Reselling products in high demand on Amazon is a great way of making money. Reselling on Amazon is sourcing cheap goods and then reselling them on Amazon at a higher price to make a profit.
You can often get cheap products when you buy large consignments from a distributor or a manufacturer.
- How do you become a successful Amazon reseller?
- What are the best strategies to deploy?
- What software can help you scale your business?
Read this guide to learn everything you need to know about reselling on Amazon.
Table of Contents
- Ways to resell products on Amazon
- How to become an Amazon reseller
- How much money do you need to start reselling on Amazon?
- Best software to use when reselling
- Am I legally allowed to resell products on Amazon?
- Is arbitrage legal on Amazon?
- Do you need a license to resell on Amazon?
- Reseller or Seller: Which is better for you?
- Can I resell branded products on Amazon?
- What if I own my own branded products?
- Frequently asked questions
Ways to resell products on Amazon
Retail and online arbitrage
Retail arbitrage is the practice of sourcing cheap products from a retail store and selling them on Amazon for a profit.
Online arbitrage is buying products from online stores to resell. You can buy from places like Aliexpress, 1688.com at cheaper Chinese prices, ship it to you and the list on Amazon.
Generally, the rule is to find products that sell on Amazon for less than the amount they are listed for after factoring in all seller fees and other expenses.
Buy products from wholesalers
If you have a large budget, you can buy wholesale products to sell on Amazon and enjoy a lower price point for each product. Wholesalers sell items to businesses or brands so that they can resell them to the final consumer for a profit. With this strategy, you will enjoy a lower price point per item, only that you will need a large capital to purchase the goods in bulk.
Buy from manufacturers
This strategy is more suited for more advanced resellers. Here, you will need to create your private label product and place an order for a manufacturer to supply you with the product. Buying from manufacturers also requires a lot of capital because you’d be buying in bulk to ensure a lower price point per item.
I suggest you start with the first three strategies for beginners since they don’t require much capital. Then, once you understand the reselling business model on Amazon, you can save up to start buying from wholesalers or manufacturers.
Resell your used products – not recommended
This is a popular technique that most people use to resell on Amazon. If you have stuff you no longer use and feel other people may need it, you can list such items on Amazon for people to buy.
However, this is not recommended on Amazon and more suited for ebay or craigslist where people are looking for used or hard to find antique items.
On Amazon, people want to buy new, unopened items.
Many times, the buyers will complain you sold a used item which could lead to your account being shut down and you will have to submit an appeal or plan of action letter.
Dropshipping – NEVER DO IT
Never drop ship as an Amazon seller. You will be banned in a matter of months. If someone tells you to drop ship to Amazon, run away.
How to become an Amazon reseller
Step 1. Register an Amazon seller account
Sign up for an Amazon seller account. On Amazon, you can either register an individual or professional account. For an individual account, you will be charged a $0.99 fee for every item you sell, while maintaining a professional account costs $39.99 per month.
Step 2. Find a perfect product for reselling on Amazon
Before you list a product to resell on Amazon, it is a good idea to get the product sample from the supplier or the manufacturer and test it to see if it will work with your audience. The reason for testing the product first is that you may find products on Alibaba that you feel will sell on Amazon, but the product pictures will differ from what the items look like in reality.
One way to find the best product to sell on Amazon is to select products with a good margin and avoid items with extremely high competition. It’s also a good idea to avoid oversized, fragile, bulky, or too heavy items.
Another tip to find a perfect product to sell on Amazon is to avoid extremely seasonal items; plus, it is essential to check if the product sells in the selected marketplace.
So where can you get the perfect products to resell on Amazon?
Search through customer reviews of competing products to see what the weaknesses are. Another approach is researching or analyzing popular keywords to determine what people buy.
Step 3. Source the product
Once you have identified a product to resell on Amazon, the next step is to source the product from the supplier. The perfect manufacturer or supplier should be able to meet your deadline and provide you with quality products.
Here are some tips to help you look out for the perfect supplier:
- Review the supplier’s performance and ask questions about their products and supplying process.
- Do a search on Alibaba to find a supplier with a good profit margin. You can also search the wholesale directories.
- Consider working with verified sourcing agents.
- If you are in the US, you can check places like Dollardays.com, Liquidation.com, Big Lots, Gabes, Tuesday Morning, and Price Master.
Step 4. Create an optimized listing
If the products you want to resell on Amazon do not exist in the marketplace, you must create an optimized listing. Even if you have the best product to resell on Amazon, but the photos are bad and the listing information is wrong, people will not buy. A listing is said to be optimized if it has the following components:
- 20 to 30 reviews with some 4-star ratings.
- A+ content.
- Highly ranked keywords
- High-quality images or videos of the product
- Clear product descriptions.
Step 5. Launch and promote your product
Developing effective and efficient marketing strategies to promote your product is important. An efficient strategy contains the following elements:
- Setting up and reviewing ad campaigns
- Monitoring the campaign metrics and tracking reach, engagement, clicks, impression, and ad frequency
- Target attaining Buy Box
- Engaging influencers
- Promoting products outside Amazon
Step 6. Grow your business
If you follow through with all the steps above, you will start to generate conversions and money will flow into your account. However, the money you’ve made can be burned down if you don’t keep track of your expenses and other business metrics. Track your product KPIs and analytics to maximize profits. Some metrics to consider tracking include:
- Net profit
- Factors influencing your profits
- Amazon fees
- Refunds and reimbursements
- Inventory costs
How much money do you need to start reselling on Amazon?
Everyone asks how much it costs to sell on Amazon.
Generally, you need between $2000 and $5000 to kick-start your journey into reselling on Amazon. The money is purely meant for purchasing cheap products and covering required costs like inventory, shipping, product photoshoots, and tools & supplies. Let’s take a look at each of these costs in detail.
One of the most significant upfront investments for most Amazon resellers is the inventory cost. After all, without listing your inventory for customers to see, a sale would never take place. If you are new to the business, it is quite alright to feel reluctant to spend your hard-earned money on inventory that you are not sure will sell.
Having amazing photoshoots is one sure way to attract a large audience to your product and drive the most sales. You will need to invest part of your budget to create stunning graphics or photoshoots.
Use services from Upwork or Fiverr or other graphic design and video creating software that can do it cheap.
Advertising is a big expense and depending on your product and category, it can be anywhere from 5% of your total sales to 15%.
Competitive products have higher ad costs. The retail price you sell at could be $15, but the cost per click could be $2. Compared to low competition products where it’s the same $15, but CPC is $0.50.
Tools and Supplies
You will be spending money on measuring, packaging, and managing your orders, and that’s where investing in various tools and supplies comes in. For example, you will need a printer to print orders and shipping information. You will also need packaging boxes and tapes to properly package your orders for delivery.
Best software to use when reselling
It might be lucrative to resell on Amazon, but if you don’t use the best tools for Amazon to scale and free up time for other important activities, you will end up always feeling overwhelmed. Find below the top tools you can leverage if you are planning to start your Amazon resell business:
#1. Inventory Management by Gorilla ROI
With Gorilla ROI, you get access to your inventory data, operations, finances, orders, sales data and more.
It gives you 100% flexibility and customization and lets you work with Google sheets to stay nimble and flexible.
If you have special formulas and calculations that is unique to your business, you can custom create anything for a full in house Amazon inventory management system.
#2. Sales estimator Chrome extensions
There are so many chrome extensions for Amazon sales estimations. Go to the Chrome marketplace and download something for free and you can get ballpark numbers of sales estimates.
#3. Supplier Database by ImportYeti
If you are struggling to find the best supplier for your business, you should consider using the best free customs data tool called ImportYeti.
There are other versions and it’s either extremely expensive, or extremely bad.
#4. Keyword research tools
An Amazon keyword research tool can help you validate product demand, monthly sales and search volume, top sellers, and product search volume. It can also help you see the number of buyers looking for specific products and whether or not the product is worth investing in.
For our recommendation, use ZonGuru rather than Junglescout or Helium 10. We have been able to work out a discount with ZonGuru that you can take advantage of.
Best products to resell on Amazon
It is one thing to understand the reselling process, it’s another thing to resell products that people will want to buy.
Here are some profitable product ideas that you can start with:
Reselling books on Amazon is a sure bet. The profit potential is usually very high if you can list the right books for reselling, like non-fiction books. Non-fiction books have a high resale value.
Electronics are one of the best-selling categories on Amazon. Some items you can consider in this category are smartphone and computer accessories and chargers for various devices. The best strategy with electronics is to resell existing brands. Do NOT try to sell electronics under your own brand as your first venture.
Home & Kitchen
Another viable category to consider if you want to succeed as an Amazon reseller is the home & kitchen category. Some products you should consider in this category are shaker bottles, food scales, and tumblers.
Toys & Games
This is a popular product category. During holidays, especially when kids are back from school, toys & games categories usually experience a surge in demand. Some products in this category to consider listing are toys for babies, colored pencils, card games, and board games.
Am I legally allowed to resell products on Amazon?
Yes, reselling is allowed on Amazon. Many successful Amazon sellers have embraced the highly lucrative business strategy of reselling on the platform. Therefore, even while there is no legislation against reselling and Amazon doesn’t technically forbid it on its marketplace, it does have tight guidelines about what and how things can be resold. Always read the terms of service and Amazon guidelines to prevent your account from getting suspended or banned.
Watch out for the following:
- Slow shipping if you are FBM
- Getting your products identified as fake by a customer and you lack documentation.
- Deliberately breaking Amazon rules to increase sales
- Listing a product under a brand or category you are not permitted to sell in.
- Listing a product as new even though it doesn’t meet Amazon’s criteria for new.
Is arbitrage legal on Amazon?
Yes, Amazon permits retail arbitrage. Anyone who asserts differently is ignorant of Amazon’s true rules. I advise reading all of the Amazon instructions if you plan to sell on the marketplace. You can easily tick the box to agree to the terms of agreement for most of the accounts you create without reading them. But for this particular account, you should take the time to read them fully. This will help you avoid a lot of hassle.
Do you need a license to resell on Amazon?
You can register as an LCC or get a business license anytime, but it’s not required to sell on Amazon. Amazon is not subject to federal regulation. It means that most of the goods you can sell on Amazon and similar platforms are consumer-focused and do not require official authorization. Therefore, you don’t need a business license to buy or sell on Amazon or other websites like Facebook or Craigslist. To safeguard your assets and receive tax and management benefits, it would be preferable to register your company as an LLC or a Sole Proprietorship. Only if you want to.
Reseller or Seller: Which is better for you?
There is no definite answer on either side. An individual or business who buys items in bulk and resells them on Amazon at a higher profit margin is known as an Amazon reseller. They deliver used goods to customers but do not hold the intellectual property rights to the product. A seller is someone who is known to sell in a particular niche using their own brand.
Can I resell branded products on Amazon?
You must confirm that you have the authorization to resell branded goods on Amazon if you are selling them and you are not the maker of those goods. Some businesses are hesitant to have their items offered on online stores like Amazon and may outright forbid it, while other brands will only permit specific suppliers to distribute their goods.
You should also make sure that they are genuine goods if you have a license to resell these branded products on Amazon.
What if I own my own branded products?
Sign up for Amazon’s Brand Registry. This will guarantee that you are the only seller on the site if you have your own branded products to offer and are the only source or seller of them. Suppose you manufacture your own items, make branded, customized, and hand-made goods, operate a private label brand, or are the only distributor of a product on Amazon. In that case, Amazon Brand Registry may be right for you.
Here’s how to apply to Brand Registry. The said Amazon page requires that you give the following details to enroll a brand:
- Your brand name is protected by an active, pending, or registered trademark. The brand’s trademark must be visible on your products or packaging, and you must submit photographs demonstrating this.
- The Intellectual Property Office’s number for the trademark registration. If you are enrolling with a trademark that has a pending registration, you can only enter the application number provided by the Intellectual Property office.
- A list of product categories where your brand should be mentioned, such as clothes, sporting goods, and electronics.
After submitting this data, Amazon will confirm that you are the trademark’s rights owner and will get in touch with you once the criteria are satisfied.
Reselling products on Amazon is an amazing opportunity. As your business begins to scale, you can even become a full-time Amazon reseller. The choice is yours on how far you want to take it. As long as you are committed to your selling strategies and you deploy the right selling tools, there’s no reason why you won’t make money reselling products that are in high demand on Amazon.
Frequently asked questions
How much do Amazon resellers make?
As an Amazon reseller, if you use the right tools and strategies, you can easily make around $1,000 per month in sales. Some of the biggest sellers on Amazon are resellers.
Do you need a license to resell on Amazon?
The short answer to this question is no. You don’t need a license to start reselling products on Amazon, this is because all the products listed on Amazon are not regulated federally. In other words, products listed on Amazon are consumer goods, which do not require government approvals.
Can I resell branded products on Amazon?
You can resell branded products on Amazon, but before you get started, ensure you get authorization from the brand or company. Some brands frown at people reselling their products on marketplaces like Amazon. Therefore, do thorough due diligence before listing any product on Amazon to sell to avoid getting into trouble.
How do I become a reseller?
Getting started as an Amazon FBA reseller is simple. All you have to do is sign up to become an Amazon seller, select goods you are sure will sell, locate a supplier for your goods, list the goods on the Amazon marketplace, apply to FBA, and lastly, be a Buy Box winner. Once you check all these boxes, you are well on becoming a successful Amazon reseller.
What options are there for sellers on Amazon?
Both the Fulfillment by Amazon (FBA) and the Fulfillment by Merchant (FBM) methods are available to you as an Amazon seller.
Is it worth reselling on Amazon?
Want more income? Purchasing and reselling items on the Amazon platform can be a great option. Reselling is the practice of getting something cheap and then reselling it to other people for more money to profit from the deal.
Is a Professional Seller Account on Amazon required for me?
You can open a professional seller account if you want to sell more than 50 items monthly. If not, you can be a private seller.
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