Amazon Wholesale: How to Start Selling in 2022
Amazon Wholesale: How to Start Selling in 2022
Are you looking to build an Amazon business that’s scalable and highly profitable? Have experimented with strategies like retail arbitrage and are looking to take your business to the next level? Then you’re probably ready to become an Amazon wholesale seller.
So, what is wholesale selling? It’s when you sell branded products that you source directly from authorized suppliers (also known as wholesalers). This requires buying products in larger quantities, so you’ll need a bigger budget. However, your per-item price will be much less than if you bought your inventory from a retail store. This means there’s the potential for higher profits.
Using a wholesale supplier is also a much more reliable way of sourcing products, as they’ll pretty much always have what you’re looking for, or have the ability to order what you need.
Table of contents
- How to Start Wholesale Selling on Amazon
- Pros and Cons of Wholesale Selling on Amazon
- What’s The Difference Between Wholesale Selling and Other Strategies?
- Tips to Help You Make More Money with Wholesale Selling
So, how do you start a business? Read our complete guide to learn everything you need to know.
How to Start Selling Wholesale on Amazon
Wholesale selling might seem intimidating at first, but it’s actually fairly easy to get started. Follow the steps below to learn how to do wholesale on Amazon:
1. Do Product Research
Your first step is to find wholesale products to sell on Amazon. It may be tempting to simply pick items that you think are cool or interesting, but if you really want to be successful you need to make decisions based on factual data.
As a wholesale seller, there are two ways you can go about finding new products:
Research the items offered by your supplier to see which ones are most profitable.
Search Amazon to find the most profitable products, then find suppliers that offer those items.
The ideal product to sell is one that:
Consistently generates high sales
Has high profit margins
Isn’t overly competitive
Is small and light, making it cheaper to ship
Amazon doesn’t provide all this information for you, but luckily there are two tools that will help find the best products to sell.
Finding the ideal product takes a lot of time and effort. To simplify that process, you can use the AMZScout Online Arbitrage and Dropshipping Extension.
Here is how it works:
Step 1: Install the Online Arbitrage and Dropshipping extension. You can add the plugin through this link.
Step 2: Start your free trial. You do not need to enter your payment details.
Step 3: Browse Amazon to get product ideas. Start by opening Amazon.com to search for a niche. It can be:
Products from wholesale suppliers
Niches you are interested in
Products trending on other marketplaces (offline or online)
Step 4: Prioritize your product ideas. Scroll in Amazon search results while checking the data underneath each product. The Online Arbitrage and Dropshipping extension will show you:
Margins (pay special attention to margins above 50%)
Amazon fees you need to pay to sell this product (or while using FBA)
Seller types (if Amazon sells this product, you will have high competition and few chances to win the buy box. Pay attention to products that have a combination of FBA and FBM sellers)
Using the tips above, you can mark priority products and look at each of them more closely.
Step 5: Check the TOP products from your list. Each Amazon product page will have a built-in window with important information about the product. Check for private label, ungated, and hazmat products. You can find out more about these product aspects below.
Step 6: Check the historical data of the product. After checking your product criteria in the app and narrowing down your list of products, check Price History and Buy Box History. Checking price fluctuations can help you develop the best repricing strategy.
Step 7: Find out how much potential profit it offers. The on-page calculator enables you to enter your costs. Your costs depend on your business model and may include:
Shipping costs (provided by your supplier or shipping provider)
Advertising costs (from Amazon PPC bids for your target keywords)
Other (tools, subscription, etc.)
The app quickly calculates your sales margins with this data. You’ll see new numbers in Profit Margin, Minimum Net, and ROI fields. Those numbers determine how profitable the product will be.
What Else to Look for When Analyzing a Product
Knowing the factors that determine how easy it is to resell the product will determine your next steps. Use AMZScout’s Online Arbitrage and Dropshipping extension to check these important criteria:
If the product is a Private Label. This means it is sold by only one merchant who has a brand registry. Typically, you cannot source private label products.
If the product is in a gated category or it has hazardous materials (hazmat). Reselling these products will require additional certificates or extra approvals from Amazon, often driving up effort or costs.
By following the steps above, you’ll be well on your way to finding effective products. Having a list of products worth considering enables you to make more effective business decisions.
If you don’t have a specific product or supplier, you can use the AMZScout Product Database. Narrowing your needs by specific product criteria can help you.
It has a variety of search filters including sales, reviews, price, and weight that let you narrow your search to only the items with the most profit potential. It also lets you search for new products or ones that have been trending up for the last few months.
So, here’s an easy way to find the most profitable ideas of products:
Step 1: Go to the AMZScout Product Database.
Step 2: Start your free trial. Enter your email (no payment details necessary)
Step 3: Use the search filters to define your criteria. Search for products based on prices, seller type, margin, and more. You can target high sales (at least 300 monthly), few sellers (you can set the range from 2 to 20), seller type (FBA or Merchant).
Step 4: Narrow down your search. Use the category filter and select categories based on where other sellers succeed and where your interests are. You can also save time using ready-made set-ups with the Product Selections feature.
Step 6: Click “Find Products” to get your results.
Step 7: Make a list of the items you’re most interested in. Make a list of items with all the important stats (sales, reviews, etc.) needed to assess its product viability.
After you’ve utilized the Product Database to narrow your product list, you have one final step. The AMZScout PRO Extension enables you to narrow products further with more important data.
This is how to use PRO Extension :
Step 1: Simply install the AMZScout PRO Extension. You can find the AMZScout PRO extension on your extensions list (in the upper-right-hand corner).
Step 2: Browse Amazon. Open Amazon and search for a Product or Niche for analysis. You can compare separate branded products or those found with the database.
Step 3: Open the extension. Click the AMZScout icon in the top right corner of your internet browser while on any Amazon product page.
Step 4: Check product sales.
When checking products from your supplier, look at average monthly sales (ideally over 300 sales per month).
When looking for product ideas, sort the results in the app by the highest monthly sales. Wholesalers should look for products that already sell well on Amazon and get the most sales in the niche.
Step 5: Pay attention to the ratio of sales/sellers. Divide all product sales by the number of sellers to see your potential portion of sales. More sellers mean more competition and less for everyone to share.
Step 6: Get additional data to make the right decisions. Check the product score for reselling, sales margins, sales history, and more.
To check the product offered by your supplier, pay attention to product scores over 7, high margins (over 50%), and stable sales throughout the year.
Compare options that meet the above criteria.
Once you find a promising product, you can find suppliers by typing “product name” + wholesale in Google search. Doing so will help you find suppliers, which we will discuss further in step three.
2. Register for an Amazon Seller Account
If you haven’t already, you can now create your Amazon Seller Account. To do so, go to this page.
You’ll have the option to sign up as either a Professional or Individual seller. As a wholesale seller, you’ll almost certainly want a Professional account. Here’s why:
A Professional account charges you $39.99 per month, but you’re not charged a $0.99 fee for every sale like you are with an Individual account. That means if you make more than 40 sales a month you’ll save money with a Professional account.
Professional accounts give you access to advanced inventory tools.
Professional accounts give you access to order reports.
A Professional account makes you eligible to win the buy box.
Individual accounts are fine for people who are just experimenting with Amazon or running a smaller business. But as a wholesale seller who’s buying larger quantities of products, you’ll be running a more serious business and will need access to all the features offered by a Professional account.
If you’re unsure, you can always start out as an Individual seller and upgrade if you need to.
To sign up, choose your preferred option and follow the on-screen instructions. You’ll need a piece of government ID, a credit card, and your tax information to complete the process.
3. Find Suppliers
Once you know what you want to sell you’ll need to find a wholesale supplier who can provide you with that product.
A Google search is a good way to start. Enter the name of the brand you’re interested in, followed by “authorized supplier/distributor” to find supplier websites.
You can also use wholesale directory sites. Some of the most popular ones are:
Top Ten Wholesale
A lot of Amazon sellers use Alibaba to find suppliers. While this site is a great resource you won’t find brand-name products here. Alibaba is best used by retailers who want to create their own private label items.
Contact a few different suppliers to see what their minimum order quantities are and what type of price they can offer you. Most wholesalers are willing to negotiate, so don’t be afraid to counteroffer and try to get the best deal possible.
If you’re dealing directly with a manufacturer it’s a good idea to get a sample of the product before buying your inventory. This will allow you to inspect the quality before making a large investment.
4. Communicating with Wholesale Suppliers
Big brands are protective of their products. So, you may have to prove that you can be an asset to them before they let you sell their goods. Here are a few tips to help you effectively reach out to wholesale suppliers:
Research the brand and how it’s currently being sold before contacting suppliers.
Don’t use Gmail, Yahoo, or other generic email accounts. Buy a domain name for your business and use that to create an email account. It will make you look more professional and legitimate.
Present them with your business plan. Explain how you plan to promote their products on Amazon and how it will benefit their brand.
Propose a video chat so you can discuss your plan further.
If you sense any hesitancy from them about selling on Amazon ask them why that is. If they’ve had bad experiences in the past explain why things will be different with you.
Talk to them about PPC and Enhanced Brand Content, and how these features can help them grow their brand.
Once you secure a deal to sell the brand get a quote. Don’t be afraid to negotiate. Most wholesalers have some wiggle room so it’s always a good idea to try and get a better price.
Start with a smaller test order, and if that goes well move on to bigger orders. The more products you order at once the lower your per-item price will be.
5. Add Your Product to Amazon
After you receive your inventory from your supplier it’s time to list your product on Amazon. Go to your Seller Central account and under “Inventory” click “Add a Product.” You’ll then be able to search for your item by name or ASIN number.
In most cases, your product will already be listed on Amazon. If this is the case it will show up in the search results. Simply select it from the list and you’ll be added to the existing listing for that item.
If your product isn’t already listed on Amazon then you’ll need to create a new listing. Make sure to use high-quality images. Your supplier might be able to supply you with some photos you can use. You’ll also want to do some keyword research by using tools like AMZScout’s Keyword Search and Reverse ASIN Lookup. Identify which keywords people most often use to search for your item and include them throughout your description.
6. Fulfill Orders and Manage Your Inventory
After you start getting sales you’ll need to stay on top of them to ensure that your customers receive their orders in a timely fashion. To make things easier you may want to consider using the Fulfilment by Amazon (FBA) program.
How an FBA wholesale business works is you ship all your inventory to Amazon and they’ll store it for you in one of their warehouses. Then when someone places an order they’ll ship the product to the customer. There are some added fees that you’ll have to pay for these services, but the convenience is more than worth it. There are also some added perks, such as:
Your items qualify for Prime shipping.
Amazon will handle all customer service related to shipping.
You don’t have to worry about order fulfillment and can just focus on managing your business.
As you’re selling products make sure to keep an eye on your inventory. Running out of inventory means you’re unable to make any sales. It also hurts your Amazon rankings, so don’t let it happen. Make sure to order more items well in advance to ensure that your new shipment arrives before you sell out of the last one.
Pros and Cons of Wholesale Selling on Amazon
No business model is perfect and every strategy comes with its fair share of pluses and minus. Here’s a quick look at the pros and cons of running an Amazon wholesale business:
Less Competition: There’s more work involved in getting approved to sell established brands. Not many people are willing to go through the process, so if you get approved you’ll be up against fewer sellers.
High Probability of Sales: There’s high demand for name-brand products, so your chances of generating sales are very high.
You Have More Choice: If you’re doing retail or online arbitrage you have limited options when it comes to what you can sell. You may not always find what you’re looking for at the price you want. But with wholesale selling, you’ll have no trouble finding a supplier who can get you what you want, whether that be books, clothing, t-shirts, gift bags, or Fire TV sticks.
More Profitable: Because you’re buying in bulk your per-item price is much lower. That means you’ll make more on every sale, which leads to more profits overall.
Less Time-Consuming: You don’t need to spend a bunch of time visiting different stores and locations looking for deals. Once you find the right supplier and establish a connection with them you simply place an order to get more inventory.
Automation: If you decide you use FBA your whole business can be mostly automated. Your wholesaler will prepare your inventory and send it to Amazon, who will store it and ship it to customers when you make a sale. This leads to a more hands-off kind of business.
Need a Bigger Budget: Wholesale suppliers generally have minimum order quantities that are quite high. This means your initial investment will be larger, so you’ll need to have some money saved up.
More Risk: Because you’re spending more you’re also taking on more risk. If you buy a bunch of inventory that doesn’t sell you could potentially lose money.
Can Be Difficult to Get Approved: It takes time to find suppliers, negotiate with them, and get approved to sell their products. Although once this is done this type of business is very manageable.
Rules to Follow: Brands often have their own rules/conditions/terms that you need to follow in order to sell their products. This can include rules on pricing, advertising, etc.
What’s The Difference Between Wholesale Selling and Other Strategies?
There are a number of differences when it comes to wholesale selling vs other strategies (retail arbitrage, online arbitrage, private label etc.):
Buying in Bulk: When you buy from wholesalers you purchase lots of products at once, often in high enough quantities to fill entire pallets. While this can lead to higher upfront cost it also means you don’t run out of inventory as quickly, which is a plus.
Dealing with Suppliers: With retail arbitrage and online arbitrage, you deal with local retailers and online marketplaces. But in order to build a wholesale business, you need to find and negotiate with suppliers which will be a new experience for most people.
Product Research: There’s more product research involved in wholesale selling. Because you have more choice you want to choose the most profitable products you can. You also need to factor in the cost of shipping from your supplier, so you need to find items that are small and light.
No Customization: Compared to private label selling, the one difference is you can’t customize your product. Instead, you’re selling established items that are most likely already listed on Amazon.
Tips to Help You Make More Money with Wholesale Selling
We’ve provided you with all the information you need to get your Amazon wholesale business started. But here are a few more tips to help maximize your profits:
Try Other Selling Methods First: If you’re new to selling on Amazon consider trying retail or online arbitrage first. These methods require a smaller budget so there’s less risk. This will allow you to learn about Amazon selling before making a larger investment.
Always Do Proper Product Research and Analysis: This point can’t be emphasized enough. The best sellers don’t find profitable products by chance. They do in-depth research to discover the items with the highest potential, based on loads of data. Use tools like the AMZScout PRO Extension to analyze any item you’re thinking about selling, and look at sales, reviews, margins, and competition levels to make smart decisions.
Use Amazon Ads: Consider using Amazon ads to drive more traffic to your product listings. Target the right keywords by utilizing AMZScout’s Keyword Search and Reverse ASIN Lookup tools.
Take a Course: Find and register for courses taught by real Amazon wholesale sellers.
Most importantly, never stop learning and continue trying new strategies to ensure your business is always optimized.
Amazon wholesale selling is a great way to build a profitable eCommerce business. Follow the steps listed above, and use AMZScout’s tools, to find the right products and get your business started.