Reselling on Amazon: A Potential for Stable Income in 2024

Selling stuff online is a great way to make an extra living, but with so many other competitors, beginners can have a hard time setting up their stores.

But there is a way to start your online sales business with fewer risks: reselling on Amazon.

It requires a lower upfront investment and has the potential to generate a stable income. Check out this guide to learn more on how to resell on Amazon.

An Overview of Reselling On Amazon: A Primer

Reselling on Amazon involves buying items for a low price and reselling them for a profit.

Unlike private label products, you can't claim ownership of the items you sell, and instead purchase them from a third party.

The most popular methods to source products are:

• Drop-shipping: Involves having someone else hold inventory and ship items on your behalf, and is a great way to sell on Amazon for free.  
• Retail arbitrage: You purchase products in brick-and-mortar stores, then increase the selling price. 
• Wholesale: You buy products in bulk at low prices and resell them.

Most resellers focus on one sourcing method, though you can also combine them to get even more inventory.

For instance, you have a drop-shipping business mainly, and source specialty items through retail arbitrage.

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How Much Can Reselling On Amazon Earn You?

Jungle Scout reports that a good portion of Amazon sellers make at least $1,000 per month in sales.

Since profit margins typically fall in the 5% to 20% range, this can mean anywhere between $50 to $200 per month.

Around 20% of sellers earn at least $25,000, while the top 1% have lifetime earnings of over a million.

Unless you become one of the top resellers on Amazon, it's unlikely to replace your full-time job, but you can make at least a small profit from it.

How Much Does it Cost to Start a Reselling On Amazon Side Hustle?

If you're first starting out with reselling products, you can stick to the Individual plan, which costs $0.99 per sale. 

When your profits grow, or if you start focusing on smaller and cheaper items, you'll need the $39.99/month Professional plan on your Seller Central account, where you’ll also pay an 8% to 15% referral fee for each item sold. 

Apart from this, you need to consider your order fulfillment costs, which will vary depending on the business model you use.

You can opt for Fulfillment by Amazon (FBA), which allows you to ship all your items to Amazon, and they'll take care of all order fulfillment.

The service comes with additional costs for storage and shipping, which depend on the type of item and weight.

If you're doing drop-shipping instead, you can work out the shipping and storage price with the third-party sellers directly.

Other potential costs include aged inventory charges, ads, and some premium services.

Where Can You Find Things to Resell On Amazon?

If you have money saved, retail arbitrage is a viable way to build your stock since retail stores carry some of the best products to resell on Amazon.

You can check the product price on the Amazon seller app to see if the price is good, and win the Buy Box against other resellers who rely on drop-shipping. 

You can pick a retail store from this list to get started:

• Costco: From shoes to clothes, furniture, or electronics, Costco has wholesale items with unlimited shelf life and for almost all niches.
• Goodwill: If you have a lower budget and want to buy tech, video games, toys, and other knick-knacks, Goodwill is inexpensive and can carry many great products to resell.
• Walmart: The go-to place for many Amazon resellers is Walmart's clearance aisle, as it has a wide selection of cheap items that bring big bucks.

If you don't live near a brick-and-mortar store or would prefer to resell products from home, consider online arbitrage instead. 

Places like eBay, Facebook Marketplace, AliExpress, Wish, and Alibaba (if buying in bulk) all have a selection of low-priced and low-competition products.

But, online arbitrage is also risky since you cannot physically inspect the products before purchasing.

You’ll need to do your research and vet the seller before buying from them to avoid a potential loss or getting a product you can’t resell.

Why You Should Consider Reselling On Amazon As a Side Hustle

Amazon can be a great place to spend all your money, but it's even better when you make money with it.

Here are a few reasons why reselling on Amazon is an amazing side gig:

• Easy to start: Whether you choose drop-shipping or an online arbitrage and FBA combination, you can become an Amazon seller within a few weeks of training and almost no capital.
• Realistic earning potential: Despite over a million active Amazon sellers, about half make at least $1,000 monthly in sales.
• Exponential growth: Once you get the profit ball rolling, the sky's the limit. Reselling products is a simple business model to scale.

Problems With Reselling On Amazon for Money

Before you head over to Amazon to create an Amazon seller account, there are a few drawbacks you should know about this gig:

• Stiff competition: You'll constantly have to compete with a million other sellers on price, product quality, and availability.
• Low profit margins: The high transaction, shipping, storage, and referral fees will eat into your earnings. You'll have to settle for 10% to 15%.
• Strict rules: Amazon is known for terminating contracts with its third-party sellers for the smallest reasons. Even a minor technical error related to an ASIN number can get you off the platform.

Frequently Asked Questions

Is It Free to Sell Stuff On Amazon?

Selling on Amazon isn't completely free. On the Individual plan, Amazon charges a $0.99 fee for each item sold, along with an 8% to 15% referral fee.

Also, regardless of whether you're using Amazon FBA or shipping yourself, you'll have to pay for shipping and potential refund costs.

Do Sellers On Amazon Make Money?

Sellers on Amazon make an average profit of around 10% to 20% per item sold. Over 60,000 Amazon sellers generated $100,000 or more in sales in 2020, which means profits of around $10,000 to $20,000. And some top earners have profits in the six-figure range.