Is reselling on Amazon legal? What the law and Amazon's rules say

Almost every store you've shopped in sells brands it doesn't own, so reselling is as old as retail. What people usually mean is narrower: can I sell something again on Amazon, do I need the brand's permission, and can a brand shut me down? Here is each answer, with the law and Amazon's rules side by side.

The short answer

Reselling is legal. Whether a particular sale is fine depends on two layers, and they don't always agree.

The law. Under the first sale doctrine, once a brand sells a genuine product, the owner of that item can sell it again without the brand's permission. A federal appeals court summed up the trademark side in one sentence in 2009: "Those who resell genuine trademarked products are generally not liable for trademark infringement" (Beltronics v. Midwest Inventory Distribution).

Amazon's rules. Amazon's store is a private company's marketplace, and its rules go further than the law: approval for some brands and categories, documents that trace your stock, condition, and sources of stock it won't accept. Amazon enforces them itself, without a court, so a perfectly legal sale can still cost you a listing.

The first sale doctrine, and where it stops

When a brand sells a genuine product, its control over that particular item ends with that sale. Whoever owns the item can sell it again, give it away or keep it, without asking. The brand keeps its rights in its name, its designs and its inventions. It just can't use them to decide who resells a unit it has already sold.

The idea runs through all three kinds of rights a brand might hold.

• Copyright. Section 109(a) of the Copyright Act says the owner of a lawfully made copy may sell it without the copyright owner's permission. This is the rule that lets used bookstores exist. In Kirtsaeng v. John Wiley & Sons (2013), the Supreme Court held that it covers copies lawfully made abroad too.
• Patents. In Impression Products v. Lexmark (2017), the Supreme Court held that "a patentee's decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose". The Court's example is a shop that restores and resells used cars: it can do business because it's free to repair and resell cars as long as the people bringing them in own them, whatever patents cover the parts inside.
• Trademarks. No statute spells it out, but courts apply the same idea. In the words of the Beltronics opinion, a brand's right to control distribution of its trademarked product "does not extend beyond the first sale of the product." An early Supreme Court case, Prestonettes v. Coty (1924), held that when a trademark is used in a way that doesn't deceive the public, it can be used "to tell the truth." Naming the brand to say what you're selling is telling the truth.

One thing to understand about how this works in practice: first sale is a defense. It can win an argument, but it doesn't stop a brand from complaining to Amazon or filing a lawsuit in the first place. What lets you rely on it is proof that your units are genuine, which is why invoices come up again and again on this page.

Where it stops

The doctrine protects genuine goods sold as they are. It stops in five places.

1. Counterfeits. First sale covers items the brand made and sold, or allowed someone else to make and sell. A fake was never sold by the brand, so there's nothing for the doctrine to protect. Selling counterfeits breaks the law and Amazon's rules.

2. Materially different goods. This is the one that catches resellers who buy genuine products. The Tenth Circuit held in Beltronics that "the unauthorized resale of a materially different trademarked product can constitute trademark infringement," and that "a difference is material if it influences the decision whether to purchase the product."

The facts are worth knowing because they look like ordinary online reselling. A reseller bought radar detectors from distributors who, the court said, were apparently breaking their agreements with the brand. The reseller sold them as new on eBay. The original serial number labels had been removed or replaced with fake ones, to hide which distributors the units came from. The brand gave warranties, software updates, rebates and recall notices only on units with original serial labels, so the reseller's buyers didn't get them. The court agreed that differences in warranty and service can be material, and that a note in the reseller's listings saying the maker wouldn't honor the warranty wasn't enough. It upheld an order stopping those sales.

That ruling came early in the case and binds one federal circuit, but the opinion lists other federal appeals courts that apply the same material-difference rule. Most of the earlier cases it relies on were about gray-market goods, meaning products made for sale in another country and imported without the brand's consent, and the court said the rule isn't limited to them. In practice, these are the differences to stay away from:

• serial numbers, batch codes or labels removed, covered or replaced;
• products made for another country's market, where the formula, labeling or warranty can differ;
• a warranty or service that buyers expect from the brand and won't get with your unit.

3. Used, opened or repaired items sold as new. The law doesn't stop you selling used goods under their brand name. In Champion Spark Plug v. Sanders (1947), the Supreme Court let a company resell repaired spark plugs that still carried the maker's name, as long as each one was clearly marked "repaired" or "used." The problem is hiding the condition. Amazon draws its own line here too, covered in the next section.

4. Agreements you signed. First sale limits what a brand can do with its trademark, copyright or patent. It doesn't erase a contract. In Lexmark, the Supreme Court said the no-resale terms in Lexmark's contracts with its customers "may have been clear and enforceable under contract law." What they couldn't do was keep Lexmark's patent rights alive in cartridges it had already sold. So if a supplier's account terms or a brand's reseller agreement says where and how you may sell, that's a promise you made. Read a supplier's terms before you open the account, and keep to them.

5. How you present yourself. Using the brand's name to say what you're selling is fine. Presenting yourself as the brand, claiming to be an authorized dealer when you aren't, or promising the brand's warranty when it won't apply is how confusion claims start. And the first sale doctrine covers the item you own, not the brand's photos and text: section 109 lets you sell your copy, not make new copies. On Amazon you rarely need the brand's content anyway, because a reseller adds an offer to the product page that already exists.

Amazon's own rules for resellers

Amazon decides who sells in its store and on what terms. Its guide to reselling gives sourcing guidelines in plain language: research manufacturers, resellers and suppliers before you buy "to reduce the risk of complaints," verify the authenticity and quality of products, check they work and are undamaged, research safety testing and compliance requirements, and "keep documentation and records of transactions, such as purchase orders and invoices." The rule underneath all of it is authenticity.

Here is how Amazon's rules apply, situation by situation.

Several of these rules live on Seller Central help pages that need a sign-in, so we couldn't check their current wording. Where Amazon says the same thing on a public page, we link that page instead, and the sources at the end list both.

Why your supplier matters more than anything else

Every rule above comes back to one question: can you show where your units came from? That depends on where in the supply chain you buy. In the Finding Suppliers lesson of Apex University, Stef, who teaches the course, walks down the chain from the top (Finding Suppliers, 1:49): the manufacturer, then redistributors that buy truckloads every week and supply smaller distributors, then wholesalers, then the retailers that sell to shoppers. Here is what each level gives you on paper. The last column is our read, not Amazon's rule.

Keep every invoice where you can find it

Keeping the paperwork findable matters as much as having it. From Stef's Purchasing lesson (Purchasing, 30:39): when an order is closed, the supplier's invoice is filed with the purchase order it paid for, so that if Amazon ever reaches out about a product authenticity claim, you can look up the ASIN, find the invoice and send it. The records to keep from every order lists what Amazon accepts as an invoice and what to keep beside it.

Can a brand stop you from reselling?

With trademark law alone, usually not, as long as your goods are genuine, unaltered and described truthfully. An Amazon community manager has put the marketplace's side the same way: "Amazon is an open marketplace where authorization isn't required to sell genuine products" (Amazon Seller Forums).

But a brand has other levers, and several of them work very well on Amazon.

• It chooses who it sells to. A brand picks its distributors and sets the terms of their agreements. In Beltronics, the distributors had agreed to minimum resale prices. A supplier that sells to you against its own agreement with the brand can be cut off, and your supply goes with it.
• It can gate its brand on Amazon. Approval can apply to a whole brand, and some brands only want sellers they have authorized. Being an authorized reseller usually means a letter from the brand, which our guide to the letter of authorization explains, and the ungating guide covers how approval works.
• It can give its chosen sellers a role. In Brand Registry, a brand can give a Reseller role to the third-party sellers it has authorized (Amazon's guide to Brand Registry roles).
• It can enroll in Transparency. Then a valid Transparency code must accompany every unit listed or shipped, and the brand applies those codes to its own products (Amazon). If your supplier can't supply coded units, you can't sell them.
• It can report your listing. Brand Registry gives a brand tools to report suspected intellectual property infringement (Amazon Brand Registry). A complaint can be filed against genuine goods, and you still have to answer it. Our guide to Amazon IP complaints covers what to do first.
• It can send a letter or sue. A letter from a brand's lawyer is a claim, not a ruling. Whether it holds up depends on the facts: what you signed, and whether your units match what the brand sells. Read it closely, gather your invoices and any agreements, and talk to a lawyer before you answer.

One more point, and this one is our opinion rather than a rule: when a brand works hard to keep resellers out, through gating, Transparency and complaints, your money usually does better with a brand that welcomes you.

Is retail or online arbitrage legal?

Yes. Buying discounted products in a store or on a retail website and reselling them on Amazon is the same first sale situation: you bought genuine goods, and you may sell them again. Amazon's guide to reselling says retail arbitrage can work "if you follow Amazon selling guidelines," and warns that "you might need additional documents, such as invoices, to sell the products."

That second sentence is where arbitrage gets hard. A store receipt proves you bought something. It isn't the manufacturer or distributor invoice Amazon asks for when a product needs approval, so many gated brands and categories stay closed to arbitrage stock. Check clearance stock closely too: a damaged box, older packaging or an opened unit brings the condition rules above into play.

Online arbitrage vs retail arbitrage compares the two models in depth, including which tools help.

Is dropshipping allowed?

On Amazon, in one form only. Dropshipping isn't a legal question so much as one of Amazon's rules, and Amazon's guide to reselling is direct about the popular version: retail-to-retail drop-shipping is prohibited.

Our guide to reselling on Amazon explains the one version of dropshipping Amazon permits, and why even that one is a hard way to resell.

What is not allowed

Some things break the law, some break Amazon's rules, and many break both.

Amazon's restricted products policy lists what can't be sold in its store or needs approval first, and the gated categories list shows where approval commonly applies. Breaking these rules is how resellers end up with account health problems, which our account health guide covers.

If you're just starting, this is good news more than bad. Every rule above points the same way: buy genuine products from the brand or its distributors, keep the invoices, and sell the units as they came. That's the wholesale model, and our guide to reselling on Amazon compares it with the others. Apex University teaches it step by step.