Difference between Amazon Wholesale and other Models
Selling with wholesale is not the only way and model offered by Amazon. There are also other worthy models if one needs to get started with more money, more planning, and more consideration. The other business models which are proving that profits can be earned with little investment or high returns on huge investments are also being used by Amazon sellers for decades.
Counter Proven Business Models
There are three other business models which are being followed by a number of sellers. The three Amazon business models are as follow:
⮚ Amazon Private Label
⮚ Amazon Retail Arbitrage
⮚ Amazon Dropshipping
Each new investor willing to start selling at Amazon should know what are the differences between wholesale and other models. So, one should be able to get with the right model. Below is the detail in which the difference between wholesale and other models is explained briefly. If you are new to amazon business models, then read this explanation thoroughly and decide on the best model you would be offering.
Amazon Wholesale and Amazon Private Label
Amazon wholesale is a business model in which you are selling a product that has produced and owns legal rights of the products. The product has the logo of a brand which may be a manufacturer or someone who has manufactured with customization. To sell a product of others, what is the essential part is to have the brand approval letter from the owner of the product which enables you to resell that product.
In the case of private labels, it is essential to have a customized logo with a patent design registered in your name. You need to register a business, patent your own product design and produce the specific product with your own customization by yourself or someone else who provides customized manufacturing. This model required a lot of money and time to get started with.
Amazon Wholesale and Amazon Retail Arbitrage
There are cases when retail stores get sales or discounts on the products they are producing on their own. In such a situation, Amazon wholesale gets the products in bulk and resells them at a higher or original price through Amazon. This process is done by Amazon Arbitrage as well but the difference is that Amazon wholesale model purchases in bulk while the Amazon arbitrage model will buy few of the items from such retail stores. In reality, Amazon arbitrage is doing business at a very small scale while wholesale is dealing with huge product units. Another difference between the two models is that Amazon Wholesale deals and negotiates with the wholesalers directly while arbitrage models just buy at discount and sell online at a higher price.
Amazon Wholesale and Amazon Dropshipping
In the case of Amazon wholesale FBA sellers, you need to have your own inventory for which you had paid to the suppliers or manufacturers but in the case of dropshipping, there isn’t any inventory available. With Amazon Dropshipping, one needs to create a seller account, create a product listing at Amazon and once an order is received against the product, the same product is purchased from somewhere else, either from another online retailer or a real marketplace, and ship it towards the customers who had placed the order. In fact, this is the model which needs no inventory or storage fees from Amazon. In this case, only the Amazon selling fee is deducted from the sellers once a payment against an order is received. This model is best if you are in the same marketplace where you are selling with the dropshipping model or at least you should have someone who could manage to purchase the product and ship it to the customers.