Standing out on any Amazon Sales Program has proven to be a hassle in the past. Fortunately, for newer sellers and to support small businesses, Amazon is always coming up with new programs like Amazon Wholesale.
Amazon Wholesale is a program you can count on. This business module has been a game-changer lately for retail sellers. Besides, it helped out the regular traffic of customers to find the best products at a comparably lower price.
A stat shows that Amazon gets 2.5 billion visits per month from the United States alone. This considerable number tells that you have immense scope to generate income through Amazon.
Here in this detailed guide, you’ll specifically get to know the kith and kin of Amazon Wholesale. So, without further ado, let’s get started.
What is Amazon Wholesale?
What you do here is you sell the products of other brands. In this program, you can’t sell products you or your brand creates.
That means you get the products at a wholesale price from the brand, label it and sell it to the customers at your profitable price. Ultimately it means you act as a reseller in this scenario.
Competition between Amazon and Walmart, the two biggest e-commerce giants, is always vivid. Considering retail business, Amazon wasn’t doing as great as Walmart in the first place.
However, from 2015 to 2020, Amazon’s retail revenue CAGR (Compound Annual Growth Rate) stood at significantly 3% higher than Walmart’s.
How Does Amazon Wholesale Work?
First of all, you need to find brands and specific products that promote reselling. You can simply find them on the Amazon product page. Click on the product and see if multiple sellers are selling the product in different price ranges.
If it is, that means you can resell the product too. For this, you’ll have to contact the manufacturer and ask for their permission to resell. If you get the consent and once all the paperwork is done, you’re good to list and sell the products. Pretty easy, right?
How Does Amazon Wholesale Differ From Other Amazon Standard Business Models?
Before getting into the steps to do business on Amazon Wholesale, let’s understand the difference between Wholesale and other prominent Amazon business models.
Amazon Wholesale vs Private Label
In Amazon Wholesale, you don’t need to have or create your product. Instead, you sell other distributors’ products on Amazon.
In Private Labels, sellers need to have their own branded products. Here, you’ll face the hassle of creating a product list, and then selling them on Amazon.
Amazon Wholesale vs Arbitrage
The central concept of Wholesale and Arbitrage is the same, reselling products. Yet the business models are different.
In Amazon Arbitrage, you buy products physically from your nearby store and resell them on Amazon. And usually, the buying quantity isn’t massive in this case.
On the other hand, in Wholesale, you don’t go to stores to buy products physically. Instead, you look for a product online that sells well on Amazon.
Next, search for the wholesaler or distributors of the products and contact them to buy products in bulk. Then you list them on Amazon and resell them.
Amazon Wholesale vs Dropshipping
The emerging difference between these two models is the product and selling system.
In Wholesale, you only list products you’ve bought from the wholesaler in bulk. And the product should be managed (Packaging, labeling, etc.) by you.
However, after packing and putting on Amazon Barcode, you choose the Amazon FBA model to sell and send the products to Amazon. So, Amazon deals with delivery and customer service.
In Dropshipping, you don’t buy any product in the first place. You list products on Amazon for sale. When a customer makes a purchase, you order it from the distributor and sell it to the customer.
Dropshipping doesn’t occupy the Amazon FBA model. When the seller gets an order from the customer, they place the order to the dropshipper and the dropshipper ships the product to the customer.
The Advantages and Drawbacks of Amazon Wholesale
Well, there are pros and cons for everything in the world, so it’s applicable to Amazon Wholesale. Let’s taste the advantages first.
Nothing To Spend On Marketing
In Amazon Wholesale, you sell products that are already populated. That means the products already have high demand and popularity among customers. It is so, as 78.4% of corporate buyers in the United States use Amazon’s platform to buy and sell products.
So, you don’t need to do any marketing for your products. Just list the products and sell them.
Easy To Start
Amazon Wholesale is a lot easier than other business models of Amazon. You can quickly look for products and everything like they’re serving you all of it on a silver platter.
In other Amazon business models, you have to wait for a long time to get feedback. But in Amazon Wholesale, things are more accessible. Once you’re done preparing all the stuff, you start making sales and profit.
Quick profit is more approachable with this sales program and growing is especially easier in the “Food and Grocery” category since it’s the fastest growing retailer’s niche in the United States for 2019-2024 (expected).
Less Work, Saves Time
You don’t need to run ads on Amazon Wholesale or do other time-consuming things. As a result, you work less and save a lot of time.
Amazon Fulfillment Model Cuts On Hassle
Amazon FBA is a lifesaver for business owners who want to make money but don’t want to deal directly with the customers and avoid all the hassling work. Amazon Wholesale primarily works on the FBA model. So, you can run your business with utmost ease.
Amazon Wholesale is more beneficial than tiring, yet it has some disadvantages that you’ll need to be aware of.
The Price Pulling Race
The most highlighting drawback of Amazon Wholesale is the competition. Different sellers are selling the same product at lower prices. In order to get clicked on and make sales, they keep on pulling down the price.
So, this price lugging race sometimes messes with the profit margin. That means you, too, need to maintain the price tag to be in competition and get the click.
In this case, you may sometimes not make a profit and need to sell your products at the buying rate to save yourself from loss or generate no sales at all.
Investment Is A Big Fact
The main thing here, you buy a specific product from the distributor in bulk. And bulk buying means more investment.
Although you get discounts and get the products at a lower price, you still need to make a big investment to successfully run the Amazon Wholesale business. That’s why you have to play more strategically to ensure profits.
Time Consuming Product Research
Undoubtedly, product research is the sole thing that will eat up most of your time in the Amazon Wholesale business. You need to invest a reasonable amount of time as well as money.
Brand Approval is A Bit Hard
Competitors are everywhere because several sellers like you are looking for an account created with wholesalers or distributors.
To stand out among all, you must get a pitch ready and convince the distributor to do business with you. It becomes challenging sometimes if you’re reaching out to a renowned brand.
Product Update And Edit
If you want to sustain your Wholesale business, you must keep up with the new products. Once you’re running the business for long with specific products, those products become your comfort.
But remember, on Amazon, you aren’t limited to any categories. And the more you can sell, the more profit you can bank. Plus, buyers don’t come for a single product only. Grab that chance and scale your business.
How to Start Selling Wholesale on Amazon
Selling on Amazon Wholesale isn’t stressful, but it needs to be done carefully. So, follow the steps below to make more out of your Amazon wholesale business.
Open An Amazon Wholesale Account
You need to have an Amazon Seller Central account to use Amazon Wholesale. You’ll be managing all your work in this account. The most crucial thing to sign up for this account is your identity.
Input all of your accurate details and sign up for your account. Amazon will require your Bank Statement and Proof of Identity here. Make sure you get all of the details correct.
Besides, Amazon will ask if you’re a limited company or an individual/sole trader. As you’re starting out, select it as an individual– dont worry, you can change it to a limited or sole trader, later on.
Now that you’ve signed up, it’ll take you inside the account, where you’ll find different options to manage your inventory.
On the top left, you’ll find a three-bar toolbar; if you hover over, you’ll see all the listed options. Toggle on the “Catalog” and add your product.
Just copy the ASIN of the product and paste it into the box that shows up on the screen that says, “Find your product in Amazon’s Catalog”.
You might be wondering, which product ASIN to copy-paste, or how to choose the right product? We’ll get back to that in a while.
Once you select the product, a new interface will come up on the screen. Here you’ll see your listed product, and adjacent to it, you’ll find the option saying, “Select A Condition”. Select “New” and then click on “Sell This Product”.
Offer Page Details
At this point, you’ll be redirected to the offer page. Here, don’t put anything under Seller SKU. Simply go to the price option and mention the lowest matched price on the box.
The “lowest matched price” means the lowest price of the product you’re selling in the listing. However, you can set your own price instead.
The following section is your “Country of origin”. Select your country here.
Next on “Fulfillment Channel”, select “Amazon will dispatch and provide customer service (Fulfilled by Amazon)”.
This is how you choose the Amazon FBA model.
Barcode Type Selection
The new interface will ask you to choose the barcode type as you proceed. Choose “Amazon Barcode” as you want your product to be recognized as yours when it reaches Amazon.
This is the identity of your products with your individual Barcode so that Amazon doesn’t mix up your product with other sellers selling the same thing.
Print this Barcode from the inventory and stick it on every single product you’re selling on Amazon. Click “Save & Continue” afterward.
Editing Product From The Inventory
If you want any changes to be done, you can do it in the “Inventory” option until the product state says active. Go to the inventory and make necessary changes on any products individually. It takes 15 minutes to activate the changes.
You can also delete a product you listed accidentally or don’t want to sell anymore. To do so, click on the checkbox adjacent to the product and go to actions. Choose “Delete products and listings”, then press OK on the pop-up that appears, and it’s done in 15 minutes.
Note: Amazon may change its Seller Central Account interface anytime. A little bit of difference may appear in this case. But more or less, they would almost be the same.
- How to Choose the Best Wholesale Products to Sell on Amazon
Finding the right product is the most important thing for doing business on Amazon Wholesale platform. There are different strategies to do it. Let’s talk about the most effective one.
Understand Which Product You Can Resell
Not every product on Amazon is eligible for you to resell. You need to go through products one by one to understand if you can resell them.
Suppose you’re willing to sell dog treats on Amazon. First, search it on Amazon and find some products. Open them in different tabs and look thoroughly.
Look for how many sellers are selling the product. Generally, that’s referred to as: “New (number of sellers) from (the starting price its going for).”
(example highlighted in yellow in the photo below)
The next thing you do is, look at the buy box right beside the product. If you’re confused about a buy box, you can see the screenshot below.
When you see a buy box and several sellers are selling the product, you get the idea that you can also resell it.
- Research Products with High Potentiality
Suppose you’ve selected a product. Are you going to hop on Amazon and sell it immediately? The answer is a big NO. But why?
Well, you haven’t done the product analysis yet. Product analysis is crucial to make a good profit out of selling. Without that, you won’t be able to know if the product is going to be profitable or not.
The prime part of the product analysis is checking the product’s BSR (Best Sellers Rank) Number. When you scroll on a product page, you’ll find the BSR in the product details/ product information section.
It generally tells us how many times or how well the product was sold. The higher the BSR, the more the profit the product will bring you. Any BSR Number below 100,000 is the best to choose.
- Select the Right Products for Wholesale
The easiest way to find and select the best product is to look at the total wholesale catalog of a wholesaler or distributor. Make an account with a distributor and ask them for the entire catalog of products they sell.
Then, refer back to all the products they sell on Amazon and see if you’re making a profit. Select the products that seem profitable to you, call the distributor, buy the products and resell them.
Another way of selecting the best product is to do it manually. You generally search for a product on Amazon, dedicating a specific category.
When you get into the populated product listing, open the products in different tabs and see if they’re eligible. Look for big brands with good reviews all the time and avoid Amazon-specific categories.
Here you can filter based on price range, reviews, and best sellers. It’ll give you the most remarkable outcome.
The next thing to do is find the wholesale companies for the product.
- Find the Right Wholesaler for Amazon
When you’ve selected the right product, directly go to Google, and type the “Product Name + Wholesale” and search. Or, if you’re doing business locally or in a specific state-focused, you can search “Brand/Product Name+ Distributors + State Name” in this format.
A list of websites will show up. Look for the words “Distributor” or “Wholesaler” on the list and dig deep into them.
Search companies that look like they aren’t selling to the general public and only selling to businesses.
Sometimes you won’t find your potential suppliers on the first page. In that case, go to Google’s 2, 3, 4, and 5 pages. When you find your suitable distributors, note their information and contact them.
You need to have an account with them to sell their products. Contact the wholesalers first through email and ask to create your account with them. It’s better if you maintain further contacts through phone calls as it is more convenient, time-saving, and you can communicate more clearly.
Another way to find a product or select a wholesaler is to look at the distributor’s sales and clearance section. You’ll find the products on sale, and you can buy them in bulk at a discounted price. If they have good selling value on Amazon and seem profitable to you, make the next move.
3) Contact And Negotiate With Brands
Once you find wholesalers for your selected product, you need to contact and negotiate with the brands. It means you have to convince the brands to do business with you.
What Brands Or Suppliers Will Require From You?
They’ll look for proper certification and legitimacy of your business before shaking hands.
Registration Of Your Business
Wholesalers or distributors will ask you to confirm that you’ve got a registered business or sole proprietorship. So, you must have the registration before opening an account with them.
Validity Document For Reselling
The Resale Certificate is the validity for reselling that wholesalers want you to have to sell their products. Besides, the resale certificate brings benefits by validating yours for a tax-free product purchasing from the wholesaler.
Social Security Number
A social security number is needed for your business too. It’s generally called EIN( Employer Identification Number) or the Federal Tax Identification number.
How To Source Established Brands That Aren’t Already On Amazon
Here’s how you source established brands that aren’t already on Amazon
Convince Established Brands To Show Up on Amazon
Established brands that aren’t yet on Amazon can be excellent sources for sales because you know their products are of high quality and on-demand in the market.
You can make these successful brands understand their product demand and possible huge sales on Amazon to bring them to the wholesale platform.
Bring Facebook Ads Business Owners To Amazon
Facebook is a vast social media and there’s a massive possibility to expand the business, which is why entrepreneurs tend to sell on Facebook the most.
If the product and services are at their best, it sells well, and the brand becomes an established one, you can convince brands on Facebook Ads and show reasonable offers on Amazon.
They’ll surely make a deal with you if they see the profit.
Look For Influencers And Bloggers
Influencers and Bloggers can give you fantastic ideas about new products. Their immense fanbase is already the interested customers of the products they use or showcase. You can convert them into Amazon customers if you can bring the right product to your business.
4) Calculate The Profit You Can Make A Month
Let’s jump on the most frequently asked question about Amazon Wholesale. “How much profit will I make with Amazon Wholesale?”
Well, it varies from business to business, and highly depends on the business plan, investment, strategies you’re using to run your business, and consistency.
However, in general, we can calculate the profit with some techniques. Let’s have a look.
First of all, you can’t calculate your profit manually. So, you need to have access to some tools for it. It doesn’t have to be a paid tool; there are free tools that are efficient enough.
Get the data listed below first using those tools.
- Total sales of the product in a month. It includes all the sales from different sellers.
- Measure competitor sellers priced from about 2%-5% of the lowest price is being offered.
- Analyze the gap and mark your ranking as a seller. Your ranking is the number of your competitors + you. This means if you have 4 competitors, your ranking would be (4+1) = 5.
When you’re done collecting the data, start calculating. You can use the method below.
- Divide the total sales by your ranking number as a seller. The result is how much sales you can reasonably expect a month from a particular product.
- Convert the sales into money now. To do it, divide the estimated revenue of the product’s total sales by your ranking.
You can use Amzscout’s extension to get the estimated total revenue. The result is your revenue per month with that product.
- You can use other tools to calculate net ROI, net profit margin and ultimately gross profit margin later on.
5) Shipment Plan
One of the crucial things we’re often careless about in doing Amazon Wholesale business is the shipment plan. Yes, you need a dedicated plan for the successful shipment of your product to Amazon.
For this, you require:
- Sticky Labels
- Measuring Tape
- Weighing Scale
Follow the Amazon FBA Shipping guide to create a shipment plan without any errors.
Most Popular Wholesale Suppliers in the US
Finding suitable wholesale suppliers in your region is one of the most daunting jobs in the Wholesale business. The right supplier will save you a lot as you can get discounts and buy products in bulk at a lower price.
Here are some of the most popular wholesale suppliers in the US. You can choose to work with them if you want to make enough profit.
Alibaba is a prominent name in the world’s most demanding wholesale marketplaces. They are doing business in nearly 200 counties.
You can use the product filter and find the top trending products in almost all categories. These products are those that are generating more sales followed by considerable revenue.
Costco is a huge brand that dominates the globe’s total wholesale business. They cover nearly every category of products and sell them wholesale. You can buy products in bulk from them at a very reasonable price.
If you’re a gift retailer, you’d like Wholesale Mart the most as your wholesaler. You’ll get all your gift products in bulk from them and with no membership charges.
As a beginner in Amazon Wholesale many retailers consider sticking in one category. The Electronics category seems highly profitable in this case. And if you’re one thinking the same, you’d love to buy products in bulk from Sunsky.
ReGO Trading runs its wholesale business, depending primarily on food and grocery items. You can already assume that food and groceries have a vast scope of making business.
You can buy the goods in a massive amount from this company at way less price than other food and grocery wholesalers. Besides, the 20-year old business reputation of ReGo Trading ensures the quality of the product to its peak.
Pro Tips to Help You Make More Money with Wholesale Selling
Here are some pro tips to stand out in Amazon Wholesale business. Apply them to win the game.
Buy Box Management
The Buy Box has three measures – the lowest price, highest customer reviews, and faster delivery period.
If you can maintain all three of them, you can surely win the Buy Box. Another fact to win the Buy Box is to try not to choose the product that Amazon already sells, as it’ll be harder for you to stand out in this case.
When you’re just starting out, don’t order 100/200 units of a product at once. Although you’re pretty sure that your product will generate massive sales, it’s wise to go slow.
Since risk is always there in every business, you must make a test shipment for 20/30/40 units of the product first to measure the risk. Once you see the yielding results are great, proceed to order in bulk.
Extensions and Tools
Calculating and listing everything together is a heck of a job if you do it manually. So, use tools and extensions to sum up your calculations and make everything faster.
How much money do you need to wholesale on Amazon?
Generally, you can start with a minimum of $2000 as a beginner. Make sure you go through all the Amazon fees details first to estimate the cost.
But it would be great if you could invest $2500-$3000in the beginning. However, utilizing this investment perfectly is also a remarkable fact in Amazon Wholesale business.
What certificate do I need to get into Amazon wholesale?
The first and foremost thing you need to have is a reseller license. You can also get a business license to convince your suppliers that you’re an actual business owner. An LLC or any corporate entity would be a plus point. But it’s not highly required or a must.
As you’ve reached the end of the Amazon Wholesale guide, we hope that now you’re convinced to get started with it. If you’re a beginner on Amazon, Wholesale is an excellent choice for you over Amazon Arbitrage and Private Label.
If you’ve already invested in different business models, but haven’t achieved the expected results, Wholesale is worth giving a try. This can be a total game-changer.
Break a leg!