What is amazon wholesale FBA?

Wholesale is the practice of purchasing bulk branded products from another manufacturer, supplier, or distributor to resell to consumers. Examples include popular consumer electronics, kitchenware, and even popular toys.

Selling wholesale on Amazon in 2021 is a lucrative opportunity — but there’s a lot you need to know before diving in. This article offers the pros and cons associated with the wholesale business model and offers step-by-step instructions on how you can efficiently get your business up and running on Amazon.

How we can find life winning product for wholesale

In wholesale fba model we can find a life winning product through amazon tools like:

1: Helium10 in this tools a option Blackbox is appeared in top left corner in second number where we can inter wholesale product hunting criteria and find a life winning product.

2:keepa :when we open keepa tool select data tab and put then wholesale criteria and find good product.

What we need for brand approval:

We need professional website and compony rejister in country where u selling and wholesale product on amazon

 

How wholesale works on Amazon

In a nutshell, selling wholesale on Amazon comprises the basic steps of:

1. Setting up a seller account

2. Finding a high-demand product to sell

3. Sourcing the product (in this case, from the manufacturer)

4. Creating an optimized listing to rank against your competitors

5. Launching and promoting the product 

6. Managing and growing your business (including inventory, sales, etc.)

(See here for more on how to sell on Amazon.)

For all methods of selling on Amazon, sellers will need to follow certain business setup practices.

For wholesale sellers, this may require you to get a wholesale license — which might also be called a business license, tax exempt form, or something else, depending on where you live. Make sure you look into what the wholesale license requirements are in your country or state.

Why sell wholesale?

Pros:

• Product demand: You can sell established brands (Apple, Kitchenaid, etc.) that consumers are already searching for. 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. More than half of wholesalers (51%) 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, 57% of wholesalers told us that they started to turn a profit in under three months, compared to 65% of private label sellers who said it took six months for them to see a profit.

• 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. 

 

How to make money selling wholesale products on Amazon

1. Find a good product to sell wholesale

Make sure that the product is not sold by Amazon or a private label seller. Amazon can afford to lose money on a sale. As such, they will price their products lower than many competitors, so you don’t want to (and likely can’t) compete with them.

Further, private label sellers often block other sellers from placing offers on their respective listings with similar products. 

Look for established brands. You don’t want to have to market for a company that’s not your own. Remember: a big part of wholesaling is about riding the coattails of successful brands.

Check for the product’s demand. Use Jungle Scout’s Extension or free Sales Estimator to estimate a product’s monthly and daily sales (more on this below). You want to find products that have a chance of selling tens—if not hundreds—of units per day. 

2. Calculate how much money you can make

Obviously, you’re interested in selling a product on Amazon to earn a profit. Here’s how you can evaluate sales and profitability before making an investment.

Make sure your product is priced within 2% of the Buy Box 

The Buy Box is the widget to the right side of the Amazon product page that lists pricing and has the gold button that reads “Add to Cart.”

Whatever the current price is in the Buy Box, you want to be within 2% of that price. If your price is higher, your offer for the product may never display in the Buy Box.  

Determine your profitability

Subtract Amazon’s fees and the cost of your product from the sales price. If you’re in the positive, then congratulations: you’re profitable!

If you know how many products you expect to sell (if you have the stock or can estimate it — see next step), you can calculate profitable from those sales and fees, too. 

Estimate your monthly sales

Determine the product’s monthly sales estimate using the Jungle Scout Extension or free Sales Estimator. Divide that number by the number of sellers on the listing (rather, those within 2% of the Buy Box price) plus one (which will be you). This is the average number of sales those wholesalers share on the listing.

For example, if a product has 3,000 sales per month and there are currently 9 sellers selling the product within 2% of the sales price, the math looks like this:

3,000 / (9 + 1) = 300 sales per month.

Understand your turn rate

To avoid costly storage fees on Amazon, try to keep only 2-3 months of sales in stock. For example, for the example product above, you would need 600-900 units in stock in order to cover sales between orders.

You can continue to monitor how much stock you’ll need and when to reorder with Jungle Scout’s Inventory Manager. 

3. Research products with high potential on Amazon

If you aren’t sure where to start your search for good wholesale products to sell on Amazon, you can use Jungle Scout’s Product Database, which sorts Amazon’s massive catalog based on your criteria. 

First, set your preferences:  

 

In this example, you can see the categories selected to the left. We also set the following criteria:

• A minimum price of $20

• Minimum of 10 reviews

• Minimum of 10 sellers

• Minimum of 300 sales per month

4. Find the right suppliers 

Finding suppliers for wholesale products looks a little different from sourcing a private label product. Typically, you’d use a tool like our Supplier Database to find high-quality suppliers in China or other top overseas manufacturers. But for wholesale, we’ll go directly to the brand owner. 

Yup, that’s right! To open a wholesale account, you’ll contact the brand owners directly. If you’re approved, you will be able to place an order and start selling as soon as possible—some brands may even ship to Amazon for you! 

There are a few benefits to this approach:

You send this proposal to wholesale supplier for approval of brand

HELLO;

I am interested in opening up a wholesale account with your products. Please let me know what information you require from me and I will get it back to you as soon as possible.

Thanks,

[your name]”

What brands or distributors will require from you

Now that you know how to find and contact brands, you need to be aware of what they’re likely to ask for as a prerequisite to opening a wholesale account.

Register a business or sole proprietorship

You will need to register a legal business entity or do business as a sole proprietor in your state. When filling out a wholesale form from a brand or distributor, they will ask for this information. 

Resale certificate from your state

This allows you to purchase products from a brand, distributor, or wholesalers tax-free for the purpose of reselling. Most brands or wholesalers will not allow you to purchase at wholesale without this.

Apply for an EIN number

An EIN (Employer Identification Number) or Federal Tax Identification Number is basically a social security number, but for your business. You can receive an EIN number for free from the IRS. 

Now that you know how to find suppliers and what you’ll need to do business with them, let’s move on to the negotiation.

5. Contact and negotiate with suppliers

When you contact the suppliers, you want to demonstrate how you can add value to the brand. Remember that these manufacturers are big companies concerned with new product development, patents, global marketing initiatives and so on.

You are offering to help extend their brand and increase their sales. 

This also gives you a fantastic advantage to negotiate with here. You can help them with selling on Amazon, because they often don’t have the time or know-how to do it themselves. 

Here are some ways you can offer to add value: