As you must be aware there are various business models to sell on amazon. I have been reselling on amazon for more than 5 years and started back with little or no capital.
Reselling on amazon is one of the most discussed amazon businesses since it has a faster capital cycle thereby investment is lower than private labeling.
In this article, I take you through how you can start your journey of selling on amazon by being a reseller on amazon from scratch and taking your reselling business to the next level. Some of our resellers do 7-8 figures on amazon per month.
Amazon resellers are those who buy products from wholesalers or brands or from other stores and sell them on amazon. And making a handsome profit in return.
What is an Amazon Reseller?
Amazon reselling is when you buy products from retailers or wholesalers or manufacturers and then sell them on amazon for profit is called amazon reselling.
- You buy a product from a wholesaler for $15 and then you sell the same product online for $40 on amazon.
- Amazon collects $5 as referral fees ( Fees for selling on their platform) and amazon charges another $5 for shipping it to customers with Amazon FBA pack and ship fees.
- You end up keeping around $15 as profit after all costs.
- The seller who carries out such transactions is called an amazon reseller.
What are the different types of reselling on amazon?
1. Online Arbitrage
Online arbitration is when you buy products from online sellers or marketplaces like eBay, Walmart, or target and sell them on amazon. But the idea is that product has to be far cheaper than it's available on amazon for you to make a profit out of it.
2. Retail Arbitrage
In retail arbitrage instead of buying products from other online sellers or marketplaces, you actually buy the products from brick-and-mortar stores and sell it on amazon. Here retail refers to offline stores. The key is to find products that are on heavy discount or on clearance, this works better during high seasons or holiday seasons.
3. Buy in bulk from Wholesalers or Distributor
In this, you approach the wholesalers or distributors, register with them and then buy products from them and then sell them on amazon. In this model, some of the distributors might have a minimum purchase amount of 500$ or so. As per our research, around 28% of amazon sellers use this model.
4. Buy from Manufacturers
If you know the manufacturers you can directly approach them to sell their products, or you can buy products in bulk and put your own branding and sell them on amazon, this is called private labeling. And it's what most sellers do on amazon around 40% of them as per our research. It's also one of the most profitable segments but it also needs to have advanced knowledge of listing and amazon ads.
5. Sell your used products:
If you have items lying around your house that you believe people would pay a price for buying used products. You can start selling them. But it's not easy to sell used products on amazon. I would suggest you to sell used products on eBay instead of on amazon or Walmart.
All the above models are profitable models. But I highly recommend you to start selling from wholesaling or other models and then move to buying from manufacturers to sell on amazon. Since private labeling requires more skill sets. For you also need to get the right amazon coach for yourself.
Difference between Authorized Seller Vs Unauthorized Seller
There are some brands that don't allow you to sell their products on amazon. And if you sell those products on amazon then amazon can get you banned or restrict your selling privileges.
Authorized sellers are those sellers whose brand has authorized them to sell their products.
Is Amazon Reselling Legal?
Yes, Amazon reselling is completely legal. You can buy products from the store and sell them on amazon. You don't need to be an authorized seller from the brand to sell on amazon.
Once you buy the product it's yours to resell on amazon, but there are a few restrictions or rules to be followed on categories of products:
You can sell products in this category if they are unused, sealed, and in original packing. Then you can freely sell them if you have bought them from wholesale or distributor.
While selling used products you have to specifically list them as refurbished products or used products on amazon, you cannot sell used products as new or under any other category.
Also, only the following products can be sold as used products or personal products:
- Personal Computers
- Video Games
- Movies CD / DVDs
- Musical Instruments
I would suggest selling used items on eBay as compared to on Amazon, though they also sell on amazon pretty well but not all used products can be sold on amazon.
There are certain brands which you can never sell on amazon they are mostly from very well-known brands like :
Marvel, Apple, Samsung, etc.
Though the list is big, once you are well established player amazon may allow you to sell some of these brands with prior approval.
You can always get in touch with amazon seller support service to know more about brand restrictions.
Amazon defines counterfeit products as any products which are not original or try to show as original, duplicate products, pirated products, etc.
If you try selling counterfeit products, amazon has zero tolerance for counterfeit products, and your selling privileges will be removed.
Your account will be banned and any funds in your account will be withheld.
Hence, its strongly recommended not to sell any kind of counterfeit products.
Steps For Reselling on Amazon:
Following is the step by step guide on how to sell on Amazon.
1. Create an Account on Amazon Seller Central:
Amazon account which you use for buying products is different from the amazon seller account.
In order to resell products on amazon, you need to first create an account on Amazon Seller Central.
You click on the link above and follow the steps. You would also have to choose between a professional and personal account.
The main difference between the two accounts is that:
- Professional Account: In this account, you are charged a fixed $40 per month for selling on amazon and you also get access to a lot of tools and APIs for selling on amazon.
- Personal Account: This is an amazon basic account where in you pay amazon 0.99 cents per product unit sold apart from other regular fees. But it also that
2. Decide on products to sell:
In order to determine which products to sell, we recommend installing the Helium10 chrome extension.
Helium 10 chrome extension comes in very handy to determine which products to sell, especially to determine the demand for the products you are planning to sell.
- Demands of products you planning to sell on amazon
- Competition for those products
- And your strategy
- You also need to check if the product is gated or non-gated
- Also if the product is a private label or wholesale product.
- Also, determine your margins
3. Plan on how to source your products:
For sourcing your products
1. Private Label: if it's a private label you can go to Alibaba or search for manufacturers of that product. Who will then provide you a quote based on your requirements and quantity. Then you can send those products to your amazon fba
2. Wholesale product: If it's a wholesale product, you can also search for the wholesaler of that product through the distributor's list and wholesales list.
4. List your products on Amazon and sell:
Once you have decide and bought your products you can list them on amazon and start selling them on amazon for a profit.
5. Other MarketPlaces
You can also sell those products on other marketplaces like eBay and Walmart. For that, you can also use helium10 in order to find the product profitability, competition, etc.
Tips to Succeed As an Amazon Reseller :
1. Use FBA:
Always use amazon fba for the fulfillment of orders, since it not only saves time in inventory management but also helps in winning buy box, since amazon distributes your products across the warehouses in the country so that it can deliver those products fastest to the customers.
2. Brand Reputation / Seller Reputation
Always maintain your brand and seller reputation, which means you need to maintain higher seller ratings in order to win over the customer. This means maintaining your reputation and to main your customer trust.
Some ways to maintain customer trust is
- By having products delivered to customers of the best quality
- Responding to customers immediately
- And selling products as described in the listing
3. Winning Buy Box
Winning of buy box is critical, in order to get a buy box when doing wholesale. One needs to do the following
- To have the lowest price for the customer,
- High seller ratings
- And fastest delivery times (FBA helps)
- Choose low-competition products
- Sell good quality products
If you follow all these steps you can easily make good profits from reselling on amazon. If you are looking to learn to sell on amazon, you can check out the free course here.
Samrudha Salvi ‧ Author
With more than 5 years on selling on amazon, and helping 100s to get started on Amazon.