Amazon Wholesale – A Guide on Getting Started!
One of the things that differentiate the Amazon FBA wholesale business model is that it’s scalable. You can also earn handsome profits with the Amazon wholesale business model. If you have already experimented with retail arbitrage and want to take your venture to the next level, Amazon wholesale model must be under your consideration.
So what is the Amazon wholesale business? In FBA wholesale business, you buy in bulk from a supplier and sell that product somewhere else. As an Amazon wholesale seller, you order in larger quantities and need a bigger budget. As a result, Amazon wholesalers get a discount on bulk orders on each item than the price they would have paid buying from a retailer. This business model has a lot of potential for earning more profits.
You can rely on wholesale suppliers for sourcing the products, and they are pretty much always what you ever wanted, and you can order the products of their specialized category.
Things we will cover in this blog post
- What’s the process of starting wholesale selling on Amazon?
- Registration of an account as an Amazon Seller
- Finding the Product Niche via Research
- Finding the Suppliers
- Creating the Listing
- Fulfilling the Orders and Managing Your Inventory
- Pros and Cons of Selling Wholesale on Amazon
- Understanding the Difference Between Selling Wholesale & Other Methods
- Tips for Making More Money Using Wholesale Selling
What’s the process of starting wholesale on Amazon?
When starting with the Amazon FBA wholesale business model, you may consider it a lot more challenging. However, there are specific steps that you can follow to begin the Amazon wholesale business model quickly.
Registration of an Account as an Amazon Seller Before you start pursuing the Amazon wholesale model, you need to sign up for an Amazon seller account.
You can do that by using one of the two options shared below.
Go to the “Sign Up” and register for a Professional Seller Account.
Or
You can also select the “Signup to become an individual seller” option for registering as an Individual Seller Account.
As a wholesale seller, you must consider having a professional account. Here are the reasons.
When you opt for the Individual Account for doing Amazon wholesale business, you get $0.99 for every sale. On the other hand, a Professional Account for doing FBA wholesale business charges you $39.99 each month. So, if you foresee having more than 40 sales each money, you will save more money having a Professional Account as an Amazon wholesale seller.
- The Amazon wholesalers who use Individual Accounts do not have access to inventory tools.
- You also do not get access to order reports in Individual Accounts.
- As an Individual Account holder, you are not eligible to win the Buy Box.
Entrepreneurs who are just getting started with Amazon to experiment running a small business can have an Individual Account. However, wholesale sellers who buy in large bulk quantities of products, running more serious business, and need to access more advanced features, should have a Professional Account.
If you are not sure, you can start as an Individual Seller and upgrade if there arises a need for it.
For you to sign up, choose the option you prefer, follow the instructions on the screen. Ensure that you have a government ID, a credit card, and your tax information to complete the signup process.
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Finding the Niche and Doing Product Research
Once you have an account, it is time to decide what you want to sell. It is often tempting to go for products with a hunch of the feeling of being exciting or cool. But if you’re going to taste success, you have to make decisions based on the actual market data.
Here are some things that you must consider looking for in a product to sell in the Amazon FBA wholesale business model.
- It needs to have a high sales level.
- Must offer you high-profit margins.
- Only go for products that are not overly competitive.
- Find the ones that are small and lighter, more cost-effective to ship.
You won’t find all these valuable pieces of information with AMZ. Still, there are tools that you can use to find the products that make the most commercial sense.
AMZ Scout Product Database is a tool that many recommend for Amazon wholesale business model. One reason for using it for the Amazon wholesale model is the variety of search filters it offers for price, sales, review, and weight to help narrow down your search for the items which make the most profitability. You can also find new and upcoming products trending during the last few months.
You can also make more adjustments to the filters and perform the searches for generating the different list of items. Finally, create a list of the products that seem interesting to you for selling.
Next, you can install the AMZ Scout Pro Extension by going to Amazon.com and finding interesting items. When you get the results, open the extension to see details relevant to them.
- Estimated revenue each month
- Estimated sales each month
- The average number of reviews received
- Net margin
- The visibility score that gives you an idea of the competition faced
- There is also a niche score that helps you determine profitability, competition, and demand.
Try to find products with at least 350 monthly sales and less than 80 reviews with a margin of 50%. The visibility score must be below three and a niche score greater than 7. Make sure that you check the niche history for reviewing the sales during the last two years. Consider niches that have a consistent deal all around the year (no seasonality).
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Finding Suppliers
In the wholesale Amazon business, select a product that you want to sell, and the next step is to find a supplier who can offer that product to you.
When it comes to the tactics of the best wholesalers for Amazon FBA, sometimes they rely on Google search results. However, wholesale for Amazon sellers does not mean they will always have a strong web presence, making it difficult to track them.
In Amazon FBA wholesale business model, Alibaba is a reliable way to find suppliers. This website lists thousands of suppliers, making it easy for you to find a company from which you can buy the type of item you need for starting a business in the Amazon wholesale business model.
You can click on the option “Search Suppliers for Amazon” to find suppliers for Amazon wholesale model using the Pro Extension. Once you can find a niche that you were interested in, you can review the available suppliers for that product.
Get in touch with different suppliers for your wholesale Amazon business to see their requirements for minimum order quantities and the price they are offering. The best wholesalers for Amazon FBA mostly show flexibility and offer a discount once you negotiate with them. Never be afraid of making a counteroffer and get the best possible deal.
You can also hire professional Amazon virtual assistant service providers for help.
When you directly contact manufacturers for wholesalers for Amazon sellers, always ask for a sample product before buying the inventory. You can inspect the quality of the products they are going to offer before you buy in bulk.
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Listing Creation
Once you receive the inventory from your supplier, now you need to create a listing of the product on Amazon. You can do that by visiting your Seller Central Account, going to “Inventory,” and clicking on “Add a Product.” You will then search for the item using its name or ASIN number.
If the product is already listed on Amazon, it will show up in the search results. Please select it from the list and add it to the listing for that item.
If the product is not yet ready to get listed on Amazon, you will have to create a new listing. Let us have a look at some professional tips to assist you further.
Importance of High-Quality Photographs
Images are equally important in the Amazon FBA wholesale business model. The potential customers need to see your products on display, which is why you need high-quality photographs from various angles. If you think you cannot do a proper job, hire professionals with the right equipment.
The Advantages
In the Amazon wholesale business model, you have to do more than listing the features of the product you are trying to sell. Instead, the aim is to showcase how the product you are selling will facilitate its buyers’ life.
There is a significant competition that brands are facing all the time. As a business focused on the Amazon wholesale model, you need to be aware of the competition and consider adding relevant keywords through your listing. You can also use AMZ Scout’s KW Search & Reverse ASIN lookup tools to find appropriate keywords that potential customers will use to search your products. Finally, make sure that you strategically place the most critical keywords in the product listing’s title and description.
Once you have finalized your listing, publish it. The product is live on Amazon and can be sold on AMZ.
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Order Fulfillment & Inventory Management
In Amazon B2B wholesale, you need to stay on top of them to ensure that your customers are receiving their orders promptly. When buying from wholesalers and selling online, always give first preference to the FBA or Fulfillment by Amazon program.
The working of the Amazon FBA wholesale business is such that you ship your inventory to the Amazon warehouse, and they store it for you. Whenever someone places an order, they send the product to that customer. They do charge some additional fees that you need to pay for their services. However, the convenience is much more against the price they charge. Some of the benefits for fulfillment by Amazon include:
- Your items do quality for Prime Shipping.
- Amazon takes care of the matters related to customer service and shipping.
- You do not need to fret about the fulfillment of the order. Concentrate on the core matters of your business, the reason a lot of eCommerce entrepreneurs prefer the Amazon FBA wholesale business model with AMZ fulfillment.
When you are selling products via the Amazon wholesale business model, you need to keep an eye on your inventory. If you don’t, you may quickly run out of stock and hurt your Amazon rankings, do not let that happen. Instead, in the Amazon wholesale model, try to order more items in advance so that the new shipment reaches the Amazon warehouse before you run out of inventory.
Advantages & Limitations of Selling Wholesale on Amazon
Advantages
More Choices
You have more choices in the Amazon B2B wholesale model when buying from wholesalers and selling online. When you are going for online arbitrage or retail, you are limited in options for what you can see. You may not always find what you need at the price you want. In wholesale selling, you do not have any issue finding a supplier who can get you your required items like Fire TV sticks, gift bags, t-shirts, clothing, or books.
Higher Profit Potential
When you buy products in bulk, you can save more money per item and get it at a much lower price. As a result, you can make more on each sale, and that leads to more profits.
Less Time Dedication
There is no need for you to spend a lot of time visiting the different stores and locations when finding deals. Once you have got the right supplier, you can connect with them and place an order for more inventory of your desired products.
Automation
When you decide that you can use FBA for your entire business, you can automate it. The wholesale prepares the inventory for you and sends it to the Amazon warehouse. AMZ will store it and ship it to the customers whenever they place an order, somewhat a hands-off kind of business.
Limitations
More Initial Investment Required
In the Amazon FBA wholesale business model, the suppliers have a minimum orders quantity that is usually high. It means that the initial investment you do has to be larger, for which you need some money to get started.
Somewhat Risky Business Model
In the Amazon wholesale model, you tend to spend more and have a higher business risk. When you buy a bunch of inventory that does not sell, you risk losing the money you spent on it.
Can Be a Bit Complex to Setup
It takes time to find the right product and then its supplier that you can trust. This effort takes time, and you have to put that amount of work to proactive manage it.
How is Wholesale Selling Different from Other Strategies?
Many differences exist between wholesale on Amazon FBA and other business models like online arbitrage, retail arbitrage, and private label.
Bulk Buying
In finding the wholesale distributors for Amazon FBA, you often need to buy in bulk to fill the entire pallets. This bulk buying can result in high upfront costs, so you do not run out of inventory, which is a bonus.
Relationship with the Suppliers
When you go for online arbitrage and retail arbitrage, you have to deal with the local retailers and the online marketplaces. However, for you to create a wholesale business, you will first need to find and negotiate with the suppliers, which can be a different experience for the new eCommerce entrepreneurs.
Searching the Products to Sell
There is a lot of product research involved in the amazon FBA wholesale business model. Therefore, you can have more choice if you want to find products that make more profit. However, you also need to consider the shipping cost from the supplier and find items that are light in weight with smaller dimensions.
No Need for Customization
When comparing with the Private Label selling, you cannot customize your product in the Amazon wholesale business model. The Amazon wholesale model only allows you to sell the products already high in demand and listed on Amazon (in most cases.
Valuable Tips to Help You Make More Money with Amazon FBA Wholesale
You have got all the information you need to start with the Amazon FBA wholesale business model. Let us look at some of the tips that you can use to increase your profits further.
Get Hands-on Experience with Other eCommerce & Amazon Business Models
When you are just getting started with AMZ, consider trying the retail or the online arbitrage first. These methods need to have a smaller budget and also involve less risk. This business model lets you learn more about Amazon selling before you can make a more considerable investment.
Spend Time on Product Research and Analysis
We cannot focus enough on the need for you to do more product searches and analyses. The top sellers for wholesale on Amazon FBA don’t just get lucky with their product searches. They conduct thorough research and discover the items with higher profit margins and analyze a lot of data. They use advanced tools that help them find the right product to sell. These Amazon FBA wholesale sellers also closely scrutinize the reviews, sales, margins, and competition level faced to make intelligent decisions accordingly.
Intelligent Use of Amazon Ads
It would help if you considered using Amazon ads to drive more traffic to your product listing. Ensure that you smartly target the right keywords using any top Amazon keyword analysis and Reverse ASIN lookup tools.
It would be best always to have an open mind to learn to devise new strategies for ensuring your business is optimized.
Author Bio
AmazinEcommerce.com is a leading Amazon FBA consultant offering its services to clients across the globe.AmazinEcommerce.com is a premium Amazon FBA Private Label & Wholesale Consultancy assisting in managing your AMZ store including private label, micro-private label, listing optimization (SEO), product photography, 3D rendering, videography, EBC / A+ Content, PPC, Packaging, Design (including Store Branding), and reinstatement of suspended AMZ accounts.
