When it comes to selling on Amazon, much of the focus is on private-label selling. However, there are plenty of additional ways to make money in the massive Amazon marketplace. Chief among them is Amazon wholesale, a business model built around a straightforward idea—purchasing products in bulk from manufacturers or distributors, then reselling them on Amazon.
If you’ve sold products online or run an e-commerce business, you’ve likely bought inventory from wholesalers. Traditionally, you would break down these bulk purchases and sell individual units or small sets, earning profit by marking up each item. However, Amazon Wholesale flips this approach on its head by allowing you to step into the role of wholesaler yourself.
Imagine the potential of selling established, in-demand products from brands you know in bulk on Amazon. With the right strategies and product selection, you can tap into this model, leveraging Amazon’s immense marketplace to drive consistent and scalable income.
In this guide, we’ll break down what wholesaling is, why it’s an exciting opportunity, and how to start wholesaling on Amazon.
How Amazon Wholesale Works
Before digging in, you might ask, “What is Amazon Wholesale?”
The concept of Amazon wholesale is surprisingly straightforward: you purchase products in bulk from established brands or manufacturers at wholesale prices, then resell them on Amazon for a profit. Wholesaling is a tried-and-true business model utilized by some of the largest companies in the world. Walmart, Target, and, of course, Costco, among many others, buy products from manufacturers in bulk at a discounted price to sell at an elevated price to the end consumer.
Unlike retail arbitrage or private label selling, wholesale focuses on recognized, in-demand products from established brands, simplifying your start-up marketing.
Here’s the quick rundown on how to open a wholesale account with Amazon:
- Set up an Amazon Seller Account: Start by creating a Professional Seller account on Amazon, which gives you access to wholesale-specific features and bulk listing capabilities.
- Find High-Demand Products: Research products with proven sales history and strong brand recognition. Look for items with consistent demand and healthy profit margins.
- Source Products from Reputable Suppliers: Build relationships with legitimate manufacturers and distributors authorized to sell branded products.
- List & Promote Your Products: Create compelling product listings that live up to brand standards and entice customers to purchase.
- Manage Your Inventory Levels: Keep track of stock levels and reorder points to maintain consistent availability.
How Does Amazon Wholesale Compare To Other Business Models
Wholesale vs. Retail Arbitrage
Retail arbitrage involves buying products from retailers at a low price and then reselling on Amazon. While it can yield high margins, it’s often time-consuming and inconsistent, whereas the Amazon wholesale business model provides a more scalable approach with a steady product supply.
Each model can be profitable, with retail arbitrage offering lower barriers to entry and wholesale providing more scalable long-term opportunities.
Wholesale vs. Private Label
Private labeling allows sellers to create unique brands around custom products, offering greater control but requiring more upfront investment and risk. Wholesale eliminates the need for branding and manufacturing, making it simpler for new sellers to start.
Both models have successful sellers on Amazon, with private label potentially offering higher margins but requiring more time for product development, while wholesale can provide faster startup times with established products.
Wholesale vs. Dropship
While both models involve reselling products on Amazon, they differ significantly in operation and investment. Wholesale sellers purchase inventory in bulk upfront, storing it either themselves or through FBA, which requires more capital but enables higher profit margins and better inventory control.
Dropshipping eliminates inventory costs since products ship directly from suppliers to customers, but this typically results in lower margins and less control over fulfillment quality. Though dropshipping offers lower risk and easier entry, wholesale generally provides a more sustainable business model with better quality control and customer experience.
Pro Tip: Learn more about different Amazon selling strategies in our guide to reselling on Amazon.
Pros and Cons of Selling Wholesale on Amazon
As with any business model, Amazon Wholesale comes with its benefits and challenges:
| Advantages of Amazon Wholesale | Challenges in Amazon Wholesale |
|---|---|
| Established product demand and brand recognition | Higher initial investment requirements |
| No product development or manufacturing costs | Strong competition on popular products |
| Scalability through existing supply chains | Manufacturer approval requirements |
| Multiple supplier relationships reduce risk | Price competition with other sellers |
| Faster time to market | Need for substantial working capital |
Advantages of Amazon Wholesale
One of the primary benefits of selling wholesale on Amazon is the established demand and brand recognition that comes with well-known products. Because you’re selling items that consumers already know and trust, much of the heavy lifting in marketing is done for you. Additionally, wholesale eliminates the need for product development or manufacturing costs, allowing you to bypass some financial, logistical, and general start-up hurdles that private-label sellers face.
Amazon wholesale is also highly scalable. Leveraging existing supply chains means you can expand your product range and inventory relatively easily, especially if you build solid relationships with multiple suppliers. Having a diverse supplier network not only provides greater flexibility but also reduces risk by ensuring that you’re not overly dependent on any single source. Plus, the wholesale model offers a faster time to market, allowing you to start selling sooner and adapt quickly to market demand.
Challenges of Amazon Wholesale
Despite its advantages, the wholesale model does come with certain challenges. First, it requires a higher initial investment than other Amazon business models, as you’ll need to buy products in bulk. This upfront cost can be a barrier for new sellers. Additionally, popular wholesale products often attract strong competition, making it more difficult to secure a significant market share.
Another obstacle in wholesale is the need for manufacturer approval, as many brands set restrictions on who can resell their products on Amazon. This can limit the products you’re able to source and sell. Furthermore, you’ll face price competition with other sellers, which can impact profit margins. To succeed, you’ll need substantial working capital to maintain steady inventory levels and respond to price fluctuations effectively.
Is Amazon Wholesale Profitable?
Yes, selling wholesale products on Amazon can be a profitable business model. Many sellers find that wholesale offers strong potential for competitive profit margins, particularly when they focus on in-demand products and build solid supplier relationships.
However, as with any Amazon business, the bottom line varies from seller to seller, with profitability largely depending on how much you pay for your products, how competitively you price them, and the careful management of Amazon fees. With the right approach to product sourcing and pricing, wholesale on Amazon can provide a sustainable income stream.
How to Setup Your Amazon Wholesale Account
Before reaching out to brands or distributors, it’s essential to understand the Amazon wholesale account requirements and typical prerequisites for setting up a wholesale account.
Register Your Business Entity
Setting up a legal business entity—such as an LLC or sole proprietorship—in your state is often required. Most brands and distributors will request your business details on their wholesale forms, so having this in place can help streamline the process.
While not required, you may want to register a website for your business, complete with an email domain you can use to contact suppliers and handle business communications. Sending emails from a personal email account such as Gmail or Yahoo can come off as unprofessional. Plus, you can keep your business communication separate from your personal email, making it easier to organize for quick and effective communication with suppliers and business contacts.
Obtain Licenses & Certificates
A reseller’s license, also known as a resale certificate or permit, is a document that allows businesses to purchase goods without paying sales tax, provided those goods will be resold to customers. Issued by the state where the business operates, the license serves as proof of intent to resell products and is often required by wholesalers before allowing tax-exempt purchases. Receiving this license can be a lifesaver for your bottom line when stocking up on inventory.
These licenses and certificates can vary from state to state, so unfortunately, there isn’t a one-size-fits-all solution that will work for every seller.
Eventually, we recommend receiving a document of approval from the brand you’re using to sell wholesale online, as Amazon will request proof that you are a registered agent to sell the product if you enroll in Brand Registry, which enables Enhanced Brand Content and numerous other benefits
Pro Tip: This guide from Avalara dives deeper into state-by-state information that can better inform your needs.
Apply for an Employer Identification Number (EIN)
An EIN, or Employer Identification Number, serves as a tax ID for your business and can be obtained for free through the IRS. Like a social security number, an EIN is used to identify your business in tax filings and is typically requested by suppliers and brands when setting up a wholesale account.
How To Find Profitable Wholesale Products
Success in Amazon Wholesale relies on choosing products that meet demand without saturating the market. Here’s how to find wholesale products on Amazon:
Leverage Product Research Tools
Tools designed for product research allow you to assess demand, competition, and profitability before you buy. Our Product Discovery tool has been engineered to do precisely this, allowing you to find the best wholesale items to sell on Amazon with precision and in a fraction of the time it would take otherwise.
Within Product Dsicvoery, you can filter by category, price point, seller count, and much, much more to reverse-engineer products that fit your budget, resources, and meet your quality requirements. Generally, we recommend targeting products with high demand and a maximum of three sellers to mitigate the likelihood of getting lost in a long list of sellers within the same product market, which improves your chances of finding viable wholesale options.
Look for products with strong monthly sales that could be improved with a few actions within your skillset; this provides an opportunity to enhance your offering and increase your value, making you an attractive brand partner.
Pro Tip: Use Viral Launch’s Product Discovery tool to reverse engineer products with consistent sales and minimal competition. You can filter by demand, sales volume, and price range, helping you identify opportunities with strong profit potential.
Validate Product Ideas
Cross-referencing product ideas with historical sales data and analyzing competitor performance can give you an edge. Once you’ve found promising selling opportunities in Product Discovery, check out the product performance in Market Intelligence to see how the entire market of similar or competing products has been doing, scouting out opportunities and keeping an eye out for areas of concern if you were to move forward with the product.
Sourcing and Negotiating With Suppliers
Identifying Reliable Suppliers
Finding reliable suppliers is crucial for any method of selling on Amazon, but it’s everything for anyone who wants to become an Amazon wholesaler. When looking for wholesale suppliers for Amazon, online directories like Wholesale Central, Alibaba, and ThomasNet can be a gold mine for connecting with verified suppliers, allowing you to search for specific brands, products, and categories.
Trade shows are a popular recommendation for contacting wholesalers, as they provide an ideal experience for seeing potential products firsthand and developing business relationships with subject matter experts. If you can make it to an event like ASD Market Week, a wholesale retail merchandise trade show, you can speedrun the discovery and negotiation phase. Or, at the very least, you can be amongst others like yourself and experienced professionals to find vendors and gain valuable experience in a fraction of the time it would take to conduct business through emails and phone calls.
Sample Away
First, before you ever finalize a contract or make any deals with a supplier, request samples and conduct quality checks to ensure you have a product compliant with Amazon standards that won’t be crushed by negative reviews from customers unhappy with the product. Since you’re not manufacturing the product and won’t be overseeing the production, it’s crucial to do your due diligence, making sure the product is as advertised before being left with large amounts of a dud product.
Negotiating Contracts
Effective negotiation can lead to better pricing and terms. Effective negotiations can yield better pricing and terms, such as favorable minimum order quantities (MOQs) and volume discounts. When reviewing a supplier’s pricing sheet, compare it with our FBA calculator to estimate profitability after fees.
Remember that, in the end, this is a very significant move on your part. It’s your business, and you do not need to say yes to any deal that you are not comfortable making. It’s a considerable investment into your business, its future, and your bank account, so make sure you’ve run the numbers on what you’re paying the supplier, what you’ll be paying Amazon for storage and seller fees, and that it’s a product with consumer demand and an opportunity for you to stand out in the product market.
Managing Inventory and Fulfillment
When it comes to logistics, sellers have two options on Amazon: Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM). Below, we’ll dive into the two fulfillment types and why we recommend FBA for wholesale inventory management.
Fulfillment by Amazon (FBA)
Fulfillment by Amazon (FBA) is Amazon’s logistics service, where Amazon handles the storage, packing, and shipping of products on behalf of sellers. For wholesale sellers, FBA can be particularly beneficial for the following reasons:
Scalability: For wholesale sellers looking to scale, FBA simplifies inventory management by centralizing your stock in Amazon’s fulfillment centers. As your business grows and order volumes increase, FBA can handle the logistics without requiring you to expand your own storage and shipping capacity.
Improved Buy Box Potential: Amazon often favors FBA sellers in the Buy Box—the section where most sales occur—due to the platform’s confidence in FBA’s fast shipping and reliable customer service. Winning the Buy Box increases your visibility and the likelihood of making sales, especially in competitive categories.
Prime Eligibility: Products fulfilled through FBA automatically become eligible for Amazon Prime, which is highly attractive to Amazon’s vast Prime member base. Prime eligibility is associated with higher conversion rates, as customers value the speed and convenience of Prime’s two-day shipping.
Streamlined Operations: With FBA, wholesale sellers can offload much of the logistical complexity of shipping and handling. Amazon handles packing, shipping, returns, and customer service, allowing sellers to focus on sourcing and expanding their product line.
Fulfillment by Merchant (FBM)
Fulfillment by Merchant (FBM) allows sellers to manage storage, packing, and shipping themselves or through a third-party logistics provider. FBM can be a more suitable option for wholesale sellers in specific scenarios:
Flexibility with Niche or Oversized Items: FBM can be advantageous for products that are niche or have lower sales volume, as Amazon’s fulfillment centers prioritize fast-moving inventory. FBM is also ideal for large or oversized items, which incur significantly higher FBA fees. By managing these logistics independently, sellers can offer such products without eroding profit margins.
Lower Fulfillment Costs: For sellers with an established warehouse or logistics system, FBM can be a cost-effective choice, particularly for items that are large, bulky, or slow-moving. By handling these logistics in-house or with a cost-effective third party, sellers can often save on Amazon’s FBA fees.
Greater Control Over Inventory: With FBM, sellers retain full control over their inventory. This approach is beneficial for managing complex inventories, seasonal items, or products with fluctuating demand. Sellers can adjust storage and fulfillment methods to meet their specific business needs and avoid long-term FBA storage fees.
Choosing FBA or FBM for Wholesaling on Amazon
With few exceptions, we recommend choosing FBA, as the sheer volume of products that typical wholesalers sell is a much more efficient option. Because of Amazon’s $39.99 monthly cost of FBA compared to $0.99 per item sold through FBM, the Amazon FBA wholesale option is more appealing and cost-effective.
The only exceptions would be if you can find a cheaper alternative option regarding logistics and don’t mind handling customer service. With FBA storage fees relying on product dimensions, weight, and care required, sellers with larger, heavier, or more niche items with a lower expected sales volume may want to explore FBM options.
Pro Tip: For a deep dive into deciding between FBM or FBA wholesale for your Amazon business, check out our complete comparison between the two options.
How to Optimize and Grow Your Wholesale Business
Scaling an Amazon wholesale business is all about optimizing your opportunities for success. Continuous optimization is key to scaling your Amazon wholesaling business. Here are strategies to grow effectively:
Win the Buy Box
A fundamental starting point for success on Amazon is to own the Buy Box, formerly known as the Featured Offer.
The Buy Box is where customers click to add items to their carts. If you’ve shopped on Amazon (and who hasn’t?), the owner of the buy box receives credit for the sale when you click the default Add to Cart button for an item. While other sellers may offer the same product within the same listing, customers would have to navigate to the “Other sellers on Amazon” menu on a product listing and choose one to receive credit for a sale.
According to BigCommerce, 82% of all sales on Amazon go to the owner of the buy box. Sellers who do not own the Buy Box for a product can make money on the marketplace, but it’s simply not a viable option for long-term success and scalability. Competitive pricing, positive seller metrics, and effective use of Amazon PPC advertising all increase your chances of winning it.
Find The Pricing Sweet Spot
Identifying the right pricing strategy is crucial for Amazon wholesale. As a wholesaler, you’ll compete with other sellers for the Buy Box, so pricing needs to balance profitability with competitiveness. Start by analyzing similar products and finding a “sweet spot” where your price is attractive enough to win sales without undercutting too deeply. Keep Amazon fees and FBA costs in mind to ensure that your final selling price maintains a healthy profit margin.
Amplify Your Advertising with PPC
Using Amazon’s Pay-Per-Click (PPC) advertising can help increase the visibility of your wholesale products, especially when entering a competitive market. PPC campaigns allow you to target high-intent keywords that match customer searches, placing your products directly in front of potential buyers.
It can be complicated for the inexperienced seller, so we recommend starting with a modest budget and closely monitoring campaign performance to refine keywords and adjust bids. As your products gain traction, consider investing more in top-performing campaigns to drive sales, which can also improve your Buy Box eligibility and organic ranking over time.
Expand Your Product Line
What’s better than having one successful product on Amazon? Having more than one!
As you build relationships with suppliers, consider adding complementary products to increase your catalog. This approach broadens your customer reach and strengthens your brand’s presence in specific niches.
While we wouldn’t necessarily recommend starting an Amazon Wholesale business with multiple products off the bat, as you may be surprised by the amount of work and initial investment necessary, it’s a huge next step once you’ve had a successful product launch. Once you feel comfortable on the platform with your initial product, expanding your product line can diversify your offering and be the foundation for exponential earnings on the platform.
Final Thoughts on Amazon Wholesale
Amazon Wholesale presents an incredibly promising business model for entrepreneurs ready to capitalize on established brands and steady demand. While challenges like competition and upfront investment are real, the scalability and growth potential make it an attractive path once you’ve knocked down those barriers.
Ready to jump into Amazon wholesale? Start with Viral Launch’s Product Discovery and Market Intelligence tools to streamline product sourcing and optimize your profit potential. With Viral Launch, you have everything you need to research, manage, and scale your business—start your journey today and make your Amazon wholesale goals a reality.
