617: Charles Chakkalo Makes 8 Figures On Amazon Doing Something Everyone Said Was Dead

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An Amazon retail arbitrage business is still a viable 8-figure model in 2026, but only if you run it like real wholesale, own your own warehouse, and specialize in a category no drop-shipper can serve. Charles Chakkalo does exactly this out of two owned warehouses in Brooklyn and Westchester, splitting his revenue 50/50 between private label and resale (75% wholesale, 25% retail arbitrage inside the resale side). He started as a high school student flipping Best Buy clearance in 2010 and now runs a nine-year-old operation that scales through logistics ownership rather than 3PL outsourcing.

I sat down with Charles, a student in my Create A Profitable Online Store course, in episode 617 of the My Wife Quit Her Job podcast. He is one of the few operators I know who has scaled arbitrage past the small-side-hustle ceiling, and he did it by treating the model as a real business with real staff, real repricers, and real warehouse real estate rather than a suitcase full of clearance receipts.

Below is his exact playbook, plus the new Amazon UPC-suppression enforcement wave that killed 300 SKUs for one operator in a single night this year.

Key takeaways

• Charles runs an 8-figure Amazon business split roughly 50/50 between private label and resale, with resale itself 75% direct-from-distributor wholesale and 25% retail arbitrage.
• He owns two warehouses (Brooklyn 2020, Westchester 2024) with in-house labor at roughly $0.30 to $0.40 per unit prep cost, versus 3PL rates of $0.30 per unit before unload, palletize, and touch fees.
• Amazon is auditing about 400,000 ASINs per day against GS1’s UPC database and suppressing listings with invalid UPCs, and one reseller lost 300 SKUs in a single night from this sweep.
• Charles’s account currently has 183 open account-health issues over six months, all responded to with invoice paper trails, and still maintains a perfect 1,000 Account Health Rating.
• A working repricer setup uses a dominate-the-buy-box or maintain-the-buy-box mode with seller-specific rules to counter aggressive competitors, refreshed every 15 minutes (not faster, despite claims).
• Ceiling price rule of thumb: no more than 20% above the average Buy Box price, or Amazon suppresses the Buy Box entirely.
• Amazon Warehousing and Distribution (AWD) is Amazon’s play to own the pre-FBA supply chain, and Charles skipped it because he already had owned warehouse capacity.

Is Amazon retail arbitrage still a viable business in 2026?

Amazon retail arbitrage as a Walmart-clearance-aisle side hustle is essentially dead in 2026, but retail arbitrage as a serious distributor-relationship business is still viable at 8-figure scale. The difference is authenticity paperwork. Amazon now aggressively audits UPCs, chain of custody, and brand authorization, and store receipts alone no longer stand up to those audits at scale.

Charles’s rule for someone starting today with $10,000 to $15,000 is direct. Skip retail arbitrage and go straight to private label unless you already have real distributor relationships. The support ecosystem, coaching, and mainstream advice all point at private label, and the reseller market is thinning as sophistication requirements rise.

If you do have distributor relationships and want to run resale, the model works. Charles’s own resale business scaled hard in 2025. The barrier is that you need real invoices from real distributors, a real Letter of Authorization from the brand if possible, and a real logistics operation to defend margins against other sellers on the same listings.

The 400,000-ASINs-per-day UPC suppression sweep is the biggest 2026 risk

Amazon is auditing about 400,000 ASINs per day against GS1’s UPC registry and suppressing listings whose UPCs are not properly registered to the brand, and one reseller in Charles’s mastermind lost 300 SKUs in a single overnight sweep. This is the single biggest structural change to Amazon resale in the last five years, and most sellers do not have it on their radar yet.

The history that created this exposure is long. For 15 to 20 years, sellers created Amazon listings using cheap or invalid UPCs (some literally purchased on eBay for pennies) that were not properly registered to the brand on the listing. Those listings accumulated years of sales history, reviews, Q&A, and ranking equity. Amazon quietly ignored the mismatch until this year.

The 2025 crackdown is Amazon reclaiming brand control at Colgate’s, Nike’s, and Hasbro’s request. Sellers who shipped pallets or trailers of inventory into FBA for a suddenly-suppressed ASIN are stranded, forced to pay removal or disposal fees to get the inventory back out.

How Charles’s account survives 183 open account-health issues with a perfect rating

Charles’s account currently has 183 open account-health issues over the past six months and still maintains a perfect 1,000 Account Health Rating because he has a full-time VA responding to every single case with invoices, bills of lading, and chain-of-custody paperwork. Amazon almost always replies “not enough information provided, vague” without specifying what would satisfy them. He accepts the vagueness, files the paper trail, and moves on.

The reason this works is defensive. If Amazon ever escalates to an account-level enforcement action, Charles can point back to a documented paper trail of his good-faith responses within Amazon’s own timelines. The 1,000 Account Health Rating is preserved because he never lets a case go silent.

Any serious reseller in 2026 needs this kind of dedicated compliance operation. Two-a-week authenticity complaints are the new normal for high-volume accounts.

How to find and open distributor relationships (the real bottleneck)

To find and open real distributor relationships, attend the biannual ASD wholesale show in Las Vegas and similar retail-buyer trade shows, ask each distributor’s salesperson for their full catalog, and be prepared to hear “we do not work with online sellers” from most of them on the first pass. Persistence and volume commitment are what turn a no into a yes.

The salesperson at a distributor works on commission. The unlock is walking in with a real, sizable purchase order commitment, then asking that salesperson to rethink their “no online sellers” policy in light of the commission that PO would generate. Charles has watched this move a salesperson’s face from polite refusal to “let me talk to my manager” in under a minute.

Some distributors will insist on a physical retail location. Charles’s view is that if a brand does not have the bandwidth to defend its own Amazon presence, outsourcing that maintenance to a professional reseller is actually good for the brand. Both Lego and Hasbro have effectively relinquished Amazon control to sophisticated resellers in the last year, and both brands’ revenue on Amazon went up.

How Amazon UPC ungating works in 2026

Amazon UPC ungating in 2026 is algorithmic based on account age, sales volume, and account health rating, weighted against how protective the brand is of its Amazon presence. Seasoned accounts like Charles’s get ungated for most brands that do not actively defend their listings. For brands that do (Nike, Sony, LEGO in certain categories), the ungating paperwork battle is proportional to the return on investment.

The practical check before buying inventory is simple. Try to list the product in your seller account first. If you get a gating notice, evaluate whether the specific brand’s ungating process is worth the time before spending on inventory.

Charles has been re-gated on eight or nine brands recently and has kept the list to bring up at his next Amazon Seller Cafe appointment. Even a nine-year-old seasoned account is not immune.

Why owning your own warehouse beats a 3PL at Charles’s scale

Owning your own warehouse beats a 3PL at Charles’s scale because the per-unit prep cost hits roughly $0.30 to $0.40 with in-house labor versus $0.30 per unit at the 3PL before unload, palletize, and per-touch fees. The pure labor math is roughly even. The real advantage is control.

Charles can walk downstairs and touch his goods any time. He does not wait on 3PL staff who may not answer the phone during a peak week. He does not risk a 3PL flood destroying inventory without notice. And critically, he can handle the operational complexity of the same product sitting on three different FN SKUs (because a UPC-suppressed ASIN had to be re-created twice), which most 3PLs cannot handle at all.

The second warehouse also functions as investment real estate in industrial zones that are appreciating. That is a P&L line most 3PL customers never capture.

The origin story: 26 pallets on a Brooklyn sidewalk at 2:30 AM

The trigger for buying the first warehouse was a night in 2020 when Charles and his brother had 26 pallets sitting on the sidewalk outside their upstairs Brooklyn office because Amazon’s trailer failed to show up on schedule. They sent the staff home, sat on chairs at either end of the pallet stack in a rough neighborhood while it rained, and waited. Amazon’s trailer arrived at 2:30 AM. They loaded it themselves.

The next morning they decided they needed a space where pallets could actually go back inside and close a door for the night. That is the Brooklyn warehouse.

The 2024 Westchester purchase was the same principle at bigger scale. Charles’s warehouses can now dock a full Amazon 53-foot trailer inside so pallets never have to sit exposed on the street. That is a five-year progression from suitcase-of-receipts arbitrage to owned trailer-loading infrastructure.

How Amazon repricers actually work in 2026

An Amazon repricer in 2026 works by pulling a data feed from Amazon every 15 minutes (not faster, despite vendor claims), comparing your listing’s price to the competitor set, and adjusting your price within a defined floor and ceiling based on the aggressiveness setting you choose. Rules-based logic (like “wait until Seller X sells out, then raise price”) layers on top for known aggressive competitors.

The two main aggressiveness modes are dominate the buy box and maintain the buy box. Dominate pushes your price all the way to your floor to hold the Buy Box against any competitor. Maintain sits at the current Buy Box level and only drops when necessary. Most professional resellers run a mix depending on the SKU’s velocity and margin profile.

The ceiling price rule (20% above average buy box)

The ceiling price rule of thumb is no more than 20% above the average Buy Box price. Above that, Amazon suppresses the Buy Box entirely and you cannot sell at any price. This is the single most-missed setting on repricers, and it costs sellers real revenue when Amazon’s Buy Box gets suppressed on their SKUs.

The floor price rule is that you must include every real cost: unit cost, prep cost, freight to your facility, freight to Amazon, and Amazon fees. Sellers who forget to bake in freight or prep cost bleed margin without noticing. Charles has personally watched competitors go out of business from exactly this oversight.

Amazon Warehousing and Distribution (AWD): why Charles skipped it

Amazon Warehousing and Distribution (AWD) is Amazon’s play to own the pre-FBA supply chain layer, and Charles skipped it because he already had owned warehouse capacity when it launched. His read is that AWD arrived simultaneously with Amazon’s product-placement fee restructuring as a way to strong-arm sellers into consolidating more of their supply chain inside Amazon’s data footprint.

The strategic concern is data. Amazon wants to be the Alibaba of North America, which means owning distribution as well as the marketplace. Every AWD pallet is a full pallet of Amazon-visible data on your supplier terms, unit economics, and inventory velocity.

For sellers without their own warehouse, AWD can be useful as a placement-fee relief valve. For sellers with owned logistics, it is a data disclosure with no upside.

The private label vs resale split (and why Charles runs both)

Charles runs a roughly 50/50 private label to resale split because each side hedges the other’s specific failure modes. Private label goes to zero if Amazon suspends the brand or a competitor knocks off the listing. Resale goes to zero if the UPC-suppression sweep kills the ASINs. Running both means neither single failure mode ends the business.

Inside the resale half, the mix is roughly 75% wholesale (direct distributor relationships with case- and pallet-quantity purchase orders) and 25% retail arbitrage (in-store buys with receipts as proof). Wholesale is more stable because chain of custody is easier to prove. Retail arbitrage is higher-margin per unit when you find a real close-out.

The brand-cutoff story: 90% of the private label catalog killed overnight

Charles once had a manufacturer partner producing 90% of his private label catalog decide to cut him off overnight after seeing his sales success on Amazon. The manufacturer decided they would rather sell direct on Amazon themselves. That relationship went to zero without warning.

That manufacturer is now in multiple lawsuits and struggling to stay in business. Charles is patiently waiting for them to fail and for the SKUs to become available again. The story is a warning: any private label business dependent on a single manufacturer without a real supply contract or IP protection is one board meeting away from collapse.

The defense is contractual. Real supply agreements with exclusivity clauses, tooling ownership, and multi-source production capacity are the difference between a private label brand and a hobby that got lucky.

Frequently asked questions

Is Amazon retail arbitrage dead in 2026?

Amazon retail arbitrage as a clearance-aisle side hustle with store receipts is effectively dead in 2026 because of Amazon’s ongoing UPC-suppression sweep and increased authenticity paperwork enforcement. Retail arbitrage as a serious business with direct distributor relationships, owned warehouse capacity, and dedicated compliance staffing is still viable at 7- and 8-figure scale.

How much money do you need to start an Amazon arbitrage business?

You need at least $10,000 to $15,000 to start an Amazon arbitrage business in 2026, but that budget is better spent on a private label product if you do not already have distributor relationships. At the arbitrage entry level, expect $10K to fund maybe 20 to 40 SKUs at low volume, most of which will not survive Amazon’s authenticity and UPC audits without established supplier documentation.

What is a good repricer for Amazon FBA?

A good repricer for Amazon FBA supports floor and ceiling price, multiple aggressiveness modes (dominate vs maintain the Buy Box), seller-specific rules, and refreshes at Amazon’s real 15-minute cadence. Popular options include Bqool, RepricerExpress, Aura, and Seller Snap. Avoid Amazon’s native repricer because it lacks the seller-specific rule logic you need to counter aggressive competitors.

Should Amazon sellers use a 3PL or own their own warehouse?

Amazon sellers doing under $1M a year in revenue should typically use a 3PL because the fixed overhead of warehouse ownership does not amortize. Sellers doing $2M or more should evaluate owning capacity because per-unit costs equalize at that volume, and owned warehouse control eliminates the risk of 3PL failures during peak season (a common horror story every Q4).

How do you get ungated on restricted Amazon categories?

You get ungated on restricted Amazon categories by submitting invoices from an authorized distributor or the brand itself, at minimum 10 units of the product, dated within the last 180 days, with your legal business name and address matching your Seller Central profile. Ungating decisions are algorithmic based on account age, sales volume, and account health rating, so seasoned accounts get approved faster than new accounts even with identical paperwork.

What is Amazon Warehousing and Distribution (AWD) and is it worth using?

Amazon Warehousing and Distribution (AWD) is Amazon’s storage service that sits upstream of FBA and feeds inventory into FBA on demand. It is worth using for sellers who lack their own warehouse capacity and are being hit hard by Amazon’s inbound placement fees. It is not worth using for sellers with owned warehouse capacity because AWD exposes supplier and velocity data to Amazon in exchange for services you already provide yourself.

What is a Letter of Authorization on Amazon?

A Letter of Authorization (LOA) on Amazon is a document from a brand explicitly authorizing you to sell their products on Amazon, and it is the strongest defense against authenticity complaints and brand-owner takedown requests. Amazon considers a genuine LOA the gold standard, though the marketplace does not always honor them and brands with active Brand Registry accounts can override an LOA if they choose.