An Amazon reseller is someone who buys products from other sources and sells them on Amazon for a profit. Rather than manufacturing or designing their own goods, resellers find existing branded products at a lower price, list them on Amazon’s marketplace, and pocket the difference after fees. It’s one of the most common ways people start selling on Amazon because it skips the product development process entirely.
How Amazon Reselling Works
The basic concept is simple: you find a product selling for $8 at a retail store or from a wholesale distributor, list it on Amazon for $20, and after Amazon’s fees and shipping costs, you keep what’s left. Resellers don’t create brands or products. They act as intermediaries, moving goods from one marketplace to another where demand (and prices) are higher.
To get started, you need an Amazon seller account. Amazon requires a government-issued ID, an internationally chargeable credit card, a bank account with routing number, tax information, and proof of your residential address from the last 180 days (a bank or credit card statement works). If you’re registering as a business, you’ll also need your business name exactly as it appears in your official registration and your company registration number.
Most resellers use Amazon’s Fulfillment by Amazon (FBA) service, which means you ship your inventory to Amazon’s warehouses and they handle storage, packing, shipping, and customer service. This gives your listings Prime eligibility, which typically increases sales. You can also fulfill orders yourself, known as merchant fulfillment, but FBA is the more popular route for resellers scaling beyond a handful of orders per week.
Three Main Sourcing Methods
Resellers generally fall into three categories based on where they find their inventory. Each has different startup costs, time commitments, and profit potential.
Retail Arbitrage
This means buying discounted products from physical stores and reselling them on Amazon at a higher price. You walk into a big-box retailer, scan clearance items with the Amazon Seller App to check their selling price and estimated fees on Amazon, and buy anything with a healthy margin. Most resellers using this method look for items with a profit of at least $3 per unit and a return on investment above 50%. They also check the product’s sales rank to make sure it actually sells consistently, generally targeting items ranked under 250,000 in their category.
Retail arbitrage is the lowest-cost entry point. You can start with a few hundred dollars and scale up. The downside is that it’s time-intensive (you’re physically visiting stores) and your supply is unpredictable. A clearance deal that nets you 40 units this week may never appear again.
Online Arbitrage
Same concept as retail arbitrage, but you source products from online retailers instead of physical stores. You browse deals, coupons, and clearance sections on retail websites, compare prices against Amazon listings, and order profitable items to your home or directly to Amazon’s warehouses. Online arbitrage scales more easily than retail arbitrage since you’re not limited by geography, and specialized browser extensions can flag restricted products and estimate profitability as you browse.
Wholesale Reselling
Wholesale resellers buy products in bulk directly from manufacturers, brand owners, or authorized distributors. You contact a brand, open a wholesale account, negotiate pricing, and purchase inventory in larger quantities at lower per-unit costs. This model offers more predictable supply than arbitrage since you can reorder the same product repeatedly. The tradeoff is higher upfront investment, since you’re committing to bulk orders, and the process of getting approved by brands takes time and often requires a legitimate business entity with proper documentation.
Wholesale resellers typically price their products within about 2% of the “Buy Box” price (the default purchase option on a product listing) to stay competitive. Using Amazon’s FBA calculator to subtract the cost of goods and all Amazon fees from the selling price is essential before committing to any bulk purchase.
What Amazon Charges Resellers
Amazon takes a cut of every sale through referral fees, which are a percentage of the total sale price (item price plus shipping and gift wrap charges). The percentage varies by product category, but 15% is the most common rate, covering categories like home and kitchen, toys and games, sports and outdoors, office products, and books. Some categories charge less: consumer electronics and computers are 8%, automotive is 12%. A few categories use tiered structures. Clothing, for example, charges 5% on the portion of the price up to $15, 10% from $15 to $20, and 17% above $20.
There’s a minimum referral fee of $0.30 per unit, so even very cheap items still cost you at least that much. Media products like books, DVDs, music, and video games also carry an additional flat closing fee of $1.80 per item on top of the 15% referral fee. FBA fulfillment fees are charged separately and vary based on the size and weight of the item. All of these fees are deducted before your payout hits your bank account, so factoring them into your sourcing decisions is critical to actually turning a profit.
Restricted Brands and Categories
Not everything on Amazon is open for any seller to list. Amazon restricts certain brands and product categories, requiring sellers to get approval before they can create listings. Some brands are restricted because counterfeiting is widespread, and Amazon wants proof you’re selling authentic goods. Others have exclusive distribution agreements with Amazon itself or with specific authorized sellers.
To get approved, you may need to provide invoices showing where and when you purchased the products, or you may need direct authorization from the manufacturer or an authorized distributor. This is one reason wholesale resellers often have an easier time with restricted brands: they can produce legitimate invoices from brand-approved sources. Retail arbitrage sellers, whose receipts come from discount stores, sometimes struggle to get ungated in popular restricted categories.
Before buying any product to resell, check whether it’s restricted on your account. The Amazon Seller App lets you scan items in stores to see if you’re eligible to sell them and in what condition (new or used). For online sourcing, browser extensions can flag restrictions as you browse product pages.
How Reselling Differs From Private Label
Reselling and private label are the two dominant business models on Amazon, and they attract very different sellers. Private label means creating your own branded products, typically by working with a manufacturer to produce goods under a brand name you own. You control the branding, pricing, packaging, and product design.
Reselling skips all of that. You’re selling someone else’s brand, which means less creative work but also less control. You can’t differentiate your listing from other sellers offering the same product, so competition often comes down to price. Private label sellers, by contrast, own their product listing and compete on branding, reviews, and marketing. They often spend 10% to 20% of gross sales on advertising, especially early on, while resellers benefit from the brand recognition that already exists.
The startup costs reflect this difference. Reselling can begin with a few hundred dollars and a trip to a clearance aisle. Private label typically requires thousands upfront for product development, manufacturing, packaging design, and initial inventory. On the other hand, a successful private label brand becomes a sellable asset. Buyers pay significant multiples for established Amazon brands. A reselling operation, built on other companies’ products, is harder to sell because the business depends on continuously finding new deals rather than owning proprietary products.
What Resellers Actually Earn
Earnings vary enormously based on sourcing method, product categories, capital invested, and time spent. A part-time retail arbitrage seller working evenings and weekends might net a few hundred to a couple thousand dollars per month. Full-time wholesale resellers with established supplier relationships and significant capital can generate six figures in annual revenue, though profit margins after all fees and costs typically land between 10% and 30% depending on the category and competition level.
The biggest variable is how efficiently you source. Every product you buy is a bet that it will sell on Amazon at a price that covers what you paid, Amazon’s referral and fulfillment fees, shipping costs to get it to Amazon’s warehouse, and any returns. Resellers who don’t rigorously calculate these numbers before purchasing often discover that a product that looked profitable on the shelf actually breaks even or loses money once all costs are subtracted. Using Amazon’s fee calculator before every sourcing decision, not after, is what separates profitable resellers from those who spin their wheels.