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Becoming an Amazon Reseller: Best Models + How to Track ROI

Posted on Categories Academy

Becoming an Amazon reseller is one of the most common ways to start and grow an Amazon business. Compared to launching a private label brand, reselling usually requires less upfront investment and allows sellers to work with existing demand.

But while reselling can scale quickly, it’s also easy to misjudge profitability if you don’t track ROI and costs accurately.

In this guide, we’ll explain what it means to become an Amazon reseller, the main reselling models, and how successful resellers track ROI and profit as they grow.

What Does It Mean to Be an Amazon Reseller?

An Amazon reseller buys products from suppliers or retailers and resells them on Amazon for a profit.

Unlike private label sellers, resellers typically sell existing branded products and compete on:

  • price
  • availability
  • buy box performance
  • fulfillment speed
  • account health

Reselling is popular because it allows sellers to test products quickly and scale without product development.

Is Becoming an Amazon Reseller a Good Idea?

Becoming an Amazon reseller can be a good business decision if:

  • you understand Amazon’s rules
  • you source products reliably
  • you track ROI and profit accurately
  • you manage inventory carefully

However, reselling also comes with challenges such as:

  • competition on shared listings
  • brand restrictions and gating
  • pricing pressure
  • variable fees
  • higher return risk in some categories

Success depends on discipline and financial tracking.

The Main Amazon Reseller Business Models

There are several ways to become an Amazon reseller. Each model has different capital requirements, margins, and scalability.

1. Wholesale Reselling

Wholesale resellers purchase products in bulk from authorized suppliers or distributors.

Pros

  • stable supply
  • predictable pricing
  • easier to scale
  • lower sourcing time

Cons

  • higher upfront investment
  • lower margins in competitive categories
  • shared listings with many sellers

Wholesale is often considered the most sustainable reselling model for long-term growth.

2. Retail Arbitrage

Retail arbitrage involves buying discounted products from physical retail stores and reselling them online.

Pros

  • low barrier to entry
  • potential for high ROI on individual deals
  • good for testing product demand

Cons

  • inconsistent inventory
  • time-intensive sourcing
  • receipts may not qualify as invoices
  • limited scalability

Retail arbitrage works best when sellers have efficient sourcing systems.

3. Online Arbitrage

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

Pros

  • faster sourcing
  • easier to outsource
  • scalable with tools and automation

Cons

  • high competition
  • price changes quickly
  • shipping delays can reduce margin

Online arbitrage is popular among sellers who want flexible sourcing options.

4. Liquidation and Clearance Reselling

Some resellers purchase liquidation pallets or clearance inventory.

Pros

  • potential for high margins
  • large inventory volume opportunities

Cons

  • inconsistent product condition
  • higher return rates
  • unpredictable profitability

This model requires careful inspection and conservative profit assumptions.

5. Used and Refurbished Product Reselling

Amazon allows used and refurbished products in many categories.

Pros

  • lower buy cost
  • less competition on some listings

Cons

  • higher return rates
  • stricter condition expectations
  • customer satisfaction risk

Used product reselling can be profitable, but condition accuracy is critical.

How Amazon Resellers Make Money

Amazon resellers make money by managing unit economics carefully.

The basic principle is simple:

Buy at the right price → control costs → sell consistently

But Amazon fees and competition mean profit can vary widely between products.

The Amazon Reseller Profit Formula

To evaluate a product accurately, resellers should calculate net profit per unit.

Net Profit Per Unit =

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

This formula helps resellers decide whether a deal is worth pursuing.

ROI for Amazon Resellers (What to Track)

ROI is one of the most important metrics for resellers.

ROI Formula

ROI = Profit ÷ Total Investment

The key is defining “total investment” correctly.

For resellers, total investment should usually include:

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

Using incomplete cost data leads to misleading ROI numbers.

Example ROI Calculation

Buy cost: $18
Prep and shipping: $3
Amazon fees: $12
Selling price: $45

Profit:

$45 – ($18 + $3 + $12) = $12 profit

Total investment:

$18 + $3 = $21

ROI:

$12 ÷ $21 = 57% ROI

That’s a strong ROI — but resellers should also consider sales velocity and return risk.

Why ROI Alone Is Not Enough

A product can have a high ROI but still be a poor business decision if:

  • it sells very slowly
  • storage fees accumulate
  • competition increases
  • return rates are high
  • pricing becomes unstable

That’s why many resellers track both:

  • ROI
  • profit per unit
  • inventory turnover

How to Track ROI and Profit Effectively as a Reseller

Reselling becomes complex as SKU count increases.

Here are best practices for tracking performance.

1. Track Profit Per ASIN or SKU

Resellers often manage hundreds or thousands of products.

Tracking profit per ASIN helps identify:

  • consistently profitable products
  • low-margin products
  • products affected by fee changes
  • products with high return rates

2. Monitor Return and Refund Impact

Returns can reduce profit significantly.

Resellers should track:

  • return rate by ASIN
  • refund amounts
  • unsellable inventory

Return-heavy products may require price adjustments or removal.

3. Monitor Amazon Fee Changes

Amazon fees change over time.

Resellers should track:

  • referral fee changes
  • FBA fee changes
  • storage fee increases
  • inbound placement fees

Fee awareness allows faster repricing and sourcing decisions.

4. Track Inventory Turnover

High ROI products are not always good if they sell slowly.

Resellers should track:

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

Fast turnover improves cash flow and reduces storage costs.

5. Track Reimbursements

Amazon sometimes loses or damages inventory.

Tracking reimbursements helps ensure missing inventory is credited properly.

This is especially important for high-volume resellers.

Common Mistakes New Amazon Resellers Make

Mistake 1: Relying Only on Revenue

Revenue can grow even when profit declines.

Resellers should prioritize net profit and ROI, not just sales volume.

Mistake 2: Ignoring Brand and Category Restrictions

Selling restricted brands without approval can lead to account issues.

Always check brand gating and category requirements before buying inventory.

Mistake 3: Overestimating ROI by Ignoring Costs

Skipping prep, shipping, or return costs leads to unrealistic ROI expectations.

Mistake 4: Scaling Without Performance Tracking

Without ASIN-level tracking, resellers may scale products that don’t contribute meaningfully to profit.

Best Practices for Becoming a Successful Amazon Reseller

If you want to build a sustainable reselling business, focus on:

  • reliable sourcing channels
  • invoice-based suppliers (when possible)
  • conservative ROI assumptions
  • ASIN-level profit tracking
  • inventory turnover management
  • compliance with Amazon policies

Reselling rewards sellers who are disciplined and data-driven.

Frequently Asked Questions (FAQ)

Is becoming an Amazon reseller still profitable?

Becoming an Amazon reseller can still be profitable, but competition and fees have increased. Profitability depends on sourcing quality, ROI discipline, and cost tracking.

How much money do Amazon resellers make?

Income varies widely. Some resellers earn a few thousand dollars per month, while others build large businesses with significant cash flow.

Do you need invoices to resell on Amazon?

In many cases, yes. Amazon may require invoices to verify authenticity, especially for gated brands or categories.

What is the best reseller model on 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 and goals.

Final Thoughts: Reselling Success Comes From ROI and Profit Clarity

Becoming an Amazon reseller is not just about finding deals.

Long-term success depends on understanding:

  • true net profit per unit
  • ROI after all costs
  • inventory turnover
  • fee changes
  • return and refund impact

Tracking these metrics helps resellers scale with confidence.

If you want clear insight into profitability and ROI across hundreds of SKUs, sellerboard helps Amazon resellers track net profit, fees, refunds, and inventory performance — so decisions are based on accurate data, not assumptions.