Selling wholesale on Amazon has a number of advantages, including:
Customer Base That Has Been Established
Because you’re selling a well-known brand’s goods, you’ll be able to tap into the brand’s existing consumer base right now. Customers are already aware of this product, enjoy it, and want to buy it. In certain circumstances, an Amazon listing with product reviews already exists, saving you the time and effort of generating a new listing.
Inventory sourcing that is Reliable and Efficient
In contrast to retail arbitrage, where you are a slave to the pricing strategies of merchants, with a wholesale approach you can be confident that as long as the product is manufactured by the manufacturer, you will be able to source it.
Scalability
You may easily raise your inventory to keep up with customer demand if an item is selling very well.
Approval of the Amazon Brand
When you get brand permission to sell on Amazon, you’ll notice less competition in the buy box, and in some situations, you’ll get exclusive selling rights on Amazon.
Reduced Risk (in Some Ways)
In some ways, wholesale is a safer business strategy than retail arbitrage or private labelling. You don’t have the risk, duty, or liability that comes with making a product and developing a brand because you aren’t the brand owner. Instead, you’re selling things with an established track record, allowing you to concentrate completely on the task of selling the product.
Furthermore, because you source inventory directly from the manufacturer and can provide Amazon with relevant evidence (receipts or invoices) to prove it, a wholesale model eliminates the risk of your seller account being permanently suspended due to customers submitting inauthentic product complaints. Because the retailer acts as a middleman in retail arbitrage, if there is anything uncertain about the receipt or suspicious about the retailer, Amazon may not accept your evidence of authenticity and your account may be permanently suspended. And, of course, there’s always the possibility that you won’t be able to find goods to sell with retail arbitrage, which you won’t have to worry about with a wholesale business.
To summarize, a wholesale strategy has more stability than a retail arbitrage approach, as well as fewer moving parts and possible dangers than private labelling.
Selling Wholesale Has Its Difficulties
Selling wholesale has its advantages, but it also has its drawbacks. If you decide to pursue a wholesale business strategy, you should carefully analyses these issues and seek to mitigate these risks.
Identifying Products That Aren’t Already Available on Amazon
You have an opportunity to establish yourself as an exclusive seller if you can identify a product that isn’t previously sold on Amazon. As Amazon’s popularity grows, this becomes increasingly difficult.
Finding Products in Which You Can Compete Successfully with Other Sellers
The other option is to discover a product that sells well on Amazon and for which you are convinced that you can win the buy box frequently enough to secure a particular percentage of total sales. However, this may be hard, and if you’re not careful, you’ll end up losing money owing to price wars with other merchants.
Getting Wholesale Accounts is a Success
When it comes to acquiring approval from brand owners to sell their items wholesale, if you are a newer seller with little experience, you will almost certainly face an uphill battle.
Orders in Large Quantities
Manufacturers’ high order quantity requirements mean you’ll not only have to invest a big amount of money in inventory up front, but you’ll also be exposed to all of the risks that come with having a large amount of inventory on hand.
