How to Buy Wholesale to Sell on Amazon?

Amazon wholesale is one of the most profitable business models 25% of sellers use. By buying products in bulk at a discounted rate, you can resell them on Amazon and keep the difference. 

While finding Amazon wholesale suppliers is key to success, choosing the right products to sell is equally important. But how do you know the products are good to buy wholesale? 

This guide will tell you what and how to buy for Amazon wholesale, and how to ensure the products you buy will sell on Amazon and bring you the profit you expect.

How Does Amazon Wholesale Work?

Amazon Wholesale

With the Amazon wholesale business model, sellers buy products in bulk from brands or distributors for a low wholesale price and resell them at a higher retail price on Amazon. This way, they pocket the difference.

In a wholesale business model, your key tasks are to find a product supplier (brand or distributor) and choose their most popular and profitable products to resell on Amazon. This process is called direct sourcing.

With direct sourcing, you get a list of supplier products, find the match to these products on Amazon, choose those with good sales volumes and high-profit margins, and resell them. 

Steps to Amazon wholesale

Here’s how direct sourcing works for Amazon wholesale step-by-step.

Steps to Amazon wholesale

Step 1. Choose a brand to source a product

Select a supplier – a brand that sells in an ungated category, and make sure it meets all criteria on your checklist (we will discuss it in the section about brand research below). Verify the supplier is legitimate on LinkedIn, Whois, or ScamAdviser.

Step 2. Approach the brand and negotiate

Contact the chosen brand and propose to sell their products on Amazon. Show them how you can add value to their business to get approved and land a wholesale supplier account. Get an offer with their product price list.

Step 3. Do Amazon wholesale product research

Use the best product sourcing software, Seller Assistant, to research products. Review the brand’s product price list and find the match on Amazon with Seller Assistant’s UPC/EAN to ASIN converter. Do quick product research with Seller Assistant’s Quick View, and pick out the products with high demand and moderate competition levels. Do extended product research for them to ensure they are suitable for selling.

Step 4. Open a wholesale account and purchase inventory

Open a wholesale account with a supplier, decide how much inventory to buy, negotiate the deal terms, and buy the inventory.

Step 5. List inventory on Amazon 

Add your offer to an existing Amazon listing. If Amazon requires approval to sell the brand, get the approval by submitting the authorization letter from a brand that you have the right to sell the brand’s products. Set competitive price.

Step 6. Fulfill your orders

Use Fulfillment by Amazon (FBA) where Amazon takes care of fulfillment and customer service for a fee or Fulfillment by Merchant (FBM) where the same is handled by a third-party logistics partner, depending on what is cheaper.

Step 7. Sell the product

Wait until your products sell, reprice them as necessary, and pocket the profit.

Related: Amazon Wholesale: All You Need To Know

How to Negotiate Prices With Amazon FBA Wholesale Suppliers

How to Choose a Supplier for Amazon?

There are many ways to choose suppliers. In the strategy we propose, you start by selecting a popular category that is not restricted on Amazon and you don’t need the approval to sell it. 

Then, you look for a resale-friendly brand for wholesale – do brand research. Typically, that should not be very popular brands like Nike or Apple, because they have very high Minimum Order Quantities (MOQ), and a rigid reseller network, and it’s very challenging to approach them. Brand research helps ensure that you can resell products under this brand. And it’s not restricted on Amazon. 

To validate that the brand is resell-friendly, make sure it meets a number of criteria below. 

Tip. You can check products for restrictions with Seller Assistant’s Bulk Restrictions Checker. It shows if products are restricted or you can’t sell them for other reasons. If you see a green open lock icon, you can sell them. If you see a red closed lock, you can’t sell products without Amazon’s approval and they are gated. If the tool shows a red closed lock with an exclamation mark, you are not eligible (can’t) to sell products on your account.

Related: How to Check Product Restrictions on Amazon?

Amazon Restricted Products – Complete Guide for Sellers

Criteria for brand research

Criteria for brand research

Prioritize US suppliers

It is preferable that a brand has a U.S. zip code. That is because U.S.-based brands are delivered fast, sell only authentic products, and issue necessary invoices. Amazon may ask you for an invoice to confirm 

Minimum listing number

A brand must have at least 200 listings. This is because typically more than half of a brand’s products will not meet your requirements. For example, when a seller has more than 50% of the BuyBox, its products are not suitable for resale.

A brand is not a seller on Amazon

The brand itself must not sell on Amazon. If it does, it will not want any competition and will not allow you to resell its products. For a similar reason, a brand must not have an exclusive distributor on Amazon (who is the sole legitimate product reseller). 

No IP alerts

A brand shouldn’t have intellectual property alerts. If it does, it’s either selling trademarked products as private label and you can't resell that brand, or the brand files IP complaints against resellers and may not want other sellers to resell. You can check a brand for IP complaints and their nature with Seller Assistant’s IP Alert extension.

Seller Assistant’s IP Alert extension

Amazon mustn’t sell the brand

The brand must not be sold by Amazon. Competing with Amazon is very difficult, and if Amazon sells more than 30% of the brand’s products, it’s better to look for another brand. 

How to Research Amazon Wholesale Products?

The next important thing before you buy products from a supplier is product research. That will help make sure the products will sell, will bring you profit, and meet other essential criteria.

To simplify this process, we will turn to Seller Assistant, a popular and effective product-sourcing tool. Below we will describe detailed steps to research wholesale products for Amazon.

Seller Assistant

Amazon wholesale product research step-by-step with Seller Assistant

Step 1. Find your supplier products on Amazon

When you get a price list from a brand, you must find their exact match on Amazon. To do that, you can use Seller Assistant’s UPC/EAN to ASIN converter. UPCs and EANs are unique identifiers for products at the manufacturer, and ASIN is the same but on Amazon. By converting the UPC or EAN to an ASIN in bulk, you can quickly and easily identify matches to all supplier products on Amazon.

Related: Seller Assistant: What Is UPC/EAN to ASIN Converter?

Step 2. Do quick product research for best-sellers

Typically, there are many products on your supplier list. You can’t do in-depth research for all, but you need to pick out the products with high demand and moderate competition levels effectively. You can do that with Seller Assistant’s Quick View feature. 

You filter out the brand’s products on Amazon. Quick View appears on the Amazon search pages and shows select data for quick product research. You can estimate product sales by its BSR (Best Sellers rank) in its main category, and the competition by the FBA and FBM seller count (for moderate competition the count is 3 to 11).  

Quick View

Step 3. Do extended product research for each product you selectedsome text

• Remove the referral from the product link 

Delete a referral (part of the link, starting with ref=). It can give you wrong information about the product. 

To get correct product data, you must remove the referral from the link

• Find out competition level by FBA seller count

The recommended count of FBA seller offers must range from 2 to 15. Seller Assistant displays the FBA and FBM seller count on the Amazon product and search pages. The number on a blue background is the count of all FBA or FBM sellers. The number on the white background next to it is the count of FBA or FBM sellers offering the Buy Box price +5% (your potential competitors). 

Seller Assistant shows the number of FBA and FBM offers

• Check if Amazon is a seller

If Amazon is a Buy Box seller, Seller Assistant alerts you with the Red Amazon icon on the product and search pages.

If Amazon is a seller, Seller Assistant shows the red Amazon icon on the product pages

• Look into the listing history

The product listing must be at least half a year old to understand how it sells. If there’s no data on the Keepa chart integrated within Seller Assistant, a product is new. 

If there’s no data on the Keepa chart integrated within Seller Assistant, a product is new

• Check out how many products you can sell

Seller Assistant calculates how many products you can potentially sell per month in the Sales field. Drops (BSR drops) show how many products were sold during 30, 90, and 180 days. If the BSR number is green and the arrow beside it points down, the product sales go up; if it is red and the arrow points up, the product sales go down. 

Seller Assistant calculates estimated sales for each product

• Find out the product’s selling price

Seller Assistant displays the average Buy Box price (Avg BB), and if it goes up or down compared to a 90-day price (green arrow up or red arrow down). It also shows the lowest FBA (Min FBA) and lowest FBM (Min FBM) prices. You can use these indicators to calculate if your product will be profitable. 

Buy Box (Featured Offer)

• Look up the best-selling variations

If a product has variations (different attributes of the same products such as size, color, style, etc.), you must select one of the best-selling variations. Seller Assistant’s Variation Viewer shows all variations' rating share, total ratings, and the rating percentage per variation (Share). The most profitable variations have the highest rating percentage.

Variations Viewer

• Research product reviews

A successful product should generally have a 4-5 star rating and minimal negative reviews. Review data is accessible via a separate Keepa chart in Seller Assistant.

Reviews are available on the separate Keepa chart built into Seller Assistant

• Confirm selling eligibility

Before purchasing inventory, confirm that you can list the product on Amazon. Seller Assistant indicates this with a green open lock for eligible products and a red closed lock the products you can’t sell (or may sell only if approved by Amazon). If Amazon requires approval to sell the brand, get the approval by submitting the authorization letter from a brand that you have the right to sell the brand’s products.

If you see a green open lock icon in Seller Assistant, you can sell a product

• Check product for alerts

Seller Assistant shows various product flags on the Amazon product pages, such as IP alerts, heavy and bulky, fragile, meltable, hazardous materials, adult products, and other indications.

Seller Assistant's product flags

• Calculate product profitability

Target a Return on Investment (ROI) above 10%. Use Seller Assistant’s FBA&FBM profit calculator to determine ROI based on the Cost of Goods Sold (COG, the purchase price from the supplier), FBA or FBM fees, and logistics costs.

Seller Assistant’s FBA&FBM profit calculator

7 Tips to Buy Wholesale Products to Sell on Amazon

When buying wholesale products to sell on Amazon, here are several tips to consider.

Tips to Buy Wholesale Products to Sell on Amazon

Tip 1. Research products before buying

Always do thorough research on products before purchasing them wholesale. This includes understanding product demand, costs, potential profit margins, and product flags. Use Seller Assistant for effective and quick product research.

Tip 2. Don’t give up if a supplier says no 

If a supplier doesn’t answer immediately or initially refuses to do business, don't get discouraged. Keep the dialogue open, be persistent, and try to understand their reservations. Sometimes, just maintaining the relationship can lead to future opportunities.

Tip 3. Convince suppliers of added value

Demonstrate to suppliers how partnering with your business can bring them additional benefits. This might include writing a proposal, a commitment to specific purchase volumes, faster inventory turnover, or access to new customers on Amazon. Get a reseller certificate to show you are a serious business. 

Tip 4. Account for all costs

Accurately calculate all costs associated with your wholesale Cost of Goods Sold, Amazon fees, shipping and logistics, and any additional fees that may apply. This helps in setting the right price and maintaining profitability.

Tip 5. Verify your suppliers

Ensure the reliability and legitimacy of your suppliers to avoid scams and quality issues. Check the supplier on business directories. Research and make sure they have an advanced website, contact and payment details, active social media, and read Google references. Look up the supplier on LinkedIn, Whois, or ScamAdviser.

Tip 6. Plan for fulfillment and shipping

Decide whether to use Amazon’s fulfillment services (FBA) or handle fulfillment yourself. FBA can simplify shipping and returns but comes at a cost. Negotiate with a supplier to ship your products to Amazon, if possible.

Tip 7. Set competitive prices and reprice

Set prices that are competitive yet profitable. Keep an eye on market changes and competitor pricing, and adjust your prices accordingly to stay competitive and attractive to customers.

FAQ

Can you sell wholesale on Amazon?

Yes, you can sell wholesale products on Amazon. You'll buy products in bulk at a discounted rate from a brand or manufacturer and then resell them on Amazon for a profit.

How to buy bulk items and sell them on Amazon?

To buy bulk for Amazon, you'd find a brand selling in ungated categories, research the products to ensure they will sell and bring profit, negotiate wholesale pricing, then list the products on Amazon and fulfill orders through FBA or FBM.

Where to buy items to resell on Amazon?

There are two main options for buying items to resell on Amazon: wholesalers who sell products in bulk at a discount, or retail arbitrage where you buy items from stores at a discount and resell them for a profit on Amazon. If you buy in bulk, you must approach brands or distributors directly.

Can I buy wholesale and sell?

Yes, buying wholesale allows you to purchase items in bulk at a discounted rate. You can then resell these items at a higher price to make a profit.

Final Thoughts

The key task of wholesale sellers who buy bulk products and sell them on Amazon is to find suppliers who sell these products cheaply and resell them on Amazon with maximum profit. You must carefully research the products to make sure they will bring the profit you expect because you invest a lot of money in these products.

The best tool to help you with that is Seller Assistant. This all-in-one product sourcing software helps ensure you choose the most profitable wholesale products. It offers all the features vital for product research. It combines a Side Panel View, FBM&FBA Profit Calculator, Quick View, ASIN Grabber, UPC/EAN to ASIN converter, Stock Checker, IP Alert, Restrictions Checker

Originally published at https://www.sellerassistant.app/blog/how-to-buy-wholesale-to-sell-on-amazon