- Lena R. Liberman
- On January 25, 2018
On this week’s Facebook Live event, Tyler talked with Dan and Eric from The Wholesale Formula. What Dan and Eric have accomplished is amazing and we’re always delighted to talk with them about their road to success and how they help, instruct, and inspire other sellers. They always keep it real, drop some great advice, and make us smile. You can watch a replay of the event below or you can scroll down further to get the key points. Enjoy!
Wednesday, January 24th: Join Tyler Henderson as he talks with the gentlemen of The Wholesale Formula, Dan & Eric. They're talking all things wholesale, so you definitely won't want to miss this.
Posted by Seller Labs on Wednesday, January 24, 2018
Dan and Eric and The Wholesale Formula: A Little Background
Dan and Eric started selling via retail arbitrage on Amazon in 2007. They made money, took their lumps, earned and learned. Because they had focused mostly on toys and games, summer was slower for them because those products are so holiday oriented. Since they’d made some money, they looked for opportunities for investing it during the slower summer season. That’s when the got into wholesale. They kept both the retail arbitrage and the wholesale businesses for a while, but the wholesale business really took off and was easier to manage. So in January 2015, Dan and Eric switched to wholesale entirely. It is their success that led to The Wholesale Formula (the business and the formula concept itself).
Is Wholesale Always the Answer?
Dan and Eric don’t think that wholesale is inherently better than retail arbitrage or private label or bricks-and-mortar or an e-commerce site (they tried them all), but it was the right choice for them. Maybe it’s the right choice for you but maybe not. You can catch their free workshop and find out for yourself. Whatever your sales angle—arbitrage, wholesale, or private label—Dan and Eric believe that it’s got to be a product that interests you and about which you are knowledgeable or passionate. If not, you can’t succeed.
Why Dan and Eric Prefer Wholesale to Private Label
- Wholesale is scalable and the brand is already established.
- Demand is established so there is lower risk.
- It’s pretty much the same process every time, so once you put that in place and document it, you can outsource and find other efficiencies.
- You can grow fast if you put the right processes in place and hire well.
- Private label requires a lot of lead time. The time and money are really heavy up front: designing, sourcing, dealing with samples, branding, launching, getting reviews, etc.
So How Do You Get a Manufacturer or Brand to Let You Be Its Wholesaler on Amazon?
First off, be wary of anyone who gives their product away without making you convince them of why you should be the wholesaler. Lack of discrimination from manufacturers leads to price corrosion and a very fast race to the bottom (not to mention unhappy customers).
You need to show manufacturers and brand owners that you are passionate about their products and express why you are the right person to bring their brand and goods to Amazon. What do you bring to the manufacturer and brand owner in terms of value? If they have been hesitant to sell on Amazon up until now, why should they say yes to you at this juncture? Find the pain point and address it.
Show that you are legit: Be an LLC, have a valid resale certificate and any other documents that your state or country requires. Have a professional website with a custom domain and professional email. Include a mission statement and testimonials.
Communicate that you understand Amazon and that there is a niche to fill with this product. How? Reverse sourcing! Instead of looking through product catalogs and hoping to find gold, use a tool like Scope to focus on Amazon by looking at what sells well and where there is an opportunity.
Once you’ve done that, don’t try to invent or make a product similar to or just like that one that’s selling well, just get that one and sell it! Get as close to the source as possible and buy there. And always show the manufacturer the value that you bring and why you’re the person to bring their product to Amazon.
Have Dan and Eric Piqued Your Interest?
If so, learn more by catching up on The Wholesale Formula’s free workshop. Even if wholesale isn’t your angle, you can still benefit from the workshop.