This post is by Dillon Carter, co-founder of goAura.com.
When it comes to building a wholesale business as an Amazon seller, relationships are paramount to your success. A great relationship with a supplier or brand can mean the difference between opening an account or not, as well as accessing larger discounts and getting exclusive products.
Simply put, building a relationship with your supplier is the “secret sauce”.
After learning this the hard way myself, I wanted to share how you can use relationships to your advantage. When this is done correctly, it can quickly become the competitive edge you’ve been looking for.
View Top Amazon Seller ToolsThe wholesale business model on Amazon
The wholesale business model works like so:
- Find branded products that are selling well on Amazon.
- Open an account with either the brand or a distributor of the brand’s products.
- Sell those products on Amazon.
- Rinse and repeat to scale.
Wholesale on Amazon sounds easy compared to private labeling and other ecommerce business models, but it’s actually one of the most challenging models of all.
The reality is that getting these wholesale accounts is the hardest part. It’s fundamentally different from what you may be used to if you are coming from a retail or online arbitrage business model. These approaches often provide a gateway into wholesale selling, but are actually very different.
Relationship-based vs transactional
Many business models for Amazon sellers are transactional in nature. You purchase goods at one price and sell them at another. No human interaction required.
Wholesale, on the other hand, is a relationship-based model. The relationship you form with your suppliers or brands is how to make this business work. It’s less about finding more suppliers (that’s the easy part) and more about building a relationship that opens doors.
Switching from a transactional business to a relationship business is hard. It’s a whole new skill set that you need to develop. You need to convince suppliers of the opportunity to take your money. It’s odd but true. The B2B sales between you and your supplier are the difficult part. Selling on Amazon is the easy part.
If you can switch your mindset from transactional orders to building relationships, you’ll be ahead of 90%+ of other wholesale sellers. What’s the benefit of all that work?
- You’ll get to sell brands and products that are hard to access.
- Suppliers will provide more competitive prices.
- You’ll be offered early access to new products.
- Suppliers will be more likely to sign exclusive distribution agreements.
These are the factors that define success in selling wholesale on Amazon.
But there’s a problem here. Brands and suppliers just don’t like Amazon sellers. You can approach them with wads of cash and they will turn you away. To overcome this problem, you first need to understand why they don’t want to sell to you.
Why don’t suppliers want to do business with Amazon sellers?
I spent four months trying and failing to build my business selling wholesale on Amazon. After getting denied for each account, I started asking questions:
“You’ve already told me no, but can I ask a few questions just to help me better understand things from your perspective?”
This simple question was a game-changer. It turned out that I had touched a nerve, and every supplier passionately explained why they don’t like doing business with online sellers.
It’s interesting what can happen when you simply ask the right question! Here’s what they said:
1. Terrible communication
As it turns out, the wholesale business model hasn’t evolved much in the last decade or so. Sure, we can sell on Amazon using amazing technology but the brands behind those products still operate as they always have.
This is why relationships matter when it comes to selling wholesale on Amazon: communication changes everything.
Every brand and supplier I spoke with brought up communication as the number one reason why working with Amazon or online sellers is painful for them. As sellers, we’re comfortable communicating behind chat or email, but we rarely make a phone call.
2. Small orders
The next thing I learned was that approaching a brand aggressively by negotiating hard on price, and then placing much smaller orders than expected, is not a healthy way to start or maintain a relationship.
I get it. You’re starting your business and capital is limited. But imagine starting a relationship and making demands from the first date, but never giving the other person what they wanted out of the relationship. Did you ever stop to ask what they wanted? Well, that’s what most people are doing when they start selling wholesale on Amazon.
