Are you a typical Amazon FBA seller? Have you followed this path?
Retail arbitrage ——-> Online arbitrage ——>
Liquidation ——-> Private label —–>
If you’re looking for the next step, I can tell you where to advance to next.
Add Amazon wholesale to your business.
Advantages of Wholesale for Amazon Sellers
With retail or online arbitrage, some of the biggest drawbacks include:
- Not being able to find replenishable products
- Enormous amount of time spent sourcing
- Items being sold out before you can order
- Quantity limits being enforced
- Being banned by stores/sites
- And others
Liquidation can provide some exceptionally profitable finds; however, you might be:
- Required to purchase in huge quantities
- Forced to take delivery immediately
- Experience a higher number of damaged or defective items
You might have considered moving to private label — which is one of the most popular sourcing strategies — only to be met with:
- High startup costs
- Huge learning curves
- Import/export nightmares
- Language barriers with overseas manufacturers
- Lots of unexpected expenses
- Thousands of dollars’ worth of inventory that you can’t move
Don’t get me wrong — all three of the above have led savvy sellers down a golden path to profits time and time again. There is absolutely nothing wrong with these sourcing methods.
And, while FBA wholesale isn’t perfect either, it tears down more of the barriers and provides:
- Significantly lower cost of entry
- Replenishable source of products
- Quick product evaluation and ordering
- Lower quantity requirements
- Flexible delivery options
- In-country suppliers (no importing necessary)
- And more
How an Amazon Wholesale Business Works
With arbitrage, you’re buying from retail stores or websites. Picking up deeply discounted items, clearance bargains, or other deals gives you the room to mark the items back up and resell them.
Liquidation is pretty much the same, but usually on a much larger scale.
When creating private-label products, you work with manufacturers to develop products that are the same as the manufacturer’s, but that bear your brand name.Wholesale allows you to work with the manufacturer (sometimes called the brand owner) to sell their existing products. You skip the private-labeling process altogether, which saves time, money and a lot of risk.Click To Tweet
Yes, that means other people might be able to sell the same products you sell. However, there are ways to get around this, including:
- Forging agreements with the brand owner that guarantee your Amazon wholesale business is the exclusive seller of their products
- Creating bundles that include items others cannot duplicate
- Ensuring the brand owner is in Amazon’s Brand Registry
Once approved, you’ll have access to the manufacturer’s catalog and receive wholesale pricing (which you can negotiate much of the time). Research the products to find the ones you’re sure will sell on Amazon, buy them in the quantities you want, and presto! You have an Amazon FBA wholesale business!
Before you run off in pursuit of all things wholesale, you'll want to pay close attention to these 3 tips from some heavy-hitting Amazon sellers. This will help to get you headed down a revenue-generating path with as few hiccups as possible.Click To Tweet
#1: Look and Act Trustworthy When You Approach Wholesale Companies
Daniel Meadors (of The Wholesale Formula) thinks too many sellers slit their own throats due to unprofessional behavior when talking with brand owners.
Manufacturers want sellers who appear professional & trustworthy, and who add value to their products and brands.
This will be a business-to business-relationship, so you actually want to appear and present yourself as an actual business. Having a professional business website (even a one-page site) that represents your company is an excellent way to help legitimize you in their eyes.
When it comes to adding value to their products and brand, it is pretty simple. You add value by doing things like improving the product page on Amazon, running pay-per-click advertising, and a myriad of other ways. Some of these may seem daunting, but trust me, they really aren’t. We learned them on our own and have taught hundreds of sellers how to successfully add value to brands, so don’t worry, you can figure it out, too.
You just have to ask yourself a simple question: “What is one thing I can do that will increase the sales, perception, or exposure of this product / brand?”
#2: Don’t Assume You Know What Customers Want
Jim Cockrum has conquered Amazon through arbitrage, private label, and wholesale. In one of his podcasts, Jim stated:
Never assume that you know what the customer wants. That’s a great way to fill your garage with products nobody will buy! You find the gaps and fill the gaps… that’s the best way to turn a profit.
If you’ve been selling online for more than 6 months, your brain is geared toward “I gotta find a product, I gotta find a product.” That’s not where you should be starting. Go straight to your Facebook page and post: “Hey, do I have any friends or family who shop on Amazon? If so, will you please let me know when you’re looking for something there and can’t find it?”
Then you ask those people to look over the search results and tell you what they are actually seeing as options and what they would rather be seeing. Then find wholesalers that offer those types of products. That’s filling a gap. So, stop looking for products… start looking for gaps, then fill the gaps with products.
#3: Build Relationships With Brand Owners, Not Only Resources
Skip McGrath is what I deem a “Power Seller.” He’s been selling successfully on eBay and Amazon since 1999 and 2006 respectively. Skip cautions new Amazon wholesale sellers not to be intimidated when approaching companies. That’s because he does so to build relationships, not to nag them for wholesale pricing. In addition to meeting a lot of awesome people, Skip also gets a few fringe benefits.
Take the time to get to know, and develop relationships with, the people at your wholesale sourcing firms. Having personal interaction with them can help in many ways, including getting advance notice of sales and special deals, advance notice of new products, and allocation of products when supply is tight.
Whenever I call one of my wholesale reps, I take a few minutes to ask about their family, how they are doing, and so on. Last week, when I asked a rep about ordering a product, she warned me about a quality issue and high return rate. She advised that I not buy the item until they got a new supply in. Had I not had that personal relationship, she would most likely have just processed my order.
Essentially, Skip is treating his wholesale suppliers like people instead of business assets. Keep in mind that you aren’t working with companies, you are working with individual men and women who work for companies.
#4: Outsource, Outsource, Outsource
Stephen Smotherman, author of the Next Level Amazon course says, “Find ways to outsource. One of the best ways you can take your Amazon sales to the next level is by adding wholesale. It’s naturally a lot less manual work than doing retail or online arbitrage. Plus, when you use a prep center to process your inventory, wholesale becomes much easier.”
Where to Learn About Wholesale for Amazon SellersWholesaling is becoming a more popular option for sellers every year. That's because — while it's not perfect — it does offer a cost-effective way to make higher profit margins with lower risk.Click To Tweet
As with everything else in life, there is a learning curve.
Ready to investigate Amazon FBA wholesale and see if it’s a good fit for you? Here are 3 resources I recommend for mastering and sourcing for Amazon wholesale:
Skip McGrath’s Newsletter — The current version and the online archives provide articles on all things eBay and Amazon. Plus, you get fresh wholesale sources every week.
Daniel Meador’s Wholesale Formula Blog — Detailed, easy-to-understand posts and videos pumped full of useful instruction and creative ideas for Amazon wholesalers.
Jim Cockrum’s Proven Wholesale Sourcing — A new way to source legit wholesale products without the traditional hair-pulling process. Jim and Teresa show you how you can build a solid wholesale segment with replenishable inventory, automated processes, and unlimited scalability.
Stephen Smotherman’s Next Level Amazon – Stephen outlines everything you need to know in order to work less, but make more take-home pay. It’s a strategy that has helped so many people go from working 60 hour weeks just to make ends meet… to truly only working 20 or so hours each week, while still bringing home a full-time paycheck.
Do you have questions about Amazon FBA wholesale? Ask them below!
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