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What Is Amazon FBA Wholesale?

Tips and Tricks from an 8-figure Wholesale Seller

Thomas introduces Dan, 1000ASINS, to discuss what is Amazon FBA wholesale

Amazon FBA wholesale entails buying products in bulk from a dedicated supplier. As always, finding profitable products takes a lot of time and effort. With wholesale, you'll also need to secure contracts with suppliers. As always, FastTrackFBA is here to help make the process easier. I recently sat down with 1000ASINS, an 8-figure Amazon wholesale seller, to shed some more light on what is Amazon FBA wholesale. If you missed the interview on the FastTrackFBA YouTube channel, don't worry. Here's the full recap with all of 1000ASINS invaluable tips for getting started as a wholesale seller on Amazon.

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Table of Contents

Who is 1000ASINS?

1000ASINS shares that he made fifteen million dollars of profit in 2023 from Amazon FBA wholesale

1000ASINS, also known as Dan Boufford, started Amazon FBA five years ago. Like many of us, he learned what is Amazon FBA wholesale by watching YouTube videos. Though his business began in his home and dealt with small quantities of products, he's since scaled it to over $1 million in monthly sales.

 

When it comes to what is Amazon FBA wholesale, Dan's straightforward model is similar to other FBA strategies: Buy low, sell high. Of course, continually finding wholesale products that make a profit is easier said than done. This is why another aspect of Dan's model is consistently reinvesting into his business. More on Dan's purchasing and investment strategies later.

What is Amazon FBA Wholesale: Beginner Tips

1000ASINS' top tip for new Amazon FBA wholesale sellers is you need deep pockets.

Selling wholesale products on Amazon presents two challenges. The first is finding wholesale suppliers with profitable products, and the second is getting those suppliers to offer you contracts. Here are Dan's top tips for getting suppliers on side:

1. Start with Low-barrier Suppliers

Reaching out to brands like Sony or Apple is a waste of time when you're starting out. You'll need to work up to deals like that, so contact small, niche, local brands instead. Many of these stores will have a form on their website you can fill out to receive their wholesale price list. They may only have a handful of products, and they probably won't be the fastest sellers, but you'll lay the foundation for a sustainable business.

2. Share Where You're Selling

Be up front about the fact that you'll be reselling online. However, you don't need to mention Amazon FBA from the off. Instead, Dan tells his suppliers that he owns an eCommerce retail company, and Amazon is simply one of the five channels through which he sells. Remember to mention your logistical capabilities, warehouse capacity, and whether you sell internationally too, as this will add legitimacy to your offers.

3. Try Not to Get Discouraged

Out of 1000 potential wholesale brands, Dan estimates that only 20-30% will be viable enough to contact. Of those you contact, 50% may be open to supplying you. After all that, you might end up with just 25 accounts. But that's more than enough to get your business up and running. Don't be discouraged by time-consuming negotiations and declined offers.

4. Put Your Money Where Your Mouth Is

You need deep pockets to get a head start in wholesale. This is relatively easy if you've already built a strong base in Amazon FBA and are willing to spend. If not, some distributors take orders of $1000 or less, but these are rare. Be prepared to take the slow route to success if you can't purchase larger orders. Or, consider external financing options like the ones we discuss later. 

5. Buy Big for Better Prices

Bigger orders mean better pricing and stronger partnerships, so don't be afraid to share your business's strengths, your FBA strategy, and even Keepa charts for similar products. Once you've established your position, you can negotiate for favorable pricing and long-term contracts. This strategy isn't cheap, and could cost up to $500,000 for a month's orders, but it will expedite your growth.

Having said all that, Dan mentions that you shouldn't shy away from smaller orders if you want to test SKUs or are sure certain products will make a profit. If your supplier is open to it, place an $800 order and buy more if everything goes well.

How to Find Amazon FBA Wholesale Products

1000ASINS shares that he searches for profitable wholesale products for Amazon FBA manually

Once they've scaled their business, many sellers will switch from manually finding Amazon FBA wholesale suppliers to automated searches. However, setting up this software requires an in-house development team and a lot of capital.

 

While Dan uses a UPC scanner if a supplier has an extensive catalog, he still touts the benefits of finding wholesale suppliers manually. Here's his strategy:

  • A distributor may offer 100 brands, so check which are already selling on Amazon. These won't supply to resellers, and may file IP complaints if they notice you selling their products. 

 

  • Once you've identified viable brands, review their product lists. You can do this manually if a brand has 40 SKUs or less. 

 

  • Check every product against similar listings on Amazon. Though this takes time, you'll get a better sense of how you can improve existing listings, add new deals, and maximize the supplier's sales. 

 

  • If a brand has more than 40 SKUs, you can use SmartScout to browse their products. This provides a quicker alternative without needing to pay for full automation. 

If you still don't have the time to manually find Amazon FBA wholesale suppliers but want to invest cash in your business, hire a Virtual Assistant. They'll scan supplier and price lists while you handle high-level duties.

 

The FastTrackFBA VA Academy will match you with a VA that suits your selling strategy. With support calls twice a week and 12-week free VA replacement, you'll be able to scale your Amazon FBA wholesale business in no time.

What is Amazon FBA Wholesale Competition Like?

Like any other form of FBA, wholesale means competing with other sellers on Amazon. However, the struggle to gain wholesale contracts in the first instance means you'll be up against sellers before you've even purchased products.

 

The more contracts suppliers have with resellers, the less profit for everyone involved. As Dan puts it, if you're coming in as a supplier's 20th seller, you're cannibalizing the supplier's existing sales. Therefore, they won't make any more money by supplying to you, and you'll be up against even more competition.

 

This is why the backbone of what is Amazon FBA wholesale is securing contracts. Even better, securing exclusive contracts eliminates the competition entirely. Dan's business has five semi-exclusive contracts, and those five accounts generate over 50% of his revenue!

How to Get Exclusive Contracts with Amazon FBA Wholesale Suppliers

1000ASINS tip to land exclusive contracts with wholesalers is to make those brands happy.

To get these coveted contracts, you'll need to make your business stand out, and be the best prospective partner for suppliers. That means:

 

  • Reaching out to niche stores that are not familiar with Amazon FBA 
  • Always keeping a supplier's products in stock 
  • Reporting monthly sales back to a supplier
  • Making suppliers aware of unauthorized sellers 
  • Finding opportunities to maximize your supplier's revenue

 

Additionally, Dan emphasizes that your business needs to bring something extra to the table. Refine your pitch and offer suppliers listing optimization or advertising services. If you can add another layer of legitimacy to a potential partnership, you're more likely to edge out the competition.  

Finding an Amazon FBA Wholesale Partner

An extra way to get ahead of the competition is partnering with another Amazon FBA wholesale reseller. For Dan, the right partner will complement your selling style, and be bold enough to bring new ideas to the table.

 

You can develop strategies with your partner, share best practices, and grow your businesses simultaneously. Plus, you can split the price of bigger orders to provide suppliers with more attractive offers.

 

Whenever your business scores a big contract, build up a good rapport with your supplier, and then suggest another contract with your partner. This way, both businesses will benefit. Also, if your partner lands a lucrative contract, they'll return the favor.  

 

If you want to reach out to other Amazon FBA sellers, or have further questions about what is Amazon FBA wholesale, join the FastTrackFBA Facebook community here.  

Cash Flow Management For Wholesale Amazon FBA

1000ASINS explains that managing cashflow for an Amazon FBA wholesale business can be extremely difficult.

Next up in the what is Amazon FBA wholesale lesson, Dan shared how to keep on top of your capital.

 

Managing cash flow is difficult at the best of times. But, as Dan says, that's exactly how it should be. If you have an excess of capital, you need to start thinking about what to purchase next.

Dan's Wholesale Purchasing Strategy

With a finite amount of cash and lots of potential products, how do you prioritize what to purchase? Dan's answer: Whatever gives you the highest profit margin.

 

Rank your potential products from the highest ROI to the lowest ROI and purchase them in that order. If you have leftover cash, you can buy products with lower ROI.

 

For products with high ROI, look to buy around six months' worth. You can store these products and won't need to worry about significant losses if purchases dip.

 

You'll only need to buy around 2-4 weeks worth of lower ROI products. That's because these items often cost more to store long-term than they make in profit.

External Financing for Wholesale FBA

If you want to speed up your scaling, your cash flow may need an injection. Here are Dan's suggestions for the best external financing options:

Credit Cards

If products don't sell, these add additional risk, so choose credit cards with favorable repayment terms. It'll take some practice to time purchases and repayments perfectly, but you'll always have the necessary capital to replenish your inventory. 

Amazon Loans

While Amazon have high interest rates, they could be far higher. For example, Dan took a $2 million loan at 13% interest. Plus, the approval process is simple, and if you have some promising products lined up, you'll easily make the monthly repayments.

Local Bank Loans

National banks are unlikely to recognize FBA reselling as a legit business. Not to mention, you won't be able to provide securities if your assets are stored in an Amazon fulfilment center. This is where local banks and credit unions can save the day. They'll offer longer-term loans with more favorable interest rates, and they may be looking to diversify their portfolio with an FBA reseller.

In Dan's opinion, a renewable credit line is best. This will allow you to keep the money in your business and balance high interest rates.

Final Thoughts and Things to Consider

1000ASINS' final tip for anyone considering wholesale Amazon FBA is to reinvest profit back into buying product.

After showing me the basics of what is Amazon wholesale, Dan shared some extra things new sellers should consider…

 

Complaints – In most cases, complaints stem from product authenticity issues. Dan suggests that new sellers appeal these and provide Amazon with invoices ASAP. If your sales volume is large, you can get away with a few complaints against your account. However, if you're a newbie, complaints will likely result in suspension and hefty losses.

 

Diversifying – Once you've scaled your wholesale reselling business, you'll have more investing options open to you. For Dan, this meant opening a prep center that works symbiotically with his Amazon FBA business. However, for new sellers, this could mean branching out into different product niches. Whatever you choose, you should always be reinvesting into your wholesale FBA business, even if you're just replenishing your inventory. 

 

Getting wholesale contracts is the next step on the ladder of Amazon FBA success. With the expert tips and tricks above, you'll be well on your way to scaling your reselling business. Good luck!  

Watch the full interview here:

You can find Dan on Instagram @1000ASINS, or check out his prep centre, Epic Prep, here.

 

Now that you know what is Amazon FBA wholesale, take a look at some of our other beginner guides: The Amazon FBA wholesale step-by-step guide, how to analyze wholesale supplier lists, and how to scale Amazon FBA wholesale.

 

We also created a playlist on YouTube named the Amazon FBA Full Course 2024.

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