Short answer: Yes, retail arbitrage is legal in Canada. No Canadian law stops you from buying genuine products in stores and reselling them on Amazon.ca, Amazon.com or eBay for a profit. What you do need to respect are trademark and copyright rules (sell only authentic goods and use your own listing content), product safety and labeling laws, store and marketplace policies, and your GST/HST and income tax obligations with the CRA. This guide covers each of these so you can resell with confidence. (This article is general information, not legal or tax advice.)
What Is Retail Arbitrage and How Does It Work in Canada?
Retail arbitrage is a method where individuals purchase at a low price from retail stores and sell the items on websites such as Amazon for a profit. The method is simple: sell high, buy low.
This has become common because stores, from time to time, have sales, discounts, and clearance sales that consumers can buy at a reduced price.
In Canada, people carry out retail arbitrage just like elsewhere. They buy cheap goods from stores like Walmart or Costco, then sell them at higher prices on websites like Amazon.
For more information about retail arbitrage in-depth, refer to our in-depth guide, Retail Arbitrage Guide for Beginners.
Is Retail Arbitrage Legal in Canada?
Retail arbitrage is permitted in Canada. Selling items bought from retail stores at a markup is acceptable, and there are no laws within Canada to stop people from purchasing items at stores and reselling them on their own.
That being said, some legal points should be noted by sellers:
- Trademark and brand restrictions:
It is not against the law to resell name-brand products, but you can be in legal trouble if you are using the brand’s logo, packaging, or marketing without their authorization. There are some brands that do not allow people to resell their product at all, so a person should check the law for the brand before reselling their product
- Intellectual Property Rights:
Be careful when selling products that would infringe copyright or intellectual property laws. Selling copied or fake products that are not original can get you into legal trouble. Make sure the things you resell are authentic and approved to be resold so you won’t have big issues with the law.
- Retailer Policies:
In Canada, there are policies in a few stores not to purchase their products to resell them. These are not Canadian law, but you will be excluded from these stores if you break them. So, if you’re going to be doing retail arbitrage in Canada, it is a good idea to check the store’s policy beforehand, particularly if you plan on purchasing in quantities and selling online.
To learn more about the legality of similar business models, read our article: Is Online Arbitrage Legal?, or our general guide on whether retail arbitrage is legal in the US.
Do Canadian Retailers Allow Resellers?
As more people seek flexible ways to earn, retail arbitrage has become a popular option. However, store policies on reselling can vary. Some stores allow bulk purchases, while others restrict items to personal use only. Here are some store guidelines:
- Walmart Canada:
Walmart typically allows people to buy items for resale; thus, in some cases, you can buy at Walmart and resell elsewhere. That being said, Walmart may limit how much of an item you can buy at a time, especially if it is a high-demand item or a special promotion is running. These limits are mostly to help give everyone a chance to buy the items they need. So, while reselling is not Walmart’s general policy violation, you might not be permitted to buy large quantities of certain products all at once.
- Costco:
In Canada, Costco’s regular membership is for personal use only. If you buy things to resell them, Costco can cancel your membership. That’s their rule.
However, Costco offers a Business Membership for businesses that purchase items for resale. Unlike the US, Canada has no “resale certificate” that removes GST/HST at the till: you normally pay GST/HST on your purchases and, if you are GST/HST registered, recover it as input tax credits. In British Columbia, Saskatchewan and Manitoba, a registered business may be able to buy goods for resale exempt from provincial sales tax with its PST number, following each province’s rules. Check Costco Canada’s current membership terms before buying for resale.
For more information on this topic, you can read How to Buy Products from Costco to Sell on Amazon.
- Dollarama:
Dollarama doesn’t have a rule against reselling the things you buy there. But they can limit how many of each item you can buy at one time, especially if they think you’re buying to resell. You can buy some items in bulk from Dollarama’s online store, but not everything from the store is available online, and choices may be limited.
Tax Obligations for Arbitrage Sellers in Canada
If you buy products to resell in Canada, you have to be aware of federal and provincial taxation laws. The federal GST applies across Canada. Ontario, New Brunswick, Nova Scotia, Newfoundland and Labrador, and Prince Edward Island use a combined HST instead, while British Columbia, Saskatchewan and Manitoba charge a separate PST and Quebec charges the QST. If your sales go over certain limits, you must register to collect and remit these taxes.
Good to know for Amazon sellers: under the CRA’s digital-economy rules, a marketplace (distribution platform operator) such as Amazon charges and collects GST/HST on goods sold through it by vendors who are not registered for GST/HST, whether they are resident in Canada or not. Once you register, collecting and remitting becomes your responsibility, and you can claim input tax credits on business purchases.
For online arbitrage sellers, the responsibility for collecting and remitting sales tax can depend on several factors, including the type of goods or services sold, the province of the buyer, and whether the sale is made directly or through an online platform.
Here are the main tax obligations you need to follow as an arbitrage seller for the Canada Revenue Agency (CRA):
- Registering Your Business: You must register for GST/HST once your taxable sales exceed $30,000 in a single calendar quarter or over four consecutive calendar quarters (the small supplier threshold). You can also register voluntarily earlier to claim input tax credits.
- Collecting Sales Tax: If you’re registered, add GST/HST to your prices and collect it from customers.
- Filing Income Tax: Tell the government how much you made, and list your business costs like buying products and shipping.
- Maintaining Records: Write down all your sales and expenses so you can show proof if needed. Use a notebook, spreadsheet, or app.
Product Rules Canadian Resellers Must Follow
Being allowed to resell doesn’t mean every product can be resold. A few Canadian rules matter most for arbitrage sellers:
- Recalled products: the Canada Consumer Product Safety Act prohibits selling consumer products that are subject to a recall. Check Health Canada’s recalls database before reselling clearance items.
- Bilingual labeling: prepackaged consumer products sold in Canada generally need mandatory label information in both English and French. This matters if you source US products to resell on Amazon.ca.
- Health products: natural health products such as vitamins and supplements need a Natural Product Number (NPN) from Health Canada, and drugs need a DIN.
- Marketplace restrictions: Amazon.ca, like Amazon.com, gates certain categories and brands and can remove listings after intellectual property complaints. Check each ASIN for listing limitations before you buy.
Planning to sell across the border too? Read our guide on how to sell on Amazon USA from Canada.
Common Legal Mistakes to Avoid in Canadian Arbitrage
While retail arbitrage may seem simple, there are several common mistakes that can lead to legal trouble. If you’re just getting started, be sure to check out our guide on how to make money with retail arbitrage to avoid these pitfalls
Selling fake Goods
Selling fake products, even by accident, is illegal in Canada. You could face fines or legal action, and sites like Amazon may ban your account. To avoid this, always check that your products are real before listing them. Being careful with your sources helps protect your reputation and keeps your business safe.
Copyright Violation
Placing brand logos, images, or any company’s copyrighted material in your product listings without permission is a huge mistake. This includes copying from official websites, like descriptions or images. Copyright owners can report, and your listings get removed, your account is suspended, or you get sued. Always create your own product description and use your own image unless you have direct permission from the brand.
Ignoring Tax Obligations
If you do not register your business, charge GST/HST, or report your income properly, you could be hit with enormous fines, interest, or even a CRA audit. Tax authorities apply to anyone who makes money off retail arbitrage, no matter the size of your business. Make sure you understand your tax duties and keep up with necessary filings.
Bulk Buying Violation
Most stores in Canada have rules prohibiting buying too many of the same item, especially if they suspect you are buying to sell. If you break such rules, you can be denied service, prohibited from coming back to the store, or your orders canceled. Always check and follow the store’s bulk-buying rules to avoid issues with getting products.
Conclusion
Retail arbitrage is legal in Canada and can be a very good way to make money by selling things. It is legal but requires awareness of trademark policy, tax law, and store policy. To succeed, always buy real products, follow tax rules, and stick to marketplace guidelines.
Prefer sourcing from home? Online arbitrage follows the same legal principles in Canada, and OABeans publishes online arbitrage leads for both the US and Canadian Amazon marketplaces.
FAQ: Retail Arbitrage in Canada
Is buying and reselling legal in Canada?
Yes. Reselling genuine products you bought legally is allowed. It becomes a problem when the goods are counterfeit, recalled, or non-compliant with Canadian labeling and safety rules, or when you misuse a brand’s trademarks or copyrighted images.
Do I need a business number to do retail arbitrage in Canada?
Not to start, but you must report your income, and once your taxable sales pass the $30,000 small supplier threshold you need to register for GST/HST, which gives you a CRA business number. Many sellers register earlier to claim input tax credits.
Can stores stop me from reselling their products?
Stores can’t make reselling illegal, but they can set purchase limits, refuse sales or cancel memberships under their own policies. Respect those rules to keep access to your sources.
