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Behind the complex phrase is a simple concept. A seller purchases products from a retail outlet at a discount and sells these discounted products for a profit. Let’s take the humble pen as an example. You walk into a Walmart store and notice that pens at the store are on sale. A $4 pen is being sold for $2. For smart retail arbitrage sellers, this is an opportunity. You buy 100 pens for this discounted rate and put up a listing on Amazon selling the same pen. The catch is that you’re selling it for $3.90. That gives you a healthy margin while still being cheaper than the retail price!