The practice involves procuring merchandise in bulk directly from manufacturers or distributors at discounted rates and then reselling those goods via the Amazon marketplace. This business model hinges on the difference between the acquisition cost and the potential retail price on Amazon. For example, a business might purchase 500 units of a specific kitchen gadget from a wholesaler for $5 each and then list them individually on Amazon for $12, aiming for a profit of $7 per unit (before Amazon fees and other expenses).
Engaging in this type of resale can offer significant advantages, including access to a wide customer base, leveraging Amazon’s established infrastructure for fulfillment and customer service, and the potential for scalability. Historically, direct access to manufacturers and large-scale distributors was limited to well-established retailers. However, the rise of online marketplaces and the increased transparency of supply chains have made this model more accessible to smaller businesses and entrepreneurs, creating new opportunities for revenue generation.
