Detailed Guide to Amazon Wholesale Business (2025 Updated)

If you’ve looked into ways to sell on Amazon, you’ve likely heard of private label, retail arbitrage, and dropshipping. Amazon wholesale is a different model, and for many sellers, it’s a more sustainable path to building a business.

The wholesale model involves acting as a traditional retailer on the world’s largest digital marketplace. You aren’t inventing a new product or building a brand from scratch. Instead, you’re buying branded products in bulk directly from manufacturers or authorized distributors and then reselling them on Amazon.

You become another distribution channel for brands that already have an established customer base. This allows you to leverage existing brand recognition, which saves significant time and money on marketing. Your main tasks are building solid supplier relationships, negotiating profitable deals, and managing the logistics of keeping Amazon’s fulfillment centers stocked.

How Wholesale Compares to Other Models

To understand why wholesale is different, it helps to compare it with other popular Amazon selling methods. Each model is suited for a different type of entrepreneur and has its own set of pros and cons.

Here’s a quick breakdown of the main Amazon business models to give you a clearer picture.

Amazon Selling Models At a Glance

As you can see, each model offers a distinct approach. While retail arbitrage focuses on opportunistic deal-hunting and private label is a full brand-creation marathon, wholesale is a straightforward B2B (business-to-business) operation.

Wholesale is a significant part of the Amazon ecosystem. As of 2024, around 26% of the 1.9 million active sellers on Amazon are wholesalers. It’s also a profitable venture for many; 57% of wholesale sellers report margins above 10%, with a solid 28% hitting margins over 20%.

How Your Day-to-Day Changes

The business model you choose completely shapes your daily tasks. A private label seller is deep in brand building, running ad campaigns, and managing social media. An arbitrage seller spends weekends scanning clearance aisles at Target and Walmart.

As a wholesale seller, your work revolves almost entirely around sourcing and operations. Success comes from finding reliable suppliers, analyzing product profitability, and mastering the process of keeping your inventory in stock to win the Buy Box.

This operational focus is what sets it apart. You aren’t creating demand out of thin air; the demand already exists. Your job is to meet that demand more efficiently and reliably than your competitors. It often comes down to who has the best supplier connections and the leanest operational setup.

Everything is typically managed through Amazon Seller Central, which provides the tools for listing, inventory management, and fulfillment. If you want to understand the platforms better, our guide on Amazon Vendor Central vs Seller Central is a great place to start.

Getting Your Business Set Up for Wholesale

Before you contact your first supplier, you need to get your business in order. Brands and distributors won’t work with just anyone; they need to see that you’re a legitimate, professional operation. Skipping these foundational steps is a fast way to be ignored by the partners you need to succeed.

Think of it as building your business’s resume. A solid setup proves you’re serious and trustworthy, which is what opens the doors to profitable wholesale accounts.

1. Form a Legal Business Entity

First, you need a formal business structure. While you could operate as a sole proprietorship, most legitimate U.S. suppliers won’t take you seriously. They want to see a formal entity as a sign that you’re a serious, long-term partner.

Your best option is usually a Limited Liability Company (LLC).

• Credibility: An LLC immediately tells suppliers you’re a real business, not just a hobbyist.
• Protection: It creates a separation between your personal assets (like your house and car) and your business liabilities. This is a critical layer of financial safety.
• Requirement: Many distributors will ask for your business registration documents and Employer Identification Number (EIN) on the application. Without an LLC, you won’t get an account.

Setting up an LLC is straightforward. You can usually do it on your state’s Secretary of State website or use an online legal service to handle the paperwork for you.

2. Get a Resale Certificate

A resale certificate, sometimes called a seller’s permit or reseller’s license, is essential for anyone serious about Amazon wholesale for business. This document allows you to buy goods from suppliers without paying sales tax.

Why does this matter? You’re the one who will collect sales tax from the end customer when the product sells on Amazon. The resale certificate proves to your supplier that you’re a retailer, making you exempt from paying tax on inventory you plan to resell. Operating without one will hurt your profits and make you look unprofessional.

You can apply for one through your state’s department of revenue or taxation agency. Keep a digital copy handy, because nearly every supplier will ask for it before they consider opening an account.

3. Set Up a Professional Amazon Seller Account

Your Amazon account is the final piece of the setup puzzle. To sell wholesale products, you’ll need a Professional selling account, which costs $39.99 per month. While there’s a free Individual plan, it lacks the features you need for wholesale, like the ability to win the Buy Box or use essential third-party software.

When you create the account, make sure every detail is consistent.

Your business name, address, and contact information must match exactly across your LLC registration, your business bank account, and your Amazon seller profile. Any inconsistency can trigger verification delays or get your account suspended.

This account is your digital storefront and your command center. It’s where you’ll manage all your listings, monitor inventory, and track sales. If you’re new to the platform, get familiar with its features by checking out our guide on what is Amazon Seller Central.

4. Build a Professional Online Presence

This step isn’t a strict requirement, but it makes a significant difference. Having a simple, professional website and a business email address (like yourname@yourcompany.com) adds a huge layer of legitimacy. When a brand representative looks you up, you want them to find a credible business, not just a random social media profile.

It’s a small investment that can change how potential partners perceive you. It shows you’re invested in your business’s image and ready to represent their brand professionally. To keep that operation running smoothly, it’s also smart to get familiar with the basics of supply chain management.

With these pieces in place, you’re no longer just someone trying to sell on Amazon. You’re a properly structured business, ready to approach suppliers as a credible partner.

Finding and Securing Profitable Suppliers

Your success in the Amazon wholesale business depends entirely on your suppliers. Everything hinges on them.

A great supplier relationship means consistent stock, healthy margins, and a partnership you can rely on. A bad one can sink your business quickly. This is where you stop setting up a business and start actively building your supply chain.

Finding the right partners isn’t about sending out a hundred generic emails and hoping for the best. It’s a methodical process of smart research, professional outreach, and careful vetting.

1. Where to Look for Wholesale Partners

You can’t sell what you can’t source. The first task is to build a list of brands and distributors who are open to new retail partners. Fortunately, there are a few proven ways to do this.

• Online Directories: Websites like Wholesale Central and SaleHoo are decent starting points. They list thousands of wholesalers, but you’ll need to do some digging to find quality partners.
• Trade Shows (Virtual and In-Person): These are excellent for making direct connections. Many are now virtual, making them more accessible. You can speak directly with brand reps who are there to find new retailers.
• Direct Brand Outreach: See a product you like on Amazon or in a store? Go straight to the source. A quick search for “[Brand Name] wholesale” or “[Brand Name] distributors” will often lead you to their partnership application page.
• Reverse Sourcing on Amazon: This is a classic technique. Find a product on Amazon that looks like a good wholesale candidate. Use a tool like Keepa to check its sales history and the number of sellers on the listing. If you see a handful of FBA sellers consistently sharing the Buy Box, it’s a strong sign the brand works with wholesalers. Your job is to identify the brand and contact them.

2. Crafting an Outreach Email That Gets a Response

Once you have a prospect list, your first impression is crucial. Brand managers receive dozens of these inquiries daily, and most are from unprofessional sellers. Your email needs to be professional, concise, and direct to stand out.

An effective first email should always include:

• Your Business Info: Clearly state your business name, LLC, and website.
• Your Resale Certificate: Attach it directly to the email. This shows you’re a legitimate business ready to place an order.
• Your Focus: Briefly explain what your business does and why you’re interested in their brand. A little personalization shows you’ve done your homework.
• A Clear Request: Be direct. State that you’d like to open a wholesale account and request their product catalog and price list.

Pro Tip: Don’t mention “Amazon” in your first email. Some brands are hesitant about adding more competition on the platform. Frame your inquiry as a retailer looking to carry their products. You can discuss Amazon later, once you’ve established a relationship.

3. Vetting Suppliers and Spotting Red Flags

Not all suppliers are created equal. Getting a “yes” is just the first step. Now, you need to ensure you’re partnering with a reliable company.

Here are a few critical vetting steps:

• Verify Authorization: Ask them for proof that they are an authorized distributor for the brands they carry. Selling counterfeit or unauthorized goods is the fastest way to get your Amazon account suspended.
• Check Business Credentials: Look them up on the Better Business Bureau. Do a quick Google Maps search for their physical warehouse address. Does it look like a real commercial building?
• Ask About Their Policies: Get clarity on their return policy for damaged goods, their typical shipping times, and any hidden fees. A professional supplier will have clear answers.

A major red flag is a “wholesaler” who doesn’t ask for your resale certificate. Legitimate suppliers must verify that their buyers are actual businesses for tax purposes. If they don’t ask, move on.

4. Negotiating Terms

Once you’ve vetted a supplier, it’s time to discuss terms. The price list they send isn’t always final. Key areas for negotiation are pricing, payment terms, and Minimum Order Quantities (MOQs). For a deeper look, our guide on how to negotiate with suppliers offers more advanced tactics.

• Minimum Order Quantity (MOQ): This is the smallest order they’ll accept. If their MOQ is too high, ask if they’d consider a smaller test order for your first purchase. Many will agree.
• Pricing Tiers: Many suppliers have tiered pricing where the per-unit cost decreases as your order volume increases. Always ask if they have a tier system and what volume you need to hit to get better pricing.
• Payment Terms: For your first few orders, expect to pay upfront. After you’ve built a track record of consistent orders, you can often negotiate for Net 30 or Net 60 terms. This means you have 30 or 60 days to pay the invoice after receiving the goods, which can greatly improve your cash flow.

Building a solid network of reliable suppliers is the foundation of a successful Amazon wholesale for business operation. It takes patience and persistence, but finding a few great partners is far more valuable than having dozens of mediocre ones.

Analyzing Products for Real Profitability

Finding a great supplier is a huge step, but it’s only half the process. Now comes the part that separates successful sellers from the rest: choosing the right products to sell.

A gut feeling isn’t enough. You have to analyze the data to determine a product’s true profit potential before you invest in inventory. The entire process comes down to one question: after all fees and costs, will this product actually make money? Guesswork leads to unsold inventory and lost capital. Solid data is your path to a healthy, growing business.

1. Run the Numbers with the FBA Revenue Calculator

Before you place a bulk order, your first stop should be Amazon’s free FBA Revenue Calculator. This tool is essential for getting a clear picture of your potential net profit on a sale.

It’s simple to use. Just enter the product’s ASIN, your item cost from the supplier, and the price you plan to sell it for. The calculator instantly provides a breakdown of all the Amazon fees, including:

• Fulfillment Fees: What Amazon charges to pick, pack, and ship your product.
• Referral Fees: Amazon’s commission, typically around 15%, but it can vary by category.
• Monthly Storage Fees: The cost to store your items in Amazon’s warehouses.

After subtracting these costs, the calculator shows your estimated net profit and net margin per unit. This isn’t a vague forecast; it’s a direct preview of your potential earnings. If the numbers don’t work here, they won’t work in your bank account.

2. Decode Key Product Metrics

Profit calculation is just the starting point. To know if a product is a winner, you need to look at the metrics that tell the full story of demand, competition, and sales consistency.

Best Sellers Rank (BSR): This is a quick indicator of a product’s popularity in its category. A lower BSR is better; a product with a BSR of 500 sells much faster than one at 50,000. For wholesale, a product with a steady BSR under 100,000 usually indicates consistent demand.

Sales Velocity: While BSR is a ranking, sales velocity gives you hard numbers. It tells you how many units a product sells each month. A product might have a decent BSR, but if it only sells 30 units a month, that may not justify a large order. You need to know the actual sales volume.

Number of Competing Sellers: This is a huge factor for wholesale. If a product listing has 40 other FBA sellers, you’re entering a fierce price war for the Buy Box, and profits will shrink quickly. The ideal spot is often a listing with 3 to 15 FBA sellers. This indicates the brand is open to wholesalers, but the competition is manageable.

A product with a low BSR, strong sales velocity, and a small number of other sellers is the ideal combination. It signals high demand with manageable competition, the perfect recipe for profitability.

3. Use Software to Speed Up Your Analysis

Checking every product from a supplier’s catalog manually is slow and inefficient. This is where specialized software becomes a necessity.

Tools like Helium 10, Jungle Scout, and SmartScout automate this analysis. With their browser extensions, you can visit any Amazon product page and instantly see a dashboard with every important metric:

• Estimated monthly sales and revenue
• Historical BSR and price charts
• The exact number of FBA sellers on the listing
• A built-in profitability calculator

These tools do more than just save time. They provide historical data, allowing you to see if a product’s sales are consistent year-round or just a seasonal trend. This depth of analysis is crucial for making smart buying decisions.

Essential Metrics for Wholesale Product Analysis

Here’s a quick-reference table breaking down the key data points you should evaluate for every potential wholesale product. Think of this as your pre-flight checklist before investing in inventory.

Using these tools and focusing on these metrics turns product sourcing from a guessing game into a data-driven process. You can quickly filter out unprofitable items from a supplier’s catalog and focus your energy only on products backed by solid data.

If you’re trying to figure out which tool is right for you, we have a full breakdown in our guide to the top Amazon product research tools.

This data-first approach lets you place large purchase orders with confidence, knowing every product you choose has been properly vetted to grow your bottom line.

Managing Inventory and Winning the Buy Box

You’ve analyzed your products and placed your first big purchase order. Now the real work starts. Getting your inventory to an Amazon fulfillment center is just the beginning. The main goal is winning the Buy Box, the button where over 82% of Amazon sales happen.

As a wholesale seller, you aren’t creating a new product listing. Instead, you’re joining an existing one and competing for a share of the sales. Amazon’s algorithm constantly decides which seller gets the Buy Box, and that decision is based on a few key factors you can control.

1. Creating a Shipping Plan and Prepping for FBA

For wholesale sellers, Fulfillment by Amazon (FBA) is almost always the best option. Using FBA automatically makes your products Prime-eligible, which is a major advantage in winning the Buy Box. Customers get fast, free shipping, and you offload logistics, customer service, and returns to Amazon.

To send your inventory to Amazon, you’ll start by creating a shipping plan in Seller Central. This is where you tell Amazon exactly what you’re sending, how many units, and how it’s packaged.

Amazon has strict requirements for how products arrive at their warehouses. You must follow their prep guidelines, which often include:

• FNSKU Labeling: Every item needs an Amazon-specific barcode. Using the manufacturer’s barcode (commingled inventory) is an alternative, but it can be risky.
• Bagging and Sealing: Items that are loose, liquid, or easily damaged will likely need a poly bag.
• Box and Pallet Rules: Your shipments must adhere to Amazon’s strict weight and dimension limits.

Getting this part right is critical. Mistakes can lead to delays in checking in your inventory or, even worse, your entire shipment being rejected at the warehouse.

2. The Core Factors of the Buy Box Algorithm

Winning the Buy Box isn’t just about having the lowest price, although that’s a significant part of it. Amazon’s algorithm is designed to give the customer the best possible experience. It considers several factors to determine which seller is most likely to deliver on that promise.

The Buy Box is a constant rotation. Amazon’s algorithm evaluates eligible sellers and rotates the “winner” based on who offers the best combination of price, speed, and reliability at that exact moment.

Here are the main variables it considers:

• Fulfillment Method: FBA sellers have a significant advantage over sellers fulfilling their own orders (FBM).
• Landed Price: This is the total cost to the customer, including your product price and shipping. You must be competitive, but you don’t always have to be the cheapest.
• Shipping Time: The faster the customer gets the product, the better. This is another area where FBA provides a built-in advantage.
• Seller Account Health: Your performance metrics matter. Factors like your Order Defect Rate (ODR), cancellation rate, and late shipment rate are all considered.

3. Using Automated Repricers to Stay Competitive

Manually adjusting your prices to keep up with the Buy Box is nearly impossible. Prices on popular listings can change dozens of times a day. This is where automated repricing tools become essential.

These software tools connect to your Seller Central account and adjust your prices automatically based on rules you set. For example, you can set a rule to always price your item $0.01 below the current Buy Box winner, but never go below a minimum price that protects your profit margin. It keeps you competitive 24/7 without requiring constant monitoring.

4. Why Your IPI Score is Important

Your Inventory Performance Index (IPI) is a single score from 0 to 1,000 that Amazon uses to rate how well you manage your FBA inventory. This number has a major impact on your business’s health.

A good IPI score (usually above 400) helps you avoid storage overage fees and storage volume limits. If your score drops, Amazon can restrict you from sending in more inventory, which can cripple your business.

Maintaining a high IPI comes down to smart stock management. Exploring more advanced systems like Vendor Managed Inventory (VMI) can provide insights into efficiency. If you want to dive deeper, we break it all down in our guide to inventory management best practices.

Common Questions About Amazon Wholesale

Starting an Amazon wholesale business is a big step, and it’s normal to have questions. Getting clear, honest answers is the best way to build a solid foundation and avoid common mistakes that new sellers make.

Let’s address some of the most frequent questions we hear.

1. How Much Money Do I Need to Start?

There’s no single magic number, but most experienced sellers recommend having at least $2,000 to $5,000 before placing your first order. This starting capital needs to cover a few critical areas.

• Your First Product Orders: A significant portion of your funds will go here. Most suppliers have Minimum Order Quantities (MOQs), so you can’t just buy one or two items.
• Business Setup: This covers essential costs like fees for forming your LLC and obtaining any state licenses you need.
• Amazon Fees: You’ll need a Professional seller account immediately, which costs $39.99 a month.
• Essential Tools: Software for product research and automated repricing isn’t free, but trying to compete without it is extremely difficult.

You could try to start with less, but it’s a much harder path. A smaller budget makes it nearly impossible to meet the MOQs from the best suppliers and limits your ability to test different products to see what sells.

2. Is the Amazon Wholesale Market Too Saturated?

It’s a fair question. When you see a popular product with a dozen other sellers on the listing, it’s easy to think you’ve missed your chance.

While competing on the most obvious, big-name products is tough, the wholesale market as a whole is not saturated. The real opportunity isn’t in a head-to-head fight with twenty other sellers. Success in Amazon wholesale for business comes from finding your own corners of the marketplace.

This could mean finding underserved niches or partnering with great brands that aren’t well-represented on Amazon yet. The goal is to be one of a few sellers on a listing, not one of thirty. That requires consistent product research and a real effort to build unique supplier relationships.

The key isn’t to avoid competition, that’s impossible. It’s to be smarter about where you compete. Focus on building a unique product catalog where you can maintain healthy profit margins without being dragged into a daily race to the bottom on price.

3. What’s the Difference Between a Distributor and a Brand?

Understanding this is fundamental to how you source products. Both can be your supplier, but they play different roles in a product’s journey.

A brand is the company that creates the product. They are the manufacturer, the original source. Buying directly from a brand almost always gets you the best pricing and higher profit margins. However, they usually have much higher MOQs and are more selective about who they partner with.

A distributor is an authorized middleman. They buy products in enormous quantities from many different brands and then sell them in smaller bulk amounts to retailers like you.

For new sellers, starting with distributors is often the smarter choice. Their MOQs are lower, making it easier to start without a huge investment. Plus, they offer a catalog of products from different brands from a single source. As your business grows and you can place larger orders, you can then start building direct relationships with the brands themselves.

4. Do I Absolutely Need an LLC to Sell Wholesale?

Technically, Amazon doesn’t require an LLC to open a seller account. But in the real world of wholesale, it’s a practical necessity. Operating as a sole proprietor puts you at a significant disadvantage.

First, there’s liability protection. An LLC creates a legal separation between your personal assets (your house, car, savings) and your business. If the business gets into debt or is sued, your personal finances are protected. That peace of mind is invaluable.

More importantly, legitimate U.S. brands and distributors often will not open accounts for sole proprietors. They see an LLC as a minimum sign of a serious, professional business that they can trust to represent their products well. Showing up with official business credentials is often the only way you’ll get considered.