A 24-year-old who has built multiple businesses around Amazon got his start doing wholesale on a $1,500 budget. He explains how to pick a product to resell for profit.
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- Jatin Naran began his Amazon wholesale career by purchasing products in bulk to resell to consumers.
- He made the rookie mistake of listing a private label product and received an IP notice.
- Since then, he’s learned how to find profitable products and suppliers.
There are several ways to make money selling products on Amazon, including arbitrage, wholesale, and private labeling.
Private label, or creating your own brand, is the most popular business model — according to Jungle Scout’s 2023 State of the Amazon Seller report, 52% of Amazon sellers use it — but it’s also the most expensive.
Wholesale, the second most common business model, is less expensive and less risky. You are not creating your own product; rather, you are reselling an existing one. What distinguishes it from arbitrage is that you purchase products in bulk directly from a brand or distributor.
However, as e-commerce expert Jatin Naran discovered the hard way, you cannot simply resell anything on Amazon.
Naran first tried his hand at wholesaling near the end of 2020.
“I ordered my first product from Alibaba, which you’re not supposed to do, and I sent that product off to Amazon under a listing thinking it was a wholesale product that you’re allowed to sell,” said the 24-year-old London-based entrepreneur. “Once it reached Amazon, I made around nine sales in the first hour and I’m like, ‘Holy crap, I’m going to be the next billionaire!'”
His high was fleeting. About an hour later, “I got an IP notice from the seller saying I’m not allowed to sell on this listing because they own the brand,” said Naran, who’d made the mistake of listing a private label product.
He lost about £500 ($606) that he’d spent on the inventory he wasn’t allowed to sell.
To avoid the same mistake, you want to look at the listing page of the product you’re interested in selling. If there’s just one seller, it’s likely a private label product. But if there are multiple sellers, you’re in the clear.
How to pick a product to sell wholesale
After the wholesale mistake, “I went back to the drawing board,” said Naran. He convinced a group of friends to figure out the business model with him. They began by watching YouTube videos on how to choose products to resell, enrolled in an online course on Amazon selling, and found a mentor.
“We found our first products, got a mini office, and we all used to be in that office doing Amazon together,” he said, estimating that their initial wholesale budget was no more than £1,500 ($1,823), with the majority of it going toward inventory purchases. “After a year, we made £100,000 in sales.” After a year, we decided to do Amazon FBA individually, and by 2022, we had all made over £100,000 in sales.”
Naran, who now does private label in addition to wholesaling, has discovered that product selection for wholesaling is relatively simple: find products that sell extremely well.
He and his friends’ purchases and resales “would be all over the place,” he said. “Tissues and liquids.” You don’t have to focus on a specific category as long as it sells and can be obtained at a lower cost.”
When it comes to determining what is selling well, several software programs, including Helium 10 and JungleScout, can help. Naran recently launched Sourcio, his own software designed to assist Amazon sellers in finding profitable products.
The difficult part of wholesaling, according to him, is finding a profitable supplier — that is, a supplier who will sell you the product at a price that allows you to make a profit.
“The best way to find a profitable supplier is to approach brands directly,” he said. “For example, suppose I want to sell Vaseline. I would contact Vaseline and open a trading account with them. This eliminates the wholesaler as a middleman, lowering your costs.
This method entails cold-calling Vaseline or whatever brand you want to sell. He’d simply type the brand name into Google (in this case, “Vaseline”) to find the official website, he explained: “Usually on the ‘Contact Us’ page there’s a sales number or customer service number.”
Rather than sending an email, Naran advises picking up the phone. A phone call is more efficient and could mean the difference between you being able to open a trade account with the brand or not. You want the brand to know that you’re not “just a random person knocking on your door to make a few hundred dollars,” he explained. Your delivery is critical. “We speak professionally: ‘We are here to do business with you.'” We want to establish a relationship that will earn you tens of thousands or hundreds of thousands of dollars in the long run.”
To succeed in Amazon wholesaling, “you don’t have to be an expert,” said Naran, who considers himself financially independent thanks to the various income streams he’s built around Amazon, ranging from selling to coaching. “You can learn how to look for a product that sells really well, source it, sell it, and then you can keep repeating the process.”
And you don’t need a lot of money: “I set aside £1,500.” That’s where I started. When I became successful, I was able to put in more money and keep repeating and reinvesting and growing. The more you spend, the more you can earn. Continue to reinvest your profits.”
