Third-party sellers have been the lifeblood of Amazon since the birth of time. It’s easy to overlook that this platform is primarily an online marketplace, not a manufacturer or brand owner. It boasts 2.3 million active sellers and is still growing. Most of Amazon’s success stories use a sales model called wholesale.
Wholesale is the process of purchasing branded products from a manufacturer, distributor, or supplier in large quantities. The intention is to resell these products to Amazon consumers. Some good examples include popular consumer electronics, popular toys, and even kitchenware.
Selling wholesale on Amazon can be very profitable. However, don’t just jump in without testing the waters first. Research by consulting a company that offers Amazon seller services to know what you need to do to make your Amazon business venture successful. First, let’s first find out what wholesale is all about and discuss how to do it on Amazon efficiently.
The process of selling wholesale on Amazon is all about following a few basic steps. It’s not simple, nor will it take just a few minutes. You need to put time and effort into this to ensure your success as a seller. Here they are:
Not so fast! You might need to get a wholesale license, business license, or tax-exempt form to start selling using this business model. Do some research on what needs to be done. If you need to consult Amazon seller services or legal services, by all means, do so.
Amazon sellers have a whole slew of other business models they use. In the beginning, they might all sound the same, but they’re not. Once you get the hang of it, the differences are hard to miss.
Resellers are people who buy products from a retail business for a discounted price and sell them on Amazon for profit. Sometimes, resellers purchase these products at regular prices and sell them at a slightly high price.
Reselling is different from wholesale in the number of products they buy and how they procure their inventory. Wholesalers make bulk purchases and resellers make individual purchases. Wholesalers negotiate directly with manufacturers, while resellers buy from retailers to sell retail on Amazon.
Private Label sellers are also different from wholesale, as they create their own branded products. Wholesalers purchase existing branded products in bulk.
Dropshippers are also a little different, as they don’t keep products in stock. Instead, they list products for sale on Amazon and place an order through their supplier. The supplier or manufacturer then fulfills the order on behalf of the dropshipper. Wholesalers own their inventory and can fulfill orders directly.
As with everything in life, there are advantages and disadvantages. The best we can hope for if you have wholesale products to sell on Amazon is the pros outweighing the cons.
Is this important? Sure, it is! This aspect of your business includes many vital processes, such as shipping, inventory storage, customer service, etc. You’re supposed to pick an effective fulfillment method that takes care of all those vital processes and leaves you to worry about other aspects of your wholesale business. Let’s look at your options.
For people who’re just starting their business, this is the perfect fulfillment method to choose. The numbers speak for themselves. Brands that are readily available to Amazon Prime members are mostly the ones who use FBA. These Prime members spend roughly $1300 annually on Amazon purchases.
Amazon FBA takes some of the most important but time-consuming tasks out of your hands for a small fee. There are a bunch of advantages this method can give you.
Many sellers claim that Amazon’s fulfillment and storage fees are a lot less than the actual costs if you fulfilled orders and stored the products yourself. Amazon FBA really is a load off your mind.
If you’re selling products that sell slowly, paying those fulfillment and storage fees might not be worth it. It’s the same with bulky and oversized items. Amazon will need to charge you a large fulfillment fee if standard shipping isn’t enough for your product.
As a business owner, knowing what fees you need to pay is essential. Using Amazon’s extensive fulfillment network doesn’t come free. There are additional fees that you may need to pay, depending on what happens to your business.
Being an Amazon FBA seller doesn’t apply to all situations. There are instances when FBM is more advantageous than relying on Amazon’s fulfillment network. This method allows you to list your products on Amazon and do the tasks related to fulfilling customer orders, such as shipping, returns, refunds, customer service, and storing your inventory.
FBM is very useful in these situations:
Fulfilling orders by yourself doesn’t come free. There are specific fees that would apply even when using FBM. Let’s discuss them briefly.
Going into Amazon FBA wholesale involves a lot of moving parts. To succeed in this business venture, you have to be prepared for everything. For many sellers, getting advice from companies that offer Amazon seller services gives them a lot of time to focus on growing their companies and leaving the grunt work to the experts.
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