Selling wholesale on Amazon involves directly buying bulk products from the supplier or manufacturer at a discount rate, and then selling products as a reseller on Amazon for retail prices. Wholesale on Amazon is not as intense. But there are mainly three cons that you need in mind before starting the Amazon wholesale business. That’s our- passion, massive investment, and forecasting.
Before starting this business, you must open a ‘’wholesale account’’. You can choose the product catalog and buy bulk products with this account. Three things are required to get started on your wholesale business: an Amazon seller account, a sales tax ID number, and money to buy inventory.
Significant Advantages to Sourcing Wholesale:
There are some significant advantages to wholesale:
- Possible to sell the same items over and over again.
- You can buy lots of products from your suppliers as you can afford or sell.
- You can deal with existing brands with a proven track record (and sales data).
- Possible to build relationships with manufacturers, brand owners, and distributors.
Though it sounds simple enough, several steps and details are needed to source the right products from the right supplier. Here we discuss some tips for successfully sourcing wholesale products for sale on Amazon.
Product Tips: The first step is to decide what you want to sell. You must have a long term view and think of it. Selling online allows you flexibility. Ideally, you want to find products with the same principles that apply to any product you have decided to source wholesale and sell on Amazon. The product should be:
- products should be simple and durable to reduce your risk of product returns due to damage or not understanding their use.
- Priced that allows you to meet profit goals.
- Popular enough, but not dominated by competitors.
- Accessible to store and ship.
- Free from any existing patents.
Start with Cash: Sourcing wholesale products requires cash flow because most wholesalers will have a minimum order amount. Generally, the more you order, the better price you can negotiate for the products. You probably need to start with $500 to $1000 available for purchasing product that’s a minimum range. You need to be mentally prepared so that you may lose that investment.
Use Resources: Amazon is a great resource to help you choose products that might be good ones for you to pick up and sell. They have some lists like “Hot new Releases’’, “Most Wished For,” “Most Gifted,” etc.
Domestic or Foreign: You have challenges locating the right supplier, understanding local and foreign business etiquette, language barriers, and ethical issues. To choose an overseas supplier, you also have to consider the costs and importing hassles. You should maintain high shipping costs to get your products to Amazon warehouse for foreign suppliers. Choosing domestic sourcing means you have an easier time talking with the right people and negotiating, and you don’t go to face the hassles of the import process.
Poor Quality Products: Sometimes, suppliers send the products that buyers don’t expect, or even buyers may pay for products that never arrive. Unfortunately, in this situation, you may say goodbye to your investment. But here are some options that you can take:
- Always try to pay by Paypal or bank credit card. With this system, you can file a dispute, and there is a hope to receive at least some money back.
- Don’t request for unexpected extra payments to cover costs.
- If manufacturers insist on payment into their bank account, then the first preference should be Paypal or bank card. And make sure that you are paying into a company and not a personal statement.
If you decide to lead a significant wholesale business, it’s a lot of work to get set up. Be aware of red flags and scams. But the exciting thing about sourcing wholesale is that you can sell the same products repeatedly. That means the work you have done now but can pay off for upcoming years also.
Click here to learn how to start selling on Amazon.
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