Is Wholesale on Amazon Saturated? What’s the Right Way to Succeed?
When it comes to selling online Amazon FBA wholesale model comes to mind. Many ask if the Amazon FBA wholesale business model is already saturated or there is still room? Well, to answer that question we need to go through the entire Amazon wholesale model to discover more about it.
If you are into some kind of belief that you will quickly get rich with your Amazon wholesale business, then you need to something else. FBA wholesale business requires buying and selling wholesale products that can help make a profitable business and there is a lot you need to determine before you go into this type of online commercial venture.
The success or failure of an Amazon wholesale seller is determined many times based on the product that they have selected. If they made the effort to find a product that can generate their profits, is of high quality, has reliable suppliers to ensure high quality, and let you outsmart the competitors, then you can make it a successful business story.
So the selection of the right product is the end game in wholesale on AMZ, what’s the right way to approach it. Well, for you to succeed you would have to search, be market savvy and create a top business plan. Read this entire blog post to increase your chances of succeeding at this AMZ FBA business model.
Know the Work of the Amazon FBA Wholesale Business Model
There are two ways that you can use to make profits and selling on Amazon. There is the reseller model, also known as the Amazon wholesale business model and then there is the private label model. There do exist similarities between the two models, still there exist a lot of differences that one has to understand before they can venture on Amazon.
Amazon Wholesale Model
The reseller model is where a seller purchases brand-name products in bulk to avail the discounts and then turns them around by selling them on Amazon using the reseller model, on an already created business listing. There are many brick and mortar that follow the same business model but that involves a lot more expensive approach which is not the case when you are trying to sell via wholesale. Amazon resellers do not have to overcome such challenges that business owners with a similar business model but with brick-and-mortar presence face.
In Amazon wholesale business, you have to find the right brand that enjoys a good reputation. FBA wholesale business can only succeed if the brand is well received by the customers and the brand owner allows you to sell it as an Amazon wholesale seller.
There is a marked difference between the dropshipping and wholesale models. In dropshipping the seller does not need to have inventory in hand and solely relies upon the suppliers for shipping the product to the customers. Resellers will still have to indirectly manage their inventory or at least ensures that the products demanded by the customers are available in stock. Dropshipping is a model where entrepreneurs get a lot more flexibility. They do not need to worry about brand equity and any other overhead expenses of managing the inventory. They can easily see the products that are trending and include them on their website.
It is a model that a lot of the smaller businesses and individuals love to concentrate on and give great short-term profits to enable them to quickly see their business grow. If you want to ensure highly competitive pricing for this model, you will have to rely on Buy Box a lot. For businesses to remain profitable, they must smartly select their products as well as their product categories to ensure greater profitability.
Private Label Amazon Model
Private label is different from the Amazon FBA wholesale business model in which you are the owner and not the reseller for any product that you want to sell on AMZ. Unlike Amazon’s wholesale business model, here these entrepreneurs buy generic products and then repackage them into their branding. Whereas in the Amazon wholesale model you do not need to add your brand name since you are not its proprietary owner. In the case of private label, you will add the brand name that you have selected on every product that you are selling on AMZ.
If you are selling private labels that do not mean that you are selling cheap, shoddy, or low-quality products to cheat innocent customers of their money. Private label owners do not claim to be selling original products. All they need to do is to source their products from a manufacturer or a wholesaler who supplies them with private labels and not a unique product. It is not easy in the case of the private label model to find a profitable product and quality suppliers. This means that private label brand owners selling on AMZ are continuously under pressure to deliver high-quality products at highly competitive prices since their brand’s or label’s repute is always at stake. Professional Amazon virtual assistants also help you at all stages of launching your product launching, from hunting to launching and ranking till the time your ecommerce starts making profits.
Amazon wholesalers enjoy a lot more flexible approach and the kind of freedom that wholesale Amazon business provides is not afforded by the private label owners. If you can find the best wholesalers for Amazon FBA, you have low barriers to entry and increased chances of getting successful. Private label is a difficult model in the sense that you have to do a lot of research and work to find out those products that have low competition, higher rate of sales, are non-seasonal, and can make you profits for a reasonable length of time.
At the base, you will find a lot of similarities for top-selling with Amazon FBA wholesale business model and private label, regardless of which way you want to go. However, the competitive landscape that you are going to overcome for the Amazon wholesale business model and that of a private label owner is significantly different. In the Amazon wholesale model, the approach of sellers is quite different from how the private label owners find products to sell.
Selecting the Best Products for the Amazon Wholesale Model the Right Way!
There is no simple and straightforward answer to this question of which product is going to sell best on AMZ on a wholesale business as it depends a lot on your situation. There will multiple factors to consider including changing demand trends, the business model that you have opted for, and the amount of money you want to invest. You will also have to take into consideration the fulfillment methods available to you as they have a vital contribution in satisfactorily answering such questions.
For you to get the answer you would have to take into consideration the different variables. Still, we can discuss some of the steps that can ease your journey to finding the best product to sell for Amazon wholesalers.
Finding an in-demand product for your wholesale Amazon business
Make sure that you are only putting your money behind a product that has a lot of demand. There are many great suppliers available that offer great discounts but then their products don’t have any real market demand. If you do not abide by this golden principle, you may end up losing a lot of money. Suppliers also provide catalogs that you can use to hunt for product ideas or you can start searching from the beginning. Still, establishing a product’s demand is key for success.
Amazon wholesalers always try to find the bestselling AMZ categories. There can many be profitable products in a good sort after categories and examples include books, toys, games, jewelry, shoes, clothing, and electronics. These are some of the categories popular for the wholesale Amazon business because of the variation in these products that can be exploited for greater profitability. The best wholesalers for Amazon FBA are always focused on finding products in categories where they have more room to create niches that are difficult to commit but still have enough sales volume to make profits.
You can also consider researching products that are similar to what you aim to sell. If you already have an idea of the kind of product that you want to sell, try to find them among Amazon products and see the indicators that reflect a reasonable demand. A higher BSR (Best Sellers Rank) and good customer ratings reflect that reasonable sales prospects ad also the fact that customers like to buy that product.
Gone are the days when you just had to sift through the Amazon searches to find out the product would sell great. Thanks to the advancement in search tools for Amazon SERP, you can quickly find products and establish their demand on AMZ. There are a plethora of tools available and we are not going to point out a single tool. Still, you can Google and find a whole range of such Amazon tools that can help you determine the total sales potential of a product to sell via the reseller model and the level of competition is going to face.
Now, we have discussed in depth the amount of research you have to do and how it is going to help you narrow down a product for the Amazon FBA wholesale business model, let’s move to the next step.
Finding a product that has low competition on AMZ
Just finding a good product may not necessarily be good enough. We may have to find a product that has low competition so that we can generate more sales in the Amazon wholesale business model. It means trying to hunt a product to sell wholesale on AMZ that does not have a lot of competition or the demand still surpasses already present competitors in the market. Competition is not easy to judge but still, there are certain steps that one can take before we finalize a product for selling via the Amazon wholesale model.
The first thing that we can try to find out is the total number of sellers who are trying to do advertise that product. Even if you see a lot more sellers in the organic results, you also need to have a robust AMZ advertising strategy for buying from wholesalers and selling online on Amazon. You may also consider it beneficial to run searches for the different keywords to find out other competitors also ranking for Amazon. One other method is also to use a Reverse ASIN tool that lets you view the competitors’ keywords and some also tell the cost per click.
The wholesale for Amazon sellers need to evaluate the crowdedness of an AMZ product listing. This is an important factor for the Amazon B2B wholesale business model. It means when you intend to go for buying from wholesalers and selling online on AMZ on the Buy Box, you would have to compete with the other sellers trying to sell the same product of a similar brand. There are tools available out there that can tell you the number of sellers doing AMZ wholesale on the same product listing by one brand owner or company.
On the contrary, the private label sellers focus on the kind of experience they deliver to their customers with their product. They look at their product listing and also how the descriptions are SEO optimized for this purpose. It means to focus on areas of the AMZ product listing to optimize it on their own by managing and improving images, videos, and also reputation management of reviews. They also have to worry about the seller rank too. This is just a glimpse of the difficulties that these AMZ private label brand owners face.
There is no dearth of the tools when it comes to analyzing the competitors and the private brand owners for selling on AMZ can find many paid options with somewhat similar data on the product detail and level of competition that exists in the given categories. They evaluate the data that they collect from these tools to focus on launching their brand for products that have the potential of greater profitability. They mostly start with the Amazon ASIN and can rely on some free tools as well for a limited overview of the competition faced on AMZ for the same products in similar categories. These tools are inevitable for success as a private label seller on AMZ including analyzing the quality of the listing, the total number of sellers for it using the ASIN (Amazon Standard Identification Number), and the FBA (Fulfillment by Amazon) fees involved. They also get data on the product potential, analyze keywords and get more information to further evaluate if they are on the right track.
Once you have all this information as a private label seller, you can move ahead with the launch of the product while keeping the overall competitive landscape in perspective. This same method can also be used for the Amazon FBA wholesale business model with a few modifications. Since you do not have to worry about the manufacturer’s end or handling the shipping of the inventory.
Selecting the most profitable product for Amazon wholesale business model
When you want to go for the Amazon wholesale model, the next step is to measure the demand for a product that needs to be high with the low-level competition. However, you have to turn its sales into profit to make it work for you. You need to make the cost vs profitability analysis before you finalize a product for wholesale selling on Amazon.
Do not try to outcompete your competitors by trying to sell the product at a very low price. The price competition even of wholesale for Amazon sellers is extremely high. Therefore, you have to be careful when selecting a product for your Amazon B2B wholesale to generate more sales and earn the required amount of profit. For you to make money buying from wholesalers and selling online on AMZ, you would have to come up with a pricing strategy that works for the product that you finalized and still delivers the profitability results you desire.
Factor in every cost that is required to be paid for. Don’t just fall for the price tag but also look at the other expenses that get overlooked in the excitement of finding a suitable product. Many other costs must be taken into consideration and can quickly add up if you do not bring them into account at an early stage. You need to have a detailed profit analysis for factoring in the Amazon fees for fulfillment and also shipping costs involved. This also means adding any relevant expenditures involved in relevant tasks and for the management of the inventory.
One way of finding the right products is to look for those that are light in weight and small in size. Even if you do not opt for the FBA fulfillment, it is more affordable to transport and handle inventory of products that is cheap and takes less space for storage. This approach helps you save a lot of money and also increases your profit margins. One way of getting the idea of the costs associated is by checking the FBA fee schedule as per the dimensions of the product that you intend to sell.
Amazon FBA wholesale business model’s success depends a lot on accurately calculating the extra costs involved. The use of the Amazon FBA Revenue Calculator can surely help you get a ballpark figure of the costs associated with your research phase. You can use this tool for calculating any product or ASIN. You can also use this calculator for determining the net profits and the margins for fulfilling FBA in the Amazon wholesale business model. Make sure that you have entered all the required information to your best knowledge to get as accurate a figure as possible.
Once you have successfully shortlisted the products for Amazon wholesale model, you can sell them by accurately measuring the costs before you finalize their sales. Jungle Scout is one such tool that you can also use as a first-time Amazon wholesaler for selling such products.
Now, you know the right way of selecting a product to sell via the Amazon wholesale business, let us go to the next step of finding the right suppliers to source such products.
What’s the way to find the wholesalers for Amazon?
In the FBA wholesale business, there are no products that deliver you guaranteed success. There is no particular list of suppliers that deliver the top quality products. For you to sell products on Amazon you would have to find a supplier and communicate with them to get the product. For that, you need to have the right knowledge.
Things that you must be aware of before finding a supplier for the FBA wholesale business
The first thing that you need to know as an Amazon wholesale seller is recognizing the best supplier that matches your product requirements and is willing to provide you with the product that you are looking for as per your specifications.
There are different supplier options available to you. As a reseller, you will have to look for the brand manufacturer. If you want to sell as a private label brand owner, try finding a supplier for the generic wholesale products, upon which you can build your brand. Make sure that you make the effort to find mark what you need and then accordingly search for it.
There are many wholesalers online. Not many of them will deliver you the kind of business dealing experience. This is why try finding wholesalers from Better Business Bureau. When you tend to reach out to the certified networks, it saves you a lot of unexpected heartaches and this is particularly true for the new sellers of wholesale products. There are many well-written guides available that you can use to say clear the wholesale supplier scams.
When you aim to become of the top-earning Amazon wholesalers, keep your focus wide. Do not just settle down for a few products and take time to develop your niche. In Amazon wholesale business, try to find the top brands and manufacturers. You also need to ascertain the right distribution channels. You also try to find the best wholesalers for Amazon FBA that you should work with. Once you develop this type of thinking, you would be able to find the wholesalers best for your Amazon business.
The above-shared details only serve you as a pretext and help you better your chances of succeeding by learning the right approach to suppliers as soon as you locate them.
The most effective way to communicate in the Amazon FBA wholesale business model
When you decide to enter the Amazon wholesale business model, you need to understand what your supplier wants out of this deal. You need to find out a way to negotiate a win-win. It is among the first few steps that you must not miss and do a bit of research to perfect it for your Amazon wholesale model of business.
Make sure that you brush up on your negotiation skills. Always go prepared when going into a supplier negotiation. Even if you want to start Amazon B2B wholesale as an individual, you have to learn to negotiate.
So what do suppliers want in the wholesale for Amazon sellers’ business deal?
You have to learn more about your supplier when the option for the Amazon b2b wholesale model. Before you decide on buying from wholesalers and selling online, always keep in mind that the supplier like any other entrepreneur would like to have a stable source of income. Unless you offer them that kind of income stability besides larger deposits, long-term contracts, and promise of more business, you would struggle to find a stable business partnership. This means understanding the suppliers’ needs and accordingly providing them the kind of assurances that make commercial sense for them to do business with you.
When you are buying from wholesalers and selling online, you have to leverage the competition. You would have to negotiate with multiple suppliers at any given time, initiate conversations with various wholesalers, and give competing offers to have more deals with the right suppliers.
Express your desire to take your business relationship with them as a partner. Make sure that you deal with the wholesalers in a courteous, professional, and responsive manner. Consider your approach as getting in touch with a business for potential partnership opportunities and try to find the most cost-effective method. Suppliers like such a friendly approach and it will help you build a long-term beneficial business relationship.
Make sure you learn more about the negotiation tactics that you can use with a supplier before you can move forward with your business proposal.
Some of the resources that you may find useful include:
- 13 Tips for Negotiating with Suppliers on Inc.com.
- How to negotiate with powerful suppliers – HBR (Harvard Business Review).
- Negotiate the Right Deal with the Suppliers
Use a trustworthy source for searching wholesalers like an established network or directory
In the beginning, you will find wholesaler networks to be a great place. You will have to consider the top directories that require payment of a subscription cost but it is well worth the expense because of the high-quality research that they have done to find the top sources.
These wholesale networks let you access thousands of verified wholesalers without any extra membership or subscription costs involved. This approach saves you a lot of time finding the top wholesalers. You can directly contact them to get the information on the wholesalers and you don’t need to have a paywall or registration.
There are many high-rated networks that you can get help from for Amazon FBA wholesale business model. You can enjoy the various membership benefits and resources for accessing high-quality and certified suppliers. Many of these networks and directories also offer a preview to help you easily start with your research.
Some of them have specialized to offer support from beginning to end to the ones offering wholesale products to sell. They have top-quality contacts in their directories and also tools that let the businesses aiming for Amazon’s wholesale business model research the products they want, organize supplier search, and assist them in effective communications with the suppliers. Therefore, if you are planning to go for the Amazon wholesale model, you can get a lot of benefits from these contacts.
Alibaba is a globally established marketplace where buyers and suppliers meet. The experience of each business owner may vary. There are cases of someone finding not very high-quality products while others being able to source top-quality products. Thus, if you want to use Alibaba for wholesale on Amazon FBA, you need to do in-depth research.
When you use supplier directories to find wholesale distributors for Amazon FBA, you may find it an expensive way to do your research. Thus, when you can find a good wholesaler, you can discontinue the use of such a directory and cancel or not renew its subscription. If you want to save yourself from the frustration of finding suppliers at a later stage, this little investment can save you from a lot of heartaches and frustrations in finding the right suppliers.
What’s the right way to selling wholesale on Amazon?
Just finding the right supplier won’t help you as you have to make smart product purchasing decisions and make a comprehensive plan on how you are going to sell these products.
Let us share with you some of the top takeaways that you can use to your benefit.
Always keep FBA (Fulfillment by Amazon) as your top priority. It is just the right program for small business owners and resellers. Ideally, you must ask your wholesaler to directly ship the products to the Amazon warehouse. You will have to pay the extra processing fee, which is well worth the hassle that you would be able to avoid.
You also need to have a plan in place to manage your inventory. If you don’t want to go the FBA route, you need to manage your inventory cost-effectively and keep up with the shipping schedule.
You also need to have a plan for promoting the products you want to sell via the wholesale Amazon FBA model. Many wholesale distributors for Amazon FBA suggest that you use advertisement. The most common method considered or Amazon FBA wholesale business model is PPC (Pay Per Click) and you need to have a plan to ensure that your products reach the intended customers on Amazon.
Many factors need to be considered for the Amazon FBA wholesale business model including inventory, fulfillment, and promotion for your business plan to help you have a robust start.
You must consider investing time in product research as it is worth the effort
When you want to opt for the Amazon wholesale business model, you must keep in mind that you would have to invest time in finding products and also the market and what you can and cannot do as a seller while keeping your strengths and limitations in perspective. The Amazon wholesale model requires a lot of time but still worth the effort, in the end, to help you start the right way.
When you put a plan in place and use a strategic approach, with time, you can surely increase your sales and start a successful wholesale products business on AMZ.
Hopefully, you have got your answer to the question, “Is Wholesale on Amazon Saturated?” and you can surely find success if you follow this AMZ FBA wholesale model in a more planned and structured manner.
AmazinEcommerce.com is a leading Amazon FBA consultant offering its services to clients across the globe. AmazinEcommerce.com is a premium Amazon FBA Private Label & Wholesale Consultancy assisting in managing your AMZ store including private label, micro-private label, listing optimization (SEO), product photography, 3D rendering, videography, EBC / A+ Content, PPC, Packaging, Design (including Store Branding), and reinstatement of suspended AMZ accounts.