Starting a business on Amazon is simple and budget-friendly, and wholesale selling is the best way to grow your brand and sell products online.
Amazon is the largest online shopping site worldwide. So, there are more customers than ever seeking what you offer.
Over 6.3 million third-party sellers use Amazon to sell millions of products worldwide. Of those, 26% use Amazon wholesale.
In 2023, selling on Amazon has become a profitable way to earn money online. This guide will take you through each step of the Amazon wholesale business.
What is Wholesale?
Wholesale means buying products in bulk from suppliers and selling them to customers. This requires a larger budget, but the per-item price is much lower than the retail price, resulting in higher profits.
What is Amazon Wholesale?
Amazon wholesale means buying products from a manufacturer at low prices and selling them on Amazon at high prices.
So, you can either fulfill orders yourself or let Amazon handle them.
Amazon provides a broad customer base that makes it easier to reach customers than building your website.
We will discuss both methods in this article.
Requirements to Sell FBA Wholesale on Amazon
To sell products as an FBA wholesale on Amazon, you need permission from the brand or company that owns them to sell them again.
You need to find brands with high demand and see if they allow you to do so on Amazon.
You can also source from an authentic wholesale supplier like DailyDealsCo.
A large budget is required as most suppliers have a minimum order quantity.
Your business must be registered to get products at wholesale prices for resale and you must maintain a good performance record and adhere to Amazon’s policies.
Fulfillment Methods for Amazon Wholesale
There are two ways to fulfill wholesale orders on Amazon: Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM).
FBM means you have to fulfill all orders yourself, including storing, picking, packing, and shipping all orders.
FBA means sending your products to Amazon’s warehouses and letting them handle customer service and returns, among other things.
FBA is the mostly used method, and we will delve into its details in this article. You can also get Warehousing & Logistics services from Buzz Byte.
Pros and Cons of Amazon FBA Wholesale
Pros:
- Low competition.
- Quick start and smooth process.
- High profits.
- Higher chance of sales.
- Growth and scalability.
- Time-saving as no physical store visits are required.
- No promotion is needed for brands with high demand.
- Established product demand with no need to build a brand.
- Lower risk of selling fake products.
- Fast delivery and customer support provided by Amazon.
- Controlled pricing.
Cons:
- Brand approval can be difficult for newbies.
- Amazon brand restrictions can make product hunting more difficult.
- Large capital is required for bulk inventory purchases.
- You have no control over product production or supply chain.
- Constant need for diversification.
- Not recognized as a seller.
- Minimum Order Quantity (MOQ) from suppliers.
- Some cases require 3PL services, adding more costs.
- FBA fees and potential storage costs.
- Lost inventory risk.
- Slow inbound time.
Amazon Wholesale vs Other Models
When it comes to selling on Amazon, there are several business models to choose from. Let’s take a closer look at Amazon wholesale and compare it with other models.
Amazon Wholesale vs Amazon Dropshipping
Dropshipping on Amazon is attractive since it requires no initial investment, whereas wholesalers need to buy inventory in bulk and store it.
Dropshippers may have their account suspended by Amazon while wholesalers have written brand approval so they remain safe.
If you need any help to get your account reinstated you may contact Buzz Byte.
Amazon Wholesale vs Amazon Arbitrage
Amazon arbitrage means buying products at a lower price from retail stores and selling them on Amazon.
On the other hand, wholesalers purchase products in bulk for bigger profits. Although arbitrage can be profitable, it requires more effort in finding, buying, packing, and shipping products.
In contrast, wholesale is streamlined, which leads to a smoother replenishment process and bigger profits.
Amazon Wholesale vs Amazon Private Label
Amazon private label allows sellers to sell products under their brand on Amazon, which can help them differentiate their products and build a unique brand identity.
This distinguishes it from Amazon wholesale, where the seller buys from a manufacturer or distributor.
How to Start Selling Wholesale on Amazon
If you’re looking to start with Amazon wholesale, here are some steps to follow:
- Research potential suppliers, focusing on reliable wholesalers with products that suit your niche.
- Contact the suppliers to know their pricing, minimum order quantities, and other essential details.
- Evaluate the suppliers based on their reputation, pricing, shipping, and return policies.
- Purchase inventory.
- List your products on Amazon with accurate and detailed descriptions.
- Fulfill orders promptly and efficiently.
- Monitor your sales and adjust your pricing and product selection as needed for continued success.
Conclusion
Conclusively, Amazon wholesale provides an opportunity to start a profitable e-commerce business on the world’s largest online marketplace.
With a large customer base and low competition, it offers high profitability and scalability.
Obtaining brand approval, investing in inventory, and adhering to Amazon policies can be challenging. With the right suppliers, fulfillment method, and marketing strategy, starting an Amazon wholesale business can be a lucrative venture.
