Reselling on Amazon with a $1 Million Seller: Let’s Go Pick Up Profit!2022-07-07
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Jessica Larrew and her husband Cliff have been reselling on Amazon for years. And though it started as a part-time side hustle, it turned into a serious business–they’ve sold more than $1 million worth of stuff on Amazon!
What’s surprising – and I think exciting – is that they’ve done this is by finding profitable products to resell primarily in nearby retail stores.
How Reselling on Amazon Works
Jessica takes advantage of Amazon’s FBA program, or Fulfillment by Amazon. This is Amazon’s way of crowdsourcing its inventory, and letting regular people like us tap into its world-class logistics network.
That means this Selling Family doesn’t have to ship anything to the end customer, handle returns, or write up product descriptions.
How the business works is like any other retail business: you profit on the spread between the cost of your product and what it sells for. Now you have to account for Amazon’s fees and shipping costs, but it’s basically buy low, sell high.
And the best part of this side hustle is that you can get started today with whatever initial inventory investment you’re comfortable with.
Getting Started Reselling on Amazon
If you already enjoy shopping and picking up great deals, why not start making a profit from it?
This business is a bit of a treasure hunt. “When we go into a store, we don’t have any idea what we’re going to find,” Jessica explained.
To get started, you need three things:
- An Amazon Seller Account — Jessica recommended the free Personal seller account for people just getting started. Once you’re selling more than 40 items a month, it makes sense to upgrade to the Professional account level.
- The Amazon Seller app — Available on iOS and Android for free.
- A few dollars to buy your initial inventory.
With those three things in place, you’re good to go. Now let’s go hunt for some profit!
Related: The Amazon Seller App is one of our top money making apps. Check out the full list for more.
The Scanning Process
When looking for products to resell, Jessica and her husband go to stores like BigLots and start looking in each of their areas. She mentioned sections like household cleaning, health and beauty, groceries, etc.
They keep an eye out for branded products. If they recognize them, customers on Amazon will too.
Jessica also mentioned that seasonal goods and limited edition items can be profitable finds. “We’re looking for something special,” Jessica said. But the main thing to look for is something that is deeply discounted or that the app shows is selling for a much higher price on Amazon.
As you go down the aisles, you’ll use the Amazon seller app to scan the barcodes of the products. It can be a time-consuming process. Jessica said they will scan 30-40 products in an aisle, then move on to the next aisle, and keep going to find those profitable products.
The app tells you how much the products are selling for on Amazon, and how much you’d make after the selling fees. That way you can make a buying decision based on the price it’s available for in front of you.
The app will also show you the sales rank of the product in its category on Amazon. This is an indication of how popular it is and how frequently it sells.
Reselling for Profit: Buying Criteria
There are a few criteria Jessica and Cliff use when purchasing items to resell on Amazon.
- At least 50% ROI. This means if you buy an item for $10, you’ll want to see at least $5 profit after fees.
- A minimum of $5 per sale. Jessica said she sometimes bends this rule if they expect to sell a large volume quickly.
- A Sales Rank under 150,000. When it comes to sales rank, the lower the number the better. (A sales rank of 1 indicates it’s the bestselling product in that entire category on Amazon.)
The sales rank is crucial because you want to be able to turn your money over quickly. Even if a product is a screaming deal, it’s usually not worth buying if the rank is really high because it’ll just sit in the warehouse collecting dust.
(This is also known as retail arbitrage, which is just one of many ways to make money on Amazon.)
What are the Product Categories for Resellers?
What are the best items to flip for a profit? Jessica recommended a few categories for new sellers.
Groceries – Potentially a quick turnaround. Limited edition candies, cookies, and seasonal stuff sells well. Keep in mind the expiration date needs to be at least 3 months out.
Health and Beauty – Shampoo, conditioner, face creams, etc. Jessica explained that women (and probably men too) are willing to spend more for discontinued items to keep using their favorite brands.
Household Items – Shoppers like finding unique items for their homes.
Toys – Popular toys and games for kids can sell well. This category is often closed to new sellers during the holidays.
Books – Used books sell well on Amazon. You can pick up books at goodwill, thrift stores, yard sales, and so on and resell. Look for niche-specific books, not mass-produced series.
Can You Resell on eBay Too?
Jessica mentioned a tool called JoeLister, which automatically generates eBay sales pages from Amazon inventory. You can even have Amazon ship the item to your eBay customer on your behalf.
It also works out what price you need to list the product on eBay to make the same profit. Jessica said this is most useful in instances when Amazon itself has received stock of the same item you just purchased.
Estimating Shipping Costs
Of course, when you’re moving physical products from place to place, shipping costs are going to be a factor. The good news is that Amazon has heavily discounted shipping costs due to the volume of goods they ship all over the world.
As a rule of thumb, Jessica estimates $1 per pound for the stuff she ships to Amazon. You can even add this estimate into the Seller App so it calculates it into your expected profit per item.
It also saves money to send items in bulk. Jessica said she makes a shipment once she’s filled a “Home Depot medium sized box.”
Can People Resell on Amazon Outside of the US?
Jessica has reselling students in Canada and the UK who are selling on both the Canada and UK Amazon stores, and the US store.
Sellers outside the US often buy products online in the US, ship them to a prep center, and having them shipped on to Amazon.
Reselling on Amazon with Online Arbitrage
Jessica and Cliff do online arbitrage too, but not as much as physically finding products in stores.
She said online arbitrage is great for people who don’t enjoy shopping or are short on time. While profit margins can be thinner (more competitive), you can often find more units of a product online than in your local store.
Jessica recommended Source Mogul as her go-to tool for online arbitrage, citing its clean and easy-to-use interface.
More info on online arbitrage here and here.
What Prep Do You Do Before Sending Products to Amazon
There are a few steps to follow once you have your products home and you’re ready to send them off to Amazon.
Jessica outlined her process as follows:
- Scan the products and tell Amazon what you have to send them.
- Tell Amazon what price you want to sell your products for. Jessica said the don’t usually undercut the current “buy box” seller.
- You will be asked some questions about the products as you add them to a shipping plan.
- You can then label the products yourself, or Amazon will do it for a small fee.
- Jessica prints FNSKU codes and covers up the original barcodes, this identifies the products as hers when sold.
- Polybag any products with open faces, bubble wrap any breakable items.
- Add everything into a box, make a note of the weight, and ship it to the distribution center Amazon tells you to.
Risks of Reselling on Amazon
The biggest risk in a reselling business is your upfront capital investment. Amazon loves this business because they can be “the everything store” without having to purchase all this stuff themselves.
The good news is most of the time you can at least break even on your inventory. Jessica told the story of a recent purchasing mis-step though. She’d found some seasoning packets for $1 that were selling for $12 on Amazon, with a sales rank of 1000 in grocery.
When she got them home, it turned out that sales rank was in some obscure subcategory and that no one was actually buying them. Luckily it was only $100 bet!