Wholesale
Amazon FBA Sale platform connects 2 million third-party sellers with hundreds of millions of consumers around the world. Out of 2 million sellers, 0.5 million are using the sales model called Wholesale.
What is wholesale?
Purchasing bulky branded products of another seller, manufacturers, or distributors to resell them to consumers.
Selling wholesale on Amazon is a profitable opportunity in 2021 – But there’s a lot you need to know before making a decision. This article includes pros & cons and offers detailed instructions on how to run your Amazon wholesale business flourishingly.
How does the wholesale work on Amazon?
- Create a seller account
- Research of most demanding Wholesale products.
- List your Product on Amazon.
- Promotion of product
- Inventory Management.
This is the usual process you would follow if you are sourcing Wholesale products to sell as a retailer on Amazon.
Amazon Wholesale vs Standard Amazon Selling
In recent years, launching private brands has become a profitable way to grow at Amazon. And you can definitely build a successful and profitable business from it. Launching your brand also means less competition because this unique product belongs only to you. But the Wholesale model is quite different; in this model, instead of creating your own brand, you focus on other brands and buy products in bulk.
Advantage:
- There is no need to create your own listing but you can use existing listings in Amazon’s catalog.
- You are using original product listings, which may be not effectively rank.
- Research and sourcing the right product from the right wholesaler is the key to success here.
You may need a Wholesale License
If you sell in the US, you must need a wholesaler license to sell on Amazon. If you are based in the UK, a wholesale license is not required. However, this changes for each site. It is advisable to check rules & regulations before you start selling as a 3rd party seller.
Why Amazon Wholesale?
High Product Demand: You can sell an already established brand having a good reputation among consumers.
Easy to get started with Amazon:
Wholesale is the easiest business model to get up and running at a fast pace.
Profitable:
60 % of the amazon Fba wholesale suppliers start earning profits in their first 3 months as compared to 70 % of the FBA sellers achieved the milestone in 6 months.
Scalability:
You can focus on growth, and develop a team to handle day-by-day operations, rather than focusing on brand building and other time taking tasks.
Cons
Fierce competition: When you list your products in bulk, there are many products that compete with you. You can avoid this by choosing products from a few competitions. It’s the nature of a beast and it’s very tempting to cut it down if you can! But this leads to a race to the bottom, and there are no winners, so don’t do it.
Choosing the wrong product:
Means disaster, Research is time-consuming but critical. Select products that are going to sell and then spent time to source them at the best price from the right manufacturer. So there is a lot of back-end work to do before creating your listings.
Considerable time investment is needed:
Selling Wholesale on Amazon is extremely slow. But this is where all your efforts lie to build and run a successful Wholesale business.
‘Brand Restrictions’ by Amazon:
If you are thinking that you will source the right product, do some good research on it, and your listing will go live. There is the possibility that you may lack documents required by Amazon to sell brands and you will fall under certain Brand restrictions. While countering, you should develop a good trusting relationship with brand owners rather than liquidators, close-out stores, and distributors to guarantee you can source and sell your chosen brand with no issues.
How to make money selling Amazon Wholesale?
While sourcing and pricing competitively, you just need to factor in the fees and Average monthly sales.
Do your thorough research
Make sure that the product you choose is unique sold by a single private label or not already used by Amazon, because Amazon always dominates the product war, and in the case of a unique product you cannot find a reliable supplier to the source.
These are the basics but sometimes forget by the seller in the excitement of finding a new hot product.
So, what are the best products to sell on Amazon?
There is no obvious answer to this. The best way to research products is to use Amazon itself. Hunt the products that have a proven demand when sold as single units. And follow the criterion, which are:
Choose recognizable brand
- Make sure Amazon is not at the top spots.
- Find the Manufacturer
- Never choose seasonal products.
- Avoid trends that are likely to be discounted.
- Choose a product with low selling prices.
- Find the Right Supplier and Negotiate Hard
After a detailed analysis of your product, you must get it. Now is the time to go to the manufacturer or brand owner. Remember that you offer yourself to help them increase their sales, so give them an explanation of how you can add value to their brand, especially since they may not have a presence on Amazon; this is something you can help them with.
Final Thoughts
The wholesale strategy is a viable alternative to private labeling. Your consistent effort leads to reasonable profits, and the best part is that once you are set up and aligned with your sellers, there is no reason why you can’t sell the same product to the same customer for a long time. This gives you a more practical approach to the evergreen business and will allow you to grow your Amazon wholesale business with new products, while the originals continue to operate steadily.