Cashback is one of the most misunderstood parts of online arbitrage.
Used correctly, it can boost your margins and give you an edge over other sellers.
Used incorrectly… it leads to bad buying decisions, messy books, and long-term cash flow problems.
Let’s clear it up.
1. Don’t Rely on Cashback to Make a Deal Work
This is the most common mistake.
A lot of sellers look at a deal and think:
“11% cashback + a discount… this works.”
But here’s the real question:
If you remove the cashback… does the deal still make sense?
If the answer is no, it’s probably not a strong buy.
What you should do instead:
- Evaluate every deal without cashback first
- Make sure it meets your profit and ROI criteria on its own
- Then treat cashback as extra profit on top
When you rely on cashback to justify a buy, you’re cutting things too close. Over time, that leads to:
- Inconsistent margins
- More risky inventory
- Cash flow issues
Strong sourcing starts with strong fundamentals. Cashback is just a bonus.
2. Cashback Is Not Income
This one surprises a lot of sellers.
Cashback is not revenue.
It’s closer to:
- Credit card rewards
- Points
- Rebates
That means you shouldn’t treat it like profit from a sale.
If you start mixing cashback into your income numbers, you’ll end up with a distorted view of how your business is actually performing.
3. Don’t Reduce Your Costs With Cashback
This is where most accounting gets messy.
Let’s say:
- You buy an item for $10
- You get $1 cashback
A lot of sellers think:
“My real cost is $9.”
Seems logical… but from an accounting perspective, this is incorrect.
Why this matters:
When you reduce your cost like this, you’re lowering your recorded expenses.
Lower expenses = higher taxable profit.
So you’re essentially increasing your tax bill… for no real reason.
The Better Way to Handle Cashback
Here’s our recommended approach:
- Record your full purchase cost
- Don’t reduce it with cashback
- Keep cashback separate from your P&L
If you want to be precise:
- Put cashback into an equity account.
- Zero it out at the end of the year
The Big Idea
Cashback is not part of your core business performance.
It’s:
- A bonus
- A reward
- Extra margin
Think of it as gravy, not the main meal.
Why This Matters for Your Sourcing
Small shifts like this make a big difference over time.
When you:
- Evaluate deals without cashback
- Keep your accounting clean
- Separate real performance from bonuses
You end up with:
- More reliable buying decisions
- Cleaner financials
- Better long-term growth
Want Better Leads Without the Guesswork?
If you want to shortcut the process and see deals that already meet strong criteria (without needing cashback to “save” them), that’s exactly what our lead lists are built for.
Our two core options:
Premium 44 (capped at 44 sellers)
10+ daily high-quality leads with solid margins and consistent turnover. Perfect for online arbitrage sellers who are just starting out.
Elite 22 (capped at 22 sellers)
A smaller, tighter list focused on higher-profit, higher-barrier, more premium opportunities. Perfect for experienced sellers with seasoned accounts looking to scale sourcing efforts and increase daily inventory buys.
Both are built using the same principles outlined above:
- Deals that work without relying on cashback
- Clean numbers
- Consistent, repeatable sourcing
If you’re trying to level up your sourcing and stop second-guessing your buys, these lists are designed to help you do exactly that.
📌 Our COO Brian Elfstrom has an extensive background in accounting, so if you need some accounting advice related to cashbacks, send us an email at hello@fbaleadlist.com.
Want more free game?Most sellers try to fix dead inventory AFTER it becomes a problem. Successful sellers avoid it upfront. Here’s the playbook:
👉 Dead Inventory on Amazon? Here’s a Simple Playbook to Fix It (Fast)