Amazon Wholesale: All You Need To Know
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This guide will help you get started, understand the basics of Amazon selling, and explain in simple words how it all works.
Amazon wholesale is a great way for sellers to grow their businesses. This model lets you buy products in bulk at lower prices from brands or suppliers and then sell them on Amazon at higher prices.
But success isn’t just about buying cheap and selling high. It’s also about picking the right products and finding trustworthy suppliers, which can be tricky.
In this guide, we’ll explain how Amazon wholesale works, share tips for finding the best products and suppliers, and the knowledge and tools to succeed and avoid common problems. We will also show you how to scan and analyze wholesale price lists for profitable deals easily.
What Is Amazon Wholesale?
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Amazon wholesale is a business model where sellers buy products in bulk from brand owners or distributors at lower prices and resell them to Amazon customers for a profit. The profit comes from the price difference between what you paid (wholesale) and what you sell it for (retail).
Buying in bulk helps you secure the lowest price per unit, but it also means purchasing large quantities upfront. This requires wholesale sellers to invest significant money upfront to place orders. That’s why it’s important to carefully choose products that are likely to sell and generate a good return.
Despite the competitive nature of the market, Amazon’s massive customer base offers endless opportunities across many product categories. With 25% of Amazon sellers engaging in wholesale (according to a Jungle Scout report), this model remains a popular and profitable choice for sellers willing to put in the time, effort, and capital needed for success.
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Pros and Cons of Amazon Wholesale
Wholesale is a market-proven model that offers moderate risks, good profit and scale potential, and predictable cash flow. However, it has both benefits and downsides.
Benefits
Quick and easy to launch
One of the benefits of wholesale is that you can launch it very fast. It takes around 6 weeks to set it up. The most effort- and time-consuming process is finding a supplier for your product and negotiating with them. Also, there’s certain paperwork involved. Typically, you’ll be able to get your first money in 3 months.
High-profit potential
Many wholesale sellers on Amazon gain a profit margin of 30% and up. This is because they get a good per-item price from the brand or supplier. This results in a great return on investment (ROI).
Moderate risk
With wholesale, you typically resell a popular brand or product. Naturally, you’ll avoid what doesn’t sell. Predictable sales history gives a clue as to whether the product will last in the market. Therefore, you can estimate its lifetime. This lowers the risk of losing money with unprofitable items.
Predictable cash flow
Once you select a product and conclude the agreement with the supplier, you have a consistent deal. You can easily replenish and restock your products. Since you’ve ensured that the product is in demand, you just proceed to sell and monitor the item's profitability. It provides predictable cash flow.
Challenges
Amazon competition
Since wholesale sellers typically sell an already existing product on Amazon, there are also other sellers on the listing. Therefore, when you do product research for wholesale deals, you must find a product with moderate competition because your target is to sell a lot.
Considerable upfront investment
Most brands you negotiate with have minimum order quantities (MOQ). Some large brands can set it as high as $20,000. However, you can choose the brands with lower MOQ or buy from brand distributors who have lower limits. Typically, MOQ is around $1,000-2,000. Therefore, you need to be ready to put money in.
Wrong deal choice is big loss
For wholesale, product research is even more critical than arbitrage. If you lose money on a couple of products, this is unpleasant, but that’s not the end of the day. But if you lose a lot on wholesale, that may seriously hit your business.
Time-consuming model
Both product research and negotiation with suppliers takes considerable time. However, it’s compensated by high profit. To streamline wholesale processes, sellers hire employees to help them and use product sourcing and inventory management tools to automate them.
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How Does Amazon Wholesale Differ from Other Business Models?
The key difference between Amazon wholesale and other business models is that wholesale sellers focus on reselling bulk products from established brands. Unlike online arbitrage or dropshipping, wholesale requires a significant upfront investment. And, unlike private label sellers, wholesale sellers do not create or own their own brands.
Here’s a breakdown of how wholesale compares to other popular Amazon business models:
Wholesale vs. online arbitrage/retail arbitrage
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Definition
Wholesale involves buying discounted products and reselling them for a profit. Online arbitrage sellers source their products from online stores, while retail arbitrage sellers buy from physical stores.
Key differences
- Quantity
Wholesale sellers purchase products in larger quantities, while arbitrage sellers typically buy smaller amounts.
- Supplier relationship
Wholesale involves negotiating directly with brand owners or distributors, whereas arbitrage sellers simply buy discounted items from stores.
Pros of wholesale
Wholesale sellers often achieve profit margins of 30% or more, compared to around 10% for arbitrage.
- Scalability
Wholesale offers better growth potential, with many successful arbitrage sellers eventually transitioning to wholesale.
Cons of wholesale
- Supplier challenges
Wholesale sellers must find and convince suppliers to work with them, while arbitrage sellers simply source products from available store inventory.
- Essential upfront investment
Wholesale requires significant upfront costs, unlike arbitrage, which has minimal financial barriers.
Wholesale vs. dropshipping
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Definition
Dropshipping involves listing products on Amazon without holding any inventory. Dropshipper finds a potentially profitable deal and agrees with the supplier who sends the product to a prep center. When a customer places an order, the supplier ships the product to a prep center that repackages it according to Amazon’s dropshipping policy requirements (dropshipper must be a seller of record for the product) and then sends it directly to the customer.
Key differences
- Inventory ownership
Wholesale sellers own and manage their inventory, while dropshippers never hold stock.
- Fulfillment control
Wholesale sellers oversee shipping processes, whereas dropshippers rely entirely on suppliers for order fulfillment.
Pros of wholesale
Wholesale sellers have official permissions from brands to resell their products, reducing the risk of intellectual property complaints, while dropshippers can receive IP complaints from brand owners who are against reselling their products for various reasons (for instance, they sell on Amazon themselves or have exclusive distributors).
- Fulfillment oversight
Wholesale sellers have greater control over fulfillment, ensuring smoother operations and customer satisfaction.
Cons of wholesale
- Upfront investment
Wholesale sellers must buy products in bulk to meet supplier minimum order requirements, while dropshippers don’t pay suppliers until after a sale.
Wholesale requires careful inventory tracking, timely restocking, and handling storage fees, none of which apply to dropshipping.
Wholesale vs. private label
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Definition
Private label sellers create and sell their own branded products, often by manufacturing or rebranding generic items. Wholesale sellers, by contrast, resell established brands without developing their own.
Key differences
- Brand ownership
Private label sellers own their brand, while wholesale sellers resell existing brands.
- Risk and investment
Private label involves higher risks due to product development and marketing, whereas wholesale is lower-risk but lacks brand ownership.
Pros of wholesale
- Established product
Wholesale sellers benefit from the proven sales history of existing brands, saving on advertising costs.
- Simpler setup
Wholesale doesn’t require creating a new brand, manufacturing products, or developing listings, which is essential for private label sellers.
Cons of wholesale
- Higher competition
Wholesale sellers compete over well-known products, whereas private label sellers face less competition due to their unique offerings.
- No brand ownership
Private label sellers own their brand, which adds value to their business if they sell it, while wholesale sellers lack this long-term asset.
How Amazon Wholesale Works?
In the Amazon wholesale model, sellers purchase products in bulk from brands or distributors at wholesale prices and resell them at higher prices on Amazon, making a profit from the price difference.
Here’s a step-by-step guide to how Amazon wholesale works.
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Steps to Amazon wholesale
Step 1. Get a reseller’s permit
Before starting, you need a reseller’s permit, which allows you to buy products in bulk without paying sales tax. You’ll collect this tax from customers when selling the products.
Step 2. Choose your product category
Select a specific category or niche based on your interests and market research. Focus on areas with high demand, reasonable competition, and good profit potential.
Step 3. Find potential suppliers
Identify brands or distributors within your chosen category. Look for suppliers with a good reputation and a range of products that align with your business goals.
Step 4. Vet the suppliers
Verify the reliability of potential suppliers. Check their reviews, request references, and validate their credentials through LinkedIn, or tools like Whois or ScamAdviser. This step ensures you’re working with legitimate and trustworthy partners.
Step 5. Contact the supplier
Reach out to your selected suppliers via phone, email, or their website. Introduce yourself, explain your business, and express interest in opening a wholesale account with them.
Step 6. Submit an application
Fill out the supplier’s application form, providing details like your reseller’s permit, business license, and contact information. Highlight your business needs and intentions.
Step 7. Open a wholesale account
Once your application is approved, set up a wholesale account with the supplier to access their products at wholesale prices.
Step 8. Request a wholesale price list
Ask your supplier for a comprehensive price list. This document includes details of the products they offer, wholesale prices, and inventory availability.
Step 9. Scan the price list for deals
Review the wholesale list to identify products with high demand, strong sales history, and good profit margins on Amazon. Focus on profitable and fast-moving items.
Step 10. Negotiate terms with the supplier
Negotiate pricing and order terms with your supplier. Larger quantities or regular orders can often secure better discounts. Building a long-term relationship may also lead to improved deals.
Step 11. Purchase inventory
Once terms are finalized, pay for your bulk order using accepted methods such as wire transfers or credit cards.
Step 12. List, prep and ship your inventory
List your products on Amazon. Add your offers to existing listings and set a competitive price. Decide between Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM) for handling orders. If using FBA, prepare your inventory according to Amazon’s guidelines and ship it to their fulfillment centers. Ensure proper labeling and packaging to avoid issues during fulfillment.
How to Find a Wholesale Supplier for Amazon
The first essential step to selling wholesale on Amazon is identifying a suitable brand or supplier. This involves analyzing whether a brand is resale-friendly (meets the checklist described below) and aligns with your business goals. To analyze a supplier (brand), look if it meets the points in the checklist. This helps evaluate the brand’s size, the number of products it offers, potential revenue opportunities, competition levels (from Amazon and other sellers), average Buy Box prices, and the quality of reviews and ratings associated with its products.
Conducting this analysis manually can be complex and time-consuming. That’s where tools like Seller Assistant's Brand Analyzer come in. Using Seller Assistant's Brand Analyzer simplifies the otherwise complex process of identifying resale-friendly brands and provides comprehensive insights about potential suppliers.
Seller Assistant’s Brand Analyzer is an advanced tool designed to streamline the brand research process. It provides all the necessary data to evaluate a brand’s suitability and ensures that you focus on suppliers capable of delivering strong profit margins.
By entering a brand’s name, you gain access to a wealth of data that helps determine whether a brand is resale-friendly and worth pursuing as a supplier.
Note. Seller Assistant is a comprehensive product-sourcing software that helps Amazon sellers quickly find high-profit deals. It combines three extensions: Seller Assistant Browser Extension, and IP-Alert Chrome Extension by Seller Assistant, and VPN by Seller Assistant, Amazon seller tools: Price List Analyzer, Brand Analyzer, Seller Spy, Bulk Restrictions Checker, and API integrations, and features: Side Panel View, FBM&FBA Profit Calculator, Quick View, ASIN Grabber, UPC/EAN to ASIN converter, Stock Checker, IP Alert, and Restrictions Checker.
Seller Assistant shows all essential product data on Amazon search, product, and inventory pages, and on any website to help you find high-margin deals. By using this FBA and FBM product sourcing software, you can easily identify products that have the potential to be sold well on Amazon.
Automating wholesale supplier research with Brand Analyzer
When evaluating whether a brand is resale-friendly, consider the following key criteria by looking at the figures provided by Brand Analyzer. It provides a comprehensive dashboard with a summary of essential metrics, including revenue, competition, stock levels, pricing, and customer feedback, helping you make informed decisions quickly.
Product volume
Focus on brands offering a substantial product range, ideally over 500 products, to increase your chances of finding profitable options. Brand Analyzer provides an overview of the total number of products a brand offers, helping you assess its range.
You can also download a file with all brand product details.
Revenue potential
Analyze the brand’s average sales and product prices to confirm it can meet your revenue targets. Brand Analyzer calculates the potential monthly revenue from the brand’s product portfolio, giving you insights into profitability.
Avoid competition with Amazon
Steer clear of brands that sell directly on Amazon or work exclusively with a few distributors, as this limits reseller opportunities. Brands where Amazon sells over 30% of the products may not be suitable for reselling because it’s difficult to compete. Brand Analyzer highlights the percentage of direct competition from Amazon under “Amz in-stock rate.”
Competition analysis
Avoid brands with excessively high seller counts (e.g., more than 15 sellers per product), as this often results in price wars and slim margins. Brand Analyzer displays the average number of sellers per product and the total products offered, helping you assess competition and market potential, reducing the likelihood of price wars.
Brand’s rating
Choose brands with high average ratings (4 stars or above) and positive customer feedback, indicating strong demand and credibility. Brand Analyzer includes data on average product ratings, total reviews, and Buy Box prices, allowing you to evaluate brand reputation and refine pricing strategies.
Eligibility and restrictions
Ensure the brand’s products are eligible for resale on Amazon and don’t require approval. Avoid brands with compliance issues or restrictions to minimize risks. Make sure you can sell the brand's product on your account.
Use Seller Assistant’s Bulk Restrictions Checker to evaluate multiple products simultaneously. Take a list of brand’s products you get from Brand Analyzer, upload it to Bulk Restrictions Checker and look at the result. A green open lock icon means the product is sellable, while a red closed lock indicates restrictions. If you see a red lock with an exclamation mark, the product isn’t eligible for sale on your account.
How to Negotiate with Amazon Wholesale Suppliers
The next critical step in your Amazon wholesale journey is to reach out to your chosen brand or distributor and secure their cooperation.
Opening a wholesale account can be challenging. Some suppliers may not respond immediately or may not reply at all. Persistence is key, and you might need to call directly to connect with the right contact.
Below are the steps to successfully negotiate with wholesale suppliers.
Steps to negotiate with Amazon wholesale suppliers
Step 1. Prepare and research suppliers
- Learn about suppliers
Research potential suppliers thoroughly. Familiarize yourself with their business and product offerings. If you contact a brand’s distributor, ensure they are wholesale resellers by reviewing their website and terms.
- Evaluate supplier credibility
Verify their reliability and product quality by checking reviews, requesting references, and validating business credentials. This minimizes risks and ensures you work with trustworthy partners.
Step 2. Establish a professional business presence
- Use a professional email
Set up a domain-based email address (e.g., yourname@yourbusiness.com) to appear credible.
- Create a business website
A professional website acts as your digital storefront, showcasing your business history, product offerings, and contact details. It helps build trust with suppliers.
Step 3. Initiate contact
Contact suppliers via phone, email, or their website. Introduce yourself and your business, expressing interest in opening a wholesale account.
Step 4. Submit a wholesale account application
Fill out the supplier’s application form with your business details, such as a reseller’s permit and business license. Keep your message concise and focused on essential details.
Step 5. Open a wholesale account
Once your application is approved, set up a wholesale account to gain access to wholesale pricing.
Step 6. Request wholesale price list
Ask for the supplier’s offer. Request a wholesale price list detailing the available products, their specifications, and wholesale prices. Use this list to identify which items are both in demand and profitable for resale on Amazon.
Step 7. Identify profitable deals
- Analyze the wholesale list
Scan the price list to identify profitable products. Focus on items that meet your sales criteria, such as strong demand, good margins, and a reasonable ROI.
- Confirm selling eligibility
- Check if the products are eligible to be sold on Amazon. Ensure they are unrestricted or approved for resale on your account.
Step 8. Negotiate terms with suppliers
Negotiate the best possible prices for the products you’ve selected. Order larger quantities to secure bulk discounts and commit to regular orders for ongoing savings.
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How to Find Profitable Wholesale Deals
The next essential step in selling wholesale on Amazon is scanning the wholesale price list you receive from a supplier to identify best-selling and profitable deals with minimal risks. This involves analyzing bulk price lists containing hundreds of items to find products that are likely to sell, generate profit, and meet other key criteria.
Performing this analysis manually can be overwhelming. When analyzing your supplier’s wholesale list, you must quickly detect high-margin leads, analyze key product metrics, get comprehensive profitability insights, identify potential risks, and filter out the best deals.
Tools like Seller Assistant's Price List Analyzer automates these tasks, simplify the process and provide actionable insights.
Price List Analyzer by Seller Assistant is a wholesale price list scanner tool designed for Amazon sellers to automate bulk analysis of wholesale price lists. Tailored for wholesale, online arbitrage, and dropshipping businesses, the tool quickly enriches your price lists with valuable data, allowing you to identify high-margin opportunities and make data-driven decisions.
Automating wholesale deal analysis with Price List Analyzer
To identify the best opportunities, evaluate products against the following key criteria. By uploading your supplier’s price list, the tool automatically matches items to their Amazon listings, calculates profitability, and flags potential risks.
Sellers can then filter and sort the results by metrics such as ROI, profit, sales rank, your Buy Box chances, and much more to focus on the best deals.
Sales performance
- What to check
Look at the product’s Best Sellers Rank (BSR) to gauge popularity and ensure it sells quickly within its category.
- How it helps
Price List Analyzer automatically provides BSR for each product, saving time and ensuring accuracy.
Competition level
- What to check
Avoid products with too many sellers (more than 15) or those sold directly by Amazon, as they can lead to slim margins.
- How it helps
The tool identifies the number of sellers on a listing and flags items sold by Amazon.
Chances to win the Buy Box
- What to check
Review who dominates the Buy Box and assess your likelihood of competing effectively.
- How it helps
Price List Analyzer highlights dominant Buy Box sellers, helping you avoid tough competition.
Pricing and profitability
- What to check
Calculate the Cost of Goods Sold (COGS), FBA fees, and logistics costs to ensure the product meets your ROI and margin goals.
- How it helps
The tool calculates profitability, ROI, and net profit for each item, providing precise financial metrics.
Product restrictions
- What to check
Verify that the product is unrestricted, free of IP complaints, and complies with Amazon policies.
- How it helps
Use Price List Analyzer in combination with other Seller Assistant’s tool, Bulk Restrictions Checker. It flags restricted products and those requiring approval, ensuring compliance. To check products in bulk, upload your list to Bulk Restrictions Checker and look at the result. A green open lock icon means the product is sellable, while a red closed lock indicates restrictions. If you see a red lock with an exclamation mark, the product isn’t eligible for sale on your account.
Customer feedback
- What to check
Focus on products with strong reviews (4–5 stars) and minimal negative feedback, indicating high customer satisfaction.
- How it helps
The tool displays average ratings and review counts for each item, simplifying evaluation.
Alerts and hidden risks
- What to check
Identify potential issues like oversized items, HazMat products, seasonal variations, or bundled products that may impact profitability or logistics.
- How it helps
The tool flags warnings such as “No FBA Fees,” “ASIN Not Found,” or “Approval Required,” helping you avoid costly mistakes.
Do you Need a License for Amazon Wholesale?
Typically, you’ll need specific licenses and permits to start an Amazon wholesale business. These documents allow you to legally operate your business, purchase products tax-free, and collect sales tax from customers as required by your state.
Documents you need to start a wholesale business
Below are the essential documents you’ll need to begin Amazon wholesale, along with explanations and guidance on how to obtain them in the U.S.
Employer Identification Number (EIN)
An EIN is a unique nine-digit number assigned by the IRS to identify your business for tax purposes. It is essentially your business’s Social Security Number and is required to open a business bank account, file taxes, and apply for other licenses.
- Why it is important
EIN identifies your business for federal tax purposes and is often required by suppliers to open a wholesale account.
- Where to get it
You can apply for an EIN online through the IRS website. The process is free and typically takes only a few minutes.
Sales license
Sales License is also known as resale or wholesale license. A sales license allows you to purchase products in bulk without paying sales tax at the time of purchase. This license is essential for buying inventory from suppliers for resale.
- Why it is important
Sales license ensures you don’t pay unnecessary sales tax on inventory purchases, reducing costs.
- Where to get it
Sales licenses are issued by your state or local government. Visit your state’s Department of Revenue or business licensing website to apply.
Sales tax permit and sales tax ID
A sales tax permit authorizes your business to collect sales tax on behalf of your state when selling taxable products. A Sales Tax ID is the number associated with this permit, which you’ll need to include on invoices and tax filings.
- Why it is important
Sales tax permit allows you to comply with state tax laws and avoid penalties for failing to collect and remit sales tax.
- Where to get it
Apply for a sales tax permit through your state’s Department of Revenue. The process and requirements vary by state, so check your state’s specific rules.
FAQ
How do I find reliable wholesale suppliers?
Start by researching reputable brands or distributors and verifying their business credentials. Tools like Seller Assistant’s Brand Analyzer can automate this process and provide detailed supplier insights.
How much money do I need to start an Amazon wholesale business?
The initial investment depends on the size of your inventory and supplier requirements, but most sellers spend several thousand dollars upfront. This covers purchasing bulk products, shipping costs, and Amazon fees.
How do I determine which products to sell wholesale on Amazon?
Analyze supplier price lists to identify profitable, in-demand products with strong sales history. Tools like Seller Assistant’s Price List Analyzer can streamline this process by calculating ROI, margins, and competition levels.
Do I need a license to start Amazon wholesale?
Yes, you need specific licenses to legally operate an Amazon wholesale business. These include a business license, sales license, and a sales tax permit to buy products tax-free and collect sales tax on behalf of your state.
What is a reseller’s permit, and why do I need it?
A reseller’s permit, also known as a resale or wholesale license, allows you to purchase inventory without paying sales tax. This is essential for reducing costs when buying products for resale on Amazon.
Final Thoughts
Wholesale sales are a profitable model with moderate risks, good margin and development potential, and predictable cash flow.
The start is easy and fast, but you must invest considerable money upfront. With the right product and supplier, you can earn good money and scale it.
Seller tools can help you with these processes. Seller Assistant automates identifying wholesale suppliers and profitable deals among thousands of your supplier products.
Seller Assistant is an all-in-one product sourcing software offering all the features vital for product sourcing. It combines three extensions: Seller Assistant Extension, IP Alert, and VPN by Seller Assistant, tools: Price List Analyzer, Seller Spy, Bulk Restrictions Checker, and API integrations, and features: Side Panel View, FBM&FBA Profit Calculator, Quick View, ASIN Grabber, UPC/EAN to ASIN converter, Stock Checker, and other features that help quickly find high-profit deals. Seller Assistant also offers integration with Zapier allowing to create custom product sourcing workflows.
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