There are several ways to make money at Amazon, and you don’t have to work in one of its warehouses to do so!
However, if you’re looking to earn some extra money with Amazon’s reseller program, you may have some questions. Like, is it profitable to resell with Amazon? I did the research and have all the answers you’ve been looking for!
Amazon Reseller Program
Amazon’s reseller program allows individuals to buy products from other stores and mark up the price to sell on Amazon. However, if you resell on Amazon, you’ll pay closing, referral, and administration fees, among others. Also, you can choose between an Individual or Professional seller account to start reselling items on Amazon.
To find out the difference between seller account styles and what you need to know before reselling on Amazon, keep reading!
What Is an Amazon Reseller?
An Amazon reseller is an individual or company that buys products from other stores in bulk and then sells them for a marked-up price on Amazon’s website.
It’s important to note that if you’re a reseller at Amazon, you don’t have creative rights to the products you sell.
Instead, you’re simply a medium for providing products that already exist to customers on a convenient platform.
Is the Amazon Reseller Program Profitable?
Yes, it can be profitable to participate in Amazon’s reseller program. However, it’s critical to note that the program is very popular, and the competition has grown fierce over the past years.
With that, many resellers on Amazon find it challenging to make a profit because of the rise of competition and the low profit margins.
The competition between resellers is so brutal because Amazon doesn’t limit how many people can be resellers in a specific market.
However, if you choose a market niche that’s tailored to the right people and hasn’t already seen a lot of other resellers, you may get lucky and see success.
Additionally, other Amazon resellers note that the amount of success you have depends a lot on the amount of effort you put in, the products you choose, and your branding strategy.
Is There a Warranty On Reseller Products?
Unfortunately, resellers on Amazon typically don’t carry an additional warranty on their products separate from a manufacturer’s warranty.
However, the manufacturer warranty won’t apply if an Amazon seller doesn’t have an authorized account.
So, as an Amazon reseller, it’s essential to get your account verified and set up correctly from the start, as a manufacturer warranty can set you apart from some of the competition.
How Do You Register To Sell On Amazon?
According to Amazon’s website, the first step to creating a reseller account is to select between an Individual and Professional plan, sometimes referred to as a standard and premium plan.
For example, the Individual plan costs $.99 per sale and is recommended if you plan to sell fewer than 40 items a month.
Additionally, the Individual plan is best for those who don’t need advanced selling tools and programs and are still deciding what to sell.
On the other hand, the Professional plan costs $40 a month no matter how many items you sell.
With that, the Professional plan is recommended for those who want access to APIs, who want to sell reports, and who intend to sell over 40 items per month.
If you choose the wrong plan initially, don’t worry! Amazon allows you to switch effortlessly at any point in time.
What Do You Need To Start Selling On Amazon?
Before you become a member of Amazon’s reseller program, you will first need to complete registration. With that, some of the forms and information you’ll need include:
- Bank account number
- Bank routing number
- Chargeable credit card
- Government-issued national ID
- Tax information
- Valid phone number
How Do You Start Reselling On Amazon?
Before you start officially reselling on Amazon, there are a few things you’ll want to consider.
First, you have to consider what products you want to sell and how each product will fit into a category or niche on Amazon.
Then, it’s important to consider how you will source and price your product so it’s competitive with others in the same category.
Finally, it’s time to think about branding. Branding is a crucial step in the reselling process because it allows you to stand out from the crowd if you do it correctly.
However, creating a branding strategy can be difficult, especially if you’re new to Amazon’s reseller program.
That said, you can always consult marketing and branding professionals for help (sites like Fiverr.com are great for this!).
How Many Resellers Are On Amazon?
Currently, there are more than two million third-party sellers on Amazon’s marketplace! So, yes, there’s a lot of competition on Amazon.
However, the reason so many people choose to sell products on Amazon is that the company has crucial customer data, like:
- What products customer are searching for
- What products customers buy
- How much customers are willing to pay for certain products
- Where customers can find the brands they’re searching for
The bullets listed above are only a small portion of the data Amazon tracks to help the reselling process go smoothly and the customer shopping experience even smoother.
Are There Fees To Selling On Amazon?
Of course, it’s no surprise there are some fees to resell on the most profitable e-commerce website in the world.
With that, Amazon charges subscription (mentioned above), selling, and shipping fees, among others.
When you sell an item, Amazon automatically collects the amount paid by the buyer, including the price and any shipping, gift wrap, etc., charges.
If you have a Professional seller plan, you can set your shipping rates for books, music, and video products.
However, for Individual seller plans, shipping charges can range from $3.99 to $14.95, depending on the product type and shipping speed.
Additionally, Individual resellers can expect even higher shipping fees for international purchases.
For each item sold on Amazon, resellers can expect to pay a referral fee.
At Amazon, a referral fee is a percentage calculated on the total sales price paid by the buyer and varies depending on the type of product.
However, the minimum referral fee, regardless of the product category, is $0.30.
Also, resellers have to pay a $1.80 per item closing fee for any product sold in the following categories:
- Software and computer or video games
- Video game consoles
- Video game accessories
Refund Administration Fee
In a case where you have to refund a customer’s order, Amazon also charges you a fee.
For example, Amazon refunds you the amount of the referral fee you paid minus the refund administration fee after a customer refund.
With that, the refund administration fee is either $5.00 or 20% of the applicable referral fee, whichever is less.
It’s important to note that the previously listed fees are only some of the fees Amazon charges. Depending on your seller account type and what products you sell, there could be even more fees.