While online arbitrage is completely legal, there are areas business owners get involved in which can be illegal due to the lure of the market. For example, you could source brands that do not allow their products to be sold by anyone that is not an authorized dealer or reseller. While this is a grey area in that technically it is not illegal, but it will most likely get you served a Cease and Desist (C&D). Another area that is definitely illegal is counterfeit products. Doing arbitrage you might get lazy and not check the actual source and not realize they are counterfeit. Regardless, it is YOU that is responsible and you could find yourself in serious legal trouble.