How to find wholesalers for your ecommerce business

If you want to purchase products in bulk and resell them for a profit, you may want to explore working with a wholesaler. However, it’s important to find the right wholesale distributors or wholesale suppliers for your ecommerce business. In this post, we’ll discuss:

• What wholesalers are
• Different types of wholesalers
• How to validate a wholesaler
• If wholesaling is allowed in the Amazon store
• Steps for sourcing and selling wholesale products in the Amazon store

What is a wholesaler?

A wholesaler is a supply company that acts as a middleman between manufacturers and sellers. Wholesalers can 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.

For sellers, wholesaling offers the flexibility to select products for your business instead of working directly with a manufacturer. It also means sellers don’t need to handle logistics around product development or sourcing raw materials.

What are the different types of wholesalers?

While wholesalers generally have the same approach to their business, there are different types. They include:

• General merchandise wholesalers: Rather than focusing on one specific type of product, general merchandise wholesalers offer a wide variety of products to a variety of different businesses.
  
• Specialty product wholesalers: These wholesalers may focus on one specific product, one product line, or a selection of products associated with a particular genre or business.
  
• Regional or local wholesalers: Wholesalers who work regionally or locally tend to focus on products that are specific to a geographical area. These products tend to be geared to a local market.
  
• Online wholesalers: While some wholesalers work in a traditional purchasing and warehousing environment, some wholesalers do the entire process online. That means they run their business online and sell bulk items to other ecommerce businesses.

How to validate a wholesaler

Amazon sellers are responsible for selling authentic products. If you’re selling branded products, they should be sourced 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.

Since your ability to sell and meet demand will largely depend on the reliability of your wholesaler, it’s important to ensure you work with a supplier you can trust.

You can verify a supplier’s credibility by:

• Looking up the supplier’s office and warehouse locations
• Checking their business bureau ratings.
• Asking the supplier about their liability policy
• Asking for referrals or contact previous customers to learn more about their experience
• Reading reviews and looking for complaints about poor customer service or product quality

Is wholesaling allowed in the Amazon store?

Sellers can work with wholesalers to source products and sell them in the Amazon store.

As an Amazon seller, you can sell wholesale products from a third-party brand or other supplier. If you have a large volume of wholesale products to sell, you can also list them in bulk if you have a Professional selling account.

5 steps for sourcing and selling wholesale products in the Amazon store

Ready to start sourcing products from wholesalers and selling them in the Amazon store? Here’s some steps to follow to help you get started:

Step 1: Decide what—and how much—you want to sell

What do you want to sell? Would you like to focus on a single niche or carry a wide selection of different items? Do some sleuthing to figure out what genre of product you want to carry. If you’re not sure, browse the catalogs of different wholesalers. You can also get product ideas by exploring Amazon Best Sellers, or use the Product Opportunity Explorer to identify trending items and categories in the Amazon store.

Remember, some products and categories require approval before you can sell them in the Amazon store. Use the Manage Your Compliance dashboard in Seller Central to identify the required documents for categories and products.

It’s also important to think about how much inventory your business needs. Ideally, you’ll want to purchase enough to benefit from the wholesale discount, but not so much that you’ll have more product than you can sell. Find out if the wholesaler requires a minimum order. Request samples, weigh the cost with the quality, and remember, the numbers are probably negotiable.

Step 2: Find and validate wholesalers

Next, it’s time to research wholesale suppliers. You can do this by going to trade shows, asking for referrals, and joining professional networks.

When you find suppliers that interest you, be sure to do your homework and validate their credibility. You’ll also want to have your business license and tax identification number ready when you contact them.

Consider costs and fees

As you’re researching suppliers, don’t forget to consider costs and fees. Ask your potential wholesaler 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. 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 suppliers.

Keep logistics top of mind

Ask suppliers about their timelines for receiving products from manufacturers, how quickly they send orders, and how fast you’ll receive them. Use this information to determine how you’ll get orders to customers. You should also ask the wholesaler about their returns process.

Step 3: Document your purchase and get 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.

Step 4: List your products and set prices

Now it’s time to get your products listed in the Amazon store and price them in a way that appeals to your customers.

List products

If the product you want to sell is already in the Amazon store, you can use its product ID, or GTIN, to match an offer to the existing product detail page. If a product isn’t already in the Amazon store, you’ll need 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, use the Add Products tool. To list in bulk, create a spreadsheet of product information and use the Add Products via Upload tool.

In some cases, you’ll need to apply to sell a product, category, or brand. You’ll be prompted to do so during the listing process:

1. From the main menu in Seller Central, select Catalog, then Add Products.
2. Search for the product using a product name, UPC, ISBN, ASIN, or other identifier.
3. 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.
4. If you see an Apply to Sell button, click it to start the approval process.

Learn more about product listings

Set prices

As you determine 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). Don’t forget to take any other expenses you might incur into account to make sure you can be profitable.

Pricing resources like Amazon’s Revenue Calculator can help you determine profits depending on your fulfillment method, while the Automate Pricing tool can help you keep prices competitive.

Learn more about Amazon pricing strategies

Step 5: Process sales and handle fulfillment

Do you know how you want to get products to customers? It’s important to have inventory and fulfillment systems in place, with enough space to organize and store your products—especially during busy sales periods.

These are some of the more common fulfillment and storage options:

Fulfillment by Amazon (FBA): With FBA, you ship products using Amazon’s fulfillment network. When a customer places an order, Amazon picks, packs, and ships it on your behalf. FBA also handles customer service and returns.

Amazon Warehousing and Distribution (AWD): Also looking for a way to store and distribute large amounts of wholesale inventory? AWD offers FBA sellers a low-cost bulk storage solution that distributes inventory to the Amazon store and other channels.

Dropshipping: If you don’t want to store, pack, or ship products, some suppliers can ship orders directly to customers on your behalf with dropshipping. However, this method can limit your opportunities to build a brand or differentiate products. You’ll also want to make sure suppliers can comply with Amazon’s dropshipping policy.

Fulfilled by Merchant: Fulfilled by Merchant is exactly how it sounds—you can fulfill orders yourself by managing your own inventory and shipping directly to customers.

Learn more in our guide to ecommerce fulfillment

Ready to try wholesaling with Amazon?

Now that you know how to use wholesaling to support your ecommerce business, you can sign up for a Professional selling plan and access many programs and tools to help you succeed.

You can also use the Amazon Service Provider Network to help you find wholesalers and other supply companies, in addition to vetted providers of services like accounting, translation, and more.

Sign up*

*A Professional selling plan is $39.99 a month + selling fees. Learn more