Amazon Wholesale Suppliers | FREE Amazon FBA Course | Module 4

Hi everyone! Welcome back to our Seller Assistant Academy. 

In this module, you will learn two approaches to looking for a product supplier.

Let’s begin!

Two approaches to finding a supplier 

Amazon to supplier, also known as direct sourcing and supplier to Amazon, which we call reverse sourcing.

What do these mean?

In the previous module, we discussed how to do quick product research on Amazon. This is necessary for deciding which products are potentially good for reselling. They must sell well and must not have any risks, like restrictions or flags. You can find the link to our previous module about quick product research in the video description.

You can do product sourcing in several ways. And I will show you the two most popular and straightforward.

Direct and reverse sourcing

What is direct sourcing?

The first way to find a supplier is direct sourcing. With this method, you select a product from the supplier and find its match on Amazon. That means you find a product for a good price at the supplier and you are able to resell it on Amazon with a good profit margin, typically more than 15%.

This model is used by wholesale sellers and those sellers who have existing suppliers. This is suitable if a supplier gives you a good discount and offers you a bulk price list of their products. You can select the items from that list which you can resell on Amazon for profit.

Other reasons to use this method are if a supplier offers large discounts for bulk deals, or if you know that the supplier is reliable and delivers orders to Amazon’s fulfillment centers fast.

Example of direct sourcing

Now let’s look at an example of direct sourcing.

• If you are a wholesale seller, your direct sourcing starts with brand research. Then you find the supplier, negotiate and agree about the cooperation, and get a price list to resell products in bulk (we discussed that in Module 2. Brand research).
• If you are an online arbitrage seller or dropshipper, you typically scrape product data from a chosen e-commerce website to find profitable deals.

When you get a price list or a file with hundreds of products, you must research them and pick out potentially profitable deals that you can sell on your Amazon account.

To do that, you can upload these bulk data to Seller Assistant’s Price List Analyzer. The Price List Analyzer finds the match for these products on Amazon, calculates their profitability, and formulates a report. From the report, you can filter profitable deals by profit, ROI, and BSR, and add to your sales pipeline. 

Once done, you upload the report you received from Price List Analyzer and upload it to Seller Assistant’s Upload your file to Seller Assistant’s Bulk Restrictions Checker and download a report. 

If the product is marked with the green open lock, you can sell a product and it’s not restricted; If it has the red closed lock with an exclamation mark, you can’t sell it on your account; look for other product; If it has the red closed lock, the product is restricted and you need Amazon approval to sell them.

When you selected the potential deals from your supplier price list, and ensured they meet your profitability criteria and you can sell them on your account, you must do extended research of each deal. We will discuss how to do extended research in the next modules.

What is reverse sourcing?

The second approach to finding a supplier is reverse sourcing. With this method, you select a product on Amazon and find its match at the supplier. This method is typically used by online arbitrage sellers or dropshippers.

This involves finding a suitable product on Amazon and looking for the same product at a much lower price at the supplier. The profit margin should be at least 15%.

Example of reverse sourcing

Now let’s take a look at an example of reverse sourcing.

First, we select a brand on Amazon - let’s take Tablecraft again in the Kitchen&Dining category.

Next, we check products with Seller Assistant’s Quick View on Amazon’s search page. 

You can see the product’s ASIN and BSR (It shows how well the product sells). The lower the BSR number, the more the product sells. A good BSR must be between 1 and 100,000, with 1 being the best. Also, you can see the number of sellers selling the product. If the seller count is more than 1 FBA seller, it’s not a private label  product and you can sell it.

If the seller count is more than 15, the competition is too high. In addition, Quick View shows if Amazon sells the product. In this case, the product is not good for reselling. Also, you can see if you can sell the product (shown by a green open lock), check that there are no IP complaints (no red triangle icon). 

Let’s look at an example.

A dispenser

In this example, you can see that the product’s BSR is 695 202, which means you can sell 53 product pieces monthly. You can find that out by going to the Amazon product page of your chosen product. Seller Assistant will show you in the “Sales” field how many units you can potentially sell monthly based on BSR.

You need an approval to sell this product because Seller Assistant shows red closed open lock, and the seller count is 5, which is more than 1 and less than 15. Also, it’s not sold by Amazon. Now, after making sure the product is good for selling on Amazon, we want to find a supplier. 

To do that, you can use Seller Assistant’s Lookup Links available on the Amazon product page with Seller Assistant Extension. To search products on Google, Google Shopping, eBay, Walmart, Target, Webstaurant, Katom, The Home Depot, and Alibaba, click the lens icon and choose the target search engine or website from the drop-down.

You will get to search results. Find several suppliers and select one of them. I will select webstaurantstore.com

Go to a product, open it and make sure that it is an exact match of the one we selected on Amazon. This includes brand name, model, size, color, materials, and pictures. Everything must be identical. 

To do that quickly and reliably, click Seller Assistant icon. This will activate the Side Panel View feature, that lets you compare products side-by-side, and calculate profitability on the supplier website.

After that, we make sure there are no other flags  such as hazmat, oversize, fragile, meltable, generic brand, or adult product flags. Side Panel View will show you if there are any flags.

Finally, we calculate profit and ROI with Seller Assistant’s FBA calculator. We enter the cost of goods and get the profit, ROI, and margin figures. They should meet our target.

If everything’s fine, we found a potential supplier. After that, we will need to do in-depth extended research, which we will discuss in the next module.

Lifehacks for finding a supplier

Now I will share several important hacks you must know to successfully find a supplier.

• Use VPN 
• Prioritize US suppliers
• Make sure that the products on Amazon and at the supplier are exactly the same
• First time, buy one-half of the estimated product sales 

VPN

Certain U.S. suppliers may block internet traffic from other countries. You can see their content only if your IP address is in the U.S. To see supplier content with limited access, you can use a VPN. It will let you select an IP address in the U.S. and open an American supplier website. You can use VPN by Seller Assistant. It  is a Chrome extension created specifically for Amazon sellers.

With key features such as IP location switching, website unblocking, a proxy bypass for smooth access to Amazon Seller Central, and easy team access management for employees or virtual assistants, VPN by Seller Assistant ensures a secure and smooth online experience for Amazon sellers.

You can find more information about using a VPN for product sourcing in the link on the video description.

Using US suppliers

A supplier must have a U.S. address and U.S. zip code. This is because U.S.-based supplier products are delivered fast, sell only authentic products, and issue necessary invoices. Amazon may ask you for an invoice to confirm that your product is authentic.

Making sure that the product on Amazon and at the supplier are identical

Again, It is very important to make sure that the product on Amazon is exactly the same as at the supplier. You must carefully compare the product model and size, and check that they are exactly the same, along with the color, materials, and pictures. 

When comparing products to ensure that the Amazon product is identical to the suppliers, pay special attention to the images.

If the product image is taken  from a different angle - check all the images to be sure that it is in fact the same product. Sometimes they may look the same, but a slight detail may be different.

How many product units should you buy at first?

When you have a product for sale on Amazon, you want to make sure that your product is available to customers at all times. This is good inventory management.

Inventory management is managing inventory levels on Amazon. That means keeping track of stock levels, restocking items, and ensuring that the products are available to customers.

To do so, you must have 3 batches of orders in the pipeline at any point in time. 

• The first one is being sent by your supplier to the prep center; 
• The second one is being sent from the prep center to the Amazon fulfillment center;
• And the third is being processed by Amazon for sale in current inventory .

However, when you start to sell a product, you don’t know how many products you can realistically sell.

You can calculate your estimated sales. This is based on a count of units you can potentially sell and you can see this using Seller Assistant. But you must keep in mind that it’s an estimate, and not an exact number. Therefore, the initial quantity you order the first time must be about one-half of the estimated monthly sales. 

For example, if Seller Assistant shows that you can sell 200 units, order 80 to 100 units. After that, closely monitor your stock. If you see that the item is selling fast, reorder.

Over time, you will get realistic figures of how the product is selling and will be able to set reorder points. You can find more information about inventory management in the link on the video description.

How to vet the product supplier?

If you work with your supplier first time, there’s always a risk. They might require, for instance, a pre-payment and then not ship the order. Therefore, you must take preventive measures to reduce such risks. Here are several ways to verify a supplier. Check the supplier on LinkedIn, Whois, or ScamAdviser

One way to verify a supplier is to check if it’s listed on LinkedIn, Whois, or ScamAdviser. LinkedIn is a social media site connecting professionals and businesses. The presence of a supplier on LinkedIn shows its reliability.

Whois is a domain lookup service that helps identify domain name ownership. It shows who owns the supplier's website and when it was registered. If the website was registered less than one year ago this is a sign that it’s not trustworthy .

ScamAdviser is a service that checks a website’s reliability and helps detect scam and phishing websites. When you check the supplier, make sure that the company’s description matches the information on the supplier's website.

Check the supplier’s contact and payment details

Look up supplier contacts on their website. The website should give clear information about the supplier's office address and must contain a U.S. phone number.

It also must be stated that the company accepts PayPal payments. That is the most secure payment method. Typically, you can find the PayPal icon in the footer of the website.

Check if the supplier has a well-developed website

Go through the supplier’s website and make sure it’s not just a single landing page. Be sure The site contains information about the supplier’s services, contacts, and so on.

Check if a supplier has an active social media presence

The Supplier’s website must have links to social media - Facebook, Instagram, Pinterest. Click the links and verify if they are active social media accounts. On the social media page, It is very important to have backlinks to the company’s website.

Google references

Verify supplier references and reviews. Search for «supplier name + reviews» and follow the links to review them. Check that they have real reviews. Learn from reviews what to expect from the supplier

That’s it for now. 

In the next module, I will show you strategies for  finding products