How Do You Find Wholesale Suppliers for Amazon FBA?
One of the best ways to make money on Amazon FBA is to become a wholesale seller. Previously on other blogs, we mentioned other types of sellers like private label sellers, retail arbitrage and online arbitrage. An overlooked avenue for sales on Amazon is to get into wholesaling. Out of the 2 million sellers that currently sell on Amazon, 26% of them are wholesale sellers.
Wholesaling is very similar to retail and online arbitrage, but the seller focuses on selling a large quantity of products. Instead of selling a lot of unrelated profitable products, the seller focuses on building a small catalog of high selling, large quantity items. To get started wholesaling, you’ll likely need some business verification like business address, EIN numbers, etc. to work with some suppliers.
If you are a brand new seller, it’s best to start with retail arbitrage and work your way up to wholesale. Once you are ready to start wholesale, you can use this blog as a reference to find some potential suppliers.
Why do you need to find good wholesale suppliers?
When you think of a wholesale supplier, you generally have an idea of a big warehouse that sends and receives large boxes and shipments. Even if a supplier looks legit, they may not be the best one for you. When talking about a “good” wholesale supplier, I’m referring to one that works well with your Amazon business.
Good wholesale suppliers often have branded, high selling items and are open to working with third party sellers like you. Here are some of the key reasons why you need to find a good wholesale supplier.
Cost
Many “wholesale” suppliers are not actually wholesale, they are smaller businesses that are acting like wholesalers. A real wholesale supplier gives you low prices on a variety of products. The cost structure that a supplier provides you can significantly impact the profitability of your business. Many wholesale suppliers have branded products that sell well on Amazon at very affordable prices.
Some suppliers are the actual manufacturers of a product and they can offer the best prices on the market. Many sellers rush to look at international suppliers, but it’s extremely important to mention that any branded products being sourced overseas have a high likelihood of being counterfeit. Selling any counterfeit items on Amazon can get your account suspended.
Competition
Finding a reliable wholesale supplier will give you a huge competitive advantage. The average wholesale product on Amazon has several sellers that list their products on there. Some sellers are retail arbitrage sellers that have a few products and some can be wholesale sellers. If you have access to a low cost and reliable supplier, you can get the lion’s share of sales of a given product.
This allows you to always be in-stock and make sales. Additionally, you will likely have the best offering since you get your products directly from a supplier. The only way another seller can compete with you is if they also have access to a supplier and they purchase a large quantity of products. Besides that, you are likely to make the most sales on a product if you go wholesale.
Shipping/inventory management:
A quality wholesale supplier can reduce the burden of your shipping and inventory management. When you first get started wholesaling, you should have the product shipped to you so you can verify the quality before sending it to Amazon. Once trust has been established between you and the supplier, the supplier can ship directly to Amazon FBA for you.
You won’t have to store, ship or touch the products because they are going from your supplier’s warehouse to an Amazon warehouse. This allows you to scale your revenue without having to buy or rent space for your Amazon business. You can literally end up selling thousands of products remotely without ever handling returns, customer service, etc. This is a very lucrative opportunity if you work with a high-quality supplier.
What is the process of finding a wholesale supplier?
Finding a good selling product:
Now that we’ve covered the importance of finding a quality supplier, how do you actually find one? First, you need to find a good product. There’s no use in finding the best supplier in the world if their product is not selling on Amazon. You’ll need to do some product research to ensure that a product is in demand before looking for wholesale suppliers. You can do this using free tools like JungleScout estimator or any other tools you might be using. In the product research stage, you should be looking for demand for a product.
A good metric to gauge demand is the sales per month of a product. In the example below, you can see the monthly sales for a toy that has a best sellers rank of 150,000. As you can see, it averages 60 sales per month. If there are 4 sellers on that listing, you can estimate you’ll get 15 sales per month on that product. There are other factors that can influence the sales percentage per seller like if someone has the buy box or if you’re the only FBA seller.
Check price history:
Looking at the average sales per month alone isn’t good enough to invest in a wholesale product. The best sellers rank of a product is not a static metric, it changes based upon the sales volume of a product. A product that has a 50,000 best sellers rank that’s selling hundreds of products per month can have a rank of 200,000 in a few weeks.
This is because there’s a lot of factors that can affect the sales of a product like seasonality, holiday shopping and more. An efficient way to check the stability of a product is to check its history with Keepa. Keepa is a tool that can show different metrics of a product like sales rank, price, etc. over a long period of time. You can go to Keepa.com and search for the product you’re interested in. Once a product comes up, you will see a graph like the one below.