A Comprehensive Guide to Making Your First $1000 with Wholesale Selling on Amazon
Table of Contents
- Introduction
- Why Choose Amazon for Selling
- Retail Arbitrage vs. Wholesale Selling
- Getting Started with Wholesale Selling
- Setting Up an LLC
- Obtaining an EIN
- Sales Tax Certificate/Reseller's Permit
- Creating a Website
- Getting Ungated in Certain Categories
- Automotive Category
- Safety Documentation
- Other Gated Categories
- Finding Good Wholesale Suppliers
- BBCW and EE Distribution
- Dealing with Specific Brands
- Numbers and Revenue Potential of Wholesale Selling
- Sales Figures for Popular Items
- Why Wholesale Selling is Profitable
- Importance of Finding Reliable Wholesale Suppliers
- FAQs
- Conclusion
Selling on Amazon: A Step-by-Step Guide to Making Your First Thousand Dollars
Introduction
Are you interested in making money by selling on Amazon but unsure of how to get started? Look no further! In this comprehensive guide, I will walk you through the process of making your first thousand dollars through wholesale selling on Amazon. Whether you are considering dropshipping or using FBA (Fulfillment by Amazon), this tutorial will provide you with all the necessary steps to succeed.
Why Choose Amazon for Selling
Amazon is a global marketplace that offers unparalleled opportunities for entrepreneurs to make money online. With millions of customers worldwide, it provides a vast customer base for sellers. Moreover, Amazon's customer-centric approach, efficient logistics, and robust platform make it an ideal choice for sellers looking to maximize their profits.
Retail Arbitrage vs. Wholesale Selling
Before diving into wholesale selling, it's crucial to understand the key differences between retail arbitrage and wholesale selling. While retail arbitrage involves finding products at retail stores and reselling them for a profit, wholesale selling focuses on purchasing products directly from manufacturers or distributors at wholesale prices.
While retail arbitrage can be a viable option on platforms like eBay, it is recommended to focus on wholesale selling on Amazon. Wholesale selling offers higher profit margins, allowing you to earn significantly more than through retail arbitrage. In this guide, we will primarily explore the profitable world of wholesale selling.
Getting Started with Wholesale Selling
To embark on your wholesale selling journey, there are a few essential steps you need to take. Let's break them down one by one:
1. Setting Up an LLC
Setting up a Limited Liability Company (LLC) is a crucial first step for wholesale selling on Amazon. Most reputable wholesale suppliers require sellers to have an LLC before considering doing business with them. Incorporating your business in a tax-friendly state like Delaware or using services like IncNow or LegalZoom can simplify the process.
2. Obtaining an EIN
Once you have your LLC in place, it's time to obtain an Employer Identification Number (EIN), also known as a Federal Tax ID Number. While services like IncNow or LegalZoom can assist with this process, you can also apply for an EIN directly on the IRS website. An EIN is essential for opening wholesale accounts and tax purposes.
3. Sales Tax Certificate/Reseller's Permit
If you are incorporated in a state that requires sales tax, you will need to obtain a Sales Tax Certificate or Reseller's Permit. However, if your LLC is incorporated in a state like Delaware, which does not have sales tax, you can skip this step. It ensures that you can purchase products from wholesalers without paying sales tax, as you will pass the tax on to the customer upon sale.
4. Creating a Website
Having a website is essential, especially if you plan to sell in gated categories or with specific brands. A professional-looking website lends legitimacy to your business, which wholesale suppliers often require. While it doesn't have to be overly complex, a website showcasing your brand and products can significantly expedite the approval process for selling restricted items.
Getting Ungated in Certain Categories
Certain categories on Amazon, such as automotive, require sellers to go through a gating process to ensure quality control. To get ungated, you will need to meet specific requirements and provide relevant documentation. Let's look at a few examples:
1. Automotive Category
To get ungated in the automotive category, you will need a website and additional documentation like Material Safety Data Sheets (MSDS). MSDS is necessary when dealing with any products related to beauty or chemicals. It assures Amazon that your products meet safety standards and are suitable for selling.
2. Safety Documentation
In addition to the automotive category, other categories like beauty, makeup, and electronics may require safety documentation. These documents outline the safety standards and precautions for certain products, ensuring customer safety and compliance with regulations.
3. Other Gated Categories
Different categories may have unique requirements for ungating. It is essential to carefully review Amazon's guidelines and provide the necessary documentation. Remember, having a well-established website and strong online presence can significantly expedite the ungating process.
Finding Good Wholesale Suppliers
Finding reliable wholesale suppliers is crucial for the success of your wholesale selling business. While there are numerous options available, let's highlight a couple of reputable ones:
1. BBCW and EE Distribution
BBCW and EE Distribution are trusted wholesale suppliers known for their wide variety of products, quality service, and competitive prices. They offer excellent opportunities for selling items like toys and action figures. Moreover, both companies provide order fulfillment services, making it easier to handle inventory and shipping.
2. Dealing with Specific Brands
When dealing with specific brands like Funko or Hasbro, it may be necessary to establish direct relationships with these manufacturers. While you may already be ungated in certain categories, some brands have additional requirements. Build relationships with reputable suppliers and take advantage of their wholesale prices to maximize your profits.
Numbers and Revenue Potential of Wholesale Selling
Now that you understand the process of wholesale selling, it's essential to grasp the revenue potential it offers. Take a look at the sales figures for popular items like Funko pops:
- Charmander Funko Pop: Generates $40,000 in revenue with 62 reviews.
- Various Funko Pops: Thrive with hundreds, even thousands, of sales per month.
These numbers clearly demonstrate the immense earning potential of wholesale selling. By purchasing items at wholesale prices, you can compete on price and generate substantial profits. Wholesale selling allows you to capitalize on established brands, eliminating the need to create your own brand.
Importance of Finding Reliable Wholesale Suppliers
Finding trustworthy wholesale suppliers can make or break your wholesale selling business. The success of your business depends on the quality, pricing, and availability of products from your suppliers. It is vital to thoroughly research and vet potential suppliers to ensure they meet your business needs. Establishing strong relationships with reliable suppliers ensures a smooth and profitable operation.
Conclusion
In this step-by-step guide, we covered the ins and outs of wholesale selling on Amazon. From setting up your LLC to obtaining the necessary permits and finding reputable wholesale suppliers, we've provided a roadmap to help you make your first thousand dollars. Remember, taking the time to find reliable wholesale suppliers is essential for long-term success. So, follow the strategies outlined in this guide, be thorough in your research, and enjoy the journey of growing a profitable wholesale selling business on Amazon.
