wholesale amazon dropshipping program

How to Start Wholesale Amazon Dropshipping in 2023 so in today's video we're going to cover,the diff

Bryan Guerra 2

Updated on Jan 11,2023

How to Start Wholesale Amazon Dropshipping in 2023

The above is a brief introduction to wholesale amazon dropshipping program

Let's move on to the first section of wholesale amazon dropshipping program

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How to Start Wholesale Amazon Dropshipping in 2023

so in today's video we're going to cover,the differences between retail suppliers,and retail drop shipping and wholesale,suppliers and wholesale drop shipping,the reason that this is relevant is the,majority of people and rightly so start,with retail drop shipping because it's,easy to get started there's a lot of,suppliers you don't really need to go,through the process of applying to,websites or finding websites to dropship,from and so it's a perfectly logical,place to start and the margins can be,decent as well that said obviously it's,not really a sustainable business long,term especially when you're drop,shipping on amazon you want to move into,wholesale eventually and on top of that,it does get more and more competitive on,the listings whereas wholesale typically,not always this isn't like a a blind,rule of thumb but typically speaking the,margins on wholesale listings are a lot,more profitable and they're they're,typically less competitive right so,retail is a great place to start don't,get me wrong and you should start there,learn the ropes get some initial cash,flow so that you can obviously turn that,cash flow and scale your business and,move it into wholesale right but then,obviously it should be a means to an end,learn the ropes make some initial money,and then slowly morph into wholesale,this video will cover the differences,between retail drop shipping and,wholesale drop shipping and how you can,ultimately move from one to the next,overall you know the business model,remains the same but you simply source,with wholesale suppliers obviously you,simply source and set up relationships,with wholesale suppliers instead of the,retail suppliers right pretty,self-explanatory now again you're still,using a third party uh you know to store,your inventory and then to ship that,inventory out to your customers and do,the order fulfillment for you so nothing,changes there right the only difference,is you'd be having a wholesale supplier,do that versus a retail supplier and a,retail store to do that right like,walmart you or or, like those are retail,suppliers whereas here we're setting up,relationships with wholesale,distributors and wholesale suppliers,okay also you're going to get better,margins here so when you purchase,products at wholesale prices it's,typically going to be closer to the,manufacturing cost and closer to you,know,a better margin because there's a lot,more wiggle room from where you're,purchasing the price at versus like the,msrp and what it's typically sold for on,amazon right it's typically much lower,than retail as well obviously because,you're cutting out the retailer who's,the middleman right the retail store and,going directly to the source directly to,the distributor right so the way that,the supply chain works is you have the,manufacturer and then you typically have,a wholesale distributor or wholesale,supplier who gets the products from the,manufacturer which then gives them,typically to the retailer who marks them,up which then you buy them from and you,mark them up obviously to drop you from,your customer whereas here we're going,either directly to the brand so we're,either going directly to the,manufacturer,which cuts everybody out or we're going,directly to the distributor or the,wholesaler which cuts out the retailer,right so there's gonna be you know,regardless of which one you do and,typically we're gonna be working with,wholesale distributors and wholesale,suppliers which is the second kind of,step there uh you know,regardless of how how far down that,chain you move you're cutting out the,retail supplier so your margin is going,to be better typically right now you,don't also have to pay sales tax with,most wholesale suppliers um and that's,going to be a key there are some so,there are like exceptions to this role,there are some decent wholesale,suppliers that do actually charge you,sales tax but that's rare okay the,majority of a wholesale suppliers are,going to take your ein in they're going,to take your resellers permanent and,they're going to remit sales tax uh you,know obviously so that you don't have to,pay it right,because you're not the end consumer,there right you're obviously buying,those goods with the intention of,selling them or drop shipping them to,the end consumer who then owes the sales,tax you don't right so you're not gonna,have to pay sales tax obviously,with wholesale suppliers which is a,major difference and a major increase to,your overall profit margin both you know,in each individual transaction but also,overall right and this is only going to,really be the case with retail suppliers,if you're tax exempt on certain,suppliers so for example i'm tax exempt,on amazon anything any single time not,with every state but with most states,like every single time i order on amazon,and i drop ship from amazon,which obviously has its benefits like if,you're drop shipping from amazon to like,facebook marketplace or from amazon to,like somewhere else you know i don't pay,sales tax on those transactions because,i'm tax exempt although with other,suppliers you know for example like ebay,it's a complete headache to get tax,exempt because you need to get tax,exempt in every single state pretty much,in order to get that uh you know in,order to get um you know,tax exempt on on all your purchases,because you're not drop shipping to one,state typically you're drop shipping to,a bunch right same thing with like uh,walmart or like home depot like they,have tax exemption programs they're,retailers so does um bed bath and beyond,so does best buy but again same thing,you're not going to be able to just give,your resellers permit and then get tax,exempt on all of those specific,suppliers or on all those specific,states on that supplier it'll typically,only be for the state that you have your,permit in right so most most cases,and most suppliers that you're going to,be dealing with on amazon when you're,drop shipping to amazon like we're,covering in this course you are not,going to be tax exempt for and so one of,the benefits you know key benefits of of,drop shipping from a wholesale supplier,is that you don't have to pay that sales,tax right and you might be thinking like,because i did this in the beginning this,was one of the biggest revelations in my,business like after i started looking at,the numbers i was like holy i'm,leaving a lot of money on the table so,like for example like let's say you buy,something for from your supplier for,forty dollars right and the tax comes,out to like i don't know like randomly,like let's say like four dollars right,you're like okay it's four bucks not,that big of a deal i'm still making you,know let's say for example ten dollars,on your on your uh profit margin right,but if you got that four dollars it's,not that big with that transaction but,over the course of a month this can add,up to thousands of dollars every single,month that would other otherwise be,profit that you're then paying to the,state that you don't need to be paying,uh because you don't you're not actually,the end uh consumer of that product so,you don't owe the sales tax there right,so that's a major distinction you might,think it's small but it is actually big,and it adds up to a lot of money over,the months over the years that you're,doing this so that's obviously a benefit,as well right now also this is fully,compliant with amazon's terms of service,so obviously you're going to have a,valid,supply chain in case they you know might,inquire about a product or in case a,customer is not happy or if you need an,invoice also you'll be able to get,ungated with this if you're buying,invoices of 10 plus quantity to get,ungated with those suppliers and then,drop shipping after the fact like that's,completely different topic but um the,key here is you'll have a valid supply,chain and proof of that valid supply,chain because you can always show,invoices from a wholesale supplier to,prove authenticity on amazon as well as,show amazon that you are indeed sourcing,from a legit distributor and not a,retail supplier they hate that right so,for example if ever there was an issue,with,an order or a product and amazon asked,you about it if you were drop shipping,from a retail supplier the last thing,that you'd want to do is show that,invoice right because then you're,basically incriminating yourself and,showing them that you are drop shipping,from a retail supplier whereas if you're,drop shipping from a wholesale supplier,you want to show that invoice because a,it's proof that you actually sent the,product b it's proof that you actually,had the product and sent the product,that the customer ordered in that,variation that upc that sku etc and also,see,it's proving that you are sourcing from,a legitimate distributor and you have a,relationship set up with a legitimate,distributor of that brand and that,product right all of which amazon loves,so that's huge there also most wholesale,companies,won't put invoices in the box another,thing that's huge or put themselves as,the seller of record when drop shipping,or providing order fulfillment to the,customer which is exactly what amazon's,asking for in its drop shipping policy,right we've covered this in the in the,first section of the course like the,first couple lectures one of the things,that amazon does because a lot of people,think you're not allowed to drop ship on,amazon and you are allowed to drop ship,with amazon it literally says you are,allowed in the terms of service the only,key is you can't be the seller or the,you can't be drop shipping from stores,that provide it with the seller that,excuse me that provide themselves as a,seller of records so for example what,i'm trying to say is like you could,technically drop ship from walmart onto,amazon if if big if here and obviously,this if is never going to happen if you,set up a relationship with walmart so,that every single time you ordered and,drop shipped from them,they put you as the seller of record on,the actual trend on the actual invoice,and put that in the box and also didn't,have it with a branded walmart box right,but that's never going to happen,retailers don't set up those,relationships with you and they also,don't typically want you drop shipping,it's not like they're going to ban use,necessarily for drop shipping although,some of them will,retailers that is but you don't want to,go out and advertise basically saying to,them like hey i'm drop shipping like can,you you know put invoices not going to,put invoices specifically showing you as,a seller of record because they want the,credit for distributing it to the,customer right so whereas with wholesale,companies they're not going to put,invoices saying that their company is,the seller of record on that in the,actual box and they're also not going to,be shipping to the customers with,branded boxes so,even if you go with the most obscure,retail suppliers which obviously the,more obscure you go the better because,the customer won't recognize the the,supplier um also they are typically not,going to put invoices in that are going,to take customers off or anything like,that but if like you were drop shipping,from walmart specifically to amazon,walmart always and this is just one,example home depot does this um there's,a lot of different companies that do,this,and even like bed bath and beyond does,this best buy does this from time to,time like they come typically in like,walmart boxes that say walmart all over,the place with a walmart invoice in,there right and so the customer is going,to know immediately that like okay i,ordered from amazon but i got it in a,walmart box it's coming with a walmart,invoice that's showing the product price,as less than i paid for it on amazon and,most customers won't pay attention to,that but some will and all it takes is,one or two to get your account flagged,right whereas this is not something that,you'll run into with wholesale companies,also for example one of the places that,i drop shipped from for a while when i,was doing retail drop shipping uh more,significantly obviously i'm still doing,retail drop shipping but i'm moving more,into wholesale for all the reasons that,we're outlining here it's more,sustainable long term there's better,prices once you set up relationships,with companies you can build like all,those things we're going to cover,in this section but one of the things i,used to drop ships from one of the,companies used to drop ship from a lot,was bed bath and beyond and like i ran,you know,i don't know like hundreds of,transactions from them and made a lot of,money if not maybe into the thousands,but the key was,what customers would always message me,and be pissed off about was invoices in,their boxes showing uh the price less so,they didn't come in a branded bed bath,and beyond box uh but what happened was,they would get invoices in there showing,that like hey they purchased uh the,invoice shows it that the purchase price,was 20 but like they paid 42 on amazon,what's the deal and i would get messages,from them all the time and because i,didn't want them to be pissed off and,reported to amazon i would just refund,them which obviously you know is losing,my prop is cutting into my profit,margins but also is more of a headache,to have to refund customers and deal,with those problems i don't want to have,to deal with those problems all of those,things are examples and things that,you're not going to have to deal with on,wholesale suppliers so obviously that's,a benefit also,and most retailers obviously like i did,say,you know we just cover this ship in,branded boxes or they do typically put,invoices in their boxes not all of them,but a lot of them do and that's the last,thing that you want because amazon hates,that right i'm not saying you can't do,it obviously the entire first part of,the course shows you how to do it,effectively but it is a risk and,obviously you're not going to know which,suppliers do that until you do enough,orders and find out right which is,obviously risky also this is a more,sustainable and long-term form of drop,shipping right because it's more,difficult to do it this way and it's a,lot easier to source from retailers,there's actually believe it or not a lot,less competition with wholesale drop,shipping and on wholesale drop shipping,listings typically not always but,typically okay,because also it's fully compliant with,the amazon terms of service like we,covered it is more long-term than,sustainable and it is something that you,can count on as a long-term business,that you can then scale without worrying,about it right so when i was scaling up,retail to like hundreds of thousands in,in sales right i was constantly worried,about it because it was like all it,takes is one email from amazon one,ticked off customer uh whereas like,amazon's gonna get pissed shut me down,and then hold my money and thank god,that never happened fingers crossed but,which is also a reason why like it's,good to start there but then as you,scale you want to move into wholesale,because you have all the the tools right,you have all the experience you know how,to make money with the business model,and you you've proven the concept now,turn it into a sustainable business long,term and you can move all the strategy,and stuff that you learned in the,products that you can actually build,long term right so that's exactly what,i'm doing and that's exactly why i,recommend it to you that's exactly why,you want to count on that obviously long,term and move eventually into wholesale,also because you're building with strong,relationships with these suppliers you,know long term as you order more and,more you can negotiate better prices,which is obviously something that you'll,never be able to do on retail suppliers,you can't reach out to walmart customer,service you can't reach out to like you,know eat like,even ebay uh you know people or like,literally any any example like no,company that's a retailer is gonna give,you better deals simply because you're,like hey i'm drop shipping to thousands,of customers i've purchased from you,hundreds of times give me a better deal,they're gonna be like no the price is,the price,whereas a wholesale supplier you can say,hey i've drop shipped this or hey i'm,sending you customers you know and i've,sent you you know 100 whatever the,number is like obviously as you scale,you'll have more leverage there but like,hey i've sent you over 300 customers now,is there anything we any way we can work,out a lower price here you know so that,it benefits both of us because obviously,you're sending them enough business to,where they're going to make it worth,your while that keep you right so you're,building that relationship you're going,to negotiate better prices over the long,term this isn't something you're focused,on the beginning it's just good to know,that that's a possibility going forward,right,also typically this is the best of both,worlds right because with wholesale,suppliers like nothing changes in the,business model we still never have to,handle the products or even ship them to,customers ourselves and we're getting,all the benefits of it,of that part of the retail drop shipping,but also there's none of the risk right,so it's the best of both worlds the,major differences here just outline the,gamma that are again excuse me is that,we can finally get better prices there's,obviously less competition overall on,these wholesale products and wholesale,listings typically it's also fully terms,assert of service compliant on amazon so,there's nothing to worry about long term,whereas,with the business whereas retail drop,shipping obviously it's risky long term,even though it can be super profitable,in the short term uh in a building long,term sustainable scalable business that,we can count on for the foreseeable,future right so it's a no-brainer even,though finding wholesale products to,drop ship is harder work up front okay,that that's a given it's gonna it's not,gonna be as easy to find wholesale,products we're gonna cover different,methods that you can obviously use to,find products specifically i'm gonna,teach you reverse sourcing from your own,retail products i'm gonna teach you,reverse sourcing from competitors i'm,going to teach you how to actually find,wholesale suppliers that you can drop,ship from set up relationships from and,then obviously scan their product,catalogs so you will be able to find,them but it is typically harder to find,wholesale drop shipping suppliers and,it's going to be more work up front but,that's a good thing right that's a good,thing because it weeds out the,competition there's better margins,obviously there's less competition like,i just outlined and there's more safety,overall as a long-term,sustainable business that's more,scalable right so it is the best of both,worlds and it's a no-brainer to,eventually move into wholesale drop,shipping

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