How to Resell on Amazon: Beginner’s Guide to $500/Day with FBA, Wholesale & Arbitrage

2025-09-19

Here's something interesting - more than 60% of sales in the Amazon store come from independent sellers—most of which are small and medium-sized businesses?
The numbers tell an amazing story. At the time you start reselling on Amazon, you'll join a marketplace where independent US sellers average more than $290,000 in annual sales. Starting might feel daunting, but the right strategy could help you earn anywhere from $100 to thousands of dollars monthly. Some successful resellers even report earnings of up to $1000 each day.
Amazon's reselling business stands out because the platform handles nearly 40% of all US e-commerce sales. It also shows great promise as 55% of wholesale resellers become profitable in less than six months. These sellers maintain profit margins above 15% after accounting for all costs and fees.
The beauty of reselling on Amazon lies in its low initial investment requirements. You can start your business venture without spending too much while accessing one of the world's largest marketplaces.
This piece will show you exactly how to buy and resell on Amazon. We'll cover everything from setting up your seller account to finding the best items that can help you reach that $500/day goal. Let's take a closer look!

Step 1: Understand How Amazon Reselling Works

You should know the basics of reselling and what works best before you start selling on Amazon's marketplace.

What is Amazon reselling?

The concept behind Amazon reselling is straightforward. You buy products at a low price and sell them for more on Amazon's marketplace. The profit is what you keep after the sale. You make money from price differences between markets or sources. This business model works well because you don't have to create new products or build a brand from scratch.
But you must calculate all fees before buying products to make sure you'll profit. New resellers often don't understand their numbers well. They end up selling too cheap and might lose money on each sale.

Is it legal to resell products on Amazon?

Amazon reselling is completely legal. The first-sale doctrine states that once you buy a product legally, you can resell it as long as it stays unchanged. This means new items must be sold as new.
Notwithstanding that, Amazon has some rules:
  • You need approval to sell certain brands (like Nike, Disney, LEGO)
  • Amazon's intellectual property policies must be followed
  • Some products require invoices to prove they're real
More than that, reselling must follow Amazon's anti-counterfeiting policy and selling guidelines. Breaking these rules can get your account suspended or banned.

Different reselling models: retail arbitrage, online arbitrage, wholesale

Amazon resellers can choose from three main approaches:
Retail Arbitrage means going to physical stores to find discounted products. You then resell these items on Amazon for profit. The best deals come from clearance aisles, liquidation sales, and special promotions at stores like Walmart, Target, or TJ Maxx. This method costs less to start but takes time to visit stores and hunt for products.
Online Arbitrage works the same way but uses online stores instead of physical ones. You look for price differences between Amazon and other online shops. The profit comes after paying Amazon's fees. You can do all this from home, which makes it convenient.
Wholesale lets you buy products in bulk straight from manufacturers or authorized distributors. You get them at discount prices and sell them on Amazon at retail prices. This model just needs more money upfront—usually $2,000 to $5,000. The benefits are worth it:
  • Your inventory source stays steady with fixed pricing
  • Profits are higher (25-30% compared to 10-15% for arbitrage)
  • You get more security through supplier relationships and proper invoices
  • Amazon's brand approval process becomes easier
Your budget, available time, and business goals will help you pick the right model. This choice affects your startup costs, daily work, marketing plans, and how big your business can grow.

Step 2: Set Up Your Amazon Seller Account

The time has come to build your Amazon presence by creating a seller account after deciding your reselling strategy. This step will be the foundation of your Amazon reselling business, so you need to think over several important factors.

Choose between Individual and Professional plans

Amazon gives you two selling plans that fit different types of sellers:
Individual Selling Plan:
  • No monthly subscription fee
  • $0.99 fee charged per item sold
  • Best if you sell fewer than 40 items monthly
  • Limited access to Amazon selling tools
  • Cannot use bulk listing and inventory management tools
  • Not eligible for certain advertising options
Professional Selling Plan:
  • $39.99 monthly subscription fee, whatever items you sell
  • No per-item selling fee (saves money at higher volumes)
  • Access to bulk listing and inventory tools
  • Knowing how to use Amazon's advertising services
  • Eligible for advanced reporting and analytics
  • Access to third-party integrations and APIs
  • Chance to compete for the Buy Box
The math is simple - the Professional plan will save you money if you plan to sell more than 40 items monthly. The Individual plan works better until your business grows.

What documents and info you need to register

You'll need these items ready before you start registration:
  • Business email address - a dedicated email for your Amazon seller account
  • Phone number - to verify and communicate
  • Government-issued ID - passport or driver's license to prove identity
  • Bank account information - to get your payments from Amazon
  • Credit card - must work internationally for fees (Amazon takes American Express, Diners Club, Discover, JCB, MasterCard, and Visa)
  • Tax information - your tax identity (EIN for businesses or SSN if you have an individual U.S. account)
The registration needs your full legal name, country of citizenship, country of birth, birth date, and where you live. You'll also need to say if you're a beneficial owner (owns more than 25% of business shares) or the business's legal representative (authorized to manage and act on its behalf).

Understanding Amazon's fees and policies

Amazon charges several fees beyond the selling plan costs:
Referral Fees: Each sale has a percentage fee that changes by product category, usually 8% to 15% (some categories have different rates). This applies to all sellers.
Variable Closing Fees: Media items cost $1.80 each.
Fulfillment Fees: Choosing Fulfillment by Amazon (FBA) means extra fees for storage and order fulfillment.
Refund Administration Fees: Customer returns cost either $5.00 or 20% of the referral fee.
Amazon takes product authenticity, intellectual property, and customer service standards seriously. Your products must be genuine and described accurately. Your account might face suspension for breaking policies, so read Amazon's terms of service carefully before listing anything.
The final step after registration involves checking your public seller profile, payment settings, shipping and returns options, tax details, notification priorities, login security, and user permissions.

Step 3: Find the Best Items to Resell on Amazon

Product selection is a vital part of your reselling trip. The market has millions of products, and you need thorough research and analysis to identify money-making items.

Use product research tools to find high-demand items

Smart Amazon resellers don't guess - they utilize powerful research tools to pick winning products. Amazon's free Product Opportunity Explorer gives you evidence-based information to find products with high demand or gaps in your chosen category. Sellers who used this tool saw their gross sales increase by 1.79% after 12 months.
Third-party tools like SellerSprite offer more advanced features:
  • Sales Estimator – Estimate daily or monthly sales from BSR values or analyze sales trends for a specific ASIN
  • Product Research – Finds profitable products that match your business criteria
Yes, it is true that 75% of Amazon sellers wish they had used product research tools when they started their businesses. These tools help you spot products with steady sales and avoid seasonal items that might become dead inventory.

Avoid restricted or gated categories

Amazon maintains strict rules about what you can sell on its platform. Restricted or "gated" products need approval before listing because of safety concerns or quality standards.
Common restricted categories include alcohol, cosmetics, fine art, jewelry, hazardous materials, and medical devices. On top of that, it's possible for brands to be gated even in open categories. Selling restricted products without approval leads to:
  • Immediate removal of listings
  • Account suspensions or bans
  • Policy violation notifications
You must check if a product is restricted before buying inventory. Tools like Seller Assistant can spot product restrictions right on Amazon's product pages.

Check profit margins and competition

Your profit depends on several factors beyond the selling price. A good Return on Investment (ROI) should be 100% or higher, though 50% works for stable growth. Smaller businesses should aim for higher net margins.
Competition analysis should focus on:
  1. Number of sellers (look for fewer than 15 sellers)
  2. Amazon's direct involvement (avoid listings where Amazon sells directly)
  3. Competition pricing strategies
  4. Stock levels compared to monthly sales
Amazon's Revenue Calculator helps estimate fees, costs, and potential profits. This analysis keeps you away from products with thin margins that might become losses after Amazon takes its fees.

Step 4: Source Products to Resell

Your Amazon reselling experience really kicks into high gear after you've spotted those profitable products. The real challenge lies in getting inventory consistently. This is where you put all that research to work by getting products that will hit your profit targets.

Retail and online arbitrage strategies

Retail arbitrage means hitting physical stores to find discounted items. These places usually give you the best profits:
  • Clearance aisles at Walmart, Target, and big box retailers
  • Discount stores like TJ Maxx, Ross, HomeGoods, and Big Lots
  • Dollar stores that work great for beginners' inventory
  • Seasonal clearance sales with discounts up to 90% off
The Amazon Seller App lets you scan barcodes to see potential profits right away. Look for items that sell for double your purchase price or give you $3 or more profit after fees.
Online arbitrage works just like retail arbitrage but focuses on deals from eBay, Walmart.com, Etsy, and Facebook Marketplace. You can source products without leaving your house, and the sweet spot is finding items that sell nowhere near their Amazon price.

Buying from wholesalers and manufacturers

Wholesale sourcing means buying products in bulk straight from manufacturers or authorized distributors. This approach beats arbitrage because you get:
  • Better prices through quantity discounts
  • More reliable inventory sources
  • Buying efficiencies that cut out manufacturers' long lead times
Smart sellers always ask for sample products to check quality before picking wholesalers. They talk about delivery timelines and return policies. It's crucial to know any minimum order quantities (MOQs) and membership fees before you commit.

How to verify product authenticity and quality

Third-party items make up over 60% of Amazon sales, but selling fake items can get your account suspended. Here's how to stay safe:
  • Research manufacturers and suppliers really well before buying
  • Keep all your paperwork including purchase orders and invoices
  • Check products to make sure they work right and aren't damaged
  • Make sure products pass safety testing requirements
Branded products need authorized distributor sourcing. The brand's authorization letter can save you if anyone questions your products' authenticity.

Step 5: 8 Expert Tips to Reach $500/Day

Your path to $500 daily Amazon sales needs smart strategies that set professional sellers apart from hobbyists. These proven tips will help you grow your business quickly.
  1. Start with low-risk categories like books or home goods
Books, home goods, and consumer electronics make excellent starting points because they have less competition and fewer restrictions. You can learn how Amazon's marketplace works while keeping your inventory risk low.
  1. Use the Amazon Seller App to scan and compare prices
The Amazon Seller App turns your smartphone into a powerful buying tool. Just scan barcodes and you'll see your potential profit after fees, competition levels, and sales rank. This takes the guesswork out of your store purchases.
  1. Track your expenses and calculate true profit margins
Successful sellers know their exact profits beyond just revenue. Your net profit comes from subtracting Amazon fees, product costs, shipping, and ad expenses from your selling price. You should target 15-30% profit margins to propel development.
  1. Use FBA to scale faster and win the Buy Box
FBA costs 70% less per unit compared to premium shipping options. FBA sellers also have the upper hand in securing the Buy Box, which handles more than 80% of Amazon's total sales.
  1. Optimize your listings with keywords and images
The core team of Amazon sellers puts listing optimization first - about 80% of them. Add all seven allowed images at 1000+ pixels on the longest side so customers can zoom in. Your title should lead with the most important keywords to boost search visibility.
  1. Monitor competitors and adjust pricing dynamically
Amazon changes prices about 2.5 million times each day. Repricing tools help you automatically adjust your prices based on competition. You'll stay competitive for the Buy Box without constant price checking.
  1. Reinvest profits into better inventory
Your business growth depends on putting profits back into higher-quality inventory, tools, and resources. Better inventory creates more sales, which gives you extra capital to expand further.
  1. Use tools like SellerSprite to learn about markets
SellerSprite gives you deep product research, keyword analysis, and competitor tracking. This helps you find profitable niches and trending products more accurately.

Conclusion

Amazon reselling gives you a real chance to build a profitable online business without spending too much upfront. This piece shows you the key steps to turn your product sourcing knowledge into a $500/day business. The process definitely takes dedication and strategic planning, but remains available to beginners who want to learn the marketplace dynamics.
Your success as an Amazon reseller mostly depends on knowing how to find the right products at the right prices. Time invested in proper product research tools will substantially increase your chances of success. The right selling model—retail arbitrage, online arbitrage, or wholesale—should line up with your capital, time limits, and business goals.
Profit margins matter more than sales volume. You must calculate all Amazon fees, shipping costs, and product expenses before making purchasing decisions. Many new sellers look only at revenue and overlook true profitability, which leads to poor results.
The FBA program gives you a great advantage to scale your business quickly. This service handles storage, shipping, and customer service while giving your listings better visibility and Buy Box chances, even with its extra fees.
Low-risk categories let you learn the platform safely at first. Experience helps you move into more profitable niches and put your earnings back into better inventory and tools. This growth cycle compounds your results over time when done right.
Amazon reselling just needs you to adapt to marketplace changes and competitor strategies. Keeping up with category restrictions, fee updates, and policy changes will protect your seller account and help your business last.
The path to $500 daily takes time—most successful sellers need several months to reach steady profits. All the same, these strategies can help you build a solid online business that brings in substantial income through the world's largest e-commerce platform.

FAQs

Q1. Is reselling on Amazon legal?
Yes, reselling on Amazon is legal as long as you follow their policies. The first-sale doctrine allows you to resell products you've legally purchased, but you must ensure they're authentic and sold in an unchanged condition.
Q2. How much money do I need to start reselling on Amazon?
You can start with minimal upfront investment. Some sellers begin with as little as $100-$500, but having $2,000-$5,000 is recommended for wholesale sourcing. The exact amount depends on your chosen reselling model and inventory.
Q3. What's the difference between retail arbitrage and wholesale reselling?
Retail arbitrage involves buying discounted products from physical stores to resell on Amazon, while wholesale reselling means purchasing products in bulk directly from manufacturers or distributors. Wholesale typically requires more capital but offers higher profit margins and more consistent inventory.
Q4. How can I find profitable products to resell on Amazon?
Use product research tools like SellerSprite or Amazon's Product Opportunity Explorer to identify high-demand items with good profit margins. Look for products with consistent sales, fewer competitors, and avoid restricted categories.
Q5. What are the key fees to consider when reselling on Amazon?
The main fees include the selling plan fee (Individual or Professional), referral fees (typically 8-15% of the sale price), FBA fees if you use Fulfillment by Amazon, and potential storage fees. Always calculate these fees before purchasing inventory to ensure profitability.
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