Wholesale Sourcing – Should You Do It?

Wholesalers and FBA: An Idea Worth Exploring

Exploring wholesale brings a whole new side to your business; whether you are selling on Amazon via Fulfillment By Amazon (FBA), eBay or another marketplace. I’ll be concentrating on wholesale for FBA for this article but many of the reasons for adding Wholesale products are the same no matter what marketplace you happen to sell on.

By adding wholesale items to your inventory you will add many things to your business but the most important, in my opinion, is repeatability. In eCommerce circles, this is known as “depth of inventory.” When you are sourcing only through thrift stores and other similar outlets, you are limited almost exclusively to ‘one off’s’ or individual units. Even when you start using retail arbitrage it is normal to only be able to purchase 2 – 5 units per item. You can find larger quantities sometimes but that’s simply not the usual result.

The point of saying all this is that you will spend hours sourcing and find individual units to sell. When you move to wholesale sourcing, you will spend the same hours sourcing but once you find that item, you can replenish your inventory of the item easily and use those saved hours to source the next product. Wholesale sourcing is a way of multiplying your sourcing time, as well as somewhat stabilizing your sales income as you are not dependant on what you found this past weekend at a yard sale or thrift store.

When I began using FBA seriously, I concentrated most on my usual sourcing methods. Which is to say, I shopped every Saturday for 4 – 10 hours, visiting every yard sale, estate sale and thrift store in the local area. I did very well and made a good profit. However, it was tiring! And time consuming! In addition, I had to keep going out every weekend, with trips to additional thrift stores during the week, to continue growing my inventory, my Amazon business and my paychecks. A light bulb came on one early Saturday morning, when I though, “What about spending some of that time searching out wholesale products using the same criteria I was using for my other inventory?” So I did. And guess what? My inventory grew, my paychecks grew and became more reliable AND I could sleep in on Saturday morning. This made for one Happy Kat!

So how do you get started? Should you simply Google “wholesalers”? NO! Anyone can call themselves a wholesaler on Google and 90% of those with the big catchy ads or high ranking for the work ‘wholesale’ are NOT true wholesale suppliers.

With most retail products there are many middlemen the products go through to get from the manufacturer to the store shelf. The closer you can buy the product to the place it was made, the lower your cost. However, depending on how you define “wholesale” many of these actual middlemen will qualify. Remember the store you drove past a few weeks ago with a big sign reading “Wholesale to the Public”? Yeah, well, most assuredly that is NOT a wholesaler. Remember what your mother taught you, “If it sounds too good to be true . . . it probably is.” To find a true wholesaler you’ve got some work and research ahead of you.

Getting Started Buying Wholesale Products for Resale

One good plan is to start with products you’ve found that sell well on Amazon and don’t face stiff competition. Once you’ve identified such a product, see if you can discover where it’s made. Use the label and try to make contact. If the company you find from that information truly is the wholesaler and tells you that they don’t sell to retailers, ask for the contact information for their distributor.

Another good option is to join some of the well known clearinghouse sites that promise to connect you with wholesalers. Most of these places have ratings systems and do at least minimal vetting of the companies on their site. Three better known are DOBA, Worldwide Brands, and AliBaba. All three sites have their detractors and their defenders. Just be aware that you will have to be responsible for doing your own due diligence. In other words, ask questions, do research and get samples whenever possible to check the quality and authenticity of the products.

Another option is to take a course about wholesaling from someone you respect in the eCommerce space. One that I am a happy affiliate for is Lisa Suttora’s new “Sourcing the Right Products Wholesale to Sell on Amazon.” I’ve heard so many testimonials from Lisa’s students on this particular course that I do not hesitate to recommend it wholeheartedly for those who want to jump into Wholesale Sourcing right now. In addition, Lisa is running a sale on the course from now until May 15th.

Stay tuned here as future articles will delve into the details of how to find legitimate wholesalers on all three of the sites mentioned, as well as back-tracking a product you find in a store.

Sign Up for Outright

About Kat Simpson

Respected as a trusted eCommerce speaker, educator, and entrepreneur, Kat Simpson has been a successful eCommerce merchant for over 10 years. She is an eBay Education Specialist and Silver Level PowerSeller, who also maintains stores on Addoway, Bonanza, Buy.com, and iOffer. Currently Kat is the producer of popular weekly Amazon FBA Podcast FBA Radio along with Chris Green of FBAPower.