The Ultimate Guide to Selling on Amazon - Chapter 3 - Identifying Merchandise Sources

Of course, selling on Amazon isn’t going to be possible without first finding something to sell. For those people looking to sell more than the odd bit of product on Amazon’s Marketplace, that generally means you’ll be on the lookout for a reliable wholesale supplier – one who can sell you the merchandise you need at prices that won’t break the bank and, most importantly, will leave you with a healthy profit margin when it comes time to selling your merchandise on Amazon.

There are a number of sources available to Amazon sellers. Very small-scale sellers prefer to buy discounted goods (sometimes from Amazon itself!) on an individual basis or in small multiples, and sell them for a small profit to keep themselves ticking over. However, if your ambitions go a lot further than selling the odd item on Amazon, you’ll need to look into buying wholesale.

We’ve put together a handy guide to buying wholesale which you can find here. It’ll give you all the information you need to start buying wholesale products and selling them on sites such as Amazon.

Vetting Your Sources

Always make sure to do your research on the distributors, wholesalers, liquidators, etc. that you use. You’ll want to find a supplier who can be trusted to deliver the goods at the best possible price as speedily and as efficiently as possible. We recommend you check out the site of a Better Business Bureau-accredited liquidator for your wholesale needs.

A good place to start looking for sources is online directories. Sites such as Top Ten Wholesale, and Web Retailer are all excellent places to start. Here are a few of our trusted favorites:

Top Ten Wholesale

Top Ten Wholesale describes itself as ‘a sourcing platform that connects wholesale buyers with suppliers in the USA and abroad’. The company is especially proud of the fact that ‘millions of retailers, chain stores, boutiques, dropshippers, auctioneers, eBay & Amazon sellers, flea marketers and other resellers’ have used its platform to source wholesalers, manufacturers, importers, distributors and trading companies.

Wholesale Central

Wholesalecentral.com calls itself ‘the web’s original wholesale directory’. It’s strictly B2B (business to business), and it has a huge database of wholesale suppliers that you can search for by individual category.

Closeout Central

Closeout Central aims to ‘provide fast access to the latest closeouts and liquidations from the nation’s leading suppliers’. Closeout Central is a specialist liquidation directory, connecting closeout sellers with closeout buyers.

Get That Wholesale

With over 5000 independent sellers listed on its directory, Get That Wholesale is one of the Internet’s largest B2B wholesale directories. Boasting a massive range of categories, buyers will find it easy to connect with the sellers they need to supply them with top-quality merchandise to sell on Amazon.

Web Retailer

As well as a comprehensive B2B directory, Web Retailer offers members forums where you’ll pick up plenty of hints, tips and tricks of the trade, as well as webinars, a news feed and blogs to keep you in the loop with all the latest from the B2B wholesale world.

Worldwide Brands

A Better Business Bureau-accredited, members-only directory offering a comprehensive list of dropshippers and wholesalers.

For those buyers based in the UK and Canada, we recommend:

eSources

Describing itself as the ‘UK’s Largest Wholesale Directory of UK Wholesale Distributors, Suppliers and Products’, eSources offers clients the opportunity to email its suppliers directly, to browse its extensive list of wholesale products and ask its comprehensive list of wholesalers, distributors and importers to fulfill orders.

Canadian Merchandiser

Canada’s go-to B2B directory for wholesalers to connect with retailers. You can list your company for free and connect with thousands of wholesalers and distributors across the country.

If you’re looking for global wholesale sources, you also have few options:

Global Sources

As well as offering a comprehensive directory of wholesalers and distributors, Global Sources offers an online marketplace, information on upcoming trade shows, an in-house magazine as well as other services.

Trade Key

A great online portal for a huge range of products sourced from all over the globe. Membership is free. Trade Key really is the ‘key to global trade’.

As well as directories, many buyers looking to sell through Amazon find online forums such as Skip McGrath, Retailers Forum and Salehoo an invaluable source of information.

As well as these excellent forums, there are also a number of online magazines we suggest you check out:

Independent Retailer

One of the USA’s leading trade publications for independent sellers with either a brick and mortar retail establishment or an online presence (or both), Independent Trader offers expert advice on all aspects of wholesale buying and selling.

Flea Market Zone

Specializing in offering advice, news and networking opportunities to the nation’s flea market vendors, market managers and other flea market professionals, Flea Market Zone is essential reading for anyone who plans to source merchandise from this often overlooked sector.

Tamebay

A UK-based provider of news and advice for online retailers and sellers whatever their level and experience. Packed with guides on everything from marketplaces to eCommerce, Tamebay is an invaluable source of information for sellers both inside and outside of the United Kingdom.

Sourcing From Liquidators

As has been previously mentioned, one of the best sources of wholesale merchandise is from an online liquidation marketplace such as Direct Liquidation. Liquidators work with some of the biggest companies in the country such as Walmart, CostCo, Target and, indeed, Amazon, selling company overstock, customer returns, liquidated stock, reconditioned goods and even scrap merchandise for the spares and repairs industry at a fraction of its MSRP value.

Resellers can enter bids on pallets of wholesale merchandise during live auctions which take place on liquidation marketplaces three hundred and sixty-five days a year. You also have the option to buy the merchandise at a fixed price, or to make the liquidator an offer on a pallet or pallets of goods.

Sourcing your merchandise from a liquidator is a great way of saving a considerable amount of money, as the liquidator is able to sell products at a vastly reduced price.

You’ll find a huge range of products from some of the biggest brand names and manufacturers in the world when you log on to a liquidation marketplace. From electronics to clothing, from food and drink to home and office furnishings, there’s something to suit every type of seller. If you’re in the business of selling goods on Amazon, you need to gain an edge over your competition. As well as excellent customer feedback and retention, one of the most important things to get right is cost. Liquidators, by selling wholesale at prices far lower than many other businesses, can give you that edge.

Legal Issues

In many states, a reseller permit is required before you can legally sell items you have purchased from liquidators, wholesalers, etc. As well as giving you permission to sell your goods on to customers, a reseller permit also means you can purchase goods from your suppliers tax-free at the point of sale. This saves a considerable sum when purchasing wholesale. For example, in California, the sales tax on purchased goods is 10.5%. A hefty sum, and one that can easily be avoided by obtaining a resellers permit.

In relation to buying goods from a liquidation marketplace, liquidators are required by US law to tax any business or individual who purchases and ships goods from them. In order to waive this tax, a liquidator requires the individual to present a copy of their resellers permit, alongside completing a form or signing an affidavit declaring that they will be taking the goods purchased out of the state (if applicable).

For more information on obtaining a resellers permit, as well as a guide to state by state reseller tax information, Salehoo has put together this handy guide.

Finding Profitable Products To Sell On Amazon

Of course, finding a reliable wholesaler isn’t the end of the story. You’ll also want to know what products to buy from them that will sell well on the Amazon platform.

Here’s the latest breakdown of which categories are growing in size and which ones are shrinking:

Scrape Hero

This should give you a better idea of the kinds of categories that you should be concentrating on when it comes to picking your products.

Thankfully, there’s also a very handy way of finding products that sell well on Amazon. It’s called the ‘Best Seller Rank’, or ‘BSR’ for short. By examining an item’s BSR ranking, you can quickly see if it’s a good bet or not. If it is, you can go ahead and purchase the product (or similar products) from a wholesaler.

So, how does it work? Well, on every product entry on Amazon under the ‘Average Customer Review’ section in ‘Product Details’ there is the Amazon Best Sellers Rank. This displays not only the item’s ranking, but also the category in which that item appears.

Amazon

For example, here we see a Conair paddle hairbrush priced at $4.49, which appears in the category ‘Beauty and Personal Care’. As you can see, it has a BSR ranking #638.

So, is a ranking of #638 any good? Well yes. Because if you look at the entry underneath – which breaks down the category into further sub-categories – the hairbrush then jumps up to a BSR ranking of #7.

So that tells you that this particular hairbrush is a very good seller in not only the parent category, but also in the sub-category. Generally speaking, it’s acknowledged that items with a BSR ranking of #5,000 or lower are pretty good sellers. The higher the ranking, the better.

However, a note of caution must be sounded at this juncture. The higher an item is up the BSR rankings, the more likely it is that the really huge companies will be selling it. Unless you can buy these types of items at very good wholesale prices, you might find that you’re competing against sellers who can’t be beaten on price. Until you’re in their league, it’s sometimes worth backing away and sticking to items being sold by fewer competitors.