Upsides of FBA Wholesale Sourcing
- You can start FBA Wholesale Sourcing with $250-500
- You can get started selling within a week (cf 3-6 months with Private Label!)
- You can (and usually do) source and sell domestically ie within the same country as the marketplace. No international shipping!
Criteria for filtering for suitable products for FBA Wholesale sourcing
- at least $20 selling price – leaves profit after FBA fees etc.
- at least 40 units/month selling – no products sitting around not selling
- at least 3 sellers – eliminates private labellers
How to persuade brands to work with you on a wholesale basis
– Position your small size as a win: “we only have 2 brands so we’ll take care of you personally”
– Using the facts of a bad Amazon listing of “your” brand vs their competition. Show the truth of their listings on Amazon- no need to brag about yourself.
How to predict Amazon wholesale sales
Only FBA (Prime) sellers priced within 2% of the Buy Box are your true competitors
– add up sales revenue, then divide it by the number of true competitors plus 1 (you!)
-you are selling a proven product -it already has proven sales
Cashflow of Wholesale compared to PL
- PL can take you about 6 months to go from research to product life
- with wholesale you can order a product same day; you can get it live in 7 days
- you can turn $1000 into $1300 within a month (at a typical 30% ROI)
- then rinse and repeat
Capital required to replace day job income of say $50K/year with Amazon wholesale sourcing
That would be around $130K net profit every year.
So your personal income as a business owner could be $40-60K while still leaving decent profits left in the business to grow it.
Protecting your Amazon seller account when sourcing wholesale
- Amazon LIKES this business model. Amazon themselves do it!
- Amazon makes more money when YOU Sell on Amazon than they do (15% referral fee plus FBA fees). So they like you doing this!
- Amazon has actually been REDUCING their presence as a reseller of brands. They prefer to let 3rd party sellers do the actual selling.
How to protect your profits as a reseller when sourcing wholesale
- only work with brands who don’t easily take on new sellers (retailers)
- only work with brands who enforce MAP (Minimum Advertised Price) – this avoids the raise to the bottom
- if a brand DOES allow too many sellers and it’s damaging their sales price, that becomes an opportunity for you to be the solution to their problem!
- if resellers are buying and not being honest about selling on Amazon, you can get them kicked off Amazon by the brand. Or the brand will usually refuse to sell to them again if you inform the brand