Making the switch from retail arbitrage to buying wholesale?
Although there are many upsides to the wholesale model, there are also a few key differences to understand. At the top of the list is product sourcing and profitability analysis. As you’re probably learning, supplier catalogs could have hundreds or thousands of SKUs to pick through. How can you possibly know which ones are going to be profitable? Without the right tools, it’s simply impossible.
In this post, we’ll discuss how to find profitable products to sell on Amazon.
Stop Relying Solely on Your Arbitrage Tendencies
Sellers new to the wholesale game often try applying their existing arbitrage buying strategies. Sometimes this works, but it usually doesn’t. Allow me to explain. When doing arbitrage, you’re pre-programmed to first seek out clearance racks. And, naturally so…you’ve got to buy things as cheaply as possible (if you hope to make a profit). Amazon fees, shipping costs and fulfillment expenses add up quickly. If you’re sending items into the FBA program, you must also factor in the various fee schedules. In the arbitrage world, obtaining items at a 90 percent discount is still no guarantee of profitability – especially if the item is a slow-moving product and requires long-term inventory storage. After all, discounted items are discounted for a reason.
Buying wholesale provides much-needed leverage to obtain better pricing across the board (not just on blowout items). Unfortunately, it’s not always easy to break old habits. Although a supplier’s MAP (minimum advertised price) for an item might be double or triple its cost, it’s easy for arbitrage habits to resurface. Rather than looking for the best fits, the tendency is to still gravitate to closeout items. Sure, the markdown percentage is great, but will future sales velocity justify ordering the vendor’s minimum quantity? Investing thousands of dollars in a potential loser is a very risky proposition.
Harness the Power of Automated Research
So, how can you find a better balance between SKU profitability and popularity on Amazon.com? For starters, you need a research tool that will quickly (and affordably) scour your supplier’s catalog for superstar products. Rather than diving into the catalog yourself, you can use eComSpy to do the work for you. Here’s how it works:
1. Sign up for 100 free eComSpy credits (no credit card required!).
2. Copy and paste your vendor’s catalog and cost information into this template (Note: Download will start by clicking the link).
3. Save the file in CSV format and upload the catalog to eComSpy.
4. In no time, you’ll have a sortable, searchable profitability report.
eComSpy makes it easy to know which SKUs you should stock up on – and, which ones to avoid. At your fingertips, you have instant access to important details about each item, including:
- Current rank on the Amazon marketplace
- # of FBA sellers competing for the Buy Box
- Lowest price offered by a seller
- Estimated commissions and fulfillment costs
- Projected margin, based on supplier cost and other market forces
Now, you’re in a great position to make an informed decision. And, maybe you’ll even get lucky and learn a few blowout items are worth buying. Who doesn’t like a top-selling item that’s almost free to stock?
With eComSpy, you start with the hard facts rather than settling for what’s left over.
Build a Better Workflow
If you’re making the switch from arbitrage to wholesale, you really need an intelligent tool that helps you make smarter buys. Our eComSpy tool helps you do exactly that with no long-term commitments. Use eComSpy only when you need it – no contracts, monthly fees or subscriptions!
Use eComSpy and find more profitable products to sell on Amazon.
This post is accurate as of the date of publication. Some features and information may have changed due to product updates or Amazon policy changes.