How to Become an Amazon Reseller

Selling 101 says that the bigger your markup, the more profits you take home. So, if you can source products for cheap and resell them high, what’s stopping you? That’s the idea behind the Amazon reseller model, where regular eCommerce sellers are buying up goods wherever they’re least expensive and then reselling those same goods with higher markups on Amazon.

There’s a lot of confusion and misconceptions about reselling on Amazon, so we wanted to clear things up. In this guide, we explain what you need to know about Amazon resellers and how you too can take advantage of this lucrative opportunity.

What Does an Amazon Reseller Do?

Basically, an Amazon reseller is any merchant who buys products from suppliers and resells them on Amazon.

Amazon resellers are distinct from distributors because distributors tend to work together with manufacturers and suppliers in terms of marketing and branding. Resellers are more or less another customer, albeit one who buys in bulk and frequently at that.

In light of rising inflation and price gouging by some opportunistic resellers, Amazon has recently launched the Invite Only Experience for High Demand Products. Under this new program, you must request an invitation to purchase selected high demand, low supply products sold by Amazon.

That’s just a broad explanation, though — in reality, there are a few different and specific methods of acquiring and reselling goods.

Retail Arbitrage

In general, retail arbitrage is when a retailer buys products at a discount from another retailer and then resells them at a higher cost. For example, buying items during a two-for-one sale and then reselling them at full price.

Amazon arbitrage is quite effective, considering how you can cut costs compared to competitors who are paying higher acquisition fees to traditional suppliers.

Wholesalers

Sourcing products from wholesalers is more in line with conventional Amazon selling. Sellers buy products in bulk with price breaks from wholesale suppliers or directly from manufacturers and then resell those products on Amazon.

Related Reading: Busy Wholesaler Stays in Stock with RestockPro

While the markups and profits are usually smaller than retail arbitrage, there are more opportunities and wider product ranges available.

Secondhand and Used Goods

Perhaps what comes to mind when you hear “reselling” is selling secondhand or used goods. Essentially, sellers offer preowned goods at a discount. Product sourcing consists of scouring secondhand stores, flea markets, and yard sales, or simply selling your own household items.

While savvy negotiators will be able to turn a profit on found items, you’ll need to spend extra time looking for new products to sell. Just be sure to list the product condition correctly and follow all guidelines for restricted products on Amazon.

Private and White Label

Private and white label goods are products manufactured by a third-party manufacturer and sold under your own brand name.

A good example of this practice is the generic store brands you see that are similar to (but priced lower than) the more popular brands. The store buys these products from a private or white label supplier and then rebrands them as their own.

Note that private labeling is different from white labeling. Private labeling is when a supplier or manufacturer produces products that are packaged and sold exclusively by a third party. Conversely, white-label products can be sold by any reseller.

As a private label seller or an exclusive reseller with a manufacturer, you should expect to have sole ownership of your products. If another seller suddenly shows up on your listing, chances are that it’s a counterfeiter or hijacker looking to benefit from your brand name.

Fortunately, SellerPulse by eComEngine has your back, very quickly alerting you whenever the number of sellers on your listing has changed. This way, you can quickly detect and address any unauthorized sellers targeting your products.

Is Reselling on Amazon Allowed?

Many sellers assume reselling on Amazon is not allowed, but that’s not actually true. Reselling on Amazon is perfectly acceptable. In fact, reselling on Amazon is protected by the first sales doctrine, as long as the product is unchanged from when it was first acquired (so you can’t buy a product, open the box, and then resell it as new).

However, certain types of reselling are restricted on Amazon. While drop shipping and online arbitrage generally are acceptable practices, you must be careful to follow Amazon's selling policies.

You can very quickly get into trouble if you're missing documentation that states you're the seller and not someone else.

How to Resell Items on Amazon

Reselling on Amazon works in mostly the same way as all other selling — the only difference is how you acquire your products. You still need to set up a seller account and manage your marketing and advertising as usual, plus handle customer support.

Your first step is finding a market opening. This could be a product that isn’t yet available on Amazon, an improved version of an existing product, or a product that's currently priced too high but has a lot of demand.

Keep Reading: 10 Ways to Reduce Shipping Costs with FedEx and UPS

To help you with price adjustments, you can utilize an Amazon repricer. A repricer can automatically adjust your listing prices based on factors such as competitor prices, market demand, and desired profit margins. With the help of repricing software, you can respond to market fluctuations swiftly, adapt to competitor pricing methods, and optimize your prices for increased sales and profits.

If you want to be a reseller, finding a market opening is only half the battle — you also need to find that product from a supplier at a workable price. Bargain hunting skills are essential for product sourcing with a reselling model, whether finding deals from other retailers, used-good sellers, or wholesale suppliers. Oftentimes you’ll find that market openings are left open for a reason.

Part of Amazon reselling involves keeping your eyes open for deals. If you’re out shopping, watch out for sales and discounts on goods you could potentially resell. If you’re looking for a specific type of product, reach out to the manufacturer or supplier directly and see if you can cut a deal. Ask your seller friends or the seller community in general where you can find new wholesalers or suppliers that match what you’re looking for.

Resellers can also benefit from SellerPulse’s number of offers change (hijacker detection) alert as it immediately signals when there’s new competition for your store. If the new seller starts to win the Buy Box more often than not, you may want to readjust your strategy (i.e. lower your price) or rethink selling this product.

We’re Here to Help

Whether you’re a new Amazon seller looking to break into the space or an experienced seller wanting to expand their business, eComEngine's seller software can give you an advantage in the largest and most competitive retail market on the planet.

FeedbackFive is our highly renowned feedback and review software that proactively improves your product and seller reputation by sending out requests on your behalf. And, as you now know, our plans also now include product alerts for proactively keeping an eye on your listings (and profits!).

In addition, RestockPro is our FBA inventory management solution that keeps you in stock and intelligently organizes your supplier info. You can easily manage hundreds of SKUs to maintain your profitability and IPI score.

If you have any questions about our tools or selling on Amazon in general, don't hesitate to ask!