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Can You Resell on Amazon? Rules, Models, and Profit Tracking

Posted on Categories Academy

Reselling on Amazon is one of the most common ways sellers start and scale an ecommerce business. It can be done with relatively low upfront investment compared to launching a private label brand — but it also comes with strict rules and financial challenges that sellers need to understand.

So the key question is:

Can you resell on Amazon legally — and can you do it profitably?

In this guide, we’ll explain Amazon’s reselling rules, the main reselling business models, and how successful resellers track ROI and profit to scale sustainably.

Can You Resell on Amazon?

Yes, you can resell products on Amazon.

Many Amazon sellers operate entirely as resellers through business models such as:

  • wholesale
  • retail arbitrage
  • online arbitrage
  • liquidation
  • used items resale (in approved categories)

However, Amazon has strict policies around authenticity, product condition, and intellectual property. Sellers also need to be careful about invoices, sourcing documentation, and brand restrictions.

Reselling can be profitable, but success depends heavily on:

  • sourcing quality inventory
  • understanding fees
  • managing competition
  • tracking profit per item accurately

Is Reselling on Amazon Legal?

In most cases, reselling is legal.

In the United States and many other countries, the “first sale doctrine” allows you to resell products you legally purchased.

But legal does not automatically mean Amazon will allow every product to be resold.

Amazon may restrict listings based on:

  • brand gating
  • category approval requirements
  • counterfeit risk
  • product safety concerns

So resellers need to understand both the legal side and Amazon’s platform rules.

Amazon Reselling Rules (What You Need to Know)

Amazon allows reselling, but sellers must comply with policies related to authenticity and customer trust.

Here are the most important rules.

1. You Must Sell Authentic Products

Amazon’s most serious enforcement actions are related to authenticity complaints.

If a customer claims a product is counterfeit, Amazon may require proof of authenticity, such as:

  • invoices
  • supplier documentation
  • purchase receipts (sometimes not sufficient)
  • brand authorization (in some cases)

If you cannot provide proper documentation, you risk:

  • listing removal
  • account suspension
  • funds being held

2. Condition Must Match the Listing

If you list a product as “New,” it must be new.

Selling opened, damaged, or repackaged items as new is a common reason for negative feedback and policy violations.

Amazon condition categories include:

  • New
  • Used – Like New
  • Used – Very Good
  • Used – Good
  • Used – Acceptable

Resellers should be consistent with condition grading to avoid returns and complaints.

3. Some Brands Are Restricted (Brand Gating)

Amazon restricts certain brands to reduce counterfeiting and customer issues.

If a brand is gated, you may need approval before selling it.

Approval often requires:

  • invoices from authorized distributors
  • minimum purchase quantities
  • account history and performance metrics

This is especially common for:

  • electronics
  • beauty
  • health products
  • premium brands

4. Some Categories Require Approval

Certain categories are “restricted categories” and require approval to sell.

Examples may include:

  • topical products
  • groceries
  • medical devices
  • automotive parts
  • high-risk consumer goods

Always check category requirements before buying inventory.

5. You Must Follow Amazon’s Invoice Requirements

Many resellers struggle because they rely on retail receipts or informal sourcing.

For higher-risk brands and categories, Amazon typically expects:

  • invoices from a legitimate supplier
  • business name matching your seller account
  • recent invoice dates
  • clear product quantities and descriptions

If you plan to resell long-term, supplier documentation becomes a major business asset.

The Main Amazon Reselling Business Models

There are several ways to resell on Amazon. Each has different margin expectations, risk, and scalability.

1. Wholesale Reselling

Wholesale sellers purchase products in bulk from authorized suppliers or distributors and resell them on Amazon.

Pros of wholesale

  • stable supply
  • predictable pricing
  • scalable business model
  • usually lower return rates than arbitrage

Cons of wholesale

  • higher capital requirements
  • competition on shared listings
  • lower margins in many categories

Wholesale is often the most stable long-term reselling model.

2. Retail Arbitrage

Retail arbitrage means buying discounted products in physical retail stores and reselling them online.

Pros

  • low barrier to entry
  • fast product testing
  • potential for high ROI on certain deals

Cons

  • inconsistent supply
  • sourcing takes time
  • receipts may not qualify as invoices
  • limited scalability

Retail arbitrage can be profitable, but scaling it requires strong sourcing systems.

3. Online Arbitrage

Online arbitrage is similar to retail arbitrage, but sourcing is done through online stores.

Pros

  • faster sourcing than in-store shopping
  • easier to scale with automation and VA support
  • wider sourcing opportunities

Cons

  • high competition
  • price changes quickly
  • shipping delays can reduce margin
  • return rates can vary

Online arbitrage is popular because it can be systematized more easily than retail arbitrage.

4. Liquidation and Clearance Reselling

Some sellers buy liquidation pallets or clearance inventory and resell items individually.

Pros

  • potential for high margins
  • large inventory volume opportunities

Cons

  • inventory quality issues
  • higher return rates
  • inconsistent product conditions
  • difficult to predict profitability

Liquidation reselling can work well, but it requires careful inspection and cost tracking.

5. Used Items Reselling

Amazon allows used items in many categories, but used inventory requires careful condition management.

Used resale can be profitable, especially for:

  • books
  • electronics
  • collectibles
  • refurbished goods (in some categories)

However, used resale often comes with:

  • higher return risk
  • customer expectation issues
  • stricter condition accuracy requirements

How Do Amazon Resellers Make Money?

Amazon resellers make money when they buy products at a low enough cost to cover:

  • Amazon fees
  • shipping and prep costs
  • advertising (if needed)
  • return losses
  • price competition

The profit model is simple:

Buy low → sell high → manage costs

But the challenge is that Amazon’s cost structure is complex.

That’s why profit tracking is essential.

Reselling Profit Formula (Real Net Profit Calculation)

Here is a simplified net profit formula for Amazon reselling:

Net Profit Per Unit =

Selling Price
 – Amazon Referral Fee
– FBA Fulfillment Fee (or FBM shipping cost)
– Buy Cost (COGS)
– Prep + Shipping Cost
– Storage Fee Estimate
– Refund/Return Impact
= Net Profit

This formula is the foundation for scaling any reselling business.

ROI for Amazon Reselling (What to Track)

Resellers often use ROI as their main decision metric.

ROI Formula:

ROI = Profit ÷ Total Cost

The important part is defining “total cost.”

For resellers, total cost should usually include:

  • buy cost
  • sales tax (if applicable)
  • inbound shipping
  • prep and labeling
  • packaging materials

Example ROI calculation

Buy cost: $20
Prep/shipping: $2
Amazon fees: $10
Selling price: $45

Profit:

$45 – ($20 + $2 + $10) = $13 profit

Total cost:

$20 + $2 = $22

ROI:

$13 ÷ $22 = 59% ROI

That’s a strong ROI — but resellers should also check how fast the item sells.

Why Profit Tracking Matters for Amazon Resellers

Reselling businesses often have:

  • hundreds or thousands of SKUs
  • changing buy costs
  • different fee structures
  • frequent repricing
  • variable return rates

Because of this complexity, many resellers struggle to understand which inventory is actually profitable.

Common reseller problems

  • high revenue but low net profit
  • inventory that sells slowly and increases storage costs
  • products that look profitable but become unprofitable after returns
  • repricing pressure reducing margins over time

Tracking profitability per ASIN or SKU helps resellers scale more confidently.

Profit Tracking Tips for Amazon Resellers

Here are the most important profit tracking practices.

1. Track Profit Per ASIN (Not Just Overall Revenue)

Some ASINs may be responsible for most of your profit.

Others may generate sales volume but very little margin.

Tracking profit per ASIN helps resellers identify:

  • top profit products
  • low-margin products
  • products with high return rates
  • products with rising fees

2. Track Refund and Return Losses

Returns can reduce profit significantly, especially in categories like electronics.

Resellers should monitor:

  • return rate by ASIN
  • refund deductions
  • unsellable inventory

Even a few high-return ASINs can reduce overall profit.

3. Monitor Fee Changes

Amazon fees can change over time.

Resellers should track:

  • referral fee changes
  • FBA fee changes
  • storage fee increases
  • inbound placement fees (when applicable)

Fee monitoring is essential for repricing decisions.

4. Track Inventory Turnover and Storage Risk

Slow inventory can create hidden costs through storage fees and aged inventory surcharges.

Resellers should track:

  • sell-through rate
  • days of inventory remaining
  • inventory aging reports

High ROI products are not always good products if turnover is slow.

5. Track Reimbursements

Amazon sometimes loses or damages inventory.

Resellers should track reimbursement activity to ensure missing inventory is credited properly.

This is especially important for high-volume businesses.

Common Reselling Mistakes on Amazon

Here are the most common reasons resellers struggle.

Mistake 1: Selling Restricted Brands Without Documentation

Brand gating and authenticity complaints are major risks.

If you can’t provide invoices, reselling certain brands can become risky.

Mistake 2: Underestimating Fees

Resellers often miscalculate profit by forgetting:

  • referral fees
  • fulfillment fees
  • storage costs
  • return losses

Amazon’s fee structure is not always intuitive, especially for low-priced items.

Mistake 3: Buying Inventory Without Checking Competition

Even a profitable deal can become unprofitable if many sellers enter the listing.

Competition affects:

  • buy box share
  • pricing pressure
  • sales velocity

Mistake 4: Scaling Without Knowing Which Products Are Profitable

Many resellers grow revenue but don’t track which items actually contribute to profit.

This often leads to inventory bloat and lower margins over time.

Best Practices for Scaling an Amazon Reselling Business

If you want to scale reselling sustainably, focus on:

  • consistent sourcing channels
  • invoice-based suppliers (when possible)
  • clear ROI and profit targets
  • ASIN-level profit tracking
  • inventory turnover monitoring
  • controlled repricing strategy

Reselling is not just about finding deals — it’s about managing profitability at scale.

Frequently Asked Questions (FAQ)

Can you resell products on Amazon legally?

Yes, reselling is legal in many countries as long as the products are authentic. However, Amazon may restrict brands or categories and require documentation such as invoices.

Do you need permission to resell on Amazon?

In some cases, yes. Certain brands and categories require approval. Some listings may also be gated depending on your seller account.

Is Amazon reselling profitable?

Amazon reselling can be profitable, but margins depend on fees, competition, and return rates. Tracking net profit per product is essential for long-term success.

What is the best reselling model for Amazon?

Wholesale is often the most stable model, while arbitrage can offer higher ROI but less predictable supply. The best model depends on your capital, risk tolerance, and sourcing ability.

Final Thoughts: Reselling Success Depends on Profit Tracking

Yes, you can resell on Amazon — and many sellers build successful businesses doing it.

But reselling becomes difficult when sellers scale without understanding:

  • true net profit per item
  • return and refund losses
  • fee changes
  • inventory turnover

Tracking profit by ASIN and monitoring ROI helps resellers make better buying decisions and scale sustainably.

If you want better visibility into profitability, sellerboard helps Amazon sellers track net profit, fees, refunds, reimbursements, and performance by product — so you can scale your reselling business with accurate numbers.