How to Sell Wholesale on Amazon
Amazon isn’t just powered by Amazon. The online retail giant is supported by over 2 million third-party sellers worldwide, and a whopping 26% of them sell wholesale.
Selling wholesale on Amazon in 2021 can really pay off. But is it better than selling from your own website or storefront?
It’s easy to get started selling on Amazon even if you’ve never sold wholesale online before. It’s also a good way to find new customers and add a new revenue stream even if you’re already selling wholesale on your own website, on Facebook Live, or at your brick-and-mortar store.
We’ll go over everything you need to know about how to sell wholesale on Amazon, including pros and cons of Amazon selling, how to find great wholesale products to sell on Amazon, and whether selling on Amazon is the best option for you.
Pros of selling wholesale on Amazon:
- Speed. It’s really fast and easy to start selling wholesale products on Amazon, especially if you already have inventory you’ve been selling elsewhere.
- Built-in customer base. Each month, more than 197 million people visit Amazon.com. In 2018, Amazon’s share of the US e-commerce market was 49%, and all signs point to that number going up. It’s by far the leader in online sales, and sellers get the chance of taking a few crumbs of that pie.
- Product demand. If you choose to sell wholesale for established brands that people are already searching for, you’ll likely see sales pretty quickly.
- Profitability. In a recent survey, 57% of Amazon wholesalers said they started to turn a profit in under three months. (Considering many businesses can take 2-3 years to become profitable, that’s really impressive!)
- Scalable. You can focus more of your time on growth and building a team to manage fulfillment, rather than focusing on creating an entire brand.
Cons of selling wholesale on amazon:
- Competitive. Many products you offer may have multiple sellers selling the exact same item or similar ones. You’ll likely have to lower your prices in order to stay competitive, which will eat into your margins and make it difficult to earn much, especially in the beginning.
- Cost. Whenever you purchase inventory, it requires a larger investment upfront to purchase products and meet any bulk MOQ requirements a wholesaler might have.
- Need to find the right product/pricing model. Not every product is going to be an Amazon money-maker – without relying on branding and unique service to differentiate you, you’ll have to rely on competitive prices and searchability alone to drive sales.
- Impersonal. If you’ve always dreamed of owning your own boutique or online store, selling on Amazon won’t necessarily have that same feel.
- Big vs. small. One of the most exciting things about starting your own business is… well, starting your own business! Some may not be totally stoked about supporting a major retail giant by conducting business through them. (Even though conducting an Amazon business is a totally legitimate way to start your own thing and make money!)
How to sell wholesale on Amazon
Now that you’ve reviewed the top pros and cons of selling wholesale on Amazon, let’s go over what selling wholesale on Amazon might actually look like for you. To start a successful Amazon business, you’ll have to find market opportunities, price your products right, and purchase your wholesale items from a reliable seller.
Before you decide on a specific product to start with, do a little Amazon research. Make sure that the product you’re considering selling isn’t already sold by Amazon or a private label seller. If it’s sold by Amazon, you definitely won’t be able to compete with them on price. If it’s sold by a private label seller, you might be blocked from selling the item. Look for items that are in high demand, especially if you’ll sell an item from an established brand. (Most experts recommend selling wholesale items from established brands on Amazon, since it’s difficult to sell items as a new seller if no one’s searching for them.)
Do the math
There’s no point in selling on Amazon if you won’t make a profit. Once you’ve identified a product you’d like to sell, see how much it’s already selling for on Amazon. Then, work backward from its list price to determine profitability. You’ll have to take into account Amazon’s fees and the wholesale cost of your product. That will tell you how much you can expect to pocket from each sale so you can judge whether it’s worth investing in a wholesale order.
Buy your products
Now, it’s time to buy your inventory. If you identified a certain name-brand product you’re interested in selling wholesale on Amazon, go straight to the source and contact the brand itself about purchasing wholesale inventory. They should respond with information about opening a wholesale account and how many items you’ll have to purchase in order to get a bulk wholesale discount. You’ll likely need a legal business entity, a retail certificate, and an EIN number, though requirements can vary from state to state.
Interested in starting smaller? Though name-brands are typically easier to sell on Amazon, you can sell other items, too. You can also purchase on-trend, stylish wholesale jewelry and accessories from Supplied, a wholesale supplier for small businesses. Supplied offers a wide selection of 100,000+ wholesale boutique items at up to 75% off wholesale prices, with free shipping and no MOQs. (That means you can order as little as one item and still get the wholesale price!)
If you decide to order wholesale items that aren’t as frequently searched for on Amazon, it’s probably a good idea to sell them at your own boutique website or Facebook page as well instead of relying solely on the Amazon marketplace for sales.
Is Amazon the best way to sell wholesale?
Amazon is a fast, convenient way to earn some extra money selling wholesale products. If your main goal is to start a side hustle and make some extra cash, it’s a great option.
However, if you’re an aspiring entrepreneur dreaming of starting her own business or opening up a boutique, selling on Amazon may not be the way to go. It could help you raise the money you need to get started the way you want to, but it isn’t the way to create a fashion brand and start your own empire. If that’s your goal, you’re likely better off selling on Facebook or starting your own boutique website.