Select Amazon FBA Wholesale Suppliers the Right Way!
There are many factors that decide between a failed and a successful Amazon business. The products you sell play a major part and the Amazon FBA suppliers can make a lot of difference. For this, you need to find the most profitable products that offer reasonable profit margins.
For that, you need to find the best Amazon FBA wholesale suppliers that fit your specific business requirements. Are you able to easily find the FBA suppliers that understand your business needs? Do you know the right way to research and source your products from such FBA wholesale suppliers? Well, let us give you a detailed answer to all such questions in this detailed guide.
Types of Amazon Suppliers
There are different types of suppliers including dropship suppliers, manufacturers, and wholesale suppliers.
Wholesale Suppliers
The wholesale sellers offer you the opportunity to purchase a large number of products at a very competitive price. When you purchase more products, you can better negotiate for a much lower price by getting discounts from the FBA wholesale suppliers.
Advantages
Reduced Inventory Cost
One of the benefits of buying from these types of Amazon FBA suppliers is that they significantly reduce your cost by offering huge discounts, giving you competitive pricing. When you buy from these Amazon FBA wholesales suppliers in bulk, the wholesale supplier also lowers the cost per item. This enables you to offer the product on Amazon at even more competitive prices. Also, once you have established a regular buying pattern, you can negotiate for more favorable deals with this type of FBA supplier.
Simple and Straightforward Way to Source
When you buy from this type of FBA wholesale supplier, they have a more simplified process and give you the option to sell more products from a given supplier.
Limitations
One of the limitations of buying from such FBA wholesale suppliers is that they require a big amount invested by you in their inventory to get the desired level of discount.
Managing & Storing the Inventory
When you do order in bulk, you will need to actively manage the storage options to take care of a big number of units.
This means when you get your inventory from the FBA wholesale suppliers, you need to quickly sell it to reduce your cost. This means doing your homework to be sure that you will quickly rid of the inventory. Always take into account the seasonality factor, because if you order inventory for a product that has seasonality issues, then you will start accumulating the costs of storing the inventory.
Dropship Suppliers
These are different from the Amazon FBA suppliers and are considered a common choice for e-commerce sellers. These are the suppliers who manage your inventory and send the products for which you received the orders, directly to your customers.
Advantages
Unlike the Amazon wholesale suppliers who send you the inventory to take care of it, you don’t have to manage inventory in dropshipping. So, when you go for dropshipping, you will not have to do extra efforts to manage the inventory. In wholesale, your FBA suppliers send you the inventory directly to manage.
In bulk buying & selling, your FBA wholesale suppliers shift the overhead costs to you. In dropshipping, you do not need to pay for the bulk products, so you won’t have felt the bulging cost of managing the inventory. You would only pay your supplier when you sell a product. This reduces the overhead cost and also lowers your financial risk.
More Variety in Products
Dropshipping is a more flexible business model for online selling. You can change your Amazon store as per the demands of your customers. It means you can follow the latest shopping trends and customer requests to carry those products that reap more profits.
Limitations
Less Control Over the Inventory
The first limitation in this model of online product sales that you do not have a lot of control over the middleman handling the shipping process. FBA wholesale suppliers deliver the inventory to you and you can manage the shipping process to your satisfaction. For dropshipping, you need to have verified and trusted suppliers. Thus, you cannot afford to have room for errors.
Inventory Issues
In wholesale, you just choose the best suppliers for Amazon FBA. Here, the availability of a product is with the supplier and products can run out of stock. In wholesale suppliers for Amazon FBA, you can manage the inventory and order in advance by carefully evaluating future demand.
Per Unit Cost
Dropshipping gives the sellers more convenience since they are not buying in bulk. This means they do not get the bulk buying discount which they would have got in the wholesale model. Therefore, it becomes even harder to offer products on Amazon at highly competitive prices in dropshipping.
Manufacturers
The manufacturer is the one who products a product and sells it to everyone including the FBA wholesale suppliers. The biggest benefit of directly buying from the producer or manufacturer is that you get a lot of discount on the price and purchase more orders in bulk as per your requirements. However, you will have to pay a lot of money upfront. You can directly source from the manufacturer if you have already established yourself as a big seller.
Advantages
As with the ordering to the manufacturer, you can also get a low cost per item on your purchase. However, you would have tried harder to negotiate with the manufacturer than when negotiating with the FBA wholesale suppliers.
You can also request the manufacturer to personalize the product as per your specifications. It can give you an advantage when you are selling a product on Amazon by differentiating it a bit from what the competitors are offering.
Disadvantages
Have to Order in Bulk
When you directly purchase from the manufacturer you will have to place a big order. This means involving large sums of money and even the minimum order quality will cost you a lot.
Not Easy for SMEs to Work with Manufacturers
Manufacturers are less flexible in working with SMEs than the FBA wholesale suppliers. Since they want to produce and sell in big numbers to keep their manufacturing process running which costs a lot of money.
What’s the top way to find the best suppliers for Amazon FBA?
Let us have a look at the criteria for selecting the best wholesale supplier for Amazon FBA.
- The manufacturer must be able to increase production scale if there is growth in the business.
- You need to provide high-quality products and the ones that you can rely upon after testing.
- You need to keep your Cost of Goods Sold (CoGS) low to ensure that you have enjoyed profit margins.
- Always rely upon a sourcing process that is easy to use and flexible.
Factors to Consider When Comparing Suppliers
When you are searching for product suppliers for your Amazon FBA business, you have to inquire and also compare the critical factors for each of the options under consideration.
Let us have a look at the list of things you need to ask your suppliers.
- The shipping duration of the products
- How will they track the packages?
- What would be the shipment mode?
- Which shipping company’s services do they need?
- What is their return policy?
- What will happen if the product does not arrive?
- The standard documentation and product certificates if needed.
- Also, check for references from other sellers who have relied upon their services.
How to find the right products for selling?
We have discussed at great length about finding the best FBA wholesale suppliers. However, if you haven’t already considered, you need to find products that you need to sell on profit. When you are trying to source your products as an Amazon seller from global suppliers, you need to follow a few tips to try to reach the right suppliers. Professional Amazon virtual assistant service providers can also assist you in hunting the right product to sell on AMZ.
Do Your Market Research
When you are performing market research for finding the items that you are going to sell online, try to focus on products that solve customers’ issues. Google Trends is one way of finding the most well-known product trends and top-performing keywords.
Validate Your Product Hunting Idea
When you have a product idea, you need to start the next process, that is to validate its demand. If the product that you have selected is going to solve a problem of the customers and has enough demand to establish a business on it.
Here are some additional steps that you can take.
- Install a Chrome extension of an Amazon reviews tool that tells you average sales of the product, reviews, and opportunity score. This approach gives you a clear understanding of the potential your selected product holds.
- Try to get feedback from friends and relatives on it.
- Go through the forums for sellers and consumers.
- Search from the customer reviews shared on the e-commerce websites.
Make a profile of your targeted customers. This approach helps you create a target audience and also lets you address customers’ pain points with laser-focused bullet points and empathizing product descriptions.
Profit Margins
When you decide a sell a product, you need to find ways to increase your profit margins. This means negotiating with the FBA wholesale suppliers. You need to put an effort to find the best suppliers for Amazon FBA. Besides saving money on negotiations with the wholesale suppliers for Amazon FBA, you need to maintain a high sales velocity. Try finding a product with a price range fluctuating between $15 – $50. This is the price point where the customers won’t think too much about their purchase decisions if they know the product they are buying serves their needs well. Always pick a product with good sales volume so that you have a smaller payback period.
Demand for the Product
There are many tools available out there that let you find the hottest products on Amazon to buy from FBA wholesale suppliers. Unfortunately, many of these products’ demand is seasonal. Therefore, you need to ask the question that is the product’s demand the same year-round? Do not invest in seasonal products. You need to brainstorm an idea for the kind of products which you need to sell. Try to sell the top-selling products by selecting from profitable e-commerce sites, Amazon wish-list, Amazon best-sellers, and Shopify. When you go through these sources, you will be able to find great ideas for selling profitable products.
Try to find products that have good demand and a reasonable level of competition.
Competition
You can buy from FBA wholesale suppliers products with low competition and a fair demand for selling on Amazon FBA. Make sure that you do not try to spend too much time to find the most perfect product to sell for your Amazon FBA business, settle for the one that has a reasonable demand, offers sustainable sales volume, and year-round business.
Categories You Need to Avoid
When you are planning to sell under the private label, you have to understand that not all products will undergo the same selling process. Complex products come with health risks and some of them have a small shelf life including items from categories like skincare, food, healthcare, electronics, cameras, and home appliances.
You need to avoid items that have a lot of complications in shipping and manufacturing as they come with many issues like negative reviews, quality assurance challenges, and liabilities.
Author Bio:
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.
