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Did you know that Amazon’s daily sales revenue is $1.29 billion? And you can cut yourself a slice of the pie through Amazon wholesaling.
Yes, selling wholesale products on Amazon wholesaling is very promising. But to be successful at it, you must know how to choose the best wholesale products. Once you’ve mastered the processes, the next step would be to automate your ads for maximum profitability.
And that’s where Merch Jar comes in. Our tools help boost your Amazon profits while you save hours on marketing tasks.
But first, let’s help you find your way around this Amazon wholesale business.
We have years of experience helping sellers start and run profitable wholesale businesses on Amazon. With our tools, wholesale sellers have been able to simplify their operations and manage their ads, making significant profits in the process.
Using our tools, sellers have saved considerable time and increased their profits by automating their ad management with Merch Jar solutions.
Wholesale business on Amazon involves buying a product in bulk from a brand, manufacturer, or supplier on Amazon and selling it to consumers on the platform.
Getting started as an Amazon wholesale seller requires knowing how the system runs. Here are the basic steps involved in the process.
Several sales models exist on Amazon, here’s how to differentiate wholesale from the others.
A private label sales model involves sourcing goods from a manufacturer and branding it with your label to sell on the platform. This is quite different from the wholesale model which has to do with buying in bulk at wholesale price and reselling at retail price.
The wholesale and retail arbitrage models are quite similar, but differences exist. Both models involve buying branded products. However, while the wholesaler buys in bulk from manufacturers or suppliers on Amazon, the retail arbitrage business owner gets discounted goods from retail stores to then turn around and resell those goods on Amazon at a profit.
As a wholesaler, you have your own inventory and fulfill your orders directly or through Fulfillment by Amazon (FBA). A dropshipping business owner, on the other hand, does not take ownership of the product initially. They wait for a purchase to be made before placing the order while the manufacturer or supplier ships the product on their behalf.
Brands, suppliers, and manufacturers have requirements you must fulfill before you become their wholesaler. These are the common requirements:
A wholesale business on Amazon is profitable, no doubt. However, one aspect many people get wrong is product choice. And once the wrong product is chosen, the venture is already doomed before it starts. Here’s how to choose the best wholesale products.
Selecting a product with high demand gives you an instant edge in the wholesale playing field. This factor is so important that even if you get great wholesale prices on products that are not in demand, you’ll run at a loss.
Conduct thorough research before you make a choice. One way to find high-demand products is by checking the lineup in Amazon’s best-selling categories. Updated hourly, this list can help you study product trends to know which products feature most frequently.
If you already have a product in mind, browse related products to see how they’re doing. Indicators of a high-demand product include the number of customer ratings and a high Best Seller Rank (BSR). To see a product’s BSR, check its product details section.
While choosing a high-demand product is a good idea, it’s important to ensure that the competition is not too stiff. Going for a high-demand item in a saturated market will lead to frustration, not profit. So, make sure to choose a product that’s in high demand but with less competition.
A quick organic search will show you how many sellers are selling the product, and the number could be intimidating. But this shouldn't discourage you. Go deeper and search with specific keywords to know sellers who are leveraging Sponsored Products. To know how crowded a product listing is, use Unicorn Smasher, an Amazon product research tool. You can instantly check how many sellers are on that listing.
Once you have a set of products to target, you should take advantage of Merch Jar’s automated solutions. We help you automate your advertising campaigns so that you don’t have to waste time managing details like keywords manually. It will cull the bad performers automatically.
OK, so you’ve found a product with high demand and low competition. That’s great, but if it has a low profit margin, your ROI will be insignificant, and potential risks will be higher. Analyzing the profit potential of a product will show you if the venture will be profitable and sustainable.
One way to do this is by pricing your product within 2% of the Buy Box. The Buy Box can be found on the right side of the Amazon product page. It has price details with gold buttons that read “Add to cart” and “Buy Now”.
Ensure your price is within 2% of the current price in that box. If the product can give you a respectable profit if you sell within that 2% margin, then you’re good to go. Otherwise, consider choosing another product.
Also, you need to know all the costs involved before setting a price. This will help you determine the potential profit. Take into consideration factors like taxes, Amazon fees, and inventory management.
Heavy products cost a lot to store and ship, and this may eat deep into your profits. Lighter products are not only cheaper to ship, but they take less storage space. Even if you’re using FBA, lighter items still work best. This factor might look insignificant but even a 1% difference can cause you to lose thousands of dollars in the long run. You save a lot in warehousing and shipping costs.
You can fulfill your sales on Amazon in two ways.
FBA is a plan on Amazon that takes the shipping burden off you. Here’s how it works. You ship your products to fulfillment centers owned by Amazon for storage. When a client purchases a product, Amazon fulfills the order on your behalf.
This program is a cheaper option than storing and shipping the products yourself. However, FBA works best for lightweight goods. If you sell heavy products, you might be better off storing and shipping them yourself.
With this method, you fulfill your orders yourself. Amazon would not be responsible for taking care of your orders. It would only serve you as a sourcing, marketing, and sales platform. You’ll be the one to store, pick, pack, and ship your products.
You can choose the best wholesale product to sell and still run at a loss if your ad game is not top-notch. Regardless of the product you choose, the Amazon marketplace is very competitive. But not to worry, Merch Jar offers intelligent ad automation that will boost your profits and still save you time and effort.
Sign up for free now and experience high profits without stress.
