Things You Need To Know Before Starting Amazon Wholesale Business
How To Make Money With Amazon (Part 4) – Amazon FBA Wholesale
This is a part of “How To Make Money With Amazon” series.
It is for everyone who is serious about making money online.
We focus on the quickest and the least risky strategies with a minimum starting budget as possible. You will gain the knowledge that you can put into practice right now, for the money to start working for you instead you working for the money.
The series consists of 6 parts:
Part 1 – Introduction To Amazon FBA
Part 2 – Amazon FBA Retail Arbitrage
Part 3 – Amazon FBA Online Arbitrage
Part 4 – Amazon FBA Wholesale
Part 5 – Amazon FBA Private Label Products
Part 6 – Amazon FBA Seller Evolution
If you haven’t read previous parts, please go over them, so you will get the most out of this one.
Amazon FBA Wholesale
What You Need To Know Before Approaching Wholesale Distributors
In this article I’m going to talk about wholesale and FBA.
Wholesale is a process of sourcing your products from distributors or manufacturers.
This model can be very profitable. If you find right suppliers or manufacturers, you can sell lots of products with high return on your investment.
You can also find wholesalers who sell well known products so you can make sure that the products which you buy from them would be profitable and that you can sell them very quickly.
When you are dealing with wholesalers or manufacturers you can get a predictable supply which makes it very easy to replenish your inventory.
As a result you can buy more products which sell well for you.
When you buy products from manufacturers in bulk it is much easier to get ungated to closed categories.
Usually when you try to get ungated for a category or for a brand you are required to provide an invoice, proving that you have bought those products from a trusted distributor.
It is a great way to make money and I would consider dealing with wholesalers as the next step after you have learned how to profitably do online and retail arbitrage.
Once you are comfortable with the whole system of FBA, using retail and online arbitrage and have a track record of sales, then you can start looking for wholesale suppliers.
Because with wholesalers you can replenish your inventory very easily, it is a very scalable model.
This can be very good and profitable model to source your products to sell on Amazon.
With regards to Cons of sourcing Amazon FBA products using wholesale distributors, it is usually not that easy to be approved by big manufacturers or wholesalers. There are some tricks that you can use, that I teach in my course, but the main thing is that you need to prove your track record of sales and that you are big enough to do business with you.
Having said this, there are plenty of smaller product suppliers and wholesalers which you can use.
Unfortunately with the smaller suppliers you usually have lower margins and as a result lower return on your investment.
Many large suppliers require you to provide additional documentation like VAT certificate in the UK or Resale Certificate in the United States.
In addition big manufacturers often require you to have a physical store or at least to have a proper online store, to prove to them that you are not just selling on Amazon.
They often don’t want to deal yet with another amazon or ebay seller.
But there are plenty of wholesalers available out there and if you put effort into finding good ones, then you can bring your Amazon FBA business to a much higher level of sales and profits.
- Can get great deals with a right supplier
- Predictable supply. Easy to replenish inventory
- Can get you ungated to restricted categories and brands
- Great next step after RA and OA
- Big wholesalers have higher minimum order size
- Low margins with smaller suppliers
- Additional requirements
- Most BIG suppliers require you to have physical or at least online store
- Many suppliers require additional documentation
- VAT registration (UK)
- Resale certificate (US)
- Not that easy to find those with good ROI
In summary sourcing products with wholesalers and manufacturers is a profitable model.
I would consider it as the next step after you become familiar with Amazon FBA online arbitrage and retail arbitrage.
Once you have found a good supplier for particular products which sell well, then it will become a predictable model. With good suppliers it is very easy to replenish your inventory, so you can sell more products that bring you the most of your profit.
As I said earlier, I would consider sourcing products through wholesalers as a next step once you are familiar with retail and online arbitrage.
I hope that by now you have a better understanding of the Pros & Cons of the Wholesale Amazon FBA.