Navigating the world of Amazon Wholesale can be intimidating for beginners. This article will demystify the process, offering clear guidance on how to start your own venture into this lucrative business model.
From obtaining necessary certifications to performing wholesale product research, we’ve got you covered.
Your Amazon wholesale journey can be kickstarted with a budget of around $3000.
Necessary prerequisites include having a Limited Liability Company (LLC), obtaining a resale certificate from your state (if you’re in the US), and maintaining a professional website and email. If you’re based in the UK, a VAT number is required.
Understanding the Wholesale Product Research Criteria
To ensure success in your Amazon wholesale venture, it’s crucial to understand the wholesale product research criteria. This guide will outline key factors to consider.
Profit Margin and Price
To achieve a healthy profit margin, aim to list your product on Amazon at a price 10 to 15 times its cost.
Steer clear of products which have only one FBA (Fulfillment by Amazon) seller. It’s vital to study your potential competition carefully. Note that Amazon gives preference to FBA wholesalers over FBM (Fulfillment by Merchant).
Keep in mind that Amazon usually pays every 14 days. However, for first-time sellers, the initial payout may take between 15 to 20 days.
Product Reviews and Ratings
Products with 15 or more reviews and a rating of 4 or higher tend to secure more sales and win the buy box. Therefore, the reviews and ratings of your chosen products matter significantly.
Best Seller Rank (BSR)
Aim for products with a 90 to 180 day average BSR. It’s preferable if Amazon isn’t constantly selling or out of stock of these products. Using a tool like Keepa can provide insights about Amazon’s stock levels over the past 90 days.
Ensure that there are 3 to 4 minimum FBA sellers for your selected product. If Amazon is out of stock, you’re likely to win the buy box when your product is in stock.
It’s recommended to deal with products that have a standard package weight of not more than 2 kg.
Products to Avoid
Just as there are key criteria to follow in product selection, there are certain types of products you should steer clear of.
- Easily breakable products, such as those made of glass or of a fragile nature.
- HAZMAT products, which can catch fire easily and pose shipping and storage dangers.
- Products with multiple variations, such as differences in size, color, and quality. These can be difficult to manage, especially when starting.
- Products that plug into electrical sockets due to potential liability and quality issues.
Recommended Product Categories
While your choices may vary, here are some categories we recommend considering for your Amazon wholesale business:
- Health and household
- Home and kitchen
- Industrial and scientific
- Kitchen and dining
- Pet supplies
- Art, craft, and sewing
- Office products
- Patio, lawn and garden
- Sports and outdoor
- Tools and home improvement
- Toys and games
Leveraging Your Supplier as an Asset
Remember, in wholesale, your supplier is your asset. Over the years, we’ve collected thousands of reliable suppliers you can access here.
Suppliers, Distributors and Wholesalers: SourceSupreme.com
Scannning Inventory Sheets: Scan Unlimited, Analyser Tools
Product Charts and History: Keepa
One Click View Stats: AZinsights
Starting an Amazon wholesale business can be an exciting and profitable venture. With the right knowledge, a clear plan, and a good supplier, your wholesale business can be a success.
Make sure to perform thorough research on potential products, understand the Amazon payout system, and pay attention to reviews and ratings.
1. How much capital do I need to start an Amazon wholesale business?
You can start an Amazon wholesale business with a budget of around $3000.
2. What kind of products should I avoid in my Amazon wholesale business?
Avoid easily breakable products, HAZMAT items, products with multiple variations, and those that plug into electrical sockets.
3. What are some recommended categories for Amazon wholesale?
Recommended categories include baby products, health and household items, home and kitchen supplies, industrial and scientific goods, among others.
If you found this guide helpful, we recommend checking out our other comprehensive resources. We have a Complete Online Arbitrage Guide for Beginners, perfect for those wanting to explore more e-commerce strategies. Also, our Complete Guide for Beginners on How to Start an Amazon Private Label is a great read for those considering the private label route. Finally, if you need more insights on the wholesale business, read and bookmark our Complete Guide for Beginners on How to Start an Amazon Wholesale Business offers deeper dives into the topic. Happy reading and best of luck with your e-commerce journey!