Selling wholesale on Amazon is the B2B model that involves buying well-reputed products from the existing brands on Amazon in bulk and receive a fair amount of discount from reselling them to the consumers (or either retail).
In this sense, you can earn a fair margin of profit without worrying about marketing or branding the new products, inventory, and the risk of product failure.
According to recent studies, almost 170 million unique customers opt for Amazon for their purchase. With that vast number, Amazon becomes your ultimate choice of retailing, reselling, and wholesaling.
However, it’s not that easy if appropriately done under some expert’s parenting who guides you through all the nuts and bolts to sell as a wholesaler on Amazon. Besides, it’s not guaranteed that if you have created an account, then you will be successful too! It’s a deep niche that needs to be studied. Here are some of the pros and cons of selling wholesale on Amazon that you always wanted to know.
Pros of Selling Wholesale on Amazon
As mentioned earlier, Amazon has become the go-to spot for shoppers in the recent paths with several reasons to explore. What we’re going to dig out today is how the retailers or wholesalers can understand that Amazon is the best way to sell their products?
Pre-built Product Reputation
The biggest upvote for selling as a wholesaler on Amazon is that the product already has the market demand for years. For example, if you think of wholesale “Nike” sneakers, you might not need to put your own time or cash in promoting, as the purchasers for your items will, as of now, rush to Amazon.
However, the percentage of competition in your niche will decide how much time and effort you need to make an impression while ranking your products on top of Amazon search results.
In the same way, if you have selected a considerable crowdy, saturated, and competitive niche that requires more time to bring ROI (under your inexperienced career), then you can easily switch some other product after selling the current inventory.
Since Amazon customers aren’t limited to a specific geographical area, there is a strong case for your product to be sold worldwide. In the same sense, you can avoid that downward sales trends.
The wholesalers are also not subjected to worry or deal with the payment operations, logistics, and other functional headaches. For instance, in WordPress and Magento, you need to switch your complete design if there is a need to update the store views, languages, and functionalities, etc. But with Amazon, the wholesaler can easily audit if the international audience is loving his catalog!
Another big positive of selling wholesale on Amazon is easy to manage and update inventory on sudden sales increase.
Let’s say if you were running a product manufacturing team for your brand, then getting the products ready on an urgent basis can be a hectic job, whereas your customer trust will also be badly affected.
But with Amazon, if you are directly importing it from the brand, then it would lot more comfortable to refill and forecast your inventory.
No Shipping Hassle
Thanks to Amazon FBA (fulfillment by Amazon), where you can store your inventory and let them ship your orders on their own. There are more than 100 fulfillment centers in the World, the wholesalers can ship their stock or inventory, and they will store it in their warehouse, package it, and ship to the customers.
Moreover, you can free yourself from shipping troubles, and your product will be easily mentioned for Amazon Prime Shipping, increasing your sales exposure big time.
Amazon Brand Approval
After approving your seller account on Amazon, you also get brand approval automatically. With that said, the customer rapidly trusts in your products, considering the retail agent authorizes it. This way, you can raise your product prices and earn more profit margins.
Cons of Selling Wholesale on Amazon
Along with the benefits of selling wholesale on Amazon, there are some stiff risks and challenges too. One must take them with great attention and take them as an opportunity to beat their competition with more competitive research.
Finding a Niche is Hard
Amazon is such a vast market that every new seller struggles to find a less competitive and still high sales record.
When a platform gets such kind of fame, many sellers from all parts of the world want to sell their products as there are fewer marketing costs. Similarly, Amazon is no different! It’s one of the most saturated platforms in terms of multivendor marketplaces.
But it doesn’t mean you’re out of the game! If you do the proper niche, keyword, competitors, and brand research, you can easily make it through. However, that’s where the importance of having a mentor in Amazon wholesale training gets double. A wholesaler must consider having a coach who guides him/ her to all the nitty and gritty of it.
Initial Capital Costs
As the sole proprietor of your new brand, you must have a significant initial investment to buy the products from a brand on Amazon. Again research is the key as you will bear the loss of any product that doesn’t go out of your inventory. So, the profit or loss is all yours, and you have to accept the financial circumstances.
Order Management Sucks
Order management is the first thing you should think while selling wholesale on Amazon wholesale. For example, if you are selling your products on multiple platforms, the chances are high that you mess things up at the start of a career.
At AMZ Soldier, we launched an Amazon wholesale course to train you on orders management effectively. It’s a complete guide to researching, launching, and successfully running your brand product campaigns.
In normal circumstances, all the Amazon orders are sent to the central order management system. Thanks to a bundle of tools available in the market to make it easy.
Investing time is worth it! A new wholesaler has to wait for a significant amount of time until his products rank high in Amazon SERPs. That is where all the competition and effort lies.
Account & Brand Restrictions
Suppose you try to purchase your Amazon wholesale inventory from a brand, distributer, ‘close-out’ type suppliers. In that case, there are chances to be refused due to improper paperwork while filling the Amazon application form. Instead of frustrating, take a deep breath and learn the art of effectively collaborating with the brands.
Selling Wholesale on Amazon: Your Direction?
So, enough talking of benefits and disadvantages of selling wholesale on Amazon! Here is what you can do to avoid all of these hurdles and make a substantial impact at the wholesale community on Amazon.
Invest Time in Research
You must not be in a hurry to buy and launch your inventory from a brand. There are several ways you can imply while researching the products there aren’t on Amazon yet:
- Keyword & Market Research: is the baby step in terms of starting any business. Do a complete keyword research and craft in-depth insights, trends, and the profit margin a product can give you.
- Attend Trade Shows: Participate in the live trade shows of the brands. Doing this will help you coordinate face-to-face and know the detailed secrets of selling their products on Amazon as a third party seller.
- Explore Best Selling Products: While researching best selling products, you can easily find out the product demand, price trends, and if Amazon is selling that product itself (You don’t want to shortlist the products that Amazon sells).
- Avoid Price Wars: Don’t select those products on which the price wars are general among the competitors; otherwise, you will lose the profit.
Learn from the Experts
Confused? In an attempt to deal with so many factors while selling wholesale on Amazon, there are chances of failure at some point. Because, as a newcomer, the wholesalers unintentionally make the mistakes for not having enough knowledge.
So, one of the best ways to master this to get help, training, and mentorship from the people like Jonathan Proulx & Curtis, who have already spend a lot of years as wholesalers on Amazon. We have included every possible detail needed to succeed and thrive while selling brand name products on Amazon from anywhere worldwide!
So, after all that talks, the next thing you must understand is these pros and cons aren’t the criteria to decide either you should start your Amazon wholesale career or not? End of the day, it’s your smartness and expertise to present a customer-loving product from nowhere.
Consider them as a blessing in disguise and accept it as a challenge. Do your research in product research, optimize your sales pitch, and let the customers run after you. You will make it through!