Learn how to successfully source wholesale products and sell them in the Amazon store.
If you want to purchase products in bulk to resell for a profit, wholesale might be for you.
Wholesale sourcing is where a business purchases products in bulk at a discount from a wholesale supplier. The seller can then repackage the products and sell them to customers for a profit.
The process of finding the right wholesaler for your business can be complex. In this post, we’ll explain what wholesalers do, how to find them, and what to look for before you place your first order. We’ll also cover how to buy wholesale products and sell them successfully in the Amazon store.
What is a wholesaler?
A wholesaler is a supply company that acts as a middleman between manufacturers and sellers. A wholesale license allows them to buy products in bulk from manufacturers at a discount and sell them to business owners at a slight markup. A wholesaler doesn’t typically sell products directly to end customers.
If you want the flexibility to select products for your business instead of working directly with a manufacturer, consider working with a wholesaler. Wholesalers already have products for you to choose from, so you don’t have to handle product development or obtain raw materials.
Is wholesaling allowed in the Amazon store?
Independent sellers who list products in Amazon’s store have the option to sell products from a third-party brand or products under your own label. Professional sellers can list products in bulk. You can also enroll in Brand Registry to access more tools and resources, including some of the ones we’ll cover in this post. Sign up for a Professional selling plan to get started and read on for details.
5 steps to source and sell wholesale products in the Amazon store
You can purchase products in bulk from wholesalers and sell them directly to customers in the Amazon store. This approach gives you the opportunity to source products at discounted prices, then sell at a higher retail rate. By purchasing in larger quantities, you can also take advantage of volume discounts and lower per-unit costs, maximizing your potential profit margins. Here’s how it can work, plus some best practices along the way.
- Decide what you want to sell.
- Find and validate wholesalers.
- Document your purchase and obtain approval.
- List products and set prices.
- Process sales and handle fulfillment.
1. Decide what you want to sell
Want to focus on a single niche or carry a wide selection of different items? One way to get a sense of what’s out there is to browse the catalogs of different wholesalers. You can also get product ideas by exploring popular products or Amazon’s best sellers. In addition, you can use the free Product Opportunity Explorer tool to identify trending items and categories in the Amazon store.
Some products and categories require approval before you can sell them in the Amazon store. Use the Compliance Reference portal in Seller Central to identify the required documents for categories and products.
Next, think about the quantity of products you want. With wholesale, the goal is to purchase enough to benefit from the wholesale discount, but avoid ending up with more product than you can distribute. Check to see if the wholesaler requires a minimum order quantity. Request samples, weigh the cost with the quality of the products—and remember, the numbers are probably negotiable.
- Make sure the products you sell comply with all applicable laws and regulations.
- Verify the products are authorized for sale or resale, and don’t violate intellectual property rights like copyrights and trademarks.
- Avoid products from prohibited sources like auctions, and avoid unsellable products like damaged goods intended for destruction or disposal.
2. Find and validate wholesalers
Once you narrow down what you want to sell, research supply companies that offer those products. Going to trade shows, asking for referrals, and joining professional networks are also some ways to connect with suppliers.
When selecting a supplier, it’s important to verify product authenticity, consider cost, and have a plan for managing logistics.
As an Amazon seller, you’re responsible for selling authentic products. If you’re selling branded products, you should source them directly from the brand or from one of their direct distributors or wholesalers. If you’re purchasing products from a wholesaler, you should validate their relationship with the brand by reviewing the supplier’s business license and brand authorization letter. You can also get a sense of a supplier’s credibility through the following:
- Look up the supplier’s office and warehouse locations.
- Check their business bureau ratings.
- Ask the supplier about their liability policy.
- Listen to customers. Read reviews or ask around to hear about other people’s experience with the wholesaler. Complaints around poor customer service or product quality are a red flag.
Have your business license and tax identification number ready when contacting suppliers. Wholesalers can’t engage with you without verifying this info first.
Consider costs and fees
Assess the costs and fees for wholesalers you’d like to work with. Ask about:
- Minimum order quantities (MOQs)
- Cost per unit
- Any other expenses like membership fees
Typically, the more you order, the lower your cost per unit. Remember, the goal is to spend enough to receive the full benefit of a wholesale discount, but not overspend. For example, if you want to buy 50 items, but the price break only happens if you buy 200 items, it might be a good idea to seek out other deals.
Keep logistics top of mind
Have you considered how to manage inventory and fulfill customer orders? Before you reach out, make sure you have adequate inventory systems in place, with enough space to organize and store inventory, especially during peak sales periods.
Ask suppliers about their timelines with manufacturers for sending and receiving products, and how quickly you can expect to receive orders. Track when you’ll receive shipments and think about how you’ll get orders to customers. Additionally, ask the wholesaler about their returns process.
3. Document your purchase and obtain approval
If a product requires approval before you can sell it in the Amazon store, you’ll need a purchase invoice from a manufacturer or distributor, or a letter from the brand authorizing you to sell their products. You’ll be prompted to submit this documentation to Amazon when you list the product. To learn whether a product requires approval (and request approval, if it does) follow these steps:
- From Seller Central main menu, click Inventory, then Add Products.
- Search for the product using a product name, UPC, ISBN, ASIN, or other identifier.
- If the product requires approval, you’ll see Show limitations next to it. You can click Show limitations to get a summary of listing requirements.
- If you see an Apply to Sell button, click it to start the approval process.
- Include supplier information
- Offer an itemized product list
- Are dated within the last 180 days
- Include your name and address, matching the information in your seller account
- Include the name and address of the manufacturer or distributor
- Show the combined purchase of at least 10 units
4. List products and set prices
There are two basic types of product listings: existing and new.
- When you match an existing product listing, you aren’t providing product information, but are simply pairing offer information (price, quantity, etc.) with an existing product detail page in the Amazon store.
- When you create a new product listing, you’re providing offer information and full information about the product to create a new product detail page.
There are also two basic processes for adding products to your inventory in Seller Central: one at a time and in bulk.
- To list products one at a time, you’ll use the Add Products tool.
- To list in bulk, you’ll create a spreadsheet of product information and use the Add Products via Upload tool.
As you decide on your pricing strategy, make sure your list prices cover your initial purchase costs, selling costs, and any additional expenses so you can maintain healthy margins and grow your business.
For example, say you purchase smartphones in bulk from a wholesaler at a discounted price of $200 per unit. You decide to buy 100 smartphones, resulting in a total cost of $20,000, then list each one for sale at a price of $300. Once the products sell, you could profit by as much as $10,000 ($100 per unit). But be sure to take any other expenses you might incur (such as selling fees) into account to make sure you can be profitable.
5. Process sales and handle fulfillment
The right sourcing method for your business might come down to how you want to get products to customers. Here are three common fulfillment options:
Fulfillment by Amazon (FBA): With FBA, you ship products into Amazon’s fulfillment network. When a customer places an order, we pick, pack, and ship on your behalf, in addition to providing customer service and processing returns. Learn more about wholesaling with Amazon FBA.
Dropshipping: If you don’t want to store, pack, or ship products, some suppliers can ship orders directly to customers on your behalf. However, this method can limit your opportunities to build a brand or differentiate products. You’ll also want to check to make sure suppliers can comply with Amazon’s dropshipping policy and learn more about how dropshipping works.
Direct shipping: You can fulfill orders yourself, maintaining your own inventory and shipping directly to customers. We call this merchant-fulfilled shipping (MFN). Learn more about how to handle fulfillment yourself in our guide to ecommerce fulfillment.
Interested in Amazon wholesaling?
You can get started with all the resources and tips we’ve covered in this post by signing up for a Professional selling plan.
Did you know you can find wholesalers and other supply companies through the Amazon Service Provider Network? This resource is included in an Amazon selling plan and can help you find wholesalers and other suppliers, as well as vetted providers of other services ranging from accounting and translation to enhanced brand content.
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