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Amazon is a powerhouse for profit.
In 2021, their net sales increased by 22%, resulting in a $469.8 billion year.
Everyone knows Jeff Bezos–the founder of Amazon–is rich, but more and more people can leave their 9 to 5s by making a bank as a third-party seller on the billion-dollar platform.
If you’re thinking about reselling on Amazon, you probably have a million questions–from how to get started to which products are profitable to how much money you can make.
So in this blog post, we’re breaking it all down so that you have a step-by-step framework for Amazon reselling success by the end.
Not all Amazon sellers source and sell their products the same way. And the first step to building your business is knowing the main types of Amazon selling and then deciding which is best for you.
There are five primary types:
Private label involves selling your own products that you don’t buy from other brands or distributors. Meanwhile, dropshipping is listing products for sale but only purchasing them when a customer places an order.
Since these two (along with handmade products) don’t involve reselling, we will focus on online arbitrage, retail arbitrage, and wholesale.
Online arbitrage is when a seller buys products from an online store and resells them on another online marketplace for a higher price.
This pricing strategy is how online arbitrage sellers make a profit.
Unsurprisingly, Amazon is the number one choice for most online arbitrage sellers. It receives the most monthly search traffic, followed by eBay and Walmart.
The difference between online and retail arbitrage is slight but still existent.
“Arbitrage” means buying and reselling a product on another platform where it’s more in demand or profitable.
Sellers who use online arbitrage buy and sell entirely online, no matter where the product is sourced. However, retail arbitrage is specific to buying lower-priced items only through retailers.
An example would be buying a coffee maker from Walmart that’s on sale and reselling it on Amazon since Walmart is a retailer.
Online arbitrage sellers source their products from retailers and non-retailers, like distributors who only sell products to third-party sellers or business owners.
Wholesale is when sellers purchase their Amazon inventory from manufacturers in bulk at a discounted rate, increasing their profit margins.
After deciding which Amazon business model is the right fit, follow these nine simple steps to start reselling on Amazon and supercharge your growth.
Regular Amazon users can’t sell products, only buy them. So before you can start reselling, you’ll need an Amazon seller account.
Amazon has two seller plans: an individual plan, and a professional plan.
The individual plan is most suitable for people selling less than 40 products a month and who don’t need advanced selling tools. Amazon recommends this plan if you don’t know what you’re going to sell yet or are still feeling unsure about starting an eCommerce business.
If you’re serious about reselling on Amazon and building a long-lasting brand you can scale, you’ll need a professional account.
A professional account includes helpful resources like seller reports, APIs, and product metrics. Plus, you can’t win the buy box with an individual plan.
Regardless of which plan you choose, you’ll need a few things handy when creating your account:
Suppliers are the people or businesses who sell you the products you plan to resell on Amazon.
Sometimes, suppliers buy products from the original manufacturers and then sell them to retailers and distributors. Or, they are the manufacturers themselves.
You’ll need to compile a list of quality suppliers when ready to buy inventory. But first, you need to do product research to determine which items are in demand and will lead to high-profit margins.
You might already have products or categories in mind. If that’s the case, you can start researching products right away. But if not, it can be overwhelming.
Start there if you haven’t decided on a category to sell in.
You don’t have to stick to only one category, and you can sell in multiple. But choosing from one of the most popular categories can help you find profitable products faster.
Take a look at the graph below. The percentages of sales share each of the Amazon categories holds. “Electricals” has the highest sales distribution on Amazon, with “fashion and apparel” following close behind.
To start finding products, you’ll need to choose suppliers and compare prices.
Some of the most popular product-sourcing tools you can use are:
There’s a lot that goes into product sourcing–more than I can cover in this blog post. But the bottom line is simple: you need to find a high-quality, in-demand product with a worthwhile profit margin range.
Once you’ve found a product that makes the cut, it’s time to list it on Amazon.
There are two ways you can do this. First, you can match an existing listing if others are already selling your product. If you’re the first (and only) seller, you’ll need to create a new listing.
Keep in mind that if you have the professional seller plan, you can upload your products in bulk instead of listing them one by one.
When creating a listing, there are a few basic things you’ll need:
The next section will teach you all about product listing optimization, but spending time on perfecting these necessities will make sure as many people see your product as possible.
Making sure your listing’s content is high-quality and well-optimized can lead to more than a 5% increase in sales.
To make your listing even more appealing, add:
For example, this mini waffle maker meets all the listing criteria (such as a title and description), but also includes an enticing video in the carousel:
Amazon gives you an excellent overview of how to start optimizing your listings for search:
The point of product optimization is to increase search traffic. Meaning, when shoppers type in the product you sell, your listing should be the first to appear.
Nothing proves the importance of optimization more than a few statistics from Search Engine Journal.
First, 70% of shoppers never click to the second page of search results. So if you’re not on the first page, you’re missing out on almost 3/4 of customers.
81% of clicks are made on the first page. And the first three items make up a whopping 64% of that.
With more than 75.1 million products being sold on Amazon, you have to prioritize standing out.
The product below is a prime example of a well-optimized listing. It has over 19,000 reviews, is an amazon choice product, uses simple bulleted points to highlight key features, and has an active customer questions section where they get back to all of their potential customers.
It takes time, but your product sourcing would be for nothing if your listings aren’t getting views.
If you’re new to listing optimization or have too many tasks begging for your attention, ZonGuru can make the process simple.
Not only does it help you maximize sales by telling you exactly where to place keywords and images, but it’s also a product research tool that generates data to track your business’s most important progress metrics. Try it out with a seven-day free trial.
Amazon offers two ways you can ship products to your customers: fulfillment by merchant (FBM) and fulfillment by Amazon (FBA).
Fulfillment by merchant (FBM) means you’re responsible for packaging, fulfilling, and shipping product orders.
The other option is fulfillment by Amazon, known as Amazon FBA.
This is when you store your inventory in Amazon’s warehouses so that when someone places an order, Amazon’s team takes care of packaging and shipping for you. With Amazon FBA, you never even have to see the products you sell.
Amazon FBA also handles customer service issues and returns, and you get automatic eligibility for Amazon Prime and Free Super Saver Shipping.
When you’re just starting an Amazon business, investing in products can feel like a gamble. You’ve done all the research and optimization to make sure your products have the utmost potential, but you never know how they’ll perform until you’ve already bought them.
These anxieties will ease over time, but for now, you have to nail pricing.
Setting prices too high will send customers running to your competitors. But pricing too low will leave you barely breaking even (or even in the hole).
Don’t make the mistake of thinking the price you paid for the product is the only expense. When determining how much you need to sell it for, you also have to consider these major expenses:
Most Amazon sellers tend to spend between $500 to $3000 to get their business set up.
While pricing can be tricky, Amazon’s revenue calculator can make it less daunting. It factors in the other expenses we discussed earlier so you don’t have to constantly keep a running tab on all your investments.
The Buy Box is the white box on the right-hand side of the product page that prompts customers to add it to their cart or click “buy now.”
82% of Amazon sales happen through the Buy Box, so it’s obvious why Amazon sellers take it so seriously.
You can also see your Buy Box percentage in Amazon Seller Central, which is the amount of times you owned the Buy Box while customers were viewing your listing. That number is divided by your total listing views to get the percentage.
Being able to check off these five criteria is how you win the Buy Box:
To maximize your profit potential while reselling on Amazon, you need to think of yourself as a brand rather than just an Amazon seller–even if it’s the only place you sell products.
If you want to start your eCommerce website, here are a few checklist items you should consider when getting started:
Since optimization is still the name of the game, you’ll also need to look into SEO for startups and learn the most important Google ranking factors.
The short answer is yes, reselling on Amazon is completely legal.
The average Amazon seller salary in the United States is over $40,000 annually ($20 an hour), according to ZipRecruiter.
In summary, reselling on Amazon can help you build a profitable career that’s sustainable and always scalable.
Amazon’s growth opens more doors for third-party sellers like you. And with the right tools, sourcing worthwhile products, optimizing your listings, and building a long-lasting brand doesn’t have to take months or years.
Looking for more side-hustle ideas like this? Feel free to drop by Collectingcents.com. See ya later!
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