What you’ll learn
An Amazon wholesale business is when you buy goods or products in bulk directly from a manufacturer (can be international suppliers too) at wholesale prices and resell them on Amazon via FBA or FBM.
As with any other business model, to thrive in this business, you need time, money, and killer marketing strategies.
The difference between succeeding or failing as a wholesale product seller is often whether you can:
- find a brand with high consumer demand
- they allow resellers to sell on Amazon
- open a wholesale account with them
- buy their minimum order quantity (MOQ)
- follow their rules regarding pricing and branding
What you don’t want to do is buy products from Target or Walmart and try to flip them on Amazon. You will be shut down quickly because you are not an authorized reseller of the brand. Reliable suppliers will help you stay on top of your game and give you an edge over other sellers.
So, how does this business model work? What should you do when looking for wholesale products to sell? How to find wholesale suppliers for Amazon?
Ahead, I will provide answers to these questions and also dive deeper to show you how to sell wholesale products on Amazon and the right tools to leverage to find the best wholesale products.
But before we jump into specifics, let’s quickly explain what the Amazon wholesale business model is.
- How wholesale works on Amazon
- Benefits of starting a wholesale business on Amazon
- Ways to sell wholesale products on Amazon
- How to choose wholesale products to sell on Amazon
- How to find wholesalers for Amazon
- Tools to help you find wholesale products to sell on Amazon
- How to sell wholesale on Amazon in 2022
- Pitfalls of wholesale business On Amazon
- Final Thoughts
- Frequently Asked Questions
How wholesale works on Amazon
Selling on Amazon is the same at its core. Selling wholesale on Amazon requires these basic steps:
- Creating an Amazon seller account and sourcing for high-quality and high-demand products to sell from major manufacturers or distributors.
- Creating an optimized Amazon listing to rank your page over your competitors.
- Promoting the products to attract the attention of potential buyers with PPC, videos, external ads, blogs, social media marketing
- and obviously, managing the business to sustain growth
If you are looking for a “done-for-you Amazon automation” business, read my thoughts on that.
Wholesale Amazon sellers need to get a business or wholesale license and tax-exempt form depending on their location. Before you make an attempt to become a wholesale seller on Amazon, ensure you check what the requirements are in your state or country before applying for a wholesale license.
Benefits of starting a wholesale business on Amazon
Amazon wholesale business model comes with the following benefits:
- Wholesale sellers do not need to create a listing, which usually involves hiring a copywriter.
- You can focus on adding value to a brand’s existing product listing.
- You’re not building a brand from the scratch; as such, the business model allows you to sell well-known products.
- You don’t need to spend time building a customer base or introducing a brand to the marketplace.
- A brand’s popularity can catapult your sales potential.
- You need a little push to enhance your marketing if you are already selling established brands.
- It’s faster to receive goods as you are likely getting it locally and not from overseas.
Downsides to wholesale business model
The benefits we’ve stated above, but the downsides are the following:
- You do not control the brand or product.
- You can be cut off from the brand without cause.
- You need to diversify as you cannot place 100% trust into one brand.
- Customers do not know you or your real company brand. Only the brand you sell.
- The more well known the brand, the smaller you will be to them.
- Brands don’t care about the resellers. There is no partnership.
Ways to sell wholesale products on Amazon
Wholesale product sellers are mainly resellers and very different to private label or creating your own product from scratch. The Amazon business model you settle for will impact everything as there are pros and cons to all types of models.
The reseller model
The reseller model is practiced by those Amazon sellers who buy brand-name products and resell them on Amazon. Most brick-and-mortar businesses practice this model. However, it comes with the challenge of building their store’s brand equity and selling other brands. Reselling is different from dropshipping, where sellers do not have any inventory but rely on wholesale suppliers to ship wholesale orders to customers. In this model, sellers manage their inventory but do not have to worry about overhead or brand equity. If you are focused more on short-term profits, the reseller model is perfect for you. But you need to choose your product categories and suppliers with caution.
How to choose wholesale products to sell on Amazon
In my interaction with most beginners, they usually want a direct answer to this question. But, choosing the best products that will sell on Amazon depends on your individual situation. Your capital, business model, demand trends, as well as your fulfillment methods, will help you answer this question.
While I can’t directly answer this question for you, the three steps that I provided below will lead you to the right answer
Step1: Choose a high demand product
The best wholesale product is a product you sell and make your profits. Even if you find Amazon FBA wholesale suppliers that are ready to offer you a discount for bulk buying, if the product is not in-demand, you’re likely going to lose money. Follow these best practices when looking to choose wholesale products:
- Consider products in one of Amazon’s best selling categories: Books, Toys & Games, Shoes & Jewelry, Clothing, and Electronics are some of the most profitable categories to consider. Since shopper preference plays a bigger role in the success of a product, these categories of products offer a lot of room for variation.
- Study current Amazon best selling products: One key way to get insight into what buyers want is to study the list of Amazon’s best sellers in every category.
- Study products similar to the one you want to sell: Studying products you intend to sell is another solid criterion to help you choose the right products. Ensure you take note of demand indicators. A high Best Sellers Rank (BSR) and the number of customer ratings are both good indicators of demand.
Luckily, you don’t have to do the product search by hand; there are tons of paid tools available to help you achieve better results. I will talk more about this later in this article.
So now that you’ve narrowed down your product ideas based on demand, it’s time to layer on the second factor: the competition.
Step 2: Choose a product with low competition
Every Amazon seller wants to sell a product that’s in high demand. The truth is, finding a product that shoppers will want to buy in a saturated market is challenging. In fact, it is more difficult to judge competition than demand.
Try these tips to find products with low competition:
- Resellers should identify how crowded the product listing is. If there are 30 other sellers competing for the buy box, run.
- Type the main search keyword and analyze the results. How many sellers are showing up with ads? Even if organic results show many sellers, a good Amazon advertising strategy will quickly set you apart from competitors who aren’t leveraging Sponsored Products. Run searches on a variety of keywords around your product ideas in order to see who’s advertising. You can even use a tool to view your competitors’ keywords (and their cost-per-click).
- Use Amazon’s Product Opportunity Explorer and Brand Analytics section to look at the click share of the Top 5 and Top 20 brands and products. The lower the better because it means that a king kong does not exist for that category.
Step 3: Choose a product with good profit potential
The last step to take when looking to choose wholesale products to sell on Amazon is to choose a product with good profit potential. If you may find a high-demand and low-competition product, but if the product is not profitable, your efforts would amount to a waste. Profitability analysis and cost estimates are important parts of determining whether or not wholesale products would be profitable. Other tips to follow include:
- Choose a pricing strategy that ensures profitability and still works for your product category. Remember, wholesale prices competition is intense on Amazon, so don’t get trapped in a race to the bottom.
- Look for products that are small and lightweight. Smaller and lightweight products take less space to store and are cheaper to ship products. This will increase your profit margin and also save you a lot of costs on overhead. You can look through the FBA fee schedule to get a good sense of the costs associated with various dimensions.
- Understand all the costs associated with selling on Amazon. The truth is that selling on Amazon goes beyond a simple retail price tag. There are tons of costs to consider; if you don’t account for them early on, the costs will quickly stack up. While doing your profitability analysis, factor in fulfilment and shipping costs, Amazon fees, inventory management, as well as other relevant taxes.
When you are in the search stage, you can use Amazon’s FBA Revenue Calculator to view potential net profits. All you need to do is to search for products or ASIN and this tool will help you calculate the net profits and margins of fulfillment with FBA.
The bottom line? Once you have a list of the wholesale products you intend to sell on Amazon, before making a final decision, ensure you estimate all the costs involved to determine your profit potential.
How to find wholesalers for Amazon
Let’s face it; there is no secret list of perfect wholesale suppliers, just as there’s no “golden ticket” wholesale product that guarantees success. To successfully sell wholesale goods on Amazon, you need to identify what you need from a supplier and then take steps to learn how to get it. Otherwise, you may get it wrong while looking for wholesalers.
So, how do you find wholesalers for Amazon?
Follow these 3 steps that I have outlined below to find the right supplier:
Step 1: Know how to recognize the best supplier
When finding wholesalers for Amazon, the first step is to learn how to recognize the best supplier that aligns with your business goals.
- Decide what kind of supplier you need: Look for a brand manufacturer if you are a reseller. Private label sellers should look for a supplier of generic wholesale goods they can use to build their own brand. If you know what you want, it becomes easier to find what you need.
- Learn to identify scams: To identify scams, your best bet is to check the Better Business Bureau for relevant information on wholesalers. Another smart move is to contact suppliers in certified networks, especially if you are a new seller.
- Engage with the industry: Take the time to understand your niche instead of focusing on a couple of wholesale goods. Who are the major manufacturers and brands? What are the distribution channels? Who should you expect to work with? Providing answers to these questions will help you find the right wholesaler for your Amazon Business.
Step 2: Learn how to communicate with suppliers
Getting a great deal from a wholesaler boils down to knowing what the wholesaler wants and negotiating the deal to arrive at a win-win situation. This is a fundamental step that most beginners miss, but with constant practice and a bit of research, it’s not difficult. As a new seller, here is how to navigate this phase:
- Learn the basics of negotiation: Don’t go into communication with a wholesaler unprepared. Whether you’re looking to start a side hustle as an Amazon wholesale seller or you want to go into it as a full-time career, learning business negotiation is worth the time.
- Learn what suppliers want: Suppliers also want what sellers want – reliable income. Therefore, if you are able to offer them income stability – either through large deposits, longer-term contracts, or a promise of more businesses in the future, you’ve put yourself in a win-win situation with them. In fact, you’re sure of getting a good deal.
- Leverage the competition: Negotiate with more than one supplier and use competing offers to drive great deals with the right wholesalers.
- Show them you will be a good partner: Another strategy is to show them you’ll be a good partner. You can do this by being responsive, courteous, and professional. Instead of looking for the cheapest option, approach this like someone looking to build a long-term partnership. Your Amazon Business will benefit greatly from this approach.
Step 3: Start your search with a trusted wholesaler directory or network
When looking to find wholesalers for Amazon, a great place to start is wholesaler networks. The best directories have a subscription cost for their service, but it’s often well worth the cost in time and money saved.
- Alibaba is an international marketplace where you can get reputable suppliers. Some sellers source excellent products on Alibaba, while others run into quality – even counterfeiting issues. So, it’s your duty to research the Alibaba platform very well before making any move to place an order.
- Wholesale Central has a list of verified wholesalers without paying any membership cost or subscription fee. Wholesale Central gives you wholesalers’ direct contact information, so it’s a great place to start.
- SaleHoo offers start-to-finish support for those who want to sell wholesale goods. They have tools that will help you research products and they offer a rich supplier directory. Plus, they will help you organize your supplier search and manage communication with suppliers.
- Worldwide Brands has earned a reputation for being the most sought-after wholesale network. They provide access to certified suppliers, resources, and also help you manage communication with suppliers. In fact, they provide a free preview of a supplier’s directory, which makes Worldwide Brands a great platform to start.
Keep in mind that you don’t have to continue paying for a subscription after finding a good supplier. A little money spent upfront might end up saving you a lot of money (and frustration) in the long run.
Tools to help you find wholesale products to sell on Amazon
With millions of products on the Amazon marketplace, it can be challenging for beginners to find wholesale items that will sell on Amazon. And that is why I have developed a list of the best tools to help you find wholesale items on Amazon.
In no particular order, here are the top 5 tools that you can leverage to research and find profitable wholesale items. Note that these are mostly research tools and there are always inaccuracies with the tools as most of the data is based on estimates. Just because a tool says that kitchen knife sellers are making $50k a month, it could be off by +/- 25%. If the numbers are overstated on the tools, and you buy a big amount thinking you can make a killing, have a backup plan in case the real number turns out to be half what the tools say.
Zonguru is a great tool that we recommend over Junglescout or Helium10. It helps with finding demand and competition analysis. Using a tool like this to speed up your research is a must if you are trying to run a business.
It has all the features you’d find in H10 but because it’s not as popular, your searches and the niches aren’t going to be revealed to everyone as quickly. That’s one of the reasons why we always recommend Amazon sellers not to enter their own products or look up their own product stats using other Amazon seller software.
AMZBase is a one-stop product keyword research tool that lets you easily obtain the listing’s title description and the Amazon Standard Identification Number (ASIN). If you want a broader search base, this all-in-one tool lets you access other search engines like Google, Alibaba, AliExpress, eBay, and CamelCamelCamel.
3. Profit Guru
Profit Guru is an Amazon wholesale focused database tool for your to search and find suppliers and distributors. You can also bulk analyze niches and products to figure out which next product to put on your list.
Their supplier directory is what likely makes them better as you can control the tactics and message of how you want to approach any possible targets.
If you want to conduct comprehensive product data research, AMZScout has got you covered. It comes with over 44 advanced filters that users can easily tweak. AMZScout comes with an option for you to enter a product ASIN or keyword to start your search. Plus, it can track a product’s historical data to determine if it’s profitable and cost-effective.
SellerApp uses product intelligence capabilities to help you search for profitable products that will sell on the Amazon marketplace. This product sourcing app provides you with useful data displayed in one dashboard and has more than 35 million products in its database. It also offers free tools to help you check the quality of your listings and estimate the sales of your products. That’s not all; this tool can help you find the perfect keywords for your wholesale product search.
Now that you know the steps to follow when choosing a good wholesale product, it’s time I walk you through the process of sourcing these products.
How to sell wholesale on Amazon in 2022
Is selling on Amazon dead? Is starting an Amazon wholesale business too later?
No and no.
More people are shopping online than every. Gen Y and Z are now getting older to have their own accounts. This generation is a digital generation so online shopping is more native to them.
Make sure you follow the basics to selling and succeeding on Amazon.
- Consider using Fulfillment by Amazon: Fulfillment by Amazon is a great program for resellers and those with small business initiatives. You can arrange for the suppliers to ship your orders directly to Amazon, though this comes with extra fees.
- Plan for inventory management: You will need a plan for managing your inventory if you decide you don’t want to use Fulfillment by Amazon. Ensure your inventory management plan is cost-effective and allows you to ship quickly.
- Promote your products: Promoting your products is a great step if you want to succeed as a wholesale product seller on Amazon. Learn the challenges and solutions of Amazon PPC management, consider your options, and then have a plan to get your products noticed.
There’s a lot more to selling products on Amazon, but learn to understand your numbers, pricing. Don’t forget about advertisement/promotion, inventory, and fulfillment in your plan.
Pitfalls of wholesale business On Amazon
As with anything in life, selling wholesale products on Amazon has its drawbacks. Let’s take a look at the top three pitfalls of the wholesale business on Amazon.
- Competition: There’s no listing on Amazon that you intend to place your offer that doesn’t have multiple sellers. It can sometimes become a “race to the bottom” since the only lever available for you to pull is price.
- Up-front Cost: Wholesaling is more expensive than dropshipping or reselling because you must buy goods in bulk.
- Research: Research is the most time-consuming aspect of this business. You have to keep researching the Amazon marketplace for product opportunities so that you can place your order in bulk from a supplier.
Selling wholesale products on Amazon is not as difficult as most beginners believe. If you can follow all the tips I have shared in this post, you’ll be one step away from becoming the best seller on Amazon. Choosing the best wholesale products comes down to understanding your needs, capabilities, the market, as well as your limitations as a seller.
While supplier and product research can be time-consuming, it’s worth the time and effort. With a strategic approach and a plan in place, you can build a successful business on Amazon whether you’re selling from your own physical stores, warehouse or from your garage.
Frequently Asked Questions
Do I need a license to buy wholesale?
Of course, you need a license to buy wholesale products. A license to buy wholesale products can also be called a seller’s permit, wholesale ID, a resale ID, retail ID, or a reseller’s license depending on where your business is located.
How much money can I make selling wholesale goods on Amazon?
There’s no fixed amount that wholesale sellers can make on Amazon. However, on average, sellers can make anything from $3,000 to $4,000 depending on your marketing strategy. Keep in mind that there’s a lot of competition out there, so you need to look for ways to stay on top of your game.
Where can I buy wholesale products to sell online?
There are several suppliers to buy wholesale products from. Some of them include SaleHoo, World Brands, AliExpress, Global Sources, and TopTen.
Can I buy products wholesale and resell them?
Of course, you can buy products in bulk from reputable suppliers and resell them on Amazon. While there’s serious competition on the Amazon Marketplace, selling wholesale products on Amazon is a great way to make money.
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