Whether you’re trying to come up with a lucrative side hustle or want to ditch your current 9 to 5 in favor of starting your own business, selling wholesale on Amazon could be the perfect solution. As the world’s largest retailer, Amazon sells products, both its own products as well as products from a vast network of third-party sellers. For savvy entrepreneurs, this means you can harness the power of Amazon’s name and features to put your merchandise in front of countless potential buyers spanning the globe.
If you’re serious about launching a successful business, though, it’s important to do a bit of homework before jumping in with both feet. Learning how to begin selling wholesale on Amazon to turn a profit isn’t difficult, but there is a process you need to understand to ensure you don’t end up getting in over your head and losing money instead of earning it. Keep reading to discover some helpful tips!
The Basics: How Amazon Wholesale Works
There are a few different methods of selling wholesale on Amazon. One option is buying wholesale products from a distributor and then immediately turning around and reselling your own wholesale lots on Amazon at a slightly higher price. While buying directly from a wholesaler is the best way to score the lowest possible prices on things like wholesale t-shirts and wholesale hoodies, a lot of people still turn to Amazon when they are looking to buy in bulk. They might be looking for something simple, like a dozen hats to customize for a family reunion, stocking up on garments for personal wear or even just willing to pay a bit more than rock-bottom pricing to take advantage of Prime shipping.
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Whatever the case may be, there are plenty of consumers who are looking for wholesale lots on Amazon and are willing to pay a slighter higher price than they would if ordering directly from a wholesaler.
You could also, of course, buy wholesale lots of products and then sell each item as-is at retail pricing. Buying a basic t-shirt for around $2 and then selling it on Amazon for, say, $12 is a solid way to make a pretty decent profit.
The other option is buying wholesale products, customizing them and then selling on Amazon at full retail price. If you know how to crop a sweatshirt, for example, you could buy hoodies in bulk at a fraction of the normal retail price, crop them in cool, unique ways and then sell them on Amazon for a hefty profit. It’s possible, of course, to buy virtually any type of product in bulk and resell online. Reselling wholesale clothing and accessories is simply one of the most appealing options for many beginners because it’s relatively easy and affordable to get started.
There are pros and cons to each option. Buying and reselling wholesale lots may be the easiest option, but it tends to have the narrowest profit margin. Customizing wholesale apparel with screen printing, embroidery or other techniques has the most room for profit, but, of course, it requires the largest investment of time. Buying wholesale garments and selling them individually at retail prices offers a good balance of profit and time investment, but you’ll have to deal with competition from a lot of other sellers offering the exact same products. It’s up to you to determine which option works best for you and will help you reach your personal goals.
Getting Started
If you want to be successful in selling wholesale on Amazon, there are a few important steps you’ll need to take to get started. First, you need to set up an Amazon seller account. The process is straightforward, but you’ll want to take your time to ensure you do it properly and don’t make any mistakes that could end up causing additional expense or frustration later.
Next, obtain a sales tax ID number. While some suppliers don’t require customers to present this document when ordering, having it gives you access to a wider range of suppliers and enables you to collect and submit appropriate sales taxes to your state’s tax authority. Now is the time to do some research regarding any other licenses or permits you may need to legally start a business in your area. You might feel like going the legal route is a lot of extra unnecessary work when you’re just starting out, but it’s best to take care of the legalities as early on in your new business as possible.
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With an Amazon seller account and your state tax ID number, there’s just one important thing left: Starting capital. As the saying goes, it takes money to make money. If you plan on selling wholesale on Amazon, you need to have the money to buy products. The good news, though, is that you can get started even if you are working with an extremely limited budget. If funds are tight, start with something small and inexpensive, like wholesale t-shirts. Once your first few sales start rolling in, use your profits to purchase additional merchandise. It takes time and dedication, but it’s not impossible to build a thriving business by using a snowball effect and continually investing your profits back into your company.
Make Your Mark Online
Even if you are planning on selling exclusively through Amazon’s marketplace, it’s smart to set up your own business website and email address. You could set up a simple Gmail account with your business name, but having your own domain appears more professional to both your customers and suppliers.
The first step is purchasing your domain. Ideally, yourbusinessname.com is your best bet. In some instances, though, you may need to get a bit more creative. Whatever you end up choosing, make sure it’s memorable and reflects your business. If you’re new to the world of websites, iPage provides simple and affordable solutions for people of all skill levels. Keep in mind that you don’t have to list and sell products on your website. A basic website featuring your business’s name, logo and story, along with contact information and a link to your Amazon page, is sufficient. If you aren’t comfortable setting up a website and email account on your own, Fiverr is a great place to find help at affordable prices.
Find Suppliers
Finding suppliers and sourcing your products are often the most difficult elements of starting an online business. You need the best possible prices, of course, but you also need suppliers you can depend on to offer high-quality merchandise, deliver products on time and provide exceptional customer service when it’s needed. If you’re planning on purchasing wholesale garments, ShirtMax is an excellent supplier option. Keep in mind, though, that even if you plan on exclusively sourcing your merchandise from us, you’ll still need suppliers for things like labels, tags, supplies for customizing apparel, etc. Make sure all of the companies you choose are ones you can depend on for quality, efficiency and customer service.
There are plenty of ways to find suppliers and products. You can attend trade shows, scour Amazon to find products that are selling well and contact the manufacturer or even purchase lists of wholesalers. Your best bet, though, is spending some time on Google or whichever search engine you prefer. There’s a plethora of information out there about wholesale distributors. Spend some time learning about the various options and reading reviews from buyers.
Choose Between Fulfillment by Amazon and Fulfillment by Merchant
This step is all about determining exactly how to get your products into your customers’ hands. When selling via the Amazon marketplace, you can choose fulfillment by Amazon (FBA) or fulfillment by merchant (FBM). Choosing FBM means that you are responsible for packing and shipping each individual order. When you opt for FBA, however, you ship your products in bulk to an Amazon warehouse and then Amazon workers are responsible for getting your products into buyers’ hands.
The FBA program can save you a lot of time, especially once you start making a significant number of sales. To put it simply, Amazon has the manpower to process millions of orders every single day. Chances are, your small business doesn’t. While Amazon does take a fee for the FBA program, the fees are often less than the ones associated with handling packaging and shipping products on your own. For these reasons, FBA tends to be the best option. As always, though, it’s important to do some in-depth research to determine which method is right for you.
If you decide to go with FBM, you’ll need to order your wholesale products, get them ready for purchase and then ship them off to Amazon’s FBA warehouse. The process for shipping products to Amazon is pretty straightforward, but you need to be careful to avoid additional processing and handling time.
Start Creating Product Listings
By this point, you’ve already put a lot of hard work into your business. Now it’s time to start seeing it pay off! When you’re ready to start creating product listings on Amazon, you’ll need to provide information, like the product’s manufacturer or brand, available colors and sizes, material, etc. You’ll also need to classify your products and add keywords to make it easier for potential buyers to find them.
If you’ve ever done any shopping online, you know how important detailed product titles and descriptions are. It’s crucial to provide as much information as possible to help potential consumers make buying decisions when they are unable to see or feel your products in person.
Remember, though, your product description isn’t exclusively for potential buyers. It’s also a powerful tool that has a major impact on how visible your merchandise is in both Amazon search results and when people perform online searches. You don’t need to be a search engine optimization (SEO) guru, but having a bit of Amazon SEO knowledge is hugely helpful. Learning how to optimize your product listings and descriptions increases the likelihood of your products showing up at the top–or at least the first page–of search results. This makes your products more visible and more likely to sell.
It’s important to note, however, that Amazon is always updating its algorithm. As a result, a listing that’s perfectly optimized and showing up on the first page one week may end up buried under other results another week. If you want to be successful selling wholesale on Amazon, you need to keep up with the latest updates and adjust your listings and descriptions as needed.
Market Your Products
Once your items are listed on Amazon, you can start making sales right away. If you want to boost your chances of success, though, you’ll want to do a bit of marketing. Setting up social media profiles for your business is an excellent option. When you do, you’ll be able to share photos of your products as well as links to their listings on Amazon. You can also invest in sponsored posts to put your products in front of people other than your followers. For a relatively small investment, you could significantly expand your audience and build greater awareness of your brand.
The Bottom Line
Selling wholesale on Amazon has proven to be a lucrative endeavor for many people. Whether you are looking to quit your day job in favor of being your own boss or you’re just looking for a side hustle to earn some extra cash, becoming a seller on Amazon could be the opportunity you’re looking for. It takes hard work, dedication and financial investment, but with patience and perseverance, you could become the next big success story!
