Wholesale on Amazon: The Complete Guide for Beginners
Anna Navolokova, Marketing Manager in Multi-Programming Solutions • 12 min read
Establishing a new e-commerce store requires trustworthy partners who will source your company without delays and extra costs. You can collaborate with producers or white-label companies. However, working with wholesalers is one of the trusted methods to gain stable revenue without overspending on resources and creating illiquid stock.
In our article, we’ll describe the benefits of buying stuff in bulk for further retailing and learn how to use FBA Amazon to optimize order fulfillment. This guide will be useful for businesses that want to generate a healthy profit and streamline their workflows.
Table of Contents
How to find wholesalers?
Before we figure out how to do Amazon wholesale, let’s learn who these entrepreneurs are. They represent intermediaries between producers and vendors. Entrepreneurs buy large amounts of products from plants and faсtories at lower prices and resell them to other companies at smaller consignments. For example, they can purchase five cartoons of t-shirts, each containing 20 packs, and then merchandise them in 5 units to retailers.
The reason why it’s beneficial for vendors to find Amazon wholesale suppliers lies in cost saving and generating more profit. After purchasing goods in bulk at discount prices, e-commerce entrepreneurs can repack and vend them to the end customer for revenue. Following this business model, your company becomes more flexible compared to the direct partnerships with manufacturers. Bulk vendors already have hundreds of items to choose from, so you don’t have to manage the development process or obtain raw materials. Moreover, you can diversify your assortment by working with a single company, which helps you save time and money on shipping and allows you to get higher discounts.
How to start Amazon wholesale? The main task is to define what you want to sell, check whether the platform allows it, and then select a trustworthy partner who will help grow your organization. Here are several tips you may consider when developing your strategy.
Choose your assortment
The marketplace provides a convenient all-in-one tool called Product Opportunity Explorer, which helps store owners list wholesale products on Amazon, considering current customer demands and the latest trends.
Entrepreneurs aren’t limited in their commercial ideas. Of course, if you don’t plan to offer forbidden stuff, which we’ll describe later in our guide to online sales. Just choose what will better suit your needs: a niche product or a great diversity of items. You may also want to realize personal innovative ideas. Still, validate them on the market first. Your goods should solve customers’ pain points. In this case, you’ll be able to capitalize on them. As an option, you may examine and improve competitors’ goods, considering users’ reviews and preferences.
Find wholesale suppliers
You may examine the Best Sellers list within the platform and contact entrepreneurs to know if you can purchase products in large volumes. Alternatively, you can check the vendor's directory and find a trustworthy partner who will ship your parcels right to the fulfillment center.
Issues to solve before you make a first deal:
- Decide where you will store items: at home, your own, or an Amazon warehouse.
- Ask vendors about the terms for sending your parcels.
- Check the minimum order quantities (MOQs).
- Compare prices from different companies and other costs like membership commissions.
When deciding on Amazon wholesale distributors, ask applicants to send you customers’ referrals. Check if there are complaints about the level of service or product quality. You probably don’t want to be challenged while reselling the stuff to your clients.
Usually, the more items you’ll order, the lower your price per item. You should buy enough to satisfy your own customers’ demands at the online store and not overspend. For example, if you decide to buy 100 mugs, but the discount starts only at a quantity of 200, it’s worth searching for another, more beneficial deal. When you start your online sales and just test the suitable assortment, you risk not selling all the 200 examples. They can simply become illiquid in your inventory, negatively impacting the profit.
Tips for finding the right products
Choosing the best items to wholesale on Amazon remains one of the main tasks for online sellers who want the maximum outcome from their e-commerce activity. Suppose you know what to sell, but doubt clients will prefer your items to the competitors’. There are several ways to add extra value to the item, improve it, and make it one-of-a-kind on the market. Thus, you may focus on stuff with high demand and low supply. Here’s where you can fully show your creativity and stand out.
Customers’ reviews are another source of valuable information in Amazon e-commerce wholesale. Among all the positive feedback, you can find cons and fix them, offering buyers what they need. The simplest example is if most vendors in your location sell hoodies without pockets, just add this element to your product, and you’ll satisfy the market demand. Think also about improving the quality of your stuff, making it more eco-friendly or reusable.
Amazon offers convenient categorization to help you choose the assortment correctly:
- Check the Best Sellers to understand what goods are trendy among buyers.
- Explore the Movers and Shakers option to find new design ideas for well-known items.
- Look through the Best Seller Ratings (BSR) to learn what clients appreciate and where there might be ways for improvement.
- Keep an eye on Hot New Releases and think about how to customize an existing product and make it better.
While you may already decided what to merch, we’d like to give you some Amazon wholesale tips on trendy items in 2024.
A lightweight and breathable garment is perfect for summer and winter nights. Bamboo and linen are ideal materials for bedclothes as they provide better ventilation and minimize heat retention. This product is an ideal option for businesses that own print-on-demand software. You can customize it to any liking, using the most popular topics, like cartoons, animals, or space. Kid’s bedding is in demand in any season, and customers often purchase it as a gift.
This item is a must for any wardrobe, which makes it a clever decision for FBA Amazon wholesale. People wear sweatshirts all year round: on a chili evening walk in the summer or as a bottom layer in cold seasons. Diversify your product, allowing customers to choose from multiple colors and prints. Don’t forget to add size range and care instructions to provide your buyers with all the vital information supporting sales.
Home & Kitchen
The global revenue from the kitchenware segment reached $62 billion in 2020 and is expected to grow to $77.4 by 2025. So those who want to jump into the massive industry can sell custom goods and differentiate themselves from other entrepreneurs. Among the most well-selling products for the kitchen are wooden cutting boards, pot holders, lunch boxes, magnets, stainless still water bottles, aprons, table runners, chair covers, mugs, drink coasters, and much more.
Active everyday life encourages people to make their homes convenient and stress-free. And you can satisfy customers' needs by offering warm blankets, cushions, candles, posters, rugs, etc.
A lot of famous people used lockdown to reflect on their lives. When there were no other opportunities to realize their talents and professionalism, celebs like Barbra Streisand, Britney Spears, Mattew Perry, Taylor Swift, and others wrote books describing their biography and uncovering personal secrets. Memoirs like “The Women in Me” and “Friends, Lovers, and the Big Terrible Thing” remain bestsellers among marketplace books. You can also use this chance to launch a profitable wholesale business.
We’ve described where to find trendy dropshipping items and suppliers to source your store. Still, some business owners may wonder where to store their stuff and how to fulfill orders. Amazon solves these challenges by offering a unique program that helps entrepreneurs streamline and optimize business operations, reaching a wider audience.
What is the Fulfillment by Amazon?
The e-commerce company allows registered sellers to delegate storing, packing, and delivering processes within the Fulfillment by Amazon (FBA) regardless of the model they follow, direct-to-consumer businesses or wholesale. You no longer need to own or rent warehouses and deliver orders to the final customer by yourself.
After subscribing to FBA, you receive advantageous perks that support your brand’s growth. Here are some of them:
- Amazon delivery costs 32% less than delivering with other transport companies.
- Products with Prime badges are delivered for free within two days.
- You can send as many or as few items to company warehouses as you wish (even start with a single unit at the beginning of your sales journey).
- The company provides customer service. They handle various queries and even returns without charging additional fees.
Within the FBA program, sellers may also opt for extra tools developed for solving specific business goals, like international delivery from centers based in the USA or direct shipment from China to American and European warehouses.
If you appreciate the benefits of outsourcing order fulfillment, read our guide and find out how to organize Amazon FBA wholesale for beginners.
Adding FBA to listings
First, you should register a vendor’s profile and choose a suitable subscription plan. Then, apply FBA for all your goods or some of them. You can do it in 2 ways:
- If you already have active listings and want to convert them into FBA, open the Seller Central menu→Inventory→Edit →Change to FBA.
- When you upload a new item to the store and want to outsource its storage to the company, choose Offer and change the shipment into FBA.
It may surprise you, but the e-commerce company can even fulfill orders made on the personal website. All you need is to sign up for the Supply chain and take advantage of Amazon wholesale automation.
Learn FBA requirements
Vendors should get familiar with inventory rules and product restrictions to start selling on the international platform. Most goods allowed on Amazon are also eligible for FBA. Still, there are some rules. For example, you can’t merchandise alcohol, vehicle tires, gift cards, and dangerous stuff. Also, you aren’t allowed to merchandise illegally reproduced or manufactured items, damaged units, goods with unregistered labels, etc.
Ensure you prepare parcels according to the marketplace rules before you send goods to the fulfillment center. You should meet packaging and shipment Amazon wholesale requirements. Thus, promotional phrases in titles, like “quality guaranteed” or similar, are not allowed. Also, using pallet-sized boxes, strings, or straps for delivering your products is forbidden.
When learning how to fulfill orders by Amazon, pay close attention to the service costs to define whether the chosen method suits your business goals and keeps sales profitable.
The company charges fees per unit stored and order finished. No fixed price will suit all the sellers. FBA costs depend on the product type, parcel weight, and size.
Monthly storage commissions also vary based on the items' dimensions, volume, status (dangerous ones cost more), and the season (from January to September and October to December). Sellers must also pay extra if their goods are kept at Amazon warehouses for more than 271 days. Read more about Amazon sustainable practices.
If parcels weren't packed correctly, you'd also pay additional service fees because workers will do it on their own.
How to send stuff to Amazon
When you've learned enough about Amazon's shipping program and are ready to deliver products to its warehouses, use the “Send to Amazon” option in Seller Central. The tool will provide detailed information about necessary preparations and packing before parcels leave your place.
The platform allows entrepreneurs to save time and money on delivery by working with trustworthy carriers. Choose the one that better suits your needs within the “Send to Amazon” feature. You can generate printable shipping labels and start tracking your parcels right to the fulfillment center and inside of it.
While the company will check your items at its warehouse, customers won't be able to make a purchase. Usually, it takes around two to four weeks to pass all the required procedures. During peak periods, check-out can last even longer, reaching six weeks. So it's crucial information for sellers who think they can start merchandising the next day they send parcels.
Tracking and managing the inventory
Sellers receive a notification about the deal and shipment when their product is sold. With the FBA dashboard, they can also remotely monitor stock, plan, and replenish it on time. A special Restock tool may help you provide management, giving custom recommendations based on clients' demands, last sales, seasonal forecasts, and much more. You can streamline the business, making it faster, scalable, and profitable with wise replenishment frequency and shipment planning.
When you set up fulfillment with Amazon wholesale FBA, it's time to think of generating more traffic and revenue with your online shop. One of the efficient ways to make marketplace listings attractive to customers is by buying Prime badges. They ensure free two-day shipping, which is a wonderful proposition for more than 84% of clients.
Sell products successfully!
To build a thriving e-commerce business, you should comply with the platform requirements, ensure an excellent customer experience, and constantly generate revenue. While some entrepreneurs are guided by the Amazon wholesale formula on their way to success, we give advice you may already use in practice. Here are steps you can take to get all in one: long-term partnership, satisfied clients, and vast opportunities for further brand growth.
Sample before you buy
When you’ve chosen the supplier to work with or can’t define which one will suit your business more, start by examining their products on your own. Order small amounts of items to check the quality and shipping speed. Some sellers may send you samples for free as a first step towards a future successful cooperation.
If you run a clothing printing business, check how the garment absorbs ink. Your direct customers should get the best possible experience, so testing supplies are a must for every POD organization that wants to thrive.
Double check invoices
Suppliers will send you the necessary invoices to provide an Amazon wholesale business model. According to the platform requirements, they should include manufacturers’, distributors’, and your names and addresses. This information should match with the selling profile. Documents should be dated within the last 180 days and include data about the combined purchase of at least ten items.
The price information is optional in invoices. Instead, they should contain wholesalers’ contacts, like phone numbers and business websites.
Also, ensure that Amazon Standard Identification Number (ASIN) can be easily identified. This unique ten-digit code is assigned for every new item you add to the marketplace catalog.
Get product approval
If you start an Amazon wholesale business, the platform may request suppliers’ permission to merchandise branded stuff. Define whether you need products’ approval and send requests following these simple steps:
- Visit Seller Central and upload items through the inventory panel.
- Search the required item by name, Universal Product Code (UPC), or ASIN.
- Click “Show limitations” across from the found unit.
- Press “Apply to Sell,” and you’ll enter the selling page.
- Find and click the yellow button with “Request Approval” on it and launch the application process.
Provide an invoice with all the necessary information described above and wait until Amazon reviews and confirms your application.
Adjust the pricing strategy
All the retailers wonder if Amazon wholesale is profitable and can help their e-commerce business grow. We can say yes. But only if you choose goods with high market demands and provide wise pricing. Here’s what it means. Your listing price should cover costs spent on the initial purchase, fees the platform offers for its users, expenses on the added value, and a healthy margin.
Let’s look at the simplest example. Suppose you decide to purchase 100 hoodies at a discount price of $20 per unit from one of the Amazon wholesale suppliers, which results in a $2000 total cost. You add a listing for sale for $30 per item. If you’re lucky enough to sell all the clothes in a short time, you’ll gain a $1000 profit. But be sure you vend hoodies at average market prices. Of course, you can add extra value to your stuff by printing custom illustrations or brand logos (in case you purchased white-label products). Then, consider this spending in your pricing strategy.
In our guide for beginners on Amazon wholesale, we figured out that purchasing supplies in bulk may give a good start for generating profit and scaling the business. You just need to find a trendy product that will satisfy customers' demands and choose a vendor to sell you dozens of units at a discount price.
If you don’t have a warehouse to keep your goods, that’s no problem because we already know what FBA Amazon means. You can delegate storing and delivering your stuff to the end consumer while focusing on promotional campaigns and brand popularization.