Reselling on Amazon is a simple way to do eCommerce business on a tight budget. While it’s easy to start, using Amazon apps and strategies is critical to finding profitable stuff to sell.
With too many resellers, you’ll need a strategic plan to stand out. This guide is your roadmap to kickstarting your Amazon reselling business.
It’s all about keeping it easy, learning the basics, and taking advantage of the opportunities.
Let’s get started on this Amazon reselling adventure together!
Different Ways of Reselling on Amazon
There are many ways to resell products on Amazon. Here are some of the most popular methods.
Retail Arbitrage
Retail arbitrage is an online business method where you purchase products at a discount or clearance from regular stores and sell them for a higher price on Amazon. It’s an intelligent way to earn money, especially when there’s a notable price gap between what you pay in-store and what you can get online.
For instance, if you buy a toy at a local store for $15 and then sell it on Amazon for $20, you make a profit of $5. This business model thrives on finding good deals and pricing disparities.
Online Arbitrage
Online arbitrage is a way to make money online where you purchase products from websites like eBay or Walmart at lower prices and then sell them for a profit on Amazon. It’s similar to retail arbitrage, but you do it all online instead of going to physical stores. The key is to find items online priced lower than what they’re being sold for on Amazon.
For instance, if you find a gadget on eBay for $10 and it’s selling for $15 on Amazon, you can make a $5 profit by selling it there. This strategy prioritizes good deals and price differences across various online platforms.
Amazon Dropshipping
Amazon dropshipping is a way to do online business where you only buy products from a wholesaler when a customer orders them. Instead of keeping stock or investing upfront, the wholesaler directly ships the products to your customer. This means you don’t need to worry about storing items. You can buy products one at a time, and there’s no minimum order requirement.
Suppose a customer orders a backpack from your Amazon store. With drop shipping, you purchase that backpack from a wholesaler who ships it directly to the customer, saving you the hassle of managing inventory or dealing with storage space.
Amazon Wholesale
Amazon wholesale is a way to make money by purchasing products in large amounts from wholesale suppliers and selling them on Amazon. It’s a good option if you have some money to spend but want to avoid the hassle of creating your own branded products. When you sell wholesale on Amazon, you can make higher profits, around 50%, but you must find reliable suppliers and handle your inventory. Services like Amazon FBA or 3rd party logistics can assist with managing inventory and shipping.
For example, you buy 100 phone cases at a lower cost per case from a wholesale supplier. You then sell these cases individually on Amazon, making a profit on each sale.
How To Get Started Reselling On Amazon?
Step 1: Research and Choose Your Reselling Model
Research the Different Models: Understand various reselling models, such as retail arbitrage, online arbitrage, wholesale, or drop shipping.
Choose Your Niche: Identify products or categories you are interested in or know about.
Step 2: Create an Amazon Seller Account
When creating your Amazon seller account, you have two options: individual and professional.
Individual Account
Cost: Free to create, no monthly fee.
Transaction Fee: $0.99 per item sold, plus a standard 15% commission fee.
Ideal For Beginners or those with occasional sales.
Professional Account
Cost: $39.99 monthly fee.
Transaction Fee: Only the standard 15% commission applies.
Additional Benefits: Access to advanced tools and features.
Ideal For Sellers with higher volume and those looking for extra tools.
Choosing Between the Two
Start as an Individual: Sign up for an individual account if you’re starting. It’s free, and you only pay the $0.99 fee when you make a sale, in addition to the 15% commission.
Upgrade to Professional: Consider upgrading to a professional account once you exceed 40 sales in a month. This eliminates the $0.99 fee, and you gain access to valuable tools, making it cost-effective for higher-volume sellers.
This flexibility allows you to begin with minimal costs and transition to a professional account as your sales grow. Remember to weigh the benefits against your sales volume to determine the most cost-efficient option for your reselling business on Amazon.
Step 3: Conducting Product Research for Amazon Sales
Generating profits through Amazon resale requires a strategic selection of products that balance popularity and low competition.
Ensuring a profitable venture involves steering clear of highly competitive products with narrow profit margins, which can limit overall earnings. Likewise, steering clear of products with low demand is crucial, as inadequate sales can lead to financial losses.
Consider the following tips;
Sample Products First
Order product samples before committing to bulk purchases to assess their quality and ensure they meet your standards.
Explore Consumer Forums
Engage with consumer forums to identify products that potential customers are actively seeking. This can provide valuable insights into market demands.
Mindful of Shipping Costs
Choose neither fragile nor hefty products, as these attributes can significantly raise shipping costs, impacting your overall profitability.
Compliance with Amazon Policies
Adhere to Amazon’s guidelines by avoiding listing restricted items, such as alcohol or hazardous materials. Violating these rules could lead to account complications.
Tip Utilize tools like Jungle Scout or Helium10 to assess a product’s performance on Amazon, considering sales history, pricing trends, and overall profitability.
By following these guidelines and maintaining a keen awareness of market dynamics, you can increase your chances of selecting products that sell well on Amazon and contribute to a profitable and sustainable business.
Step 4: Find Product Suppliers
Discovering product suppliers for Amazon resale involves strategic sourcing.
For retail arbitrage, explore supermarkets like Walmart and Target, Costco and Sam’s Club warehouses, department stores during end-of-season sales, outlet malls, and Amazon liquidation stores like BULQ. Utilize the Amazon Seller app for real-time pricing comparisons. In online arbitrage, leverage tools like Tactical Arbitrage, Keepa, or RevSeller to scout online stores for lucrative deals.
For drop shipping, explore reputable suppliers listed in various categories. Avoid AliExpress and eBay dropshipping as they violate Amazon’s policies. Consider Alibaba dropshipping for direct factory collaboration.
For wholesale, explore local suppliers or opt for China wholesale vendors using directories like ThomasNet and Maker’s Row.
Remember to conduct due diligence before committing to any supplier. Assess their reliability, quality, and the terms of the partnership to ensure a successful and sustainable reselling business on Amazon.
Step 5: Optimize Your Product Listings On Amazon
Creating an effective Amazon product listing starts in Seller Central. Whether adding a new product or selling an existing one, use specific identifiers like name, UPC, EAN, ISBN, or ASIN to locate it in the Amazon catalog.
Enhance visibility with Amazon SEO by ensuring your listing includes pertinent keywords in the title and description. Optimize with high-quality images, compelling videos, and clear product descriptions.
Include bullet points emphasizing the product’s Unique Selling Proposition (USP). This comprehensive approach enhances your listing‘s appeal, helping it rank higher in search results and capture the attention of potential buyers on the platform.
Step 6: Choose Amazon Fulfillment Options
Fulfillment by Amazon (FBA)
You can ship your products to an Amazon fulfillment center and let Amazon handle the storage, packing, and shipping of your goods utilizing FBA.
Using Fulfillment By Amazon makes your items available to Prime members. Since Amazon Prime members get free two-day shipping, your conversion rate will boost dramatically by having the badge.
However, besides Amazon’s referral fees, Amazon FBA will charge you 10% to 20% of your gross sales.
Fulfillment by Merchant (FBM)
With Fulfillment By Merchant, you handle inventory and delivery of orders and have a complete say over the quality of service provided to clients. However, the only amount you’ll have to pay is Amazon’s regular closing fee and your own shipping and storage costs.
Starting with FBM or a 3PL is an option if the fees associated with having Amazon fulfill and ship your orders through FBA are too expensive.
Seller Fulfilled Prime (SFP)
If you’re a seller on Amazon, you can provide your customers access to Amazon Prime by using a unique fulfillment technique called Seller Fulfilled Prime (SFP). You must maintain a good Seller Feedback Rating and adhere to Amazon’s stringent shipping and fulfillment policies to participate in SFP.
Note Choosing between FBA, FBM, or SFP depends on factors like cost, control, and Prime eligibility, catering to diverse business needs.
Step 7: Boost Your Product Visibility
To generate sales while reselling products on Amazon, consider implementing the following marketing strategies.
Amazon Advertising
Utilizing Amazon Advertising, specifically Sponsored Products, can significantly amplify visibility on the platform. By strategically investing in targeted Amazon ads, you can enhance product exposure, potentially increasing sales by up to 100%.
For instance, if you’re reselling fitness equipment. Implementing Sponsored Products for popular items like resistance bands or yoga mats could result in a 3.3 times higher visibility, compelling more customers to explore and purchase, ultimately driving substantial sales growth.
This advertising strategy proves instrumental in reaching a broader audience and maximizing your products’ impact within the competitive landscape of Amazon.
Customer Reviews
Getting reviews on Amazon plays a pivotal role in driving sales on Amazon. Imagine you’re reselling electronics, and a satisfied customer leaves a positive review highlighting the product’s durability and performance.
This positive feedback can lead to a remarkable 200% increase in sales as potential buyers trust peer endorsements. Actively encourage satisfied customers to share their experiences, creating a positive feedback loop.
Swiftly addressing negative feedback demonstrates a commitment to customer satisfaction, mitigating potential concerns, and fostering a positive online reputation.
Social Media Promotion
Harnessing the influence of social media proves instrumental in amplifying Amazon sales. Leveraging platforms like TikTok, Instagram, and Facebook can result in a substantial 32% increase in sales.
You redirect a targeted audience to your Amazon listings through engaging posts, promotions, and compelling visuals. Showcasing your products on social media platforms and providing a direct link to your Amazon product page can convert followers into customers.
Deals and Lightning Deals
Participating in Lightning Deals, offering a significant discount on a popular gadget for a limited time, can lead to a substantial 72% sales boost. This tactic attracts deal-seeking customers, creating a sense of urgency and driving rapid conversions.
Regularly featuring products in Amazon’s Deals section ensures increased visibility, drawing in a broader audience seeking discounted offerings. The allure of exclusive deals positions your products favorably, fostering increased sales and establishing a dynamic presence on the Amazon marketplace.
You can combine these strategies based on your product type and target audience for a comprehensive approach to boosting sales on Amazon.
Pro Tips to Making Money By Reselling On Amazon
Considering a boost in your Amazon reselling profits? Take note of these practical tips.
Smart Start
For newcomers, begin with products facing less competition. Imagine diving into selling unique handmade notebooks instead of popular electronics. This approach builds a stellar reputation, earning excellent seller ranks and top-notch ratings.
Quality Matters
Whether dealing with low or high-competition items, prioritize quality—picture selling durable kitchen utensils. Customers value longevity even in a competitive market, leading to positive reviews and sustained sales.
Chase Big Margins
Seek out products with substantial profit margins. Example: Spot a quality blender on eBay for $20; flip it on Amazon for $50 with free delivery. A $30 profit per sale adds up quickly.
Niche Wisdom
Avoid the temptation to resell everything. Focus on 2 or 3 niches, like home decor or tech gadgets. Specializing allows you to cater to diverse needs, establishing a reputation as a go-to seller in those areas.
In Amazon reselling, success lies not just in selling but strategically. Use these tips to maximize your profits with thoughtful choices and targeted niches.
Is it legal to resell products on Amazon?
Indeed, engaging in product reselling on Amazon is legally permissible, and this extends to other platforms such as eBay or Facebook Marketplace. The legal basis supporting this activity is the first-sale doctrine, a principle granting individuals the right to resell a product once it has been legally acquired.
Importantly, this resale must occur unchanged; for instance, if a product is labeled as “new,” it must genuinely be in a new and unused state.
While reselling is generally legal, Amazon places restrictions on certain brands. Notably, sellers may need approval from Amazon to list and sell products from renowned brands like Nike, Disney, LEGO, Adidas, L’oreal, Marvel, Samsung, RayBan, and Under Armour. This approval process is in place to maintain control over the sale of certain branded items.
To navigate this, sellers can resell products from generic or lesser-known brands, avoiding needing specific approvals. Always adhere to Amazon’s comprehensive guidelines to ensure a legally sound and compliant reselling experience. Understanding the intricacies of brand restrictions and approval processes is essential for a successful and lawful reselling journey on Amazon.
Why Do Some Amazon Resellers Fail?
Amazon resellers often face challenges leading to failures. More product research can result in low-demand or highly competitive items. Selling poor-quality products damages reputation and garners negative reviews.
Violating Amazon policies, pricing errors, and ignoring customer feedback are detrimental. Ineffective listings, fulfillment issues, and choosing highly restricted brands pose threats. Relying on a narrow product range and neglecting marketing efforts limit success.
Adaptation is crucial; failing to stay informed and adjust strategies can lead to obsolescence. Successful resellers prioritize research, customer satisfaction, policy adherence, and ongoing adaptation to market dynamics. Identifying and addressing these challenges is vital for a prosperous reselling business on Amazon.
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