If you’re interested in eCommerce, Amazon is one of the best places to start.
You can get up and running with less than $100 and have a few different options for product sourcing.
Plus, if you participate in Amazon FBA, you eliminate the headaches of a standard eCommerce business – they will store, pick, pack, ship, and deal with customer service for you.
Pretty hard to beat, right?
If you’re a beginner looking for detailed instruction, here’s how to resell on Amazon.
What is Amazon FBA, and Do I Have to Use It?
If you’re reading this article, you’ve probably heard the term “FBA” tossed around at least a time or two.
So let’s talk about what it is.
FBA stands for Fulfillment by Amazon. This program is the standard for Amazon sellers.
It allows sellers to send the products they sell to an Amazon fulfillment center. From there, Amazon will store, pack, pick, ship, and handle all customer service.
It’s a dream come true for most sellers since it eliminates the need to do these tasks themselves or hire employees.
And as a seller, being a part of the FBA program is good for your customers.
When you participate in FBA, your products are eligible for Prime free shipping plus free shipping on items over $25.
Of course, FBA isn’t free. As a part of this program, they’ll charge you with shipping fees and storage fees. (You can get an estimate of these charges before listing an item.)
Which is pretty understandable since Amazon is storing and shipping for you.
But here’s some good news, if you don’t want to be a part of FBA, you don’t have to.
You’ll be missing out on some benefits, but it’s totally up to you.
Just remember that even though not using this program will save you some fees, you’ll have to cover shipping and shipping materials yourself, so it’s hard to say exactly what you’ll save.
(You can use Amazon’s calculators here to estimate profits on a particular product with and without FBA. And we’ll talk more about the costs of each down below.)
How to Resell Products on Amazon
If you’re ready to get your Amazon business up and running, here are some steps you’ll need to take.
Decide What Products You’ll Sell and How You’ll Source Them
Getting a product listed on Amazon isn’t difficult at all.
The tricky part is the product selection. Because, like it or not, the product you choose will be your make or break.
There are generally three options for selling products on Amazon: retail arbitrage, working with a wholesale supplier, or white labeling products.
Here’s a look at what each means:
Retail Arbitrage
Retail arbitrage is when you find something at a retail store, usually on clearance, buy it and send it into Amazon FBA to sell at full cost.
Let’s say, for example, you go into Walmart and see a selection of Barbies that are regularly $17, marked on clearance for $3.
You then use an app like the Amazon Seller App or Scoutify to scan them. These apps will tell you the price on Amazon, potential profit, associated FBA fees, and competition.
With this info, you can decide whether or not the Barbies are worth your time.
If they are, you purchase them, send them to Amazon through the FBA program, and start looking for the next item to buy.
Pros of retail arbitrage – You can potentially find items to sell in any store you walk into. You don’t need to form relationships with wholesalers, and you can start as small as you’d like.
Cons of retail arbitrage – You won’t always find good deals. And when you do find good deals, there will be limited quantities of the item.
Working with a Wholesale Supplier
Let’s say you’ve done a bunch of market research, and you’ve found products on Amazon that are popular but have very low competition.
Because of this, you’re ready to work with a wholesale supplier.
Now comes the hard part. Because as nice as it is to work directly with a supplier, many big companies have stringent rules on who they’ll work with – and even if they don’t, there are still cost-prohibitive factors like minimum order quantities to deal with.
If you want to work with a wholesaler, you’ll need to do a lot of research, get samples of the items, and find out about minimum order quantities and payment terms.
And if your idea is completely untested, you’ll want to start with a small order to make sure the item sells like you think it will.
Pros of working with a wholesaler – You can order large quantities of an item. There’s consistent pricing, so it’s easy to predict profits.
Cons of working with a wholesaler– As a beginner, it can be hard to find a quality wholesaler. You still have to worry about minimum order quantities. And your item might not sell as well as you think it will.
White Labeling a Product
Your last option is to white label a product.
White labeling means finding a product you want to sell and working with a company to put your brand info and logo on it.
You can find products that can be white-labeled on Alibaba and AliExpress.
White labeling requires much more research and comes with higher risk than the other two options.
This is why if you’re a total beginner, I recommend getting your feet wet with some retail arbitrage.
Pros of white labeling a product – If you pick a winning product, you can dominate the market with your brand. Plus, you get the fun of creating your own brand.
Cons of white labeling a product – There are cost-prohibitive minimum order quantities, you’ll need a logo designed, you need to do a lot of market research, and white labeling can be risky.
Create an Amazon Seller Account
Now that you have an idea of what you’ll be selling, it’s time to create your Amazon seller account.
First, decide what kind of account you’d like – Individual or Professional.
Individual plans cost $0.99 per item, up to 40 items. If you sell more than 40 items per month, you’ll want the professional plan, which is $39.99 for unlimited items.
Aside from your plan costs, you’ll also be able to view referral fees for each category. The referral fee is Amazon’s cut of the item you sell, regardless of whether or not you participate in FBA.
When you go to set up your account, you’ll input your basic info, choose your plan, and then you can set up FBA if you’d like.
FBA fees will depend on the shipping weight of your time. (The lower the weight, the lesser the fee.) Plus a storage fee.
Storage fees range from $0.48 per cubic foot to $2.40 per cubic foot. These fees depend on the size of the item and the time of the year.
List Your Products
Once you have your account created and your products sourced, it’s time to list your first product.
You’ll need to list one product at a time.
If you’re listing a product already on Amazon, simply match it to the existing listing and follow the prompts to add some basic info. If you’re using FBA, you’ll need to select that option as you list your items.
If you’re creating a listing for a product you’ve white-labeled or a product that’s not on Amazon, you’ll need to create a whole new listing. Amazon will give all the details you need, which includes the need for you to create a UPC for the product.
If you opted into FBA, Amazon will generate a shipping label to send your products to their fulfillment warehouse.
Analyze Sales and Adapt Your Strategy
You should start seeing your products sell if you did good market research.
If you see one type of product selling quickly and for a nice profit margin, start trying to find more of it.
If you’re doing retail arbitrage (probably the very best idea for beginners), keep looking for clearance products with high popularity, low competition, and a good profit margin.
Analyzing and repeatedly looking for good deals will help you build a successful Amazon business.
Frequently Asked Questions
What are the most profitable items to resell on Amazon?
The most profitable items to sell on Amazon constantly change due to trends and seasonality. However, as a reseller, you can make sure you get the most profit by looking for items that are compact, low weight, and resell for at least $25.
Popular categories include toys and games, electronics, video games, and clothing.
Of course, this list isn’t all-inclusive. The truth is, depending on the deals you find, you can have success and high profitability in any category.
Where can I buy items to resell on Amazon for retail arbitrage?
If you’re a new seller interested in retail arbitrage, department stores are the best place to find items.
Start by downloading a scanning app like Amazon’s seller’s app or Scoutify. Then, hit up the clearance section of all of your local stores. Think Walmart, Walgreens, CVS, TJ Maxx, toy stores, etc.
When you find items on clearance, use your seller’s app to scan them. From there, you can see profitability, competition, and FBA fees.
You can also hit up bookstores, grocery stores, and anywhere else you can think of.
Where can I buy items in bulk to sell on Amazon?
If you want to buy items in bulk to sell on Amazon, you need to find wholesale suppliers. Unfortunately, finding suppliers to work with can be a bit of a challenge – especially if you don’t have enough money to meet the required minimum order quantities.
Your best bet is to go to trade shows. Many wholesalers are willing to create new seller accounts at these events.
You can look for trade shows in various industries here.
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Final Thoughts
If you want to resell on Amazon, getting started is super easy. The best way to get your feet wet is to look for clearance items at stores and send them to the Amazon FBA program.
Of course, before you do this, you’ll want to use a seller’s app or Amazon’s calculators to ensure there’s enough profit margin to make it worthwhile plus low enough competition for your item to sell.
Once you get more comfortable reselling on Amazon, you can find wholesalers or white-label products. (Only if that’s what you want to do. You can still have a successful business by sticking wholly to retail arbitrage or expanding it to other stores.)
Any of these three strategies can help you build an Amazon reselling business.
