What Is a Good ROI for Retail Arbitrage? (UK, 2026)

"Is this a good enough return?" is the question every retail-arbitrage buy comes down to. ROI is how sellers answer it in a single number, but the honest answer is that a good ROI depends on how fast the item sells, how much cash you're tying up, and the risk. Here's how to think about it properly.

What ROI actually means

Return on investment is your profit as a percentage of what you spent. If you buy an item for £10 and clear £4 profit after all of Amazon's fees, that's a 40 percent ROI. The key word is after fees: ROI on the sale price before deducting the referral fee, fulfilment fee and VAT is meaningless.

ROI = net profit / total cost, as a percentage.

So what's a good number?

The widely-used rule of thumb in UK retail arbitrage is a minimum of 30 percent ROI, and many sellers hold out for closer to 50 percent or more. Below about 30 percent there's often too little margin to absorb a price dip, returns, or a fee you underestimated, so the deal turns into work for very little reward.

But 30 percent is a floor, not a target. Whether a given ROI is worth it depends on a few things:

• How fast it sells - A 25 percent ROI on something that sells out in a week beats a 60 percent ROI on something that sits for six months. Fast turnover lets you recycle the same cash many times a year.
• How much cash it ties up - A slim ROI on a high-value item locks up a lot of capital for one bet. Higher-risk items should clear a higher ROI to be worth it.
• The absolute profit - 100 percent ROI on a £2 profit is barely worth the prep time. A 35 percent ROI that nets £8 a unit across 40 units is a genuinely good buy.

ROI versus profit in pounds

Don't chase percentages alone. ROI tells you how efficiently your money works; profit in pounds tells you what actually lands in your account. You want both to make sense. A useful habit is to set a minimum ROI (say 30 percent) and a minimum profit per unit (say £3) and only buy items that clear both, so you avoid low-value flips that eat your time and thin-margin gambles that eat your nerves.

Why the calculation has to be accurate

ROI is only as good as the numbers underneath it. The most common way sellers overstate ROI is underestimating the FBA fulfilment fee or forgetting VAT, which makes a mediocre deal look great. Use the live fee for the specific product, not a size-tier guess, and include VAT if you're registered.

That's the whole point of scanning in the aisle. retailscout's deal analyser reads the barcode and shows your profit and ROI on the exact price you'd pay, with Amazon's live fees and your own VAT and prep settings already applied, plus how well the item sells so you can weigh the return against the turnover.

A quick worked example

An item sells for £24. After a 15 percent referral fee, the FBA fee and the smaller fees, Amazon takes roughly £8, leaving £16. If you paid £10, your profit is £6 and your ROI is 60 percent, an excellent buy that also nets a solid £6 a unit. If you paid £13, profit is £3 and ROI is about 23 percent, below most sellers' floor, and only worth it if the item sells very fast.

The takeaway

A good ROI for UK retail arbitrage usually starts around 30 percent, but the smart way to use it is alongside sell-through speed and absolute profit, not on its own. Set a minimum ROI and a minimum profit, deduct every fee and VAT accurately, and favour items that turn over quickly. Do that and your cash keeps working instead of sitting on a shelf.