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Amazon wholesale marketing is one of the key things to learn when optimizing your Amazon business. Optimizing your listing to produce high impact.
Dan Meadors of The Wholesale Formula has a business in Reverse sourcing wholesale.
Their Amazon business has done $25 Million in revenue over its lifetime.
They have Taught 1000s the same model, and have had 100s of student success stories
Free Workshop:
Walking through the details of the process, with examples of product selection; how many units you can sell when sharing a buy box.
Reverse sourcing wholesale
- Find a product doing well on Amazon
- Contact manufacturer directly
- Become an authorised seller of the products
Traditional route
Go to the traditional distributor – blind bad – very inefficient.
Reverse sourcing means you go directly to the brand who controls IP in Amazon wholesale marketing.
How do you decide what to sell?
Finding product on Amazon.
Realistically there isn’t a better place to look!
3 Main Criteria for selecting from listings:
- Amazon doesn’t sell the product
- Products with 3 or more sellers
- The product sells numerous times a month
Amazon doesn’t sell
It’s not that you can’t compete
- It’s that they don’t play fair. You can’t share the buy box.
- You can beat Amazon but only by lower pricing.
- Whenever Amazon is on a product, it’s harder to change the listing.
Products with 3 or more sellers
Why not be exclusive?
Because you’re starting from a point where you know the brand will work with 3rd party sellers.
Then it’s opportunity cost – you can’t contact all the brands!
If they are single seller products, they are likely to either be a private label product; or an exclusive relationship.
The product sells numerous times a month
That means a minimum of 40 sales/month.
Wholesale is a cashflow rewarding business model. [you turn your cash over fast]
The worst possible thing is that your money dies.
So you have to focus on products that have a consistent product selling history.
How does Wholesale compare to Private Label in terms of cash required and cash turnover?
The vast majority of products are ordered domestically.
They don’t have a warehouse, may use a prep centre.
First of all, you pay your supplier for the products.
Then they ship in the product immediately
It’s often 7 days or less!
Free Workshop:
Walking through the details of the process, with examples of product selection; how many units you can sell when sharing a buy box.
Credit means much better cashflow
Often get 30-day terms!
Often you can often sell through a lot of the product.
Private Labellers struggle with getting enough cash.
Predictable cash flow
This can be a lot safer than PL for making sure that cash is consistently moving.
If you look at Retail Arbitrage, it’s still more cash-intensive, Because you always pay for inventory upfront.
Why Private Label sellers make good Wholesale sellers
If you look at the skillset that makes up Private Labelling:
The vast majority of listings on Amazon are terrible!
For the brands that Dan works with, they have established fans and followers of the brand. Whenever you can optimise the listing, it has such a high impact immediately.
Private Labellers usually have this expertise of optimising listings.
Approaching manufacturer directly
The reason a brand would be interested in working with you IS that optimisation ability.
Most retailers have a transactional relationship with brands in Amazon wholesale marketing.
Whereas Dan’s model focusses on adding value eg
- Optimize listings
- Work on pictures
Then the brands start wanting to work exclusively with Dan’s company.
Each brand needs its own expert. This skill is currently in high demand.
That demand is only going to go up.
Right now, private label brands are overtaking established brands.
It’s not that the product is better; it’s being driven by the
Who to work with
Typically it’s going to be hard to go for a really big brand.
Normally it would smaller brands.
What size brand should we approach?
Typically it’s via listings:
- Do they have a lot of listings?
- How good are the listings?
- Have you heard of them? Or expect to see in the big box store.
If you’re not sure, reach out!
How to approach brands initially
The first thing Dan would do is go to a website google, look for their “wholesale” tab or contact us and try to set up an account.
Hi, we’re a retailer based in x, we would love to carry your product, what do we need to do set up an account?
How do we maximise the likelihood of getting to work with a brand?
This is the secret sauce for Dan’s company and training on Amazon wholesale marketing.
Email to potential second email and/or phone call.
A lot of closes happen on the phone – it’s easier to relate and give info over the phone.
Student example from Dan’s course
The student moved to the US in 2011, didn’t speak English.
Set up business in 2014 after going through course up
Got an account with “Espeez” who make rock candy (it’s not usually in Walmart)
Espeez were doing $160K a year in sales
Then he went through and optimised the listing and ran sponsored ads.
Within 12 months they went to $1.1M in annual sales.
Selling a wholesale based business
Then he sold his company which had an agreement with Espeez!
The agreement and SOPs – sold for $400K via Quiet Light
Now he gets s a % of gross profits to help manage the company
Example of huge wholesale business sale
eTail sold the business for $75M – 95% of their revenue was wholesale
Your ability to sign agreements and work with brands has never been in greater demand.
The next frontier of sales is online – brands understand this!
They understand that they need to improve their Amazon presence.
They are looking for expertise!
Example of working with a brand
The brand established since the 1960s that Dan works with.
Amazing product, but bad listings.
Last year the brand had $2.5M in sales
Dan’s company has a contract is for 12% of retail sales for their consulting – nearly $300K in revenue for his company!
Free Workshop:
Walking through the details of the process, with examples of product selection; how many units you can sell when sharing a buy box.
Also, contact strategies to convert brands.
They will leave it up for a few days. BUT it will come down at some point.
Thursday 30 Jan 2020 is the earliest registration for the workshop.
Watch my full interview with Dan Meadors
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Of course, if Wholesale selling isn’t something that appeals to you and you’d prefer to launch your own private label product, I actually run a paid course called “Private Label Process” Check out the Private Label Process Amazon Course here. If you’re looking for a UK based Amazon FBA UK Course teaching you how to sell on Amazon’s Global Marketplaces using the Private Label Amazon Selling Model – the Private Label Process is for you.
