How To Start Reselling on Amazon

Elise Jackson

Post details

  • AUTHOR: Elise Jackson
  • CATEGORY: Amazon Brand Strategy
  • DATE: 19/03/2024

In 2022, resellers in the US sold 4.1 billion products, averaging $230,000 in sales, offering ample opportunity for entrepreneurs looking to sell on Amazon that are not a brand or manufacturer. 

If you want to make extra money or start a new business, becoming an Amazon Reseller is a good place to start. But, it can be a highly competitive space to enter, ample resellers are offering similar products, so you must approach it smartly if you want to turn a profit. 

But that doesn’t mean you shouldn’t try! So, how do you become a reseller on Amazon?  Let’s look at everything you need to do to get started. 

Who counts as an Amazon reseller?

Reselling is an e-commerce business model where you obtain products from various sources and sell them directly to customers. Essentially, a reseller buys ready-made goods from suppliers and sells them on Amazon to end customers.

Amazon resellers may find their products on the second-hand goods market or websites like eBay, Vinted, or Facebook Marketplace etc. This business model is particularly profit-focused rather than product-focused.

Some may confuse distributors and resellers, the difference is that distributors have direct relationships with the manufacturers (sometimes even working on marketing campaigns and operations), whereas resellers do not have relationships with the manufacturers.

 

How to become an Amazon reseller

Here’s an overview of how the reselling process can look:

 

1. Research product demand

This is the beginning stage of the process, you will need to analyse trends to identify products with high demand that you can resell for a profit (the super important part).

The popularity of products constantly evolves, so you need to keep your finger on the pulse when it comes to this. Stay informed, and adapt your offerings – the key is to be flexible.

You can check the popular product categories in the Amazon store to evaluate which products may be viable to sell. Remember – you must take into account the different Amazon fees before deciding to resell products.

 

Here’s how to calculate viability:

1. Conduct product viability and product research on bestselling products.
2. Browse through selling rankings to learn about top-selling products.
3. Use e-commerce tools to find low-competition, high-potential products. This is an important step as positioning yourself as an early leader can help you stand out in a product category and you’ll have the potential of winning the Featured Offer (formally Buy Box).

 

2. Set up your account

Once you have decided what products to sell, now is time for the simple part – register for your Amazon account! Simply visit the “Become an Amazon seller” page and follow the steps to set up your account.

 

3. Procure the products

You’ve picked your products, great! Now, you need to procure them to sell. This requires you to find reliable sources and purchase products in quantities that meet your business goals.

 

How to source products:

1. Do some research on manufacturers, resellers and suppliers before you purchase any products to reduce the risk of complaints.

2. Verify the authenticity and quality of the products.

3. Check that the products work properly and are undamaged

4. Research safety testing and compliance requirements for the products

5. Keep documentation and records of transactions, such as purchase orders

Remember, if you resell from various sources you will get varying quality which could impact returns, profitability and customer satisfaction.

 

There are three ways you can build the procurement process for your brand:

  • Wholesale: This is where you buy in bulk directly from a brand or distributor and then resell it at the given retail price. This ensures a steady stream of inventory directly from the brand with a consistent price.
  • Retail arbitrage: For sellers who buy from physical stores to then resell on Amazon. They may find a product selling for £5 in-store and see the same product on Amazon listed at £20, so will be able to sell that for a profit.
  • Online arbitrage: It’s the same as above but online. A seller may discover products easily on eBay, or Etsy etc using this method.

 

4. List the products online

Now it’s time to list the products online and set competitive prices to attract customers! Have a look at product listings that already exist to get pointers on what to do and not to do.

Reselling is competitive, prices change all the time so it’s key to remain strategic about your pricing when you list your products. Undercutting your competitor’s prices too much could spell profit loss when you count the fee and you risk bringing marketing prices down too, so there is a fine line to walk.

To find the ideal price you can use automated pricing tools such as Amazon’s, that adjust prices automatically based on real-time fluctuations based on your rule parameters. Doing automatic versus manual frees up your time to focus on other aspects of your business. However, if you are starting with just a few products you might want to opt for manual as you learn the ropes of strategic pricing.

Being strategic with your pricing also helps you win the Featured Offer (formally the Buy Box), more on that below.

 

5. Handle shipping and fulfilment

Next up you need to decide how you will ship your items to your customers! Amazon offers a few fulfilment options for sellers like Fulfilled by Merchant (FBM), Seller Fulfilled Prime (SFP) or Fulfillment by Amazon (FBA).

While all have their merits, if you are a new reseller to the platform, FBA is the easier choice for novice sellers. Fulfilment by Amazon (FBA) option, Amazon manages the complete customer delivery experience.

FBA allows products to be shipped to an Amazon fulfilment centre, where Amazon takes care of the rest – from storage to shipping and delivering to buyers. Sellers that use this method will show the prime badge on their products.

 

Reseller tips to boost sales

While the reselling landscape can be competitive, you can cut above the noise by implementing certain tactics to boost sales, here are a few to help you get started:

 

1. Run Sponsored Products Ads

Think about paying to boost your chances with Sponsored Products! Sponsored Products ads are a specific type of Amazon pay-per-click (ppc) advertising. These ads empower brands to promote their products directly within the Amazon marketplace. When a customer searches for a product on Amazon, sponsored product listings can appear at the top of the search results.

Running Sponsored Product Ads will crucially help with brand awareness, drive product discovery, reach a wider audience and send traffic to your listing!

Visit our guide on Amazon Advertising to get tips on how to set this up!

 

2. Review your contracts

You want protection when reselling on Amazon from distributors deciding to sell directly themselves on Amazon and undercutting you on prices. We suggest reviewing all contracts with your distributors and updating the terms if needed to include a clause that they can’t sell on Amazon. Even though you cannot legally enforce RRPs, you can seek legal advice.

 

3. Work towards winning the Amazon Featured Offer.

The Featured Offer (formally known as the Buy Box) is the white box on the right-hand side of the Amazon product listings, where consumers can purchase items. It features the product’s price, shipping information and information about the seller. Amazon rotates the winners of the Featured Offer, unlike before when it would only be one seller, which gives you a higher chance of being featured.

This is great news for resellers competing to sell the same product! However, it takes time to win a place on the Featured Offer so, how do you win it? Here is the TL;DR version:

  • Fulfilment method: Fulfilment is probably an important variable considered by Amazon. FBA and SFP (seller fulfilled prime) sellers have a high score for multiple variables including shipping method and on-time delivery. It’s very unlikely for FBM sellers to beat other resellers with similar prices and win the buy box.
  • Shipping time: Shipping time has a high impact on winning the Featured Offer, and it’s a crucial factor in ensuring a good customer experience too.
  • Selling price: The final price of your listing, including shipping and VAT, is one of the most important criteria to win the Featured Offer.
  • In-stock status: Usually, if your item is OOS, you can’t win the Featured Offer and it will rotate to another seller. This is why sellers must keep good stock levels of their products as Amazon won’t want to recommend you if you have unreliable stock flow.
  • Feedback rating: Feedback rating aggregates all feedback scores the seller has received over the last 30, 90 and 365 days. The most recent feedback has the greatest impact.
  • Customer response time: Amazon checks responses for the last 7, 30 and 90 days and compares them with competing sellers. Being able to respond to customers within 12 hours increases your chances of being featured.
  • Feedback count: The Featured Offer takes into account the number of buyers who have given seller feedback. A higher feedback count can lead to winning.

As we mentioned, it takes time to be featured by Amazon, you need to prove that you are a reliable seller whom customers love to buy from, so if you want a more in-depth guide, visit how to win the Amazon Featured Offer.

 

4. Create unique product bundles

To stand out from the crowd when selling the same products as other resellers, you can create bundles composed of different items to offer new bundled products. This allows you to add a new and unique listing to your catalogue that differs from distributors.

 

5. Drive awareness through Social Media

PSA: Just like you would any business, you will want to create a robust marketing strategy that drives traffic to your listings and builds brand awareness. While this could be an article itself, we recommend developing a social media strategy for your reselling business to drive people to your listings. You can also utilise social media ads as well for that extra boost.

 

6. Partner with an Amazon Live influencer

Amazon Live is a great tool to drive discoverability, give your listing a boost and showcase your products in use. It provides sellers with the opportunity to blend commerce with content creation and allows brands to build an audience on the platform and a different way to connect, inform and educate on products.

For example, say you’re a beauty brand, you can utilise Amazon Live to do a beauty tutorial with your products, offering a dynamic way to talk about your latest product and answer questions through a live Q&A.

You can partner with an Amazon Live creator (who are like Instagram influencers, they have a following on Amazon and videos can command thousands of views!) to showcase your product in use while giving an honest, live review that can drive customers to your listing.

 

Find out how to get set up on Amazon Live in this guide.

 

Our thoughts

Reselling is a great way to break into the Amazon e-commerce platform when you’re not a brand, distributor or manufacturer – but it’s not easy. The key is to source products that are low-competition with potentially high profits and ensure a steady flow of inventory can come your way. Using Amazon’s automated pricing tool will help you stay ahead of competitors and will be integral to your strategy.

Your research at the start of your reselling journey is a crucial step to creating the right ingredient for success while maintaining competitive pricing will help drive traffic and profits. We highly recommend having a robust business plan that takes into account product procurement, marketing and fulfilment methods.

Using the reseller tips we outlined above, and with a little patience, you can start to see the profits trickle through in your reselling journey!

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