{"id":6015,"date":"2020-03-23T10:29:12","date_gmt":"2020-03-23T10:29:12","guid":{"rendered":"\/?p=6015"},"modified":"2024-03-26T20:11:30","modified_gmt":"2024-03-26T20:11:30","slug":"sourcing-products-to-sell-wholesale-on-amazon","status":"publish","type":"post","link":"https:\/\/tacticalarbitrage.com\/blog\/sourcing-products-to-sell-wholesale-on-amazon\/","title":{"rendered":"Sourcing Products to Sell Wholesale on Amazon"},"content":{"rendered":"

Selling wholesale on Amazon has plenty of perks and benefits, but it also has its downsides. It is much harder to start selling wholesale on Amazon than it is compared to using retail arbitrage or being a private label seller.<\/span><\/p>\n

One of the biggest perks of selling wholesale on Amazon is that the competition is not as strong, and, in most cases, you will be selling products from an already established brand.<\/span><\/p>\n

This article is a guide on how to source products to wholesale on Amazon. We will touch on what constitutes a potential wholesale product.\u00a0 We will also focus on sourcing tactics directly from manufacturers so you can sell them on Amazon.<\/span><\/p>\n

\"Sourcing<\/p>\n

What is Wholesale Sourcing?<\/span><\/h2>\n

Wholesale sourcing is an Amazon business model, which means that you buy products directly from manufacturers and then resell them to consumers.<\/span><\/p>\n

As the wholesaler, you are acting as a bridge between the manufacturers and the final consumer.\u00a0 You are not creating a new brand or improving the product in any way. You don\u2019t get to add to the value of the products.<\/span><\/p>\n

Typically the process goes like this:<\/span><\/p>\n

    \n
  1. Build Relationship<\/b> – You meet and chat with the manufacturers in person or by phone<\/span><\/li>\n
  2. Right To Sell<\/b> – Obtain the right to sell their products<\/span><\/li>\n
  3. Buy All You Can<\/b> – Purchase your comfortable quantity of products as you can in order to sell on Amazon.<\/span><\/li>\n<\/ol>\n

    Most manufacturers have a <\/span>minimum order quantity<\/b> (<\/span>MOQ<\/b>). This is the minimum quantity you can order as a wholesaler.\u00a0<\/span><\/p>\n

    This can act as a barrier for most small-time sellers as they are often higher compared to the what you can sell a retail arbitrage business.<\/span><\/p>\n

    Aside from the higher cost of starting a wholesale business on Amazon, there is also the barrier of obtaining the right product to sell on Amazon. You cannot sell <\/span>some<\/span> branded products on Amazon without obtaining permission from the manufacturers.\u00a0<\/span><\/p>\n

    As such, before placing your first order, you might want to obtain permission from the manufacturer or distributor.\u00a0 Some products are gated, or closed from selling Amazon.<\/span><\/p>\n

    This gated process is easily overcome with documentation from the manufacturer.\u00a0 This is either in the form of a letter or proper invoices.<\/span><\/p>\n

    How Wholesale Differs from Retail Arbitrage<\/span><\/h2>\n

    As previously mentioned, wholesaling involves buying products directly from manufacturers and reselling them on Amazon to the final consumers.<\/span><\/p>\n

    Since the process of sourcing for these products is pretty much straightforward, it is quicker for wholesalers to restock their inventories, and they don\u2019t need much guesswork in regards to the next items to sell.<\/span><\/p>\n

    Most retail arbitrage products out there are branded. This means that the product already has a customer base.\u00a0 Some customers may be familiar with the particular brand.\u00a0\u00a0<\/span><\/p>\n

    This takes out all the necessary work needed to build trust and confidence in consumers before they purchase the product.<\/span><\/p>\n

    Still retail arbitrage involves a heavy investment in time going into each store to locate profitable products to sell on Amazon.\u00a0 Another factor is the added cost of time and money to prep each product.<\/span><\/p>\n

    \"How<\/p>\n

    What\u2019s the Deal With Online Arbitrage?<\/span><\/h2>\n

    Online arbitrage is different from selling wholesale on Amazon. This is because it requires more time in the sourcing process.\u00a0\u00a0<\/span><\/p>\n

    Sellers will need to look for their products from different sources such as online retail stores to find the place offering the same item at the lowest cost.<\/span><\/p>\n

    You need to find a source that offers the item at the lowest cost.\u00a0 Next, you buy them in bulk and then resell the products on Amazon FBA at a higher cost to make a profit.\u00a0<\/span><\/p>\n

    Searching through hundreds of stores and keeping track of the different prices out there can quickly become unmanageable.<\/span><\/p>\n

    \"online<\/p>\n

    Online Product Sourcing While You Sleep<\/span><\/h3>\n

    Tactical Arbitrage<\/span><\/a> provides an easy option for searching through stores to find the lowest price for a particular product.\u00a0<\/span><\/p>\n

    All you have to do is search for products that you want, and Tactical Arbitrage will search through hundreds of stores on the internet.\u00a0\u00a0<\/span><\/p>\n

    It even works for you while you sleep.<\/span><\/p>\n

    What is MAP?<\/span><\/h3>\n

    Online arbitrage offers you a little more flexibility to set your prices either below or above other sellers in the marketplace.\u00a0 Some wholesale manufacturers dictate the bottom price you can sell a particular product for.\u00a0<\/span><\/p>\n

    This is called <\/span>MAP<\/b> or minimum advertised price<\/span><\/p>\n

    This, in essence, is to keep the market fair for all sellers regardless of the quantity they buy from manufacturers.<\/span><\/p>\n

    Wholesaling, unlike retail or online arbitrage, gives you a more relaxed market. Selling a known and trusted brand makes it easier for you to sell larger volumes.\u00a0<\/span><\/p>\n

    The wholesale business model is also much easier to scale over time than retail or online arbitrage since finding and stocking your inventory is rarely a problem in this case.<\/span><\/p>\n

    How Wholesale Differs From Private Labeling<\/span><\/h2>\n

    Private labeling is similar to wholesaling in terms of scalability and ease of stocking the inventory. It also involves sourcing products directly from manufacturers and then reselling them on Amazon FBA.\u00a0<\/span><\/p>\n

    However, unlike selling wholesale on Amazon, private labeling gives you the chance to become the brand owner.<\/span><\/p>\n

    Custom Product Options<\/span><\/h3>\n

    In private labeling, the process is similar to this:<\/span><\/p>\n

      \n
    1. Come up with a product idea or use an existing product<\/span><\/li>\n
    2. Look for a manufacturer to produce them<\/span><\/li>\n
    3. Branding them with your own brand or search for manufacturers who create brandless products<\/span><\/li>\n
    4. Get the right to brand them.\u00a0<\/span><\/li>\n<\/ol>\n

      One great thing about private labeling is that you do not need to warehouse or store your products<\/span>.\u00a0 Most of the time you can send them into a prep center or directly into Amazon.<\/span><\/p>\n

      The advantage of wholesale is the safety mechanism in place by most manufacturers.\u00a0<\/span><\/p>\n

      While selling wholesale on Amazon, you won\u2019t have to worry about other businesses selling the same item at ridiculously low prices. This is adhering to the MAP policies that we discussed earlier.<\/span><\/p>\n

      While you have control over costs in private labeling, there is always the chance that another seller may be manufacturing a similar product.\u00a0 Sometimes this leads to taking over your sales if the price is much lower.<\/span><\/p>\n

      How to Start Your Wholesale Business on Amazon<\/span><\/h2>\n

      When sourcing wholesale products, it is obvious that your aim is to find profitable products. Several different factors affect the profitability of any given product.<\/span><\/p>\n

      The reasons below should all be taken into consideration when sourcing for a wholesale product.<\/span><\/p>\n

      \"\"<\/h3>\n

      Popularity<\/span><\/h3>\n

      You need to consider these 3 things:<\/span><\/p>\n