There are many third-party brands out there that started reselling on Amazon a while back. Here’s the main idea behind it: sellers buy items in bulk at a discount, and then resell on Amazon for a profit.
Such merchants are now masters at reselling stuff on Amazon. The trend is actually an entire business model in itself.
It’s also a very profitable strategy, whether you’re just starting out or looking for extra income. And there’s no reason why you couldn’t boost your profits the same way.
The trick is to know the best tactics 3P sellers need to set up a successful reselling business. That’s exactly what we’ll discuss below.
So, without further ado, let’s learn how to start reselling on Amazon.
How Does Reselling on Amazon Work?
So what is reselling on Amazon? Well… resales. It’s about sourcing clearance products in bulk, like books or clothing, with a high margin.
Then, you can list those items on Amazon and sell them to new customers for a profit. Here’s how the process works in a nutshell:
- Find products below retail value and with high consumer demand.
- Buy in bulk from stores, suppliers or manufacturers to increase your ROI.
- Check average pricings on Amazon to set up profitable resale prices.
- Handle product storage to smooth out the supply process.
- Upload product listings and start selling.
- Pack and send your orders. Then, pay your shipping and Amazon fees.
- Enjoy your profit.
There are 3 key Amazon reselling models. Let’s see how each one works for Amazon resellers.
- Retail Arbitrage. This one is all about flipping products. Sellers find clearance items and brick-and-mortar stores. Then, they resell those items on Amazon for a profit.
- Online Arbitrage. Here’s the other side of arbitrage sales. Merchants still focus on buying and reselling overstock on Amazon. But they do so by searching for discount goods in online stores.
- Wholesale. Merchants buy from product suppliers at low-cost, and sell each item at higher markups. It takes a bit of sales know-how and also more storage space.
If there are “reselling on Amazon for beginners” models, these are it. Each of the previous models is great to get new brands started on their Amazon journey.
Resellers can focus on one of these selling models or combine all three. The latter approach will help you find more products and also increase your revenue.
Related content: Amazon Business Models
Is Reselling on Amazon Legal?
In a word, yes. There’s no legal issue when reselling things on Amazon. The main condition is honesty: you must list the resale products as used.
Also, be very careful about selling counterfeit goods, or about IP infringement.
You can also benefit your sales from stating the item’s condition. Buyers should be aware of the product’s quality before purchase. This practice will only add to your standing as an Amazon reseller.
And if you’re looking to sell specific brands, make sure you have authorization to do so.
Is Reselling on Amazon Worth It?
Here’s the big question: can you make money reselling on Amazon? Yes, of course, but it all depends on what you’re willing to invest.
You’ll need to buy the products and keep them until you can sell and ship them. Then there’s the marketing labor, and a bit of customer service.
But the key is to set a large difference between original sales prices and reselling prices. To do so, always consider storage, shipping and Amazon’s fees.
Always take note of this when reselling clearance items on Amazon.
To make things easier, you can also enroll in Amazon FBA. With this program, you hand down all the logistics hassles to Amazon for a monthly fee.
Buying and Reselling on Amazon
Now, let’s see how to make money reselling items on Amazon.
What Do You Want to Resell?
Product research is key when reselling on Amazon. Your items of choice may depend on what you can actually find and buy. But there are two rules to follow:
- Go for products with high competition, but proven success.
- Resell items with low competition, but no proven success.
The goal is to find the right balance between profitability and competition. You want to make the most profit, but you also need to provide a unique offer to customers.
Here are some of the best products to resell on Amazon:
- Books. You can focus on reselling unique books, like first prints or autographed copies. This can help you find niche customers which may turn into loyal followers.
- Jewelry. It’s easy to ship and it offers high profit margins. Plus, you’ll always find buyers looking for a perfect gift for a loved one. That said, you may have to deal with a lot of competition.
- Toys & Games. This is a great option for seasonal resellers. You can stock up on popular toys and sell them for a profit during special holidays.
This is just the tip of the iceberg, of course. Only you can decide what the best product is to sell.
We recommend being selective. This approach will help you narrow down your options, Therefore, you’ll sell faster, attract more conversions, and even get a chance to win Amazon’s buy box.
Locate Your Suppliers
Where can you find the products that you want to sell? Choosing a supplier is crucial to running a long-term reselling business.
You want to buy from a place that provides quality products in bulk. So, make sure the supplier can provide what you need on a regular basis.
And don’t go with your first choices. If possible, talk to your suppliers to find more about the products they sell, and their own practices. Make sure you check for the following:
- Supplier’s performance
- Quality control practices
- Market reputation
Wholesalers can look for reliable suppliers on Alibaba. This site is home to many Chinese suppliers, offering excellent profit margins. As for the arbitrage models, you can start your product search in places like Walmart or eBay.
We recommend that you use the Amazon FBA Calculator to find the best products to resell. This tool can help you find sales gaps within Amazon which you can exploit.
Register, list and sell
So now that you’ve set up your reselling operation, it’s time to dive into Amazon and start making profits!
First off, you’ll need to create an Amazon account. It’s not a hard process, but there are a few nuisances, which we tackle in this guide.
Lastly, you need to upload your products and share them with the marketplace. This is another whole process in itself, which you won’t regret learning about right here.
In our experience, the best Amazon sellers are the more thorough ones. Knowing the ins and outs of Amazon will pay off with a seamless selling experience and steady revenue.
So, is reselling on Amazon profitable? Yes! But can you really make money reselling on Amazon? Well, that depends on you.
The retail and online arbitrage ways can turn into profitable side businesses. But if you’re looking for a full-time gig, then you should also go with wholesale.
In fact, the most successful resellers mix and match these models to make the most out of reselling products on Amazon.
Once you’ve mastered the reselling approach, you can upgrade to a private label or dropshipping business.
It takes time, yes. But it’s also an easy business model to start up. And with the right marketing strategy, there’s no reason why you shouldn’t succeed.
Esteban Muñoz is a content writer at AMZ Advisers, with several years’ experience in digital marketing and e-commerce. Esteban and the AMZ Advisers team have been able to achieve incredible growth on Amazon for their clients by optimizing and managing their accounts, and creating in-depth content marketing strategies.