| Wholesale Sourcing for Amazon by Dan Meadors
Wholesale Sourcing for Amazon by Dan Meadors
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Did you know that you can start with no experience when you go into wholesale sourcing for Amazon? Learn more from today’s episode with Dan Meadors.
How can you use wholesale sourcing for Amazon?
Eg: give up day job quickly; build a scalable business; build a sellable business.
The Amazon wholesale model can create a reliable, consistent business.
It’s a very cashflow based business.
They have tried to make something as simple as possible.
Capital requirements for wholesale sourcing
With any physical product business, you do need to have the capital to invest.
Private Label is probably more capital intensive.
For wholesale sourcing for Amazon, you should be able to start with $2000.
Ideal brand partners have a MOQ (minimum order quantity) between $250-750.
With those, $2000 gives you enough bandwidth to access discount tiers and have a few SKUs.
Who can do this?
Dan has had a 17-year old start – now 19, selling millions.
Also, a couple in their 60s and 70s have also successfully adopted.
How quickly can you scale the model of Wholesale sourcing for Amazon?
The model does scale easily because of pace to market.
From seeing something on the screen to selling it is often 7 days!
If you’re running at 30% ROI – that’s 30% month over month growth.
Download their FREE Guide here!
thewholesaleformula.com/amazingfba
How to work without capital
If you don’t have the budget for capital, but you have the skills, you. You can be a consultant.
Agency model for Amazon wholesale
Dan came across a product with 40 sellers on it. Competing with others
That company wanted to turn the business into a sellable asset.
They wanted to have a clean Amazon presence – large reach.
Wanted to run advertising- margins were not enough.
The manufacturer asked if Dan would help set up an account and manage the account for them and just take a commission.
Example
Yesterday signed a deal – working directly with manufacturers
- Sometimes exclusive with a product
- In this case, they wanted massive growth and willing to spend serious advertising dollars.
- Dan set them up on Seller Central and managed the account for a percentage of revenue
- Agency type contract
- Worth $250,000 dollars to their business – interest-free!
Can you start with NO experience of selling on Amazon?
Yes – they have a lot of students who do this.
They struggle with the confidence in making the pitch.
Of course, if you have the experience, you’ll do even better.
Selling your agency service to manufacturers
You have to be clear what you’re selling when you talk to the brand.
If you don’t have a lot of experience, you can’t sell that!
Base on logic rather than experience.
If it’s poor results, they can just stop!
Most decisions are based on understanding.
Dan doesn’t try to sell – he focuses on EDUCATION.
Show them
- Where they’re at
- Where they COULD be
Eg adding 5 quality pictures – it sounds legit because it IS!
You can show competitor listing or something optimises.
They are buying into the RESULT not the EXPERIENCE
You’re not the Guru
Dan says things like: “ I don’t promise I’m the solution. I’m more of a consultant.”
Eg: Dan has worked with 19 brands to create EBC – Enhanced Brand Content.
How does that work? Talk about things that work and invest them in the process.
We’re happy to make a connection with a contractor – they work to create it – and then it goes on Amazon.
Be good at figuring out what the problem is.
There is an outsourceable solution for anything.
The community of the wholesale formula provides this stuff.
The biggest block to wholesale sourcing for Amazon is your fear
Dan and Eric have one major virtue – charging into stuff!
Eg property – they decided 6-8 months ago to invest in properties.
First one was a storage unit – traditional analysis eg cap rates looked amazing.
It was way more tedious to do that
Bought 4-5 houses that were wildly profitable -but only based on the learning from experience.
How to develop a relationship with manufacturers
Work on the basis of deficiency
If there is a listing with garbage images and title etc. but it is still selling, that is a great opportunity,.
For Dan and Eric, it started with them.
Develop processes before you get a person on board.
The first hire meant that they were stuck trying to get value out of an employee.
It’s better to start with processes first and then hire a person to run them.
How to create SOPs (Standard Operating Procedures)
- Do the process.
- If the process was good, record self doing it.
- Then use them to train employees.
- If they can replicate the process consistently, turn that into an SOP.
How to hire employees
Dan encourages manufacturers to think about RESULTS.
Similar to employees – just want smart and hungry people.
When you plug a smart person into a process they will make the process better.
Now, whenever Dan trusts an employee that almost gives them ownership.
Dan will guide it but not do it.
Three Aspects to wholesale sourcing for Amazon:
Scouting, sourcing, selling
Scouting
Operate with typically 3 criteria – to see if it could be a lead. .
Anybody who has never sold on Amazon can start tonight.
Looking for a product with these criteria:
- NOT sold by Amazon.
- Don’t share buy box well. Hard to change detail pages.
- Sold by more than 3 sellers
- Counterintuitive! The ultimate goal is to be the only seller. By creating a ton of value over time! NOT in the first pitch. Instead, provide value, show them what’s possible.
- Start with 3 sellers because want to avoid PL products! The majority of PL creators want to be sole retailer on Amazon. So that doesn’t give good alignment of interests.
- Established sales history
- min. 40 times a month
- Doesn’t want to launch sales
- Their performance has a baseline that won’t get worse than
- How much could it grow?
- Are there clear deficiencies
- Eg one picture
- Bad title
Contact
If hits criteria, look on Google “can see Eye Drops”
Look at their website.
Find contact details.
Sourcing (finding a manufacturer and getting an order)
The goal is to educate them in the processes.
Over time, you’ll end up working with the right partners.
Where you’ll grow seamlessly.
The right partners matter much more than the number of partners
Bad business relationships result from goals that aren’t aligned.
One account represents a profit for Dan and Eric for $250K
You don’t need a ton of accounts to get a great business.
Dan would ideally work with 3-4 brands.
At the moment they work with 45 brands now.
Selling
This includes optimisation and re-engineering.
Monitoring inventory.
Placing re-orders.
How do you get paid?
That can be flexible.
They are an “authorised retailer” but effectively a channel partner.
Often just purchase a product from them and sell it at a profit.
Sometimes one of 2-3 people authorised to do that.
Do offer a pure Agency type deal sometimes.
Normally the. Company is looking for a very specific result.
Eg looking for immediate and massive growth in order to prepare for a sale
Training
Set up special page for Amazing FBA audience.
Dan wants people to understand the model and see if it might be for them.
If it IS for you, it is one of the most scalable models download their guide.
thewholesaleformula.com/amazingfba
Tips for those not yet on Amazon
Jump in! There has never been a bigger opportunity with more viability.
Amazon’s FBA system has empowered normal people to build massive businesses.
Look at what models exist and start experimenting.
Tips for those already doing Private Label
You’re already doing this business model mostly.
Just find products in your searches that could enable you to sell within 7 days.
Avoid the trap of thinking of your products as your brand!
The brand is the value of the service.
Story of total new starters – getting started from Zero
Someone who came into their business 2 months ago.
He started out as a student of the course.
He had never sold on amazon
Started with course in 2016.
Built wholesale line $160K/year
Used strategy in course
Learned over time
He didn’t own the IP but he owned the relationships
In 14 months up to $1.1M revenue
Sold relationship to the brand – set of processes 2.5X of profit (seller discretionary earnings)
Ie around $460K
Listing to closing was a few weeks!
Check out their Website:
http://thewholesaleformula.com/
Other Amazon Wholesale help from Dan Meadors:
https://amazingfba.com/amazon-wholesale/
Some of the links on this page are affiliate links, which means that if you choose to make a purchase, I will earn a commission. This commission comes at no additional cost to you. Please understand that I have experience with all of these companies, and I recommend them because they are helpful and useful, not because of the small commissions I make if you decide to buy something. Please do not spend any money on these products unless you feel you need them or that they will help you achieve your goals.
Watch my full interview with Dan Meadors
July 2, 2020
July 1, 2020
June 30, 2020
