Amazon FBA Whole Business Model – Maximizing Profits & ROI
The Amazon FBA wholesale business model is gaining a lot of traction lately. However, you have to know the right approach to successfully sell and make profits from the Amazon FBA wholesale.
Let us have a look at the best way to approach the Amazon FBA wholesale business.
The right product to sell via FBA wholesale
When you are trying to find a product to sell as wholesale on Amazon FBA, ensure no private label seller or Amazon is selling it. No one can compete with AMZ on the amount of money to spend for promotions. They can also lower the price of their products to a level that cannot be matched by competitors regardless of how deep their pockets are.
It is also not possible for a wholesaler on AMZ to sell if a private label seller has already blocked sellers from offering the same product with their respective listing, even similar-looking products.
When you plan to do Amazon FBA wholesale, make sure that you only connect with established brands. You must not end up marketing for another company and not your private label brand. One of the basics of becoming successful with the AMZ wholesale model of business is to use the success of established brands to make profits. Make sure that you use the Amazon keyword search tools like Helium or Jungle Scout (there are others as well). These tools will help you find out more information about the minimum and maximum price, bulk export or import, filtered searches, or even apply templates for changing price in a snap. Make sure that you use tools like Free Sales Estimator to only find and select products that have hundreds if not thousands of sales per day to find a fair share and ROI fast enough.
Calculating your profits using the Amazon FBA wholesale business model
The prime reason for you to go for FBA wholesale is to find a product that would you make profits. You have to learn the basics of evaluating your forecasted sales and profitability before you decide to put your money into it.
You have to ensure that the product that you are trying to sell is within 2% of the Buy Box.
What is a buy box?
Amazon product page has a widget in it at the right side where you can list pricing and also have a golden button that you can see as “Add to Cart”.
Make sure that the price at which you are offering the product is within the 2% fluctuating rate of what is being offered in the Buy Box. If you are offering a higher price, you will not have your product displayed in the Buy Box.
The product fees involved in Amazon FBA wholesale
You have to know the amount of fee you can expect from a product. You can use the Amazon FBA calculator for calculating the fee. Just enter the ASIN of the product in the FBA calculator, enter the required data and you will be able to compute the fee.
Knowing profitability for your Amazon FBA wholesale business
For knowing your profitability, you would have to minus the cost that you paid for the product and the Amazon fees. If you have reached a positive figure, good job, you can expect profit from your FBA wholesale venture.
You would also have to estimate the total number of units of the product that you have selected to sell. You would have to expect the stock or estimate it and then you can move on to the next step to calculate the exact profits by accordingly taking sales and fees into account.
Calculating your monthly wholesale FBA Amazon sales
There are many tools available online (some paid and a few free), like Free Sales Estimator and the Jungle Scout, that you can use to estimate your monthly sales. These sales that you have calculated will be all the sellers selling that product
3,000 / (9 + 1) = 300 sale per month. It means that 9 sellers are selling the same product and also in the range of 2% of the sales price.
Understanding Amazon FBA Wholesale Turnover
You also need to be aware of the costly fees to pay on Amazon when you are trying to keep two or three months of sales in inventory. For instance, if you take the above-mentioned product, you need to have around 550 to 850 units of it in your inventory to cover the sales between orders.
In Amazon FBA wholesale, you would have to keep monitoring the stock that is required and when is the time to reorder.
Finding the products that have high Amazon potential
If you do not know how to start your research for profitable products for wholesale FBA Amazon, you can use the different tools for this purpose. These FBA wholesale Amazon tools have a big catalog to fit your criteria. Make sure that you know your preferences and give details accordingly.
Suppliers are critical
There is a difference between looking for a supplier in private label than in the case of Amazon FBA wholesale. Different supplier database tools help you find high-quality suppliers in China or anyplace else for getting overseas manufacturers. For wholesale, you would have to directly contact the brand owner.
For you to open a wholesale account, you would have to get in touch directly with the brand owners. Once if you are approved as a wholesale reseller on AMZ that you can place the order and start selling at the earliest. A few of the brands also help the sellers by directly shipping for you to Amazon.
Let us have a look at the benefit of using this method for wholesale FBA Amazon.
No need to ship the products directly from China
By using this method and relying upon your supplier for FBA wholesale Amazon product delivery, you can save yourself a lot of hassle. Most of the brands that you are going to get in touch with are located in the US. There is no need for long waits to get your product delivered and recover payments after weeks or even months on your inventory. You do not have to worry about things like overseas shipments and customs clearance.
No need to wait for a Chinese supplier for Amazon FBA wholesale business model
Amazon FBA wholesale works differently, not requiring you to get in touch with a Chinese supplier to communicate or wait for the next day to get a response. When you go wholesale, you will get in touch with the US businesses, working within the normal business hours.
Amazon FBA wholesale doesn’t require you to create your brand
A key advantage of the Amazon FBA wholesale business model is that you do not have to create your brand like the private label. You would be selling someone else’s brand and this means not starting from scratch to launch a new product. You just source the product that is already selling well on AMZ.
No PPC budget for Amazon FBA wholesale
When you are trying to sell a product with your private label, you would have to set aside a huge budget for running a PPC campaign. You do not need to worry about such an expense when doing Amazon FBA wholesale business. You can still use PPC to gain an advantage but it is not necessary in a lot of cases.
Finding the brand’s contact information
In Amazon FBA wholesale business model, you would be required to get in touch with the brand by just find it via a search engine like Google. There can be many examples of brands that you can easily find with a simple Google search. Once you have reached the brand’s website, you will navigate to the contact section to reach them. In some cases, you may also find the wholesale tab to keep an eye on and use that for getting in touch.
What will you have to provide to the Amazon FBA wholesale distributors or brands?
Now, you would have probably figured out the right method for contacting brands, make sure that you are ready for the prerequisites that you need to fulfill the wholesale account requirements.
Registering a sole proprietorship or business
The first thing you need is to have a legally registered business entity or start as a sole proprietor in a chosen state within the US. Once you fill out the wholesale form given by the distributor or brand, they will ask for this information too.
A resale certificate for the selected state
In Amazon FBA, you would have to secure a resale certificate. In the Amazon FBA wholesale business model, you would have to provide it to most of the brands or wholesalers. Else, they will not allow you to proceed with the Amazon FBA wholesale.
Applying for the EIN Number
The next step is to have an EIN or Employer Identification Number or Federal Tax Identification Number. It is a social security number for your business entity. You will receive the EIN from the IRS (Internal Revenue Service) for free.
This discussion will enable you to easily find suppliers for Amazon FBA wholesale. You will also know the requirements for doing business with them and move to the next step of negotiations. Professional Amazon virtual assistant services can assist you in that if you find it hard to do so.
Contacting negotiating with the suppliers for Amazon FBA wholesale
The next step is that you would have to contact the suppliers and demonstrate ways in which you can add value to their brand. The manufacturers are big companies that remain concerned about things like global marketing campaigns, patents, and new product development for FBA wholesale.
Besides trying to start your Amazon FBA wholesale, you are also trying to increase your online sales and brand presence.
This is something that you can offer in wholesale FBA Amazon. This gives you a lot of advantages in FBA wholesale Amazon business to better sell on AMZ and many of the brands may not have the time, resources, or know-how to do it.
Let us have a look at the ways to add value as an Amazon FBA wholesale business owner.
- You need to find those brands that are not interested in directly selling their products on AMZ. These are the brands that already have a presence on AMZ but it is not easy for them to do so and they haven’t yet succeeded in the past. If you can convince them that you can help them with your better understanding of the Amazon FBA wholesale business model, you are helping them in a way increase their online business.
- Focus on how you aim to assist them in making their product a lot more attractive and how you can effectively address customers’ complaints. It is possible once you have identified the issues and ways to help overcome them.
- You need to identify the problems that you can help them overcome. For instance, you may give them advice on improving the quality of their product’s images or perhaps optimize their AMZ product listing’s SEO.
If you are still not able to convince a supplier or brand, that is not the end of the world. At times, you would have to be patient for the negotiations to become more fruitful. Make sure that you follow up with them regularly.
You would also have to find out ways to find well-established brands which are not already selling on AMZ for Amazon FBA wholesale.
There are different wants to find such brands for doing Amazon FBA wholesale.
- Try to find out those kick-starters that have a lot of backers and have a bright future. These are the business owners that may not be too familiar with Amazon and the advantages that it can offer to their business. As a wholesaler, you must procure some extra units of their products to be able to sell once it gets manufactured.
- There many entrepreneurs that also use Facebook advertisements for starting advertising their products. They work like a Kickstarter and still, they have not yet discovered ways for Amazon to use to their business advantage. You can help them set up the platform and enable them to expand their reach.
- You would have to also follow blogs covering consumers and lifestyles. These are blogs developed by some of the major influencers who can sometimes help you find some great products that have not yet been able to find their way on Amazon.
AmazinEcommerce.com is a leading Amazon FBA consultant offering its services to clients across the globe.AmazinEcommerce.com is a premium Amazon FBA Private Label & Wholesale Consultancy assisting in managing your AMZ store including private label, micro-private label, listing optimization (SEO), product photography, 3D rendering, videography, EBC / A+ Content, PPC, Packaging, Design (including Store Branding), and reinstatement of suspended AMZ accounts.