5 Main Advantages of Getting into Amazon FBA Wholesale

November 24, 2020
Written by Jayce Broda
Advantages of Getting into Amazon FBA Wholesale

Amazon is a large e-commerce platform that caters to millions of businesses. Along with it comes a set of rules that the sellers have to follow. You might not even think that it's possible to sell on Amazon FBA wholesale due to its strict implementation of rules, but it can be possible.

The thing is, what Amazon doesn't allow is a seller having multiple accounts. However, if you're interested in pushing through with selling wholesale items on Amazon, you have to keep everything under one online store. Things may be harder to manage due to the large quantities of products that you have to work with, but you'll eventually get the hang of it.

Wholesaling on Amazon

If you are to sell on Amazon, particularly wholesale products, you have to know how things go. Wholesaling on the platform is commonly mistaken as retail arbitrage (RA). Although both selling methods try to sell a cheap product with prices that are significantly higher, the quantities are different.

Wholesaling vs. Retail Arbitrage

With wholesaling, you get to sell the products at a higher price, but the quantities are more than those when selling on RA. Usually, RA deals with one-off items at lower quantities.

In terms of investment, the main difference is that you would have to invest more money compared to RA. Another notable difference will have to be sources of products. With the RA business model, you can order a lot of products from online stores and brick-and-mortar stores. Wholesaling, on the other hand, completely sources products from the manufacturers.

Due to the difference in sources, the process for obtaining inventory is a lot faster for wholesaling compared to retail arbitrage.

Private Labelling vs. Wholesaling

The first steps for private labelling and wholesaling on Amazon are the same. Both models source the products directly from the manufacturers. The succeeding steps are what sets one apart from the other. 

In private labelling, sellers work closely with the manufacturers to add a label to the products. This is done to increase the value of the products. However, wholesaling is just merely selling what the manufacturers are selling. No modifications will be made, and no private labelling will be done. Price-wise, products that are sold on a wholesale basis are significantly lower than that of those that are privately labelled.

Benefits of Wholesaling on Amazon

Not all sellers on the platform have to sell a new product. If you don't have any new products to sell, then you can definitely opt for wholesale items. You can try wholesaling clothes, home essentials, and other products. Here are some of the benefits that you can get when you choose this route.

1. Work with established brands

Wholesaling means that you don't have to put in much effort into doing product research and branding. If you're wholesaling, you can sell products by an established brand. All you need to do is to make sure that you give your customers the best experience possible.

Your customers already know what to expect in terms of product quality and price. As a wholesaler, it's your responsibility to make sure the products are processed, packaged, and shipped on time. You also have to handle customer complaints. Basically, you will have to go through every step that a typical Amazon seller would go through. Only this time, you don't have to put in much effort into the initial phases of selling.

2. Better control of prices

The products that you're going to sell already have their suggested retail prices. If you would like to be a successful wholesaler, you have to be mindful of your inventory. The more inventory you have, the higher the profit margins you can make.

Selling wholesale products is about being able to schedule things properly. You have to be great with numbers and analyze the trends that can possibly help you when scheduling your future orders.

3. Easy to scale up

One of the great things about wholesaling on Amazon is the ability to scale it further, should the need arise. If there is a significant increase in customer demand, you can easily contact the manufacturer and order greater quantities. You don't even have to wait for some time for your orders to be processed.

4. Lower risks

Selling as a wholesaler will merit less risk in terms of manufacturing and advertising. Since you're already working with a known brand that already has an established and fully-working manufacturing plant, you don't have to worry, anymore. You don't even have to put in resources into launching new products, as well as in research and development.

It significantly lowers the risks. This includes not having to worry about manufacturing and production costs. You also don't have to employ staff for these particular processes.

5. Existing customer following

Selling on Amazon as a wholesaler would mean that you don't have to worry about introducing your products to your target audience. You basically already have an existing customer base. They already know of the brand. All you have to do as a wholesaler is to deliver well in terms of  processing and shipping.

You get to spend less on advertising and PPC campaigns. You also don't have to worry about launching a new product line since the brand will be the ones responsible for introducing it to the public. So, you really don't have to build a following; this will come along with the brand that you're working with.

How to Find Wholesale Suppliers for Amazon

Now that you're familiar with how Amazon FBA wholesale works, the next thing you should do is to find wholesale suppliers. For this, you can scout for several suppliers, first. Here are some of the suppliers that you can choose from:

1. SalesHoo

If you're tired of dealing with bogus suppliers, then you should definitely try SalesHoo. It is a paid directory service, so it weeds out customers who are not serious about making a purchase. Here, you will have access to genuine suppliers at wholesale prices. You can also opt to be a premium member. This will allow you to have access to helpful information like market data on niches and products.

2. Liquidation.com

Based on the name itself, this site mainly focuses on companies that are about to close down, have filed bankruptcy, or are selling pieces that they don't need. It's one of the biggest supplier directories out there. You'll find a wide range of products and product types -- from new products to old ones.

3. Tuesday Morning

Are you looking for products to sell wholesale at very low prices? Tuesday Morning is like a backyard sale in neighborhoods. You can keep checking every now and then to see the best deals. Usually, electronics, home and garden equipment, luggage, and toys are sold here. If that's your niche on Amazon, then this is the perfect place to find products to sell wholesale.

How to Start an Amazon Wholesale Business

Selling on Amazon FBA wholesale is just like selling any other product on the platform. It all starts with product research. As much as possible, make sure that you've researched well about the niche you're getting into. There are some niches on Amazon that are doing well compared to others. However, you can focus on a niche with a small market and take advantage of the situation.

After product research, you should start ordering your products. While waiting, you can work on your product listings, making sure that they are all optimized. When all of this is done, and your inventory is ready, you can launch your products and start selling on Amazon.

Basically, it's really just the same with you selling non-wholesale products on the platform. The only difference is that you have to deal with a larger inventory. It may be hard to deal with, especially if you're just starting out, but you'll eventually get the hang of it once your systems are in place.

Key Takeaway

If you want to start selling on Amazon but don't exactly know which product to sell, you should definitely consider getting into wholesaling. It's not for every seller, but if you have the budget for it, you will be able to enjoy the perks that come along with selling wholesale products.

If you're already selling wholesale on Amazon and need some help, an Amazon account specialist can help you! Send us an email at [email protected]!

Go from surviving to thriving on Amazon.

Use the power and influence of advertising to increase sales. Learn more about how you can benefit from our management expertise.
Talk to us

Read More

Amazon Refund Policy: A Guide on How to Refund on Amazon

Being the largest and most popular eCommerce website globally, Amazon has been the best place for buyers to shop for their needs without leaving the safety of their home or office. With over $233 billion in revenue and 288 million square feet of stores and warehouses, Amazon, like any other business, has had their ups […]

7 Signs You Seriously Need an Amazon Ad Agency, and How to Find "The One"

Is your conversion rate as dry as the Sahara desert? Are you running a one-man show where you are responsible for Amazon SEO, PPC campaigns, listing optimization, marketing, etc.? Is your ACoS too high? Are your customers giving you more hate than love? It only means one thing. You, my friend, badly need an Amazon […]

Beginner's Guide: ASIN Basics and Amazon ASIN Suspension Appeal

As a new seller, you might get overwhelmed with the Amazon policies and guidelines when creating ASINs. It is too overwhelming that you're, well, tempted to skip reading it all together because you still have a business to run. You will just go with the flow, read the tutorials on the web, and follow your […]

crossmenuchevron-down