Virtual Assistant for Whole Sale
How does Amazon Wholesale work?
Selling wholesale on Amazon involves buying bulk products directly from the manufacturer or supplier of the product at a discount, then selling them as a reseller on Amazon for retail prices. This model allows you to sell products from established brands with existing demand. Before you can place a wholesale order for most brands, you must open what is known as a “wholesale account”. This account will give you access to their product catalog and allow you to buy the products in bulk. Setting up a wholesale account with a good brand or supplier is the biggest barrier to entry for most people trying to get started with wholesale on Amazon. Another barrier is that a minimum order quantity will apply to your orders, meaning there will be a minimum amount of each product that you have to order. This increases the startup costs associated with wholesale when compared to arbitrage strategies.
Intro to Amazon Wholesale
Buying in Bulk for Amazon FBA
This is a guide how to buy wholesale products and sell them on Amazon. Unlike a lot of the stuff you may read about wholesale on Amazon, the wholesale product sourcing strategies in this guide actually work. I know because we’re using them right now to buy hundreds of thousands of dollars worth of products every month. If you are interested in the potential benefits that an Amazon wholesale business can offer you, this guide will help you figure out things like what wholesale products to sell on Amazon and how to find wholesale suppliers.
Why sell wholesale?
Pros:
- Product demand: You can sell established brands that consumers are already searching for and purchasing. This takes the burden off your business for marketing.
- Quick to get started: Behind retail arbitrage, wholesale is the easiest business model to get up and running. 42% of wholesalers in Jungle Scout’s study of thousands of Amazon sellers told us it took them less than six weeks to get their businesses up and running.
- Profitable: Also, 55% of wholesalers told us that they started to turn a profit in under six months.
- Scalable: You can focus your time on growth, even building a team to manage the day-to-day operations, rather than focusing on building a brand, creating listings, or other efforts fledgling brands need to do.
Cons:
- Competition: Nearly all of the listings on which you place offers will have multiple sellers. And since the only “lever” you have to pull is price, it can sometimes become a “race to the bottom.”
- Up-front cost: Because you must purchase goods in bulk, usually, wholesaling is more expensive than reselling or dropshipping.
- Research: The most time-consuming aspect of wholesaling is research. You will have to explore dozens — maybe even hundreds — of product opportunities and ensure that you can get the product in stock from a supplier.
- Cold outreach: Before you can begin reselling other brands on Amazon, you must be approved by the brand. This includes cold calling or emailing various companies requesting to open up a wholesale account so you can resell the products on Amazon.
Why sell wholesale?
Finding potential suppliers is the first and one of the most challenging parts of wholesale sourcing. Finding and securing a relationship with a manufacturer, brand owner or distributor will take the majority of your time (especially early on). In general the main key to securing a wholesale relationship is to follow the following format for successful outreach:
Email < Phone < In Person
All 3 of these methods of communication work, and should be used in your outreach. We’ve found that in person is the best way to land new accounts early on, with phone being the next best option, followed by email. The more personal you can make your outreach, the better your chances – especially if you’re primarily an online-only business that sells on Amazon. You increase your chances of being heard the farther right you move in the above spectrum as it will make it more personal. Basically the farther right you go, the harder it is for a rep to say no! With that introduction on communication options, let’s look at some of your options for finding wholesale suppliers. Here are methods we’ve used and are still using:
- Trade shows
- Cold call or email representatives of products we have sold previously
- Find products on Amazon that are selling well, and reaching out to the company
- Doing research via Google on products we want to sell and finding their local distributors
How to Set Up an Account with a Wholesale Supplier
After you have found a product that you want to purchase wholesale to sell on Amazon, then it’s time to get things in place to be able to begin ordering. Here are the steps involved with setting up your account with a manufacturer or distributor and placing your first wholesale order:
- Find a product you want to sell
- Locate the contact information for the company who sells the product
- Reach out to the individual who makes decisions about their wholesale distribution
- Convince them that you should be one of their distributors
- Fill out an account application
- Fill out any ecommerce agreements (if applicable)
- Obtain product catalog and price list
- Evaluate price list
- Place opening order
This is a general order of how things typically go. There will be some companies that have additional steps, and some that have fewer, but this should give a good idea of what to expect. I will go into more detail on some of the most important steps throughout the remainder of this post.
Making Initial Contact with Potential Wholesale Suppliers
When you reach out to companies, you’ll want to get in contact with the main representative for the brand, product, or product line that you are interested in purchasing. For the purposes of this post, we’ll use the term brand representatives. Brand representatives (Reps) are the people you’ll communicate with to purchase product from each brand.
They can have various titles such as:
- Sales Representative
- Brand Manager
- Territory Representative
Your goal will be to get in contact with the brand representative that can help you get an account opened to sell their products. At times, these individuals will be “gatekeepers” and will need to understand why they should sell their products to you. Many reps have been instructed to ignore online-only businesses without getting many other details. At this stage, it’s very important to clearly communicate your value adds, and how you will be able to help them. The more things you can do for a brand owner, and the more clearly you communicate that, the better your odds of being able to purchase from them. You have to come up with creative angles for why you would be a good retail partner for the brand/distributor and how you could help grow their business. nProviding value can take many different approaches, but try to identify any issues the representative is having related to distributing their products online. If you are able to identify issues, do what you can to help them solve the issue.
This can take many forms, but one example we’ve had happen is buying product that the company has had trouble selling to other people. Another example is providing expertise related to helping them understand different online retail marketplaces. If you can help in these ways, and build rapport & trust with the representative, your odds of being able to purchase from them wholesale go up dramatically. In addition to providing value, make sure you have a clear message before starting your outreach. I find it often helps to show your outbound emails to people close to you or other members of your team (if applicable). You want the messaging to be concise and coherent as you oftentimes only get one chance with a representative to determine if you will be able to work together. I recommend doing this for emails, phone calls, as well as in-person events.
It’s also a good idea to practice for questions that are likely to come up if you’re having the conversation on the phone or in person. We practice all of these things with all team members prior to attending any trade shows, or having them help with outbound phone calls. The goal for all outreach: No matter how you contact the brand representative or who you talk with, your first goal should be to get the account setup forms. This will gain you some momentum and makes it more likely to keep the conversation going and ultimately get the account setup.Here’s some info you’ll want to have before talking to a wholesale contact and some sample explanations:
- Type of store / What’s your story? / Why do you want to carry their brand
- Mention you are an online (insert category name) retail business that is looking for new products to add to your current selectio
- Current customers are expressing demand for their product
- Your story should fit your categor
- Other products you sell
- List any products you sell that are similar — if none, mention that you are just getting started and would like to purchase their products because it fits the customer base you are marketing to
- Brick & Mortar presence/location (If you have one
- Distribution methods / marketplace
- Amazon, eBay, Jet, Walmart, etc
- Full price or off-price retaile
- Frame the conversation as you sell for full price rather than sale merchandise
Assuming you are able to work something out and the representative agrees to try to open an account, you’ll want them to send over the account setup forms to your email. At this point, you will usually need the following information for most account applications (in addition to the info above):
- Tax ID Number/Resale Certificate
- This is your state resale certificate
- EIN Number
- This is your employer identification number
- Business Address / Shipping Address / Billing Address
- Shipping Account Numbers
- If you have an account with UPS, you should have a parcel and freight shipping numbers.
- If not, you can have most companies ship to you and bill you on the invoice under their shipping accounts.
- Dun & Bradstreet Number
- This is a company that does credit checks for businesses and some companies will want to contact them to get previous payment history on your business.
- Note that Dun & Bradstreet has paid plans, and you will almost certainly be marketed them at some point (either via mail or phone). I would not recommend any of their paid options, as the free one is more than adequate.
- References — If applying for credit
- This is a list of other wholesale accounts you have had in the past
- May ask for banking references as well
- Bank Acct Info — If applying for credit
*Also keep in mind that most accounts will only be opened if accompanied by an initial order, so you’ll want to be able to send that in with the forms. We’ll talk more about deciding what to order later in this post.
After you’ve filled out all the required information, submit it all to the company. If you don’t hear back within 2 to 3 business days, reach out and see if you can get an update. A lot of business success comes down to persistence. This is a time when you want to push to get the account up and running. For some accounts we currently order from it’s been necessary for us to follow up 4 or 5 times to get an account opened up. This doesn’t happen every time, but persistence does pay off in some cases. When you hear back from the company on your account application, hopefully you will be getting the “yes” you’ve been waiting for so you can start selling their products. If your application was declined, try to find out the reasons why. Then see if you can reopen the dialogue to address the concerns and see if there’s a way you can add value that will be able to get them to reconsider. You can’t win every account though, and you will get some “no’s” that can’t be solved for one reason or another. It’s important to determine the difference between a situation where you should move on and one where you should continue to try to “win” the account. This is a bit of an art form and will be easier as you have more contact with potential brands. If we determine that it’s a firm “no”, we will move on and set a reminder to follow up with that company in 6-9 months to see if anything has changed.
How to Evaluate Which Products to Buy to Sell on Amazon for a Profit
Once you have an account set up, you’ll want to acquire a list of all the products the supplier sells and the pricing information. This can usually be found in the product catalogs or other information you were provided when you opened the account. If not, you’ll want to reach out to your representative to ask for it. Your goal should be to get this information in a spreadsheet that includes prices and UPCs to make evaluation as easy as possible. We’ve been able to get a list of prices and UPCs in a spreadsheet from the vast majority of accounts we’ve worked with. When you make this request, you might be initially be met with some resistance. If you are persistent, they typically will be able to get it for you. In the event you can’t get the spreadsheet with prices and UPCs, then I’d consider having a virtual assistant help get the data into a spreadsheet.
Once you have the products and prices in a spreadsheet, you can run them through a tool that will help you evaluate the products in bulk to see which ones match your guidelines. The tools we recommend for this are Price Checker 2 and Tactical Arbitrage. We’ll walk through an example of how to use Price Checker 2 below. If you already are using Tactical Arbitrage for online arbitrage, then I’d recommend using that for your initial evaluations when getting started with wholesale sourcing. Once you have an excel sheet with UPC’s and their corresponding prices, here are the things you’ll want to set up before starting the evaluation:
- Setup the Price Checker 2 software
- Select the excel document (file) to run in Price Checker 2
- Make sure the columns for UPC and price pull through correctly and match up with the correct headers from your file
- Input a cost profile to estimate prep and ship costs which can be factored into the net profit/ROI results when the product is evaluated
Amazon FBA Wholesale Frequently Asked Questions
What companies should I contact to find wholesale suppliers?
Should I attend trade shows? What trade shows should I attend?
Do you have to be able to receive pallets when doing wholesale sourcing for Amazon FBA?
Do I have to have a website?
How much money do you need to get started with Amazon FBA wholesale sourcing?
Amazon is a central hub to buy wholesale products
Buying wholesale products means you’re purchasing in bulk. And there’s no better place to get started than at Amazon Business. Whether you’re buying printer paper or swivel chairs, you can get the same bespoke Amazon experience you’re used to at home – for your business.