Last updated on June 5th, 2023
Written by Mohamed Aden
Ranking high in the search results on Amazon is one of the most common challenges that sellers face. Doing so involves offering competitive pricing, something that retailers cannot easily provide. One solution to this is to venture into an Amazon FBA wholesale business. This may sound too complex, but it can be understood easily when broken down. If you want to know how FBA works and how the wholesale business can work for you, read on.
FBA, or Fulfillment by Amazon, is a service provided by Amazon to its sellers. This allows Amazon to do the packing and shipping of your orders for you. You just have to upgrade your selling account to register for FBA on Seller Central. Once your account is set up and upgraded, you just need to put up your listings and send your stocks to Amazon. Amazon will then be responsible for packing your products (depending on your instructions) and delivering them to your customers. Sounds great, right? That's not the end of it. Below are some more advantages:
Registering for FBA automatically grants your brand the Amazon Prime badge, which means that you have access to Amazon's most loyal and active customers. In 2019, 150 million people subscribed to Amazon Prime. Amazon Prime subscribers have also been reported to spend twice as much as regular customers. With the Prime badge, subscribers will be able to receive your products free of shipping fees within two days.
In addition, having an Amazon Prime badge makes you eligible to vie for the Buy Box. The Buy Box is the channel through which more than 80% of Amazon sales are made. Winning the Buy Box guarantees an instant boost in sales of more than 200%. Needless to say, registering for FBA and getting the Prime badge is one of the best decisions that you can make when selling on Amazon.
By subscribing to FBA, you will have the privilege to use Amazon's warehouses to store your products. This can be very convenient, especially if you are selling huge items. This can save space in your home or save you money because you won’t need to rent your own warehouse.
Amazon FBA doesn't solely pack and ship, per se. Through FBA, Amazon also takes charge of inventory, management of shipping and returns, and tending to customer queries. Amazon will be able to attend to your customers 24/7 through all their available channels.
However enticing this may sound, you must keep in mind that you are still responsible for your products' quality and marketing. Search engine optimization, through creating effective listings and taking good photos, is still your responsibility. The best part about FBA is that you can focus on improving your products and listings as Amazon takes care of the logistics and management.
Investing in wholesale can be daunting at first. It's understandable, as it involves a considerable amount of capital and may require some time to generate massive profits. However, with proper market research on the most profitable products and adequate marketing strategies, you will enjoy the benefits that Amazon FBA wholesale can give. Some of the many benefits are as follows:
When you buy directly from the manufacturer, you skip the additional charges that distributors and retailers add to the price. This makes it possible for you to provide competitive pricing in the Amazon marketplace without sacrificing your profit.
The seller's performance matters to Amazon. Keeping a healthy account will give you a better fighting chance to climb up the ranking, organically. A healthy account involves always having enough in the inventory.
As wholesale entails buying in bulk, it would take a substantial amount of time before you would need to replenish your stock. This allows you to save both time and money (due to shipping costs), unlike when having to order items regularly. It also means that you don’t need to worry about repackaging individual products as they are delivered without additional stickers or packaging that distributors and resellers provide.
It's no secret that hijackers and counterfeiters are all over the Amazon marketplace. This could easily scare off legitimate sellers as black hat practices can happen without them even knowing. This could also traumatize buyers and make them lose their confidence in your brand.
So how does protection from FBA wholesale come in? While there is still the possibility of having your account suspended in the event of a hijacked listing, having proof of transactions from a manufacturer serves as better evidence that your business and products are legitimate, compared to receipts from retail transactions. Amazon FBA wholesale can make it easier for you to get your account reinstated after a suspension.
Fortunately, you don't have to search high and low to look for wholesale suppliers. You can actually find them listed at the back of the products that you use every day, or at the weekend market that you pass by on Sundays. The following are some of the ways that you can find a supplier for your Amazon FBA wholesale business:
A trade show is an industry-specific event where manufacturers and distributors can exhibit their products. Trade shows are good ground for meeting suppliers and building business connections. Most trade shows are not open to the public as they are reserved for company representatives. If this is the case, you can look up the specific trade show online and see the participating businesses' list.
An alternative to big events like trade shows are your local flea markets, or Sunday markets. Just be careful and make sure that you connect with manufacturers, and not distributors.
You don't have to go very far to look for manufacturers. Usually, products have their manufacturers printed on the packaging. A little research can lead you to a manufacturer's details so that you can contact them directly.
Sometimes, you can also learn about a product's manufacturer through Amazon, itself. You can do this by looking up the top brands of the type of product that you want to sell wholesale. You can choose the top three (or as many as you would like) in the search results and do individual research on the brands.
Starting an Amazon FBA wholesale business from scratch could be a big leap. And even if you already have an existing seller account and would just want to transition into wholesale, it would still require some adjustments and careful consideration. While wholesale under FBA can definitely help sellers establish themselves on Amazon, industry professionals can definitely guide you through the process.
Consulting with professionals can help you better gauge risks and opportunities, as well as to strategically set up your Amazon FBA wholesale account. Get a free consultation and contact Likitha at [email protected] today.
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