What Is An Amazon Reseller

As online shopping becomes more and more popular, many people are seeking ways to increase profit by reselling products on the Amazon marketplace. You don’t even need to come up with fresh product concepts or manufacture new products before you can turn a profit.

You can simply purchase products at a cheap price and then sell them again at a higher price— that’s the big idea behind the Amazon reseller model.

Today, there are over two million third-party sellers on Amazon sourcing items and reselling them. So, if you are also looking to be an Amazon reseller, you need to make your research to find the perfect product to resell and unique strategies to generate more profits.

In this article, we’ll discuss what an Amazon reseller is, how you can become one and resell products, determine the perfect products to resell, the pros and cons of this amazon business model, and the best practices to effectively increase your profits.

What Does An Amazon Reseller Do?

Simply put, a reseller is a merchant that purchases products from a manufacturer or distributor and then lists the products for sale on Amazon, usually at a higher price to make a profit.

Amazon resellers either sell specific products or a variety of items and may also offer additional services, such as packaging and shipping, to customers who purchase products through their Amazon listings.

How To Become An Amazon Reseller?

Becoming an Amazon reseller is relatively simple but it requires some effort and planning. It is essentially the same as selling on Amazon but without having to produce new products.

You’ll only buy products and sell them again to interested buyers. Here are the basic steps to becoming an Amazon reseller:

  • Create An Amazon Seller Account

Without a professional seller account, you cannot sell or resell on Amazon. To list items for sale on the marketplace, you have to register as a seller.

Amazon levies various fees on its sellers, including a professional monthly plan at $39.99 and an individual plan priced at $0.99 per item sold.

Also, ensure to include all necessary information while creating your account to avoid any problems in the future.

  • Choose The Best Products To Sell

Amazon is the largest e-commerce company with millions of user base and sellers worldwide with lots of products available for sale.

Choosing the right product to sell can be so daunting, however, you should consider the market demand, a specific product niche, best-selling products, limited competition items, availability of the products, high-profit margin goods, and pricing. Even if you wish to sell different variety of items, thorough research will help you choose the ideal product to resell.

Further, you can source products on different e-commerce platforms at a lower price and then sell them on Amazon for a profit. Some popular online marketplaces are; eBay, AliExpress, Walmart, Shopify, and AliExpress among others.

When sourcing products from other e-commerce marketplaces, it’s important to ensure that the products adhere to Amazon’s policies. You should also research your competitors and ensure that you can sell products at a competitive prices.

  • Find A Supplier

Reselling doesn’t require amazon sellers to create new products, hence, you have to get a reliable supplier or manufacturer who can provide you with products to sell.

You can easily connect with manufacturers directly or by using a third-party service that connects resellers with suppliers. You can also find reliable suppliers from trade shows, online directories, referrals, or sourcing agents.

When evaluating potential suppliers, it’s important to consider factors like price, quality, reference, customer reviews, and shipping costs.

  • List Products To Resell

To effectively list products on Amazon, you have to provide well-detailed information about the product, including product title, description, images, quantity, and pricing for buyers to locate the products faster.

However, be sure to follow Amazon’s regulations for product descriptions and images while creating your product listings.

  • Fulfill Orders

Amazon resellers also fulfill orders when buyers purchase products through your listings. You can fulfill orders by packaging and shipping the products to the customers using Amazon’s fulfillment services, or working with a third-party fulfillment provider.

Methods of Amazon Reselling

There are several methods of reselling on Amazon, and which method you choose may depend on your goals and resources.

  • Retail Arbitrage

Retail Arbitrage is an online reselling business model that involves buying discounted or inexpensive products from brick and mortar stores and reselling them on Amazon at higher prices.

This reselling method can be relatively cheap, as it doesn’t require purchasing products in bulk or maintaining a large inventory. However, it can also be time-consuming and requires a lot of effort to find profitable products.

Here’s how it works, you could buy a product on eBay for $30 and resell it for $50 on Amazon, keeping $20 profits on every sale.

  • Online Arbitrage

Online arbitrage involves purchasing low-priced products from online retailers, such as Walmart or AliExpress, and reselling them on Amazon at higher prices.

The retail arbitrage and online arbitrage methods are similar, however, you have to source for products online if you are using the online arbitrage reselling method. Thus, making it more convenient, and readily accessible, and you can purchase items in bulk to get a good price.

  • Private label

Private label involves working with a manufacturer to create custom products with your branding and packaging. Though private label brands takes more time and money up front, it results in higher profits because your items will stand out from those of other merchants and you will have more control over the branding and pricing.

  • Wholesale

The wholesale reselling model requires buying products in large quantities from a manufacturer and then, reselling them based on the buyer’s demand.

Without a doubt, this method can be more scalable with a large budget, as you can purchase large quantities of products at a discount and keep a profit margin on each sale you make.

The wholesale method requires more upfront investment and may also require a warehouse to store your inventory. You can make use of the Amazon FBA fulfillment method to ease stress as Amazon will handle all shipping processes.

  • Dropshipping

Based on statistics, dropshipping is a resell and fulfillment model for 33% of online stores and fulfills 23% of all online sales, Amazon included.

Dropshippers were used to processing 34% of Amazon orders in 2011, and that percentage has only increased since then.

Amazon dropshipping involves listing products for sale, then purchasing them from a wholesaler or manufacturer who then fulfills orders directly.

There are many platforms that you can dropship to from Amazon, including eBay, Facebook Marketplace and more. Bear in mind that each platform has their own inherent risk.

With this method, you don’t have to purchase products upfront or maintain inventory, but it has its setbacks— there’s high competition from dropshipping similar products and you may have less control over the quality of products.

Reselling Products On Amazon

Pros

  • More profits

Amazon resellers purchase products and sell them at a higher price, thereby making more profits.

  • Huge customer base

Millions of buyers gather daily on the Amazon marketplace, hence a platform to resell to more buyers and increase your revenue.

  • Low startup costs

Amazon reselling doesn’t require high capital to start. It is relatively inexpensive compared to other business models and you don’t even need to stock up on products before selling.

  • Low Price Tag

Most resellers buy items in bulk and while selling in bits, they sell products at a lower price than the manufacturer or distributor, still keeping a high-profit margin.

Therefore, more customers will prefer to buy from them at a lower price, leading to more sales at the same time, more revenue.

  • Easy fulfillment option

Resellers can make use of the fulfillment by Amazon, FBA program to enable Amazon to handle deliveries and shipping processes.

  • Private Labeling

You can buy products directly from manufacturers and resell them with your branding and packaging. Brand owners will stand out from the competition and their brand will be more recognizable.

  • Sales trends and market data

Amazon provides resellers with access to data about sales trends and customer behavior, which can help resellers make informed decisions about what products to sell.

Cons

  • Competition

Day by day, lots of resellers vying for customers’ attention are joining the marketplace, and it’s becoming more crowded selling similar products.

  • Pricing And Demand

There is always constant change with fluctuations in product demand and pricing and since Amazon is a large and prominent marketplace with millions of users, customers might prefer a reseller listing to another. So you have to stay up-to-date on market trends, deals, and news to be able to adapt quickly to changing conditions.

In addition, Amazon will also charge you selling fees, storage fees, and fulfillment fees, which can eat into profit margins.

  • Counterfeit And IP infringement

Amazon has struggled with issues related to counterfeit products and infringement of intellectual property, which can be a challenge for resellers who are trying to sell authentic products.

Best Practices For Amazon Reselling

Reselling on Amazon can be more easier and profitable. Let’s consider some best practices you can follow;

  • Build A Strong Relationship With Your Supplier

By developing a good relationship with your supplier, you can negotiate better prices and access new products.

  • Offer Excellent Customer Service

Providing excellent customer service can help you stand out from other resellers and generate positive reviews and feedback from customers.

  • Build A Strong Brand And Customer Base

Creating a strong brand and customer base can help you stand out in a crowded marketplace. This can be done by creating a memorable brand name, logo, and packaging, and by building a loyal customer base through targeted marketing and promotions.

  • Stay Up-to-date On Market Trends And Regulations

The Amazon marketplace is constantly changing, and resellers need to stay informed about market trends and any new policies from Amazon or the manufacturer.

Also, you can make use of sales data and analytics tools to identify trends and make data-driven decisions about pricing and the best products to sell.

Amazon Reseller Policies

While many sellers have concern that reselling on Amazon is illegal, the marketplace has policies in place that recognize the business model and regulates reselling activities.

Some products may require approval from Amazon or the manufacturer before they can be resold on the platform. Therefore, Resellers need to be aware of these policies and comply with them to avoid any penalties or account suspension.

Furthermore, Amazon protects resellers from intellectual property infringement claims by the first sale doctrine. According to the first sale doctrine, every buyer should be permitted to resell a product bearing a brand name as long as the resold product did not change.

In essence, you can legally purchase a branded product, offer them for sale, and resell it without getting suspended.

The first sale policy however works for resellers based in the United States and not for resellers based in Europe.

And importantly, any slight difference between the original product and the one being sold again will no longer be accepted as authentic by Amazon law and may result in account suspension.

Conclusion

Reselling is becoming a fast-growing business model and a terrific way to sell products online to generate more revenue. However, it is highly competitive, especially in the Amazon marketplace

Notwithstanding, you can increase your success and profit margin by getting the right products and suppliers, building a strong brand, and customer base, and staying up-to-date on market trends and Amazon policies.

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