As sellers, we see it. We see it coming right at us. The Amazon marketplace is changing. The beautiful part of this is as Amazon sellers we already make adjustments to our strategy regularly. This is nothing “new”. It is just a new wrinkle Amazon is adding that forces us, as sellers, to raise the bar.
If you don't see the changes, you are either oblivious or have your head in the sand.
Let this be your wake-up call.
You need to make improvements to your processes, you need to make improvements to your sourcing methods and you need to make improvements to the experience that you are providing to customers.
Luckily, you have a community that supports you.
Nate is one of the most giving people I have met, and he provides a platform to help sellers to continue to develop in their journeys. Heck, he reached out to me and asked that I write this piece about how you can start expanding your business to wholesale.
I promise you, I will address that. However, I want to first touch on:
- Why you should be looking forward to the rest of this article.
- Why should you be trying to expanding your business into wholesale.
- What form of wholesale should you be converting your business to.
Let's face it. Brand Restrictions are real.
They are going to become more prominent. That doesn't mean the end of the world for retail arbitrage and online arbitrage. Those who are jumping ship are just making room for you to get comfy on it!
However, It does mean to continue to grow at an aggressive pace you will need to source in a manner that is congruent with these new policies and procedures.
Amazon wants its sellers to have real relationships with brands, to insure that product sold on Amazon is both as described and authentic. All of these changes harken back to the customer experience, and making sure we raise the bar for what customers can expect.
There are many forms of wholesale:
Distribution-Based — This means you work with a distributor who may represent several lines and can provide you with a more diverse inventory
Closeout-Based — This is end of lifecycle product that can be purchased, often times, well below traditional wholesale pricing.
Liquidation — This is generally store based liquidation from returns or shelf pulls, also often well below traditional wholesale pricing.
Direct Manufacturer — This is going directly to the brand owner, and becoming an approved seller through them.
Each of these models has its benefits. In some models, you can win with great pricing, in others, you get great selection and consistency. Our model is the Direct Manufacturer model. We work closely with brands to become an approved seller of their goods on Amazon.
In regards to which model works best under brand restrictions, it is the manufacturer direct model as, if done correctly, you will ALWAYS be an approved vendor of the brand you are working with.
All of the companies we represent know we sell on Amazon and support it. In that regard, our focus is on developing great relationships, and great relationships have to be founded in honesty.
In terms of the other models they certainly have their advantages, but I don't believe they offer the same possibility to be in compliance with ungating standards that the Direct Manufacturer model offers. That being said, I am going to focus on that model (we use it, and we believe it is the best model to help with ungating).
Here is the thing about wholesale, and what makes this transition rather easy. You are selling the same type of product, you are just sourcing in a more efficient manner. You can source before you go to bed, or when you wake up.
Our secret is that we ONLY source products that are already on Amazon.
We don't go out and look for companies and then see what they have to offer. On the contrary, we find products that we like then go find suppliers for those products.
All of our sourcing begins at Amazon, which makes this something you can do ANYWHERE that you have an internet connection.
Here is the strategy I would use to start expanding my business into wholesale:
#1 I would set aside time each day to source.
Block off a consistent time that you are looking for products on Amazon. Find a list of say 50-100 products that you believe would be good to carry.
#2 Pick a morning when you wake up to go through that list of products and use Google to find the manufacturer of those products.
Put all of their contact information down (email, phone, link to site, etc)
#3 Develop a template email, and start emailing those who you can.
There are many ways to create template emails for copying and pasting. You can do this in Gmail in “canned responses” or with a premium 3rd party tool like MixMax.
#4 Anyone who cannot be emailed should be placed on a call list, and prioritized accordingly.
#5 Rinse and repeat this process.
You will find that your success rate is low, maybe 3% of people will actually work with you and have products worth carrying. However, creating these initial relationships will help you to start developing a steady stream of suppliers who will give you the income needed to focus more aggressively on wholesale and develop better conversion strategy!
I realize this is simple, and quite honestly, I constructed it that way.
I know that you are busy people and cannot afford to lose your existing income from Retail Arbitrage. Taking this approach will lead to a slower growth model or wholesale expansion model, however, it will begin to give you access to wholesale accounts and products directly from manufacturers. As we gain ground there, our businesses become less reliant on arbitrage, and we develop forms of passive income.
About Dan Meadors
Dan is the co-founder of The Whole Sale Formula and is ranked among the top 200 US Amazon FBA Sellers. His ability to sell on the platform is matched only by his ability to share what he knows with others, along with his business partner Eric Lambert.
You can follow Dan, Eric and the team at TWF on Facebook.