How To Start A Wholesale Amazon FBA Business in 2021
The wholesale ecommerce market generated over $2.64 trillion in 2018 and it accounted for nearly 1/3rd of all wholesale sales. These trends will only continue to grow as the wholesale market globally starts to adopt ecommerce. Many of the successful wholesale industry leaders aren’t leveraging ecommerce properly and this is a huge opportunity for sellers to enter the market.
Sellers are not directly competing with big wholesale distributors, they are partnering with Amazon to compete in the market. By leveraging Amazon’s fulfillment and customer networks, new sellers can enter the market and scale their business to six and seven figures within a matter of a few years.
Why wholesale?
Even with popular reselling strategies like retail arbitrage and private label, a growing number of sellers are shifting to wholesale as their primary selling business model. Wholesale empowers sellers by giving them the flexibility of retail arbitrage with the scale of private label. This allows wholesale sellers to experiment and test many products and stick with what sells best. Since wholesale has certain requirements, there’s a higher barrier to entry and that makes competition less for wholesale sellers.
Additionally, sellers who use other strategies like retail arbitrage and private label can pivot to wholesale with some work. With wholesale, there’s already existing demand for a product. All sellers have to focus is finding a good niche, supplier and shipping into Amazon. By doing this, sellers can launch one successful product after another and build their Amazon wholesale business.
Selling wholesale products on Amazon is a great business model because you can get bulk orders and repeat orders. Wholesale businesses often have a major portion of their revenue coming from a few clients that make a lot of repeat orders. Amazon provides this for sellers and wholesale customers can easily reorder from the seller once they run out of inventory.
Wholesale selling on Amazon gives sellers real-life experience with managing a wholesale business. Sellers can use Amazon as their launchpad to build their own wholesale business. By selling on Amazon, you will gather the necessary knowledge and suppliers. You can then leverage this to build your own customer base outside of Amazon and grow your business.
Why Amazon?
Starting a real wholesale business is very tough, especially without prior experience. Ask anyone you can find who grew their distribution or wholesale business. They will likely inform you it took several years to even be profitable, let alone succeed.
Amazon also has a thriving B2B (business to business) marketplace. Instead of the common consumer marketplace that everyone is aware of, Amazon has a lot of business customers that are willing to buy products in bulk. Since launching a few years ago, Amazon B2B is already making over $10 billion in sales annually. Sellers make up nearly one half of the sales for B2B customers.
With Amazon, you can find products with existing demand, find suppliers, use Amazon’s fulfillment network and make sales. By using Amazon for wholesale, Amazon basically handles all of the hard aspects of running a wholesale business. This includes finding a niche (Amazon has many to choose from), finding a customer (Amazon already has millions), fulfilling orders to the customer (Amazon has the FBA network).
Wholesale sellers on Amazon only have to focus on finding good products to sell, finding a supplier and shipping to Amazon. Once sellers find a good product, all they have to do is keep reordering and this will generate sales.
Now that you are familiar with the opportunity of selling wholesale products on Amazon, let’s dive into what you actually need to get started with a wholesale Amazon FBA business. This will be the real requirements you need to do step-by-step to go from where you are now to actually having a real wholesale Amazon FBA business.
Requirements needed to get started
Professional seller account: The first step of starting your wholesale Amazon FBA business is to actually get approved to sell on Amazon. It’s important to do your seller application correctly because if Amazon rejec