The New York Post said the women, who are sisters, admitted shipping the American products to Santiago for a profit.
"It's a really easy way to make money, and it doesn't cost me anything," a seller named Maria-Teresa said Friday.
The Post's story comes after the paper revealed that New Yorkers on welfare are buying food with their benefit cards and then sending it to their poor relatives in the Caribbean.
Maria-Teresa, 47, also said she gets the products from her sister in New York.
She uses some of the products, but sells the rest out of her Santiago home -- providing markdowns from what locals would pay in the shops, the Post said.
Her most popular item is the 24-ounce box of Frosted Flakes for $2, compared to the $4 Dominican counterpart.
She sells Enfamil baby formula for $15 -- below the $25 cost in the United States and $19 in Santiago shops.
"People want the best quality for the price, so they buy the formula made in the United States," she said.