Reselling on Amazon is a great way to make some extra money, but it’s important to understand how this process works before you start. If you don’t know what you’re doing, then many things could go wrong and end up costing you time or money.
There are several common mistakes that people make when they first get started with reselling on Amazon.
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The best way to avoid the mistakes listed in this article is by educating yourself about all of the steps involved in successful reselling on Amazon. By reading this ultimate guide thoroughly, it’ll become easy to learn the necessary things for success as an Amazon seller. Let’s dive deep into this topic.
What Is Reselling on Amazon?
Before you decide to go out and turn your old items into cash or even buy someone else’s products to resell, it’s important to understand what exactly you’ll be doing.
Reselling on Amazon is when individuals have or find products and purchase them, intending to sell them for a profit.
Typically, individuals who are just starting will purchase these items in bulk quantities at low prices to sell them later for more than they initially paid.
What makes this strategy so successful is that it takes advantage of two things: firstly, many people don’t want the hassle of having to sell/resell products themselves (since it can be difficult if you don’t know where to start), and secondly, there is always a high demand for certain products, so it’s unlikely that all of your inventory will end up being worthless.
Common Mistakes You Might Make When Reselling on Amazon — And How to Avoid Them
Online arbitrage is the most popular way to get started with Amazon, and this is because it can be done from anywhere as long as you have internet access. There’s also retail arbitrage, which is where you purchase items directly from brick-and-mortar stores (that are selling at retail price) so that you can later resell them for a profit on Amazon.
Reselling on Amazon is a great way to make some extra money, but it’s not always as straightforward as you may think.
There are many ways that people can mess up their first go-around with this type of business model, so it’s best to be aware of those mistakes maybe before you dive in headfirst. Here are the most common pitfalls and how you can avoid them from the beginning.
1) You don’t have a plan or a goal.
One common mistake that beginners tend to make is getting too far into their new Amazon business without having any idea what they’re going to do with all of their new products once they have them.
Oftentimes, these new sellers will just start buying up as much inventory as they can, not having a plan for what to do with it once it’s all accounted for.
2) You’ll buy too many products at a time.
Another common mistake people make when starting is buying far too many items at once because they think that doing so will save them money in the long run.
This is partly true since you will probably have to pay less on shipping fees when dealing with bulk orders, but there’s also such a thing as buying too much and then realizing that you don’t know how you’re going to resell those items after all.
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Just like with any other business venture, it’s important to keep your investments reasonable and manageable from the start, rather than blowing your entire wad on the first shipment that you receive.
3) You’ll buy the wrong products.
One of the biggest mistakes people make when they’re starting is buying items that nobody needs or even wants. This inevitably results in the seller spending far too much money on their inventory to make it worth anything, and sometimes even having to dispose of their merchandise altogether because no one will buy it.
To avoid this problem, always do your research before purchasing any items for resale. Look at product reviews and ratings to find out what other customers are saying about the product you plan on selling, and read up online about how popular that item may be in general.
Also, keep an eye out for seasonal trends — while some products can be timeless classics, others may only be in demand during the few weeks of the holiday season.
4) You’ll sell too many items at a time.
A reselling business is a lot like any other type of business in many ways. This includes the fact that it can hurt your profits when you simply don’t have enough time to sell everything that you own. Many individuals who are new to this type of thing will try to move as much inventory as possible, but they forget the most important element is knowing when and how to find buyers for their products.
If you’re going to resell on the Amazon marketplace, keep in mind that there is already a lot of competition with not only similar sellers, but also within the same product category itself. You want to make sure that you do proper research into the pricing before selling your items so you don’t end up selling them for far less than what consumers are willing to pay.
Sometimes, low competition products are a good indication that you’re not selling items for a high enough price, and if you end up flooding the market with your products, then you might feel that it was a quick win but in the end, this will only result in making less money than you would have otherwise.
5) You’ll try to sell too many different types of products at once.
Selling on Amazon is not as easy as it may seem, which is why most beginners tend to stick to what they know best when they first start. Rather than trying to sell everything under the sun like some individuals do, keep your initial goals simple and manageable until you can decide whether or not this type of thing is right for you.
No matter what type of reselling business you decide upon, always keep your goals realistic so that they are achievable without too much effort or time being put into it.
6) You trust third-party sellers way too much.
Are you worried about Amazon’s crackdown against third-party sellers? You shouldn’t be because once established, Amazon trusts their suppliers, but it also doesn’t mean that you should blindly trust random people on Amazon without doing your homework.
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While the platform (and Amazon FBA) are a great way to sell products, there is always a chance that a supplier is just out to make a quick buck, so ensure that everything lines up before moving forward.
At the end of the day, remember that you are responsible for having things in line and providing proof of every order. This means providing invoices, receipts, shipping slips and other documentation as needed, so that Amazon knows exactly what is going on at all times.
7) Your product descriptions aren’t up to par.
Having your own brand might sound great, but does your brand have anything unique to offer? If you’re reselling other people’s products, then there is a good chance that they already have their descriptions, which are not as good as one would like. In a way, this is great news for you.
One of the biggest mistakes that new resellers make (this applies to all eCommerce websites including Amazon, eBay, Walmart and Alibaba) is putting little-to-no effort into the product descriptions for each item, and this means relying on whatever copy was provided to you by the manufacturer or distributor. Speaking of Alibaba, here’s an article speaking about shipping costs in case you’re interested in knowing more about this.
The advantage of an online store compared to a retail store is that you can focus your efforts on describing your products in much greater detail; which means that you provide additional value to prospective customers. The more information that you provide about your products, the better off you will be.
8) You don’t consider how long it takes to ship items.
For many consumers, time is of the essence. If someone purchases a buy box from you for a low price that unfortunately takes a long time to arrive, the price factor goes out of the window.
As an Amazon reseller, you need to keep time in mind because your goal should be to offer the best value items that you possibly can and have them delivered as quickly as possible.
9) You don’t follow up with customers.
The customer is always right — if they are unhappy with something they ordered or how long it takes, they will use their Amazon seller app and let everyone know about it.
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This is where you can really interact with your customers and potentially turn them into repeat buyers if they feel like they are being taken care of properly.
If you don’t follow up with them after the sale has been made, there is a good chance that Amazon will pick up on it and, if it is a repeated occurrence, might even ban you from using their services in the future.
Amazon is taking over the internet one day at a time, so you better be prepared for “the Amazon effect” sooner rather than later because you never know when it might reach your doorstep.
Instead of hoping that things turn out in your favor, why not work towards making sure that everything goes smoothly when it comes to reselling products by not only having high-quality products, but also by following up with customers and resolving any potential issues that they might have?
Why Would Someone Want to Resell on Amazon?
Getting a proven sales record when you resell on Amazon can be a huge advantage because it provides you with a way to generate more money, compared to other traditional methods of selling.
For example, if you had your retail store and wanted to sell a certain brand on your shelves, then there is a good chance that the manufacturer will ask for a larger cut from the sales, as compared to reselling on Amazon.
Also, many private label brands make it easy to sell anything — ranging from a few things to a whole lot of things — on Amazon because they handle the entire shipping process for you.
Finding profitable products might seem like a daunting process, but it’s quite simple once you understand its workings. While there is a good chance that there are already hundreds of products on Amazon that are similar to what you’re looking to sell, by doing some sleuthing around, you should be able to find the original product that you can resell at high-profit margins.
The advantage of this over retail stores is that you don’t have to worry about any of the storage and inventory costs that they might incur.
Dealing With Customer Issues as an Amazon Reseller
Private label sellers have to consider how many resellers they are working with. Proven success comes after a lot of trial and error, so knowing that you have a direct line of communication — both to the customer and to the manufacturer (here’s how to find the right manufacturers) — available to you whenever you need it is important.
Also, Amazon’s biggest advantage over its competitors is that they are easy to get in touch with when problems arise or questions come up with dropshipping, especially for higher-ticket items.
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You should always be the one handling your customer service issues because this will help boost sales and lead to repeat customers.
The one thing that you want to avoid is having Amazon handle your customer service because this could potentially lead to a ban if their support team finds problems with the products you are selling, or follows up with unhappy customers after purchasing from you directly.
Reselling on Amazon – FAQ
What are some examples of profit margins to expect when you resell on Amazon?
When you become an Amazon reseller, you will typically see a markup that is much higher than what you would normally find at retail stores. For example, if you wanted to purchase a new pair of Beats headphones, then it’s highly likely that they will be priced somewhere between $99 and $199.
However, because there are so many different resellers on Amazon, you will often find the same headphones being sold from anywhere from $150 to $350.
The advantage of buying at a wholesale price and then reselling on Amazon is that it’s much easier to list products that have been sent directly from the manufacturer.
What is Amazon’s sales rank?
The sales rank is the number of items that are currently being purchased in comparison to all other competing products. You will often consider this factor in determining which product has the highest profit margin.
As an example, if there were 20 different pairs of Beats headphones on Amazon, and they all cost around $100, then it would be fairly easy for you to find the highest selling pair of headphones.
Looking at the seller rank is wise since this would be your opportunity to purchase that specific model and then turn around and sell it for a higher price.
How do I get started with an Amazon seller account?
To get started with an Amazon seller account, all you need to do is visit their official website and enter your personal information. You will then be prompted to choose a unique Selling Receiver Name, which should be something that reflects your company’s own brand.
After filling out the necessary forms and once everything is processed, you should receive an email letting you know that your account is complete. You can then log in and start selling your products.
Once you’ve created your Amazon seller account, the next important thing to do is come up with a unique Selling Name for your business. This will reflect on the brand’s image that you are trying to create, so make sure it’s something that customers can trust.
Should I focus on a specific, low-competition niche?
Amazon product research comes down to sourcing new popular products to sell. If you decided to go down the route of being a high-end reseller, then you should go after the most popular items on Amazon.
Being a general reseller is also another option, as this will allow you to source different types of products and make sure that your inventory is always filled.
What’s a good amount of monthly sales to make?
Brand owners that deal with high-competition niches are likely to spend a month or so building an asset before they can turn any significant profit.
On the other hand, eCommerce business owners that work with more unique niches are likely to see an increase in sales fairly quickly, which could allow them to generate monthly profits within their first few months of being up and running.
With that said, the answer to this question is that it depends on several factors. A brand new listing might hit the ground running, while a high competition product might require you to build an asset before you can see any profits.
Final Thoughts on Having an Amazon Reselling Business
Having an Amazon resale business means that thinking ahead is something that you need to do. Considering possible outcomes is always advisable in business, and this is never truer than when it comes to your Amazon reseller account.
Make sure that you’re familiar with the policies and procedures in place before potentially breaking any rules, especially if you plan on selling products for a living.
By avoiding the most common mistakes, you can not only save yourself valuable resources but also set the foundations for your business. If you do want to start reselling products on Amazon, then it would be wise to look at all of the mistakes that many bestsellers made (and then recovered from) and try to avoid them.
Keep everything organized so that you can easily keep track of your inventory, work out profit margins and determine the best time to sell. If you notice that you’re making any of the above mistakes, then you should look to fix them as soon as possible so that your business can continue running smoothly.
Finally, if you’ve enjoyed this article and want to learn more, here’s an article about how to make $300 USD per day (even if you suck at business).