As RVers on the road, we tend to focus on retail arbitrage for our Amazon businesses. The reasoning makes sense. We are always moving and there’s always a new store to source. For many, the thrill of the hunt is what keeps them going. They love the excitement they get when they find that next product. It’s like a real life treasure hunt, except it makes money. Real money.
For the last couple months, I’ve been gently suggesting that people start thinking about moving their business more into wholesale. I even did a live webinar on the subject. Many seem reluctant to make the jump, but there are several reasons why you should. There has been more talk of wholesale recently in the Facebook group, so I though it would be a good time to write an article about it.
You no longer have to run around from store to store to find your next item to sell. Chances are, one of your current suppliers already has your next item. All you have to do is sort through their offerings and find it. There are even software solutions to make that even easier.
It’s a REAL business
At least it fits MY definition of a real business. A real business is a possession. It’s something you own. Because you own it, you can do with it what you please. That means you can place a value on it and sell it to someone else. It also means that it’s something you can pass down to your children.
Let’s look at retail arbitrage. It’s a great way to make money. It’s even a fun way to make money. Unfortunately, it depends on you running around searching for product. If you were to try to sell that type of business, where would the value come from? No one can buy your skill and knowledge in finding product. You could build up a sourcing team and train them. At that point one could say value could come from the team. The truth is, you are a major part of that team and without you, it would likely fall apart.
Wholesale is a different story altogether. If you are running a business based off wholesale, you have a list and a reputation. That’s all you need. That’s where the value is. If you have a list of accounts, contacts, and products, that holds value. If you have a history and a good reputation with that list of suppliers, that adds even more value.
With that list, and very little instruction, anyone can step in your place and begin running your business. That person could be someone you sold the business to, or it could be your children that you passed the business down to.
If you are doing RA and you want to grow, you’re going to have to hire some employees and train them, pay them, deal with payroll taxes, worker’s compensation insurance, and everything else that comes with hiring employees. Even then, the sourcing may not be done the way you want it to be!
Wholesale is easy to scale and grow to whatever size you want to be. Once you grow so big that you can no longer handle it from your RV (probably sooner than later), you can have your inventory sent to a prep center. They can receive, prep, pack, and ship your inventory to Amazon for you. That will clear the way for you to focus on what really matters: running the business!
Not everyone will have access to the suppliers that you find. That means not everyone will have access to the products you sell. The items you keep in stock will be the ones you have a shot at the buy box on and that avoid the race to the bottom. Less competition means margins are steady.
Source from Anywhere
This can truly make your business location independent. Sure, RA allowed you to travel from town to town finding inventory, but with wholesale you don’t even need the town! Your inventory is just a phone call away. Are you regularly in areas with no cell phone or internet service? No problem! You can set up inventory alerts that go to a virtual assistant and they can order your products for you and have them shipped to your prep company. Once you get to this point, it is as close as you are going to get to passive income. The only thing you may want to do is be continually looking for new suppliers.
If you want to source a restricted product, it’s no problem! You are getting it through a legitimate wholesale source, so supplying invoices are no problem. Also, when you are sourcing from wholesale suppliers, the products available are almost limitless. It’s no problem finding products that aren’t restricted,
Protect Your Seller Account
It has gotten to the point that the number one reason for suspensions is inauthentic claims. If you are buying from wholesale sources, you know your product is authentic and you have exactly the correct paperwork to back up your side of the claim. Basically, if your business is 100% wholesale you’ll never have to worry about an inauthentic claim against you.
Where to Go from Here
Hopefully by now you see that wholesale is a great option for those on the road full time in an RV. You may not want to quit hitting book sales or sourcing the clearance aisle, but wholesale needs to be a big part of your business.
If you are interested in learning more about wholesale, there is a complete wholesale course available in the Road to Freedom membership community. In it, there are instructional videos, terminology glossary, a list of potential wholesalers, and a replay of a live wholesale webinar we did for our members where I answered all the questions they could throw at me. I even found wholesale suppliers live and they got to watch me do it!
Make sure that while taking on wholesale, you avoid the seven most common mistakes Amazon sellers make!