5 TIPS FOR TRANSITIONING FROM FBA ARBITRAGE TO FBA WHOLESALE

As many people know selling on Amazon is a great way to make extra money on the side. Many people start by simply selling products they find from retailers or if you are doing higher quantities you might already be using a Fulfillment by Amazon (FBA) arbitrage service. Eventually, you might get to a point where you want to grow your Amazon business and create more profit for yourself. The next step in your journey is to take the steps to become an Amazon wholesaler. Transitioning from an FBA arbitrage program to an FBA wholesale program can be exciting, so to set you up for success, I have some great tips for you.

1. FIND THE RIGHT VENDORS

Making the transition from FBA arbitrage to FBA wholesale starts with finding the right vendors for your business. There are two main types of vendors that you will find when looking for wholesale vendors. The first is buying directly from the manufacturer and the second is from a distributor. There are pros and cons to each. When buying from a manufacturer you will have the opportunity to receive deep discounts off products when you buy in large quantities. The downfall of buying directly from a manufacturer is that they don’t typically have a variety of different products and brands. This is the reason some opt into buying from a distributor. Distributors offer many different products and brands in one location. It can save you money on shipping and get you a variety of products, but this comes at the cost of lower to no discounts when you are purchasing in large quantities. Making sure that you have great vendors can provide you with a lot less stress and help your business to run a lot more efficiently.

2. NEGOTIATING RATES

Negotiating rates with vendors can be a way to further grow your profits for your Amazon business. Not all vendors are willing to negotiate rates, but it never hurts to ask. Many vendors already have a discount structure for buying in bulk and for receiving free shipping. Vendor negotiations can go beyond the set discount structures, but it takes a little more effort on your end. Vendors may be willing to give discounts if you can show them that you plan to continually grow the volume of product that you are purchasing for them. 

Quickbooks has a great article on the specifics of negotiating with suppliers (vendors): https://quickbooks.intuit.com/r/business-development/7-tips-for-negotiating-the-best-deal-with-your-suppliers/

3. BECOMING AN APPROVED AMAZON SELLER

When looking for vendors you want to make sure ahead of time that the vendors will approve you for selling their products on Amazon. I have personally come across a few vendors who have asked Amazon business owners to take down listings, and this can be a tough situation to navigate when you have spent large amounts of money on products. Some vendors will only allow you to sell on Amazon if you are buying directly from them (as opposed to through a distributor) and others require larger minimums for orders of people who sell on Amazon. Some companies employ people to monitor Amazon for people who are not authorized to sell their products on Amazon, this is why it is so important to make sure your vendors allow you to be an approved Amazon seller.

4. BRANDING AND MARKETING

Branding and Marketing are one of the most important parts of any business. Branding makes it easy for people to recognize your Amazon store and marketing helps people to hear about who you are and keep current customers coming back. Making sure you have a logo and name that people will recognize is a great first step. Marketing to new customers via social media and digital ads are a great way to pull in more sales. Lastly using email marketing using software like Mail Chimp or Constant Contact helps to keep current customers informed on news and products and keeps your customers coming back.

5. FINDING A PREP CENTER  

To scale any business, you will need to implement processes that others can take off your plate, so you can spend time growing your business. When you’re dealing with 100s-1000s of products one of the most time-consuming things can be prepping and packing all the products to send to the Amazon Fulfillment Centers. This is one of the most important processes that you should look into contracting out if you want to grow your Amazon business. This will save you time so that you can focus on orders and marketing for your business. A prep center can help you to process all your products and deliver them directly to Amazon so that you don’t have to. Prep centers save you money on storage space and help you get the job done right the first time. When looking for an FBA prep center you want to make sure that your products are taken care of and don’t get lost in the shuffle. At Prep Ninjas we strive to streamline your preparation process for your FBA business and our mission is to care for every customer’s products as if they were our own.

CONCLUSION

In making the transition from FBA arbitrage to FBA wholesale, the best thing is keeping a growth mindset. What types of processes do you need to implement? What things can I contract out? When building and planning for this transition it is best to think ahead and make sure you establish things early in your business, so that it doesn’t hinder your growth. It’s an exciting new adventure growing your business and I hope these tips help you on your journey.

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