Amazon is one of the most popular places to resell products, making it a lucrative business model that can be scaled over time.
With approximately 2.2 billion visits online, it’s the most visited e-commerce platform in the United States as of April 2023.
Be it new sellers, experienced retailers, budding entrepreneurs, or eCommerce beginners looking for a side hustle income; Amazon is an exciting opportunity that makes getting started easy.
This thriving digital marketplace seamlessly integrates with the retail experience of brick-and-mortar stores, enabling you to sell products made by your brand or private label brands.
Here’s a complete guide on how to resell on Amazon and remain profitable, whether you’re selling products from national brands that multiple sellers offer or unique private-label products.
- How Profitable is Owning an Amazon Reseller Business?
- What You’ll Need to Start as an Amazon Reseller [& Associated Costs]
- Why Should You Consider an Amazon Reseller Business?
- How to Start Reselling on Amazon Reseller: Step-By-Step Instructions
- Things to Consider When Building an Amazon Reseller Business
- Inspiration for Amazon Reselling Business Ideas
- Frequently Asked Questions
- Similar Side Income Businesses to Consider
- Wrapping Up
How Profitable is Owning an Amazon Reseller Business?
The revenue pie for Amazon sellers is only increasing, allowing sellers to rake in $1,000-$2,500 per month.
There’re mainly two permutations of how to resell on Amazon that directly affect profits.
There’re first-party vendor sales wherein vendors sell their inventory to Amazon.
In turn, Amazon controls the pricing, and product listings include the tags ‘shipped and sold by Amazon.com.’
The benefits of being a first-party vendor include priority sales and brand trust through Amazon’s credibility.
Third-party sellers, who can be individuals or professional sellers, are also permitted to sell on the Amazon marketplace.
For order fulfillment, they can opt for Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM).
The upsides here are favorable pricing control, payment terms, and improved margins.
What You’ll Need to Start as an Amazon Reseller [& Associated Costs]
Before starting to sell on Amazon, form a business, register with Amazon as a seller, and decide how you’ll fulfill orders.
Here are additional requirements to make a note of:
- Business Registration: Depending on the state and legal structure, business registration can cost anywhere between $570-$1,180.
- Registering an Amazon Seller Account: Amazon allows the option to sell one item or sell thousands. The individual plan costs $0.99 per sale, while using a Professional plan costs $39.99 per month, irrespective of how many items sell.
- Order Fulfillment: To fulfill orders on Amazon, shipping costs apply depending on the product category, item size, and weight. The fulfillment fee for most products ranges from $3.22-$7.17 unless the product falls into oversized product tiers. In that case, the fulfillment cost can vary from $9.73 – $179.28
Do I Need a License or Certificate to Start an Amazon Seller Business?
A certificate is an important seller attribute awarded by the U.S. federal government or other standard-defining organizations as they’re valuable to business customers with specific sourcing needs.
Sellers can provide certifications to Amazon applicable to their business to further validate their enterprise on the online marketplace.
Amazon recognizes diversity and ownership certifications like Woman-Owned Business Enterprise, LGBT Business Enterprises, and Veteran-Owned Small Businesses, to name a few.
Businesses can apply for various quality certifications like ISO 14001 – Environmental Management Systems, ISO 9001 – Quality Management Systems, and more.
You can review a comprehensive list of certifications recognized by Amazon here.
Why Should You Consider an Amazon Reseller Business?
Small business owners to individuals can leverage Amazon’s existing infrastructure and database to expand their business model and customer base, which directly affect revenues.
Whether a high-competition product or items with high resale value, here are the perks of reselling on Amazon:
- Low Start-Up Cost: Setting up a storefront on Amazon costs invariably lesser than setting up a brick-and-mortar shop in a locality.
- Network with B2B customers: B2B customers tend to have a larger basket size, and Amazon has over five million business customers, giving your online business better chances to succeed.
- Build a Passive Income Stream: With some upfront work, like assessing the right product to sell and sourcing high-quality products, gig workers can achieve a healthy side income over time.
- Global Expansion: Scaling can become easy with tools like Amazon Global Selling. It supports Amazon sellers with the infrastructure to put their products in front of a worldwide audience.
How to Start Reselling on Amazon Reseller: Step-By-Step Instructions
The following section reveals the Amazon reselling gameplan as actionable steps, making it easy to launch a side income business:
Step 1: Research and Shortlist Your Product
Reviewing the Amazon Seller App is a good starting point for researching what products to sell.
Such analysis lends insights into the highest-selling category and reviews other sellers, product ranking, etc.
It has sections on ‘frequently bought together’ and ‘customers also bought’ that will help shortlist products basis the niche market.
Identifying products with high margins can be an easy go-to plan. However, offering low-competition products backed by a marketing strategy can also yield results.
Inferior quality products might mean saving investments during the sourcing process but typically results in high order-to-return ratios and poor reviews.
Note products that belong to the gated category as reselling them on Amazon requires additional approvals.
Dig deep to identify products sold by one merchant, making it a private label brand. Sourcing this product may be close to impossible because someone else owns it.
Review the product’s historical data, like price history, buy box wins, and price fluctuations, to develop the best repricing strategy to meet the market demands of your target audience.
Helium 10 is a resource aspiring Amazon resellers can leverage to identify the best products to sell.
Step 2: Build A Supplier List
Upon identifying the product niche, find suppliers to purchase products from. Retail stores such as Target, Walmart, and Walgreens present several periodic clearance sales where resellers can buy items at low prices.
In cases when such items are resold at amplified prices, the ecommerce world calls it retail arbitrage.
Rather than stumbling into a brick-and-mortar store, it can be more practical to acquire quality items to sell from online marketplaces, such as Walmart’s online store or Alibaba.
When you opt for reselling products from these platforms, the strategy is labeled online arbitrage.
Remember, wholesalers are well-positioned to propose the lowest price per item.
However, resellers usually need bulk orders, and sourcing such high-quantity goods through reputed suppliers may call for a larger investment.
Purchasing from manufacturers is another option that may also demand bulk ordering.
But for brand owners, the upside of acquiring bulk products from independent manufacturers is the option to brand and white label the purchased products.
Step 3: Register as an Amazon Seller
After completing the initial research, sign up for an account to start reselling on Amazon.
There are two options available for opening an Amazon seller account:
- Click “Sign Up” to register as a Professional seller. This account costs $39.99 a month and comes with all the tools and features Amazon has to offer sellers.
- Click “Sign up to become an individual seller” to register as an Individual seller. This account is free but cannot access nearly as many features. A $0.99 fee is levied on every sold item, and it allows selling single items.
Step 4: Create Optimized Product Listings
Next, log into the Seller Central account, select the “Inventory” option in the menu, and click “Add a Product.”
A search bar will appear on the “List a new product” page. Look for an instruction stating, “Search Amazon’s catalog first.”
Now you can either input new products to existing Amazon listings or develop an entirely new one.
Verify whether Amazon’s database already displays the product. You can write the product’s name or enter its Amazon Standard Identification Number (ASIN) in the search bar.
To make the product listing visible to Amazon buyers, keyword research can help optimize the product listing with Amazon SEO to rank higher in the search results.
An optimized listing on Amazon consists of relevant keywords, high-quality images and videos, clear, detailed product descriptions, and informational bullet points highlighting the product’s USPs.
Remember, low-competition products require a brand-new product listing and robust optimization with niche and product-relevant keywords.
Step 5: Make a Decision to Use FBA
Avoiding FBA fees sounds better in the early stages.
But successful Amazon reselling is closely tied to seller ranking, which means opting for Amazon’s Fulfillment (FBA) helps acquire higher positions on search results and brings the seller closer to winning the Buy Box.
Amazon FBA takes care of storage, picking up, packing, and shipping, provides complete customer service, and even deals with returns.
Unless you’re reselling a unique item to stay competitive when racing against many sellers, strongly consider using FBA.
Step 6: Win the Buy Box
The “Buy Now” button appears on Amazon’s listing pages, referred to as the “Buy Box.”
Most Amazon sales go through a Buy Box, and the percentage is higher on mobile apps, making it a vital reselling tool to understand.
Because several sellers are on each listing, only one individual can win the sale. Therefore Amazon has a mechanism to determine who will receive the deal.
A professional account is required to win the buy box. Provide competitive prices, and build credibility for the account by receiving positive customer rankings and reviews.
Chances of winning the buy box are higher when experiences related to speedy delivery, shipping options, and customer care are enhanced.
Things to Consider When Building an Amazon Reseller Business
If you’re looking at this business model as a professional seller and are passionate about becoming a successful reseller, account for these factors:
1. Resources to Run an Amazon Reselling Business Alone
Being a solo seller works if you want more control over the business. It grants flexibility and allows sellers to choose what to do with the profits.
However, teaming up with a business partner can be an excellent decision to scale the business.
Bringing the cost per unit down may require capital investment to purchase products in volumes, thereby increasing profit margins.
Running the business with a team frees up bandwidth, letting resellers focus on scaling the Amazon business as well.
2. Developing Your Personal Brand
U.S. brand owners grew sales by over 20% yearly in Amazon’s stores.
Building your brand and private label increases the chances of eliminating the immediate competition from other FBA sellers.
A common mistake Amazon sellers make when they start selling is building their brand around a single product instead of opting for a broad product category.
The latter makes it easier to scale in the long run.
3. Develop a Strategy to Manage Inventory
One of the crucial tasks when reselling on Amazon is your ability to forecast sales.
Managing inventory through proven strategies avoids tying up capital with surplus stock, which may impact profit.
On the other hand, a lack of supply can lead to failure in fulfilling customer orders, leading to negative customer reviews affecting the seller’s ranking.
Inspiration for Amazon Reselling Business Ideas
On average, small and medium-sized businesses in the U.S. sell more than 4,000 items per minute, making it an online marketplace that sellers cannot ignore.
Here are the best items you can consider:
Electronic gadgets are a popular e-commerce category with high competition products and high demand that make online retailers focus on smartphone and computer accessories and device chargers.
You can choose low-ticket gadgets like phone covers or earphones with a proven success record for high monthly sales.
This category has seen significant growth since the pandemic. Products under the house, kitchen, and food categories have seen an uptick making weighing scales, bottles, and kitchen organizers popular.
Improve your product research process by studying what all the other resellers in your home appliances are selling.
Buying these products from wholesalers serving this category can be cheap. Thus, resellers enjoy high margins.
Success, however, in this category requires sourcing high-quality products and an awareness of trends, as beauty is a competitive and trend-driven industry.
Consider items like lipstick, shampoos, deodorants, or complete beauty kits.
Sports equipment is a broad category that makes an excellent reselling option on Amazon. Start small with products like yoga mats and water bottles and eventually expand to gear and e-products.
This clothing category has lower risks for side income enthusiasts starting their ecommerce journey. Unlike brands or private-label sellers tied to a specific product style, individuals can begin by selling no-label utility-based accessories.
Frequently Asked Questions
Is It Legal to Resell Products on Amazon?
Reselling products on Amazon is legal and doesn’t require a permit for an authorized reseller.
Whether products are purchased from a retail store or wholesale through a distributor makes no difference.
Ensure listing retailer-purchased items under the “Very Good Condition” or “Used” categories as they aren’t new.
Is It Necessary to Have a Professional Seller Account on Amazon?
While it’s not necessary to have one, it allows selling over 50 products each month.
It also comes with all of Amazon’s features and access to tools that can help you save money in the long run vs. signing up for an individual account.
Similar Side Income Businesses to Consider
If reselling on Amazon doesn’t seem like a business that motivates you at the moment, there’re additional side business options to consider:
- Resell Concert Tickets: The average profit margin on reselling tickets is around 10-20% and can be an excellent way to earn money on the side. Since this opens doors to the entertainment industry as a means of side income, expect high earnings by selling bulk tickets for high-value concerts.
- Sell Sports Cards: If you’re an avid collector of baseball, basketball, or football cards, this can be a quick way of making money by serving sports enthusiasts. Consider diversifying your sports cardholding portfolio by collecting items from different leagues in unique sports. For example, English Premier League (EPL) in football, National Basket Association (NBA) in basketball, Major League Baseball (MLB), etc.
- Sell Used Rims: Vehicle owners always look for affordable ways to upgrade or enhance their car’s appearance. The market for used, custom-made, or aftermarket rims are high-demand products with tremendous potential for a profitable monthly income.
To summarize, reselling on Amazon can be a lucrative side income or a complete enterprise.
There’s no denying that online marketplaces are only here to grow.
An e-commerce giant like Amazon brings immense value to its sellers, given the millions of daily visitors the platform garners.
Reselling on Amazon needs a competitive edge and is harder to scale if the focus is on selling established brands.
Developing a private label brand can take time, but it’s guaranteed to find long-term success.
Bringing in new products with high margins can be a game-changer and is crucial to becoming a successful Amazon reseller.
With various products to sell online, there is no shortage of product markets or high-paying customers seeking products that make their lives convenient or just pretty!