Amazon Wholesale Explained: How to Source, Sell, and Profit with FBA

The Amazon wholesale model remains one of the most accessible and scalable paths into selling on Amazon. But it’s easy for new sellers to oversimplify or misunderstand key steps—and that’s when margin erodes, and risk creeps in. In this post, we’ll dive into how to source, sell, and profit with Amazon wholesale and FBA, giving you the roadmap to build a sustainable wholesale business.

What Is Amazon Wholesale?

In the wholesale model, sellers purchase existing branded products (from manufacturers or authorized distributors) at wholesale prices and resell them on Amazon. Unlike private label, you don’t develop your own brand or product — instead, you ride the demand of established brands. Wholesale sellers typically use FBA (Fulfillment by Amazon) for storage, shipping, returns, and customer service.

Key advantages:

• Lower risk, because you’re selling known products
• Faster launch speeds (no product development)
• Built-in demand for many SKUs
• Scalability through volume, relationships, and catalog diversity

But the profit lies in execution — sourcing, compliance, listing optimization, pricing, and operations all matter.

Step 1: Set Up the Foundations

Before sourcing, make sure your business infrastructure is solid.

• Register your business & get your EIN — Amazon and distributors expect formal business credentials
• Obtain a resale certificate or sales tax permit — to purchase products tax-free when you intend to resell
• Professional Amazon Seller account — typically the “Professional” plan is required for wholesale operations
• Brand/supplier authorization documents — some brands require you to prove you’re an approved reseller or have authorization letters for product lines

Without these in place, many distributors won’t even engage.

Step 2: Product & Market Research

Even though wholesale deals with existing SKUs, you still need to pick what to sell wisely.

Criteria for product selection:

• Consistent, stable demand (not just fads)
• Moderate competition (avoid oversaturated SKUs)
• Healthy margins after Amazon fees, shipping, etc.
• Products not dominated by Amazon retail or restricted brands
• Brands or SKUs where you can competitively differentiate (e.g. better pricing, bundling, faster restock)

Use tools like Helium 10, JungleScout, or Amazon’s own analytics to validate demand and competition.

Step 3: Find and Vet Suppliers

Where you source matters as much as what you source.

• Contact brands directly — many brands have “Become a Distributor / Wholesale” programs or contacts
• Authorized distributors — check that they are legitimate and recognized by the brand
• Request documentation — invoices, authorization letters, proof of legitimacy
• Start small & test orders — avoid committing too heavily before verifying quality, delivery, packaging

Be cautious of counterfeit risk or unauthorized suppliers. Always vet supplier credibility, get references, check public business records, request current invoices, and verify that they are allowed to supply the brand.

Step 4: Profit Modeling & Cost Analysis

Your margin is king in wholesale. Overlook any hidden cost, and you might be left with very thin profits.

Include all costs:

• Unit wholesale cost
• Shipping to Amazon (domestic or international)
• Amazon referral & FBA fees
• Storage, long-term storage, removal fees
• Returns and damage allowances
• Taxes, duties, tariffs if applicable
• Holding costs (capital tied up, risk)

A common rule: aim for at least 2–3× your landed cost in sale price (after Amazon fees) to maintain healthy margins.

Step 5: Listing Strategy & Optimization

Because you’re often entering existing listings (unless the product is new), you’ll need to differentiate and compete on content, imagery, pricing, and fulfillment.

• Listing contributions — add better images, enhanced content, additional bullets, backend keywords if allowed
• Optimize product titles, bullets, and descriptions — be precise, incorporate relevant keywords
• Better imagery & lifestyle photos — if allowed, superior visuals help you stand out
• Maintain winning metrics — high seller metrics (fulfillment speed, low defect rate) help Buy Box chances

Because many sellers may be competing on the same listing, conversion and pricing become the battleground.

Step 6: Pricing & Repricing Strategy

Your ability to compete on price without destroying margin is essential.

• Dynamic repricing tools — monitor price changes among competitors and adjust to keep competitiveness
• Minimum advertised price (MAP) constraints — if brand enforces MAP, you must comply
• Strategic undercutting & bundling — sometimes offering bundles or “value-add” deals helps avoid head-to-head price wars
• Margin buffers — maintain a buffer to absorb small fluctuations in fees, shipping, or returned goods

Step 7: Inventory & Fulfillment Strategy

Wholesale is only as scalable as your logistics.

• Stagger shipments & restocks — avoid large stock dumps that lead to long-term storage fees
• Monitor sales velocity & turnover — align inventory with demand
• Regionally balanced fulfillment (multi-warehouse) — reduce shipping costs and improve delivery times
• Returns management & quality control — inspect shipments, remove defects, minimize returns

Step 8: Scaling Tactics & Optimization

Once your initial SKUs are working, you can scale with strategy:

• Expand into adjacent branded lines or categories
• Negotiate better pricing or terms with suppliers as your volume grows
• Use bundling or exclusive variations within the same brand
• Diversify to multiple distributors for redundancy
• Monitor performance metrics and drop or adjust underperformers

Risks, Pitfalls & Mitigations

Final Thoughts

Amazon wholesale is a compelling model: lower product development risk, faster time to revenue, and leveraging existing demand. But profit lies not in the model itself — it lies in how well you execute sourcing, vetting, logistics, pricing, and listing optimization.

If you’d like help auditing your wholesale plan, sourcing suppliers, or scaling your wholesale + FBA operations, GoAmify is ready to support. Let’s make sure your wholesale approach is both profitable and sustainable.