The beauty of Amazon is that it’s designed to make life easy for shoppers and sellers. You don’t need to manufacture your own products to run a successful third-party shop on Amazon. Third-party sellers make up over half of all sales, equating to 6500 sales per minute in the U.S.
Amazon resellers purchase products in bulk, re-brand them and sell them on Amazon for a profit. It’s completely legal, and the barriers to entry are considerably lower than most other sales methods.
This article is a deep dive into everything you need to know to make money reselling on Amazon.
Reseller Vs. Vendor: What’s the Difference?
When it comes to Amazon sellers, the terms vendor and reseller are often confused. To clarify:
Vendors manufacture their own products and sell them through the Amazon platform. Resellers purchase new or used products and resell them on Amazon as refurbished or rebranded. Amazon reselling is like when boutique owners source merchandise and sell it under their brand’s name.
Amazon buys products directly from vendors to sell on the platform. Some resellers even buy products from vendors to flip on Amazon. Think of vendors as product suppliers or manufacturers.
Amazon resellers buy wholesale products from vendors or physical shops. They use Amazon as a medium for selling the product but don’t own the creative rights. It’s perfectly legal, and Amazon knows that sellers operate this way.
Example of the Vendor – Reseller – Customer Relationship
The process is also called amazon retail arbitrage.
Here’s an example:
You purchase 50 towels at wholesale quantity for $2 per towel, investing a total of $100. You resell them on Amazon for $16 per towel. Shipping and fees to Amazon cost $5 per towel, leaving you with a profit of $9 per towel. After the stock is sold, you’d have a profit of $450 when you only invested $100.
The vendor benefits because they sell large quantities of their product without worrying about marketing, branding, and individual customer service.
Amazon benefits by collecting fees each time products are sold on their platform. Reselling is a big reason Amazon has so much product variety, making it a super convenient place for customers to shop.
Lastly, the reseller benefits by collecting the profits!
Is Reselling the Same as Dropshipping?
Reselling and dropshipping are not the same thing. Amazon doesn’t even support dropshipping as a business model without very strict stipulations.
Dropshipping is a fulfillment strategy where a seller acts as a middleman between vendor and customer. Shoppers purchase goods from the dropshipper’s store, but the goods ship directly from vendor (manufacturer) to customer – never crossing the hands of the dropshipper.
Dropshipping costs less, but shipping is usually slow, and you don’t have much control over packaging and quality. Flipping on Amazon has higher associated costs, but you can trust that Amazon will ship the package securely and quickly.
Is It Legal to Resell Amazon Products?
Reselling on Amazon is perfectly legal, and yes, Amazon is aware of it. There are a few rules to bear in mind, but none are overly restrictive or unreasonable.
Used or opened products must be listed as so.
Several brands like Adidas, Gucci, and even My Little Pony are restricted for resellers. This is to prevent counterfeit products from flooding the platform.
FBA products must follow packaging and labeling rules.
Is Reselling on Amazon Worth It?
Amazon arbitrage can be a very lucrative gig for those willing to put the work in. 40% of all Amazon sellers make between $1,000 and $25,000 per month. The majority start making a profit within the first year.
The main obstacle is setting your products apart, especially in the more competitive niches. Branding and customer satisfaction are musts for winning repeat customers and word-of-mouth referrals. If you want to resell on Amazon, you can’t be afraid to make mistakes. Part of the Amazon resellers program is learning as you go!
Top Five Ways to Resell on Amazon
Don’t think you’re part of a small group of entrepreneurs with this idea. The platform is pretty saturated with amazon reselling business already. This is why finding a niche that isn’t tapped out and choosing the right selling method is important.
The following section explains how to start reselling on amazon via different selling structures.
Retail arbitrage is when buyers procure merchandise from physical stores at wholesale prices (a significant discount than purchasing individually) and resell the items on Amazon for a profit. You’ll need a place to store inventory using this type of Amazon arbitrage.
The idea comes from stock traders that buy stocks in one market and sell them for a higher price in another. Amazon is just another platform for retail arbitrage – it’s not a new concept.
Where to Buy Products to Sell on Amazon
If you plan to sell used and refurbished goods, you could buy goods from local thrift stores and fix them up. You can also purchase items from local wholesalers, distribution centers, and retail giants.
As long as you find the products at a large enough discount that it’s possible to make a profit, it could be a good opportunity for reselling on Amazon.
Private Label Products
You may have noticed seemingly identical products posted by different sellers.
Resellers can buy products from manufacturers and rebrand them to market on Amazon. It’s perfectly legal as long as you have an agreement with the manufacturer and their brand isn’t listed anywhere on the product.
Don’t fall into the trap of slapping a brand name on generic items and expecting sales. You’ll have to work with the manufacturer to add value-adding features if you want to attract shoppers and resell products on Amazon.
Easy Way to Get Cheap Private Label Products Online
With the rise of the Amazon resale business, wholesalers have found ways to make themselves more attractive to resellers.
AliExpress makes it simple to order goods with your brand’s label from manufacturers. Once you’ve designed your logo, packaging, and thank you cards, you can submit your ideas to them, and they’ll have the manufacturer apply the branding and packaging design. They send the products (in bulk, of course) to you or Amazon fully ready to go.
AliExpress has various product and service offerings, but remember to have realistic expectations. Users sometimes complain about slow shipping times and inconsistent product quality. Do some research before deciding on a supplier.
Amazon online arbitrage is when buyers purchase products online to resell for a profit. This includes vendors such as Wish, eBay, Alibaba, AliExpress, and more. The benefit of online arbitrage is that you have a broader selection to compare prices and quality.
You could just buy from the cheapest possible seller and resell at the highest price possible, but this won’t give you sustainable earnings. If you want to build a stable income source, your products must be high-quality. Only purchase from trustworthy sources and learn from red flags whenever possible.
Watch out for Online Scammers and Fake Vendors
There are frauds in every trade. Beware of deals that seem too good to be true. Always research a company before buying from them and ensure they have at least some reviews.
A few things to look out for:
- Stock product images
- Lack of transparency or inability to explain specific details
- Shoddy communication
- Their business seems brand new, but they claim to have experience
- They’re willing to work without proper contracts
- They promise too much.
As a newbie to reselling items on Amazon, you don’t yet have an eye for spotting scams – only purchase from reputable sources until you have the expertise to branch out.
Purchasing from Wholesalers
Buying from wholesalers in bulk and selling them at unit price is the most straightforward way of flipping on Amazon. Rather than investing in a brick-and-mortar shop to sell goods, you can use Amazon as your storefront. Of course, Amazon collects fees, but this is the price you pay for using their platform to connect with millions of buyers.
Three Ways to Purchase From Wholesalers
- Manufacturers – Manufacturers own their means of production and sell to companies that can purchase large quantities. This option works for those who have space to store large inventories or want to customize the goods.
- Merchant wholesalers – Merchant wholesalers work directly with manufacturers to purchase goods in bulk and sell them to business owners at a markup. You may go this route if you want to browse products before making a purchase or don’t want to be involved in the production and design process.
- Online wholesalers – It’s most common for Amazon resellers to buy from online wholesalers like Alibaba and DHgate. Wholesalers can ship sold products to an Amazon fulfillment center, to you, or directly to customers.
How to Find Clearance on Amazon
Amazon has a few hidden gems for finding deals that most people don’t know about. Amazon Outlet is their clearance page where they sell overstock or returned items for a discount.
Amazon return pallets is a program where you can buy pallets of returned items for huge discounts. The condition of the goods is usually fairly good, but you risk some items being defective.
If you have a way to source used products of value, consider used product arbitrage. Amazon allows certain product categories to be sold as used like:
- Electronic devices
- Industrial and Scientific
- Major appliances
- Music and instruments
- Video games and DVDs
- Outdoor goods
- Office products
Remember that you must advertise items with an accurate condition – don’t be afraid to mark something as “acceptable” condition and mark down the price! Flipping used goods on Amazon is a sustainable way to connect shoppers with low-priced products they would otherwise have had to buy new.
How to Resell Items on Amazon: Your Step-By-Step Guide
We’ve put together a complete guide going over how to create a successful Amazon reselling business. Get ready to start flipping on Amazon with the help of us here at Profit Stack!
1. Find a Product to Resell
Choosing the right product to sell is quintessential to your success. Performing product research is the first step to narrowing down your options.
Many popular products are oversaturated, and the competition is way too tough to expect results. It can be more cost-effective to enter the market for a less competitive niche and use SEO and branding to dominate that product.
The following sections will cover the best things to resell on Amazon.
Best Items to Resell on Amazon
Be strategic when deciding on a product or product line. Some niches are way more profitable than others. Here are some of the best things to resell:
- Photo accessories
- Toys and Games
- Home and Kitchen Supplies
- Handmade/Specialty Goods
- Pet Supplies
- Low-Cost Electronics
Don’t just take our word for it. Within these categories, there are good and bad products.
For example, selling plain dog collars is probably ultra-competitive, but selling monogrammed or specialty collars might be more achievable. Smaller markets are usually easier targets.
Where to Find the Best Things to Resell on Amazon
Amazon product research means finding out what products can make you the most profit without being too difficult to sell. There are a ton of tools for you to cross-reference until you find your perfect fit.
Here are a few resources to check out:
- Amazon Movers & Shakers
- eBay trending lists
- Customers Also Bought sections
- Amazon Basics
- Google keyword searches
- Amazon Best Sellers
- Browse retail stores
- Look at what you buy!
Is Selling Books on Amazon a Good Idea?
There’s a growing market for online book sales and it can be lucrative if approached correctly. Amazon sells new, used, and even textbooks on its platform. If you’re considering reselling books on Amazon, check out their Best Sellers in Books list to see what people are buying.
Not sure what makes or breaks a good product idea? We’ve put together a list of things to consider during the research process.
- Is there a large demand?
- How difficult is it to source the product?
- Is it likely to be damaged in the shipping process?
- Is it small and lightweight? (Ideal for low shipping costs)
- Does the product have seasonality?
- Are there restrictions due to shipping concerns or possible legal issues?
- Is the sales price range between $18-$50?
- Are there other related keyword opportunities?
- Use online tools like Helium10 or AMZScout to see the profit potential and past performance.
2. Competitor Analysis
Take a look at what top-performing Amazon resellers are doing to succeed. Can you do something similar? Does it look like you could break into the niche?
Read some product reviews. What do buyers like or dislike? Use this insight to pick a supplier who can provide high-quality items that will score you glowing reviews.
Define Your Pricing Strategy
You can’t just set a price equal to or below competitors and hope for the best. You don’t know how much profit, or lack thereof, the competition brings in. Deciding on a pricing strategy that supports profit margins while remaining competitive is crucial.
Start by understanding your profit margins and setting a minimum, maximum, and breakeven price. Play around in this range until you figure out what works best. Many sellers start with a price towards the low end of the competitive range. Avoid pricing too low and devaluing your niche.
Use A/B testing to see what pricing works best. Try using coupons, product mix pricing strategies, and repricing. Pricing strategies are an ongoing part of the Amazon reseller business, so it’s best to get comfortable with the basics.
Come up with A Branding Strategy
Without branding, you’ll quickly be overshadowed by the competition. Branding builds trust, making you appear established and more committed to customer satisfaction. Here are a few branding strategies essential for any Amazon arbitrage business.
- Create a logo and a quick blurb. Want to learn more about marketing logo ideas?
- Build a website separate from Amazon.
- Apply search engine optimization so shoppers can find you through Google searches.
- Craft a delightful customer experience – this includes thank you cards, timely communication, smooth returns, and other creative marketing tools.
- Keep your business name open-ended in case you want to expand your offerings in the future. If you name your business “Cat Costumes R Us,” you’ll have to completely rebrand if you want to sell dog costumes.
3. Setting up Your Amazon Seller Account
For those wondering how to become an Amazon reseller, you’ll have to start by heading to Amazon Seller Central and creating an account.
Pick between creating an individual account or a professional account. Professional accounts offer many more features but have a $39.99 monthly subscription fee. Individual accounts charge $0.99 for each item sold, so consider this when making your choice.
You’ll need to provide personal information for tax and billing purposes (billing address, bank account information, etc.). They’ll ask you to enter information about the products you sell, like the UPC codes.
After you’ve verified all information, including your address via mail-in code, you’ll be able to start as an Amazon reseller!
4. Inventory Procurement
Managing an inventory means ordering enough stock to avoid shipping delays but not ordering so much that you pay extra for storage. If you take the FBA route, you’ll order products directly to the Amazon fulfillment center and pay them to store them for you.
Do some digging and calculate how much you expect to sell compared with how long inventory will take to get to your country. This depends on location, product type, demand, and supply chain events. Check out Amazon’s inventory management service to help you make smart ordering decisions.
Remember, when deciding where to buy products to sell on Amazon, consider how their shipping times will impact your inventory costs.
5. Register for Amazon FBA: It’ll Help Your Rankings
Amazon FBA is why you can offer 2-day shipping to customers as a reseller. They take care of 99% of the shipping process, so you don’t have to worry about the technicals.
Here’s how it works:
- You order inventory, and your supplier ships it directly to Amazon’s warehouse.
- Amazon stores your inventory for you until your customers make a purchase.
- Amazon packs and ships the goods to your customer.
- Amazon prefers sellers who use their service and boosts the rankings of FBA members.
Amazon FBA Charges
Amazon FBA charges fees that depend on the size and weight of the item. Here are a few examples. Note how fees can add up with larger and heavier items and consider it when planning your Amazon reselling business
- Small standard items (15″ x 12″ x 0.75″)
- Fulfillment: $2.93 – $2.59
- Large standard items (18” x 14” x 8”)
- Fulfillment: $3.54 – $6.13
- Small oversize (60″ x 30″)
- Fulfillment: $8.94 + $0.38/lb above first lb
- Large oversize (108” (longest side))
- Fulfillment: $82.58 + $0.79/lb above first 90 lbs
6. Plan for Giveaways, Discounts, and Freebies
Part of branding is a commitment to customer service. Adding a personal touch makes shoppers more likely to buy from you again.
Price adjustments are an easy way to stand out to shoppers as “on sale,” giving the appearance of a bargain.
You can also entice customers with coupons or “Subscribe & Save” offers. After they’ve made a purchase, add small bonus gifts to their order or even include a thank you note. Lastly, always reply kindly and professionally to reviews and take their criticism as an opportunity for improvement.
This type of personalization goes a long way in forming long-lasting customer relationships. Adding a personal touch can make a world of difference when reselling on Amazon.
The Amazon Giveaway Service
Amazon giveaways provide third-party sellers to raise product awareness and increase customer interaction. Though it costs you a bit of money, the benefits of visibility and potential customer loyalty are worth it. You can set up a fun contest or sweepstakes and let shoppers enter to win.
- You must have a professional account and participate in Amazon FBA.
- In Seller Central, go to Advertising – Promotions – Giveaway.
- Select a product to enter and tell Amazon the details.
- Decide how many to give away.
- Choose a type of giveaway (there are a few options).
You can even offer non-winners coupons so they can still make a purchase from you!
Other Amazon Giveaway Websites
These platforms allow resellers to run giveaways on Amazon year-round.
- Jumpsend: Run discounts and email promotions while monitoring inventory.
- Vipon: Offer high discounts on Vipon to attract new customers.
- RebateKey: Easily run rebates from your Amazon storefront.
- Rebaid: Offer up to 100% rebate values to generate sales.
- Stack Influence: Run giveaways on social media with the help of their strategists.
7. Maintain Customer Relations
Adding a personal touch to your brand will do wonders for you as an Amazon reseller.
- Respond to reviews and messages professionally and kindly.
- Try to get back to customers within 24 hours.
- Offer discounts to disgruntled customers.
- Send customers coupons, referral codes, and prompt them to sign up for your email list for exclusive offers.
- Include information about your brand in your profile for customers to see.
8. Contest for the Amazon Buy Box
The Buy Box is the box on the right side of a product page that customers use to add items to the cart. 82% of sales come from the Buy Box, but not every seller gets one. Only one seller per category gets the Buy Box on their page.
Everyone is competing for the Buy Box because of its power to increase sales, especially on mobile devices.
Eligibility Checklist for the Buy Box:
In really competitive niches, it’s difficult for new sellers to get the Buy Box. These factors make you eligible, but there’s no guarantee. If you’re flipping on Amazon, make sure to cross off this checklist.
- Competitive price
- Professional seller status
- Order Defect Rate (ODR) = low returns
- Positive customer experience
- Time selling on Amazon
How to Confirm Your Eligibility for the Buy Box
- Log in to Seller Central.
- Click on the inventory tab and Manage Inventory.
- Choose Preferences.
- Choose “Buy Box Eligible.”
- Select “Show When Available.”
- The system will say “yes” or “no” if you’re eligible for the Buy Box.
Final Thoughts – How to Make Money Reselling on Amazon
At Profit Stack, we strive to be an information gateway to help our readers succeed. We put this guide together so you can grow your Amazon resale business without making the mistakes that so many newbies do.
When you start reselling on Amazon, start small and scale when business calls for it. Be open to growth, but don’t force it before you’re ready.
If you want to learn more about marketing, check out our other guides!