibaba for 5k units is $3.84[1] + $2.04 shipping per unit. Plug those numbers into Amazon’s FBA profitability calculator[2] and you’ll find that the seller only needs to sell 67 units per month to break even, after giving every buyer $20, because the seller’s net margin at this volume is nearly 60%.
For example, the top search result for “webcam” on Amazon.com right now usually sells for $35[0]. Its wholesale price on Alibaba for 5k units is $3.84[1] + $2.04 shipping per unit. Plug those numbers into Amazon’s FBA profitability calculator[2] and you’ll find that the seller only needs to sell 67 units per month to break even, after giving every buyer $20, because the seller’s net margin at this volume is nearly 60%.
[0] https://camelcamelcamel.com/product/B087NN41JH
[1] https://www.alibaba.com/product-detail/China-Factory-Wholesa...
[2] https://sellercentral.amazon.com/hz/fba/profitabilitycalcula...