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Why You Need Wholesale Accounts

Post Series: Wholesale Tips and Tricks

The biggest advantage of an Amazon FBA business is the ability to scale.

Why limit your businesses growth to the amount of inventory that you can personally source and prep on your own?  FBA provides the warehousing, shipping and customer support. Your suppliers can ship directly to FBA’s warehouses, or to a Prep Company. There’s no reason at all you should ever have to see or touch inventory yourself as an Amazon seller. Unless you’ve decided to scale your business to the point where having your own warehouse makes sense.

Most people start out selling on Amazon by going into stores and scanning things with their smartphone using the Amazon seller app or similar to find goods they can sell on Amazon for a profit. This is known as retail arbitrage. It’s a great way to generate sales quickly, and though it’s the easiest way to get started it does take time to develop expertise and become really good at it. There are sellers doing over a million dollars a year with retail arbitrage after all. But so many long term arbitragers are exiting over the last year.

Because there are serious limitations with arbitrage and it’s getting really tough.

Arbitrage is a never ending treasure hunt, where you’re constantly looking for profitable inventory. It offers very little replenishment opportunities and most of products that you find aren’t available again after the stock runs out.

The biggest frustration in relying solely on arbitrage alone is the time involved with constantly having to find new inventory every day. If you stop sourcing, or the deals dry up your sales and income drop. And with retail arbitrage, you’re limited to the number of products you can physically source and pick up within your area.  Plus, many stores are becoming less reseller friendly, often treating them like criminals for purchasing too many products at their store, and sometimes even kicking them out!

Another issue is the COMPETITION.  Those neat tools that help you scour websites for deals are also used by HUNDREDS of other hungry (often new) sellers. And the national sales advertised online are also picked over by many other sellers. This results in too many people competing for the buy box on Amazon, and the inevitable race to the bottom occurs where prices continue to drop until no one is making any money.

Follow the herd, and you’ll get slaughtered!

Add to this the ever-increasing brand restrictions on many products which prevent you from selling them on Amazon, brand owners issuing sellers IP infringement notices for being an “unauthorized distributor”, and Amazon being quick to suspend and treating sellers as guilty until proven innocent, it makes arbitrage a lot more difficult (and risky) than it once was.

Enter the world of Wholesale.

Buying from a brand owner allows YOU to become an authorized reseller and legitimately sell their products. You’ll have invoices and even a letter from the company should Amazon ever question the authenticity of your products. Much better than retail receipts from a store!

You also have a replenishable source of inventory that you can sell every day, month after month without having to worry about the supply running out. My eBook, The Wholesale Truth is a great way to learn more about wholesale for beginners.

They have the products and Amazon has the audience. Your job is to get your hands on desirable products (supply) and put them in front of Amazon’s HUGE customer base (Demand). Sure, it takes money to make money with wholesale, but often you can place orders with minimum opening orders of $150.

I reccomend that you check out The Wholesale Formula’s blog on wholesale too. They sell over $8 million a year on Amazon via wholesale and really know their stuff. Check it out here.

DISCLOSURE: I receive compensation from The Wholesale Formula for people who sign up using links on my site. I’ve been through their entire course and believe it to be the best training available to learn how to scale an Amazon business via wholesale.

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