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3 Mistakes New Wholesale Sellers Make

Published on: December 1 2022 by Bryan Guerra

3 Mistakes New Wholesale Sellers Make

3 Mistakes New Wholesale Sellers Make

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00:00:00 00:00:05 so let's tok about three mistakes that
00:00:02 00:00:07 new wholesale sellers make
00:00:05 00:00:08 now number one is placing too large of
00:00:07 00:00:10 an order
00:00:08 00:00:12 and in a previous lecture we've actually
00:00:10 00:00:15 toked about how placing too
00:00:12 00:00:17 small of an order continuously can be a
00:00:15 00:00:18 red flag and a bad thing as well right
00:00:17 00:00:21 so obviously it goes without saying you
00:00:18 00:00:23 don't want to keep placing small orders
00:00:21 00:00:24 but when you're starting and when you're
00:00:23 00:00:26 a new seller and you're just ordering
00:00:24 00:00:28 wholesale for the first couple times
00:00:26 00:00:30 it's a different ballgame okay so
00:00:28 00:00:32 placing too large of an order when
00:00:30 00:00:33 you're starting out can be a huge
00:00:32 00:00:34 mistake okay
00:00:33 00:00:36 i get it trust me when you find a
00:00:34 00:00:38 profitable product that's selling a lot
00:00:36 00:00:40 of units per month it's super
00:00:38 00:00:42 exciting although when you're new you
00:00:40 00:00:44 might not see some of the red flags on
00:00:42 00:00:46 that product okay now obviously a great
00:00:44 00:00:48 way to understand these different things
00:00:46 00:00:50 that could go wrong is to watch some of
00:00:48 00:00:52 the wholesale tutorials in this course
00:00:50 00:00:53 specifically obviously in the module
00:00:52 00:00:56 that you just went through right
00:00:53 00:00:58 although the best way to understand is
00:00:56 00:00:59 not to simply watch the tutorials it's
00:00:58 00:01:01 actually to watch the tutorials
00:00:59 00:01:04 but then go out and source products
00:01:01 00:01:06 yourself so you can learn by doing okay
00:01:04 00:01:08 so that said don't place too large of an
00:01:06 00:01:11 order when you're starting out
00:01:08 00:01:12 instead place a smaller order and test
00:01:11 00:01:13 it out so you
00:01:12 00:01:15 can see for yourself what goes right and
00:01:13 00:01:17 what goes wrong right
00:01:15 00:01:18 now if you if your product is extremely
00:01:17 00:01:20 profitable
00:01:18 00:01:22 and it sells quickly then great
00:01:20 00:01:24 congratulations you just
00:01:22 00:01:26 sourced your first profitable wholesale
00:01:24 00:01:27 product and now you can replicate
00:01:26 00:01:29 it and source more products with similar
00:01:27 00:01:31 indicators that look
00:01:29 00:01:32 like it if it's not as profitable as you
00:01:31 00:01:34 thought though or it doesn't sell as
00:01:32 00:01:35 quickly or maybe other competitors jump
00:01:34 00:01:37 on the listing
00:01:35 00:01:39 or any number of other things
00:01:37 00:01:41 potentially go wrong then again
00:01:39 00:01:43 congratulations right that's not a
00:01:41 00:01:44 failure it's just experience and it's
00:01:43 00:01:46 feedback
00:01:44 00:01:48 you just learned a lot about what could
00:01:46 00:01:49 go wrong and now you'll know all those
00:01:48 00:01:51 things for the future for your next
00:01:49 00:01:53 products and at
00:01:51 00:01:54 at worst honestly it'll probably take
00:01:53 00:01:56 you a little bit longer to get your
00:01:54 00:01:57 money back so you'll have a slight cash
00:01:56 00:01:58 flow issue
00:01:57 00:02:00 because it didn't sell as fast as you
00:01:58 00:02:02 wanted but you'll still get the majority
00:02:00 00:02:03 of your money back so it's not like
00:02:02 00:02:05 you're out those products right
00:02:03 00:02:07 when i say things that can go wrong on a
00:02:05 00:02:09 wholesale listing usually
00:02:07 00:02:10 usually it just means your profit isn't
00:02:09 00:02:12 as high potentially
00:02:10 00:02:13 as you expected but you're still
00:02:12 00:02:14 somewhat profitable or you're breaking
00:02:13 00:02:17 even
00:02:14 00:02:18 or your items don't sell as fast as you
00:02:17 00:02:20 expected them to
00:02:18 00:02:22 and so your cash flows tied up for a
00:02:20 00:02:22 little bit longer than you expected
00:02:22 00:02:24 right
00:02:22 00:02:26 so even if it's you know a lot of things
00:02:24 00:02:27 can go wrong with listing right but even
00:02:26 00:02:28 if it's one of these things or a couple
00:02:27 00:02:30 of them
00:02:28 00:02:31 it does not mean it's horrible and
00:02:30 00:02:33 you're going to lose all your money it's
00:02:31 00:02:34 just an indicator of
00:02:33 00:02:36 hey this is a potential red flag so i
00:02:34 00:02:38 should avoid it in the future right
00:02:36 00:02:39 so when you're starting out do not place
00:02:38 00:02:42 too large of an order
00:02:39 00:02:44 test and learn you will get better now
00:02:42 00:02:44 the second thing that can go wrong
00:02:44 00:02:47 obviously
00:02:44 00:02:47 that the mistake that wholesale sellers
00:02:47 00:02:50 make
00:02:47 00:02:52 is not understanding every cost okay so
00:02:50 00:02:53 the total amount that you'll be spending
00:02:52 00:02:56 on every product
00:02:53 00:02:58 is not just the cost of the product and
00:02:56 00:03:01 the cost of the shipping okay
00:02:58 00:03:02 so it's again not just the cost of the
00:03:01 00:03:05 product
00:03:02 00:03:07 and the shipping okay it's also amazon
00:03:05 00:03:08 fees so make sure and this is if you're
00:03:07 00:03:09 watching any of the tutorials that i've
00:03:08 00:03:10 done
00:03:09 00:03:12 you will have done this right you are
00:03:10 00:03:14 going to use either the fba calculator
00:03:12 00:03:16 that amazon provides you for free
00:03:14 00:03:17 we're going to download the free amz
00:03:16 00:03:20 scout plug-in which
00:03:17 00:03:22 is a an fba calculator and an fbm
00:03:20 00:03:23 calculator so you should be calculating
00:03:22 00:03:25 your amazon fees right
00:03:23 00:03:27 but always remember that your amazon
00:03:25 00:03:28 fees are also a potential cost when you
00:03:27 00:03:29 sell it it doesn't matter if you're
00:03:28 00:03:31 selling fba
00:03:29 00:03:33 or fbm so make sure you run your
00:03:31 00:03:35 products through an fba calculator
00:03:33 00:03:36 and calculate those fees okay again it
00:03:35 00:03:38 is also
00:03:36 00:03:40 potential prep center fees if you're
00:03:38 00:03:41 using a prep center now everybody's not
00:03:40 00:03:43 gonna be using a prep center
00:03:41 00:03:45 a lot of people especially if you're in
00:03:43 00:03:47 the us or if you're ordering wholesale
00:03:45 00:03:48 products to another specific marketplace
00:03:47 00:03:50 you know directly you're going to be
00:03:48 00:03:51 ordering directly from the wholesale
00:03:50 00:03:53 supplier
00:03:51 00:03:54 into fba right a lot of people will be
00:03:53 00:03:56 doing that right
00:03:54 00:03:57 now if you're placing a test buy you
00:03:56 00:03:58 might be ordering it to yourself first
00:03:57 00:04:00 and then shipping it in
00:03:58 00:04:02 so that's another thing to consider
00:04:00 00:04:03 another potential shipping cost
00:04:02 00:04:04 but the majority of people are not going
00:04:03 00:04:06 to be using prep centers although for
00:04:04 00:04:08 the people that are outside the us and
00:04:06 00:04:10 selling on the us marketplace
00:04:08 00:04:11 or for the people that are in the us and
00:04:10 00:04:13 just want to not really get their hands
00:04:11 00:04:15 dirty but they want you know
00:04:13 00:04:16 product inspections on certain products
00:04:15 00:04:17 you might be considering using a prep
00:04:16 00:04:19 center
00:04:17 00:04:21 so if you are obviously remember that
00:04:19 00:04:23 that's also potential fees for every
00:04:21 00:04:24 product now it's gonna depend prep
00:04:23 00:04:25 senator prep center
00:04:24 00:04:27 and this is something that we've covered
00:04:25 00:04:30 obviously in other lectures right
00:04:27 00:04:30 but if you're using a prep center then
00:04:30 00:04:32 your theme
00:04:30 00:04:35 could be anywhere from 50 cents to like
00:04:32 00:04:36 two bucks a product so make sure
00:04:35 00:04:38 that once you identify the prep center
00:04:36 00:04:40 that you're using and what the prep
00:04:38 00:04:41 center's fee is per product
00:04:40 00:04:43 that you calculate those fees into your
00:04:41 00:04:46 potential profit margin
00:04:43 00:04:47 understand every cost okay so remember
00:04:46 00:04:48 to factor these things in when you're
00:04:47 00:04:50 sourcing and
00:04:48 00:04:52 also keep an eye on potential return
00:04:50 00:04:54 oriented items is something i didn't
00:04:52 00:04:56 really tok about a lot because i don't
00:04:54 00:04:58 potentially source a lot of these things
00:04:56 00:05:00 for wholesale on amazon but i wanted to
00:04:58 00:05:01 hit it home because a lot of you know if
00:05:00 00:05:02 i don't say it
00:05:01 00:05:04 and you know then i can't hold people
00:05:02 00:05:05 accountable for not knowing it right so
00:05:04 00:05:08 i want to hit it home
00:05:05 00:05:10 avoid potential return oriented items
00:05:08 00:05:11 like clothing for example or breakable
00:05:10 00:05:13 products those are two of the ones that
00:05:11 00:05:15 are most prevalent so clothing can be
00:05:13 00:05:17 return oriented because
00:05:15 00:05:18 for example if you're sourcing like a
00:05:17 00:05:20 bunch of different sizes
00:05:18 00:05:21 well people that are especially when
00:05:20 00:05:23 they're shopping on amazon
00:05:21 00:05:25 they might shop and buy like a small but
00:05:23 00:05:26 then realize that they're a medium right
00:05:25 00:05:28 so they return the small
00:05:26 00:05:30 and then obviously if they return the
00:05:28 00:05:31 small and they don't categorize the
00:05:30 00:05:33 return correctly
00:05:31 00:05:34 then you might be out that item and you
00:05:33 00:05:35 might be losing out on that money right
00:05:34 00:05:37 so that's why
00:05:35 00:05:39 i avoid clothing when i'm sourcing a lot
00:05:37 00:05:40 of times wholesale specifically for
00:05:39 00:05:42 amazon
00:05:40 00:05:43 you can source wholesale for ebay posh
00:05:42 00:05:44 micro mercari obviously or things like
00:05:43 00:05:46 that
00:05:44 00:05:47 because those aren't as very easy to
00:05:46 00:05:49 return but just keep in mind that a lot
00:05:47 00:05:51 of people source clothing on amazon
00:05:49 00:05:54 with the intention of hey i'll just
00:05:51 00:05:55 return it if it doesn't fit me okay
00:05:54 00:05:57 so different size things like that
00:05:55 00:06:00 different shoes different clothing items
00:05:57 00:06:02 a big return oriented item on amazon
00:06:00 00:06:04 obviously breakable products that's also
00:06:02 00:06:05 another return oriented item
00:06:04 00:06:07 uh that goes without saying right
00:06:05 00:06:08 because it can break in shipping so
00:06:07 00:06:10 these are things to think about when
00:06:08 00:06:11 you're sourcing just keep them in mind
00:06:10 00:06:13 okay
00:06:11 00:06:15 these are almost always bad wholesale
00:06:13 00:06:17 products to sell on amazon
00:06:15 00:06:18 because of potential returns and even if
00:06:17 00:06:20 they're still profitable make sure you
00:06:18 00:06:21 account for potential return issues here
00:06:20 00:06:23 and there
00:06:21 00:06:25 and losing profit that way but like i
00:06:23 00:06:27 said i just want to hit this home so
00:06:25 00:06:28 if you can you know if all else fails
00:06:27 00:06:29 avoid clothing
00:06:28 00:06:31 and different sizes if there's different
00:06:29 00:06:32 sizes on the listing if not then you're
00:06:31 00:06:34 fine
00:06:32 00:06:36 and if you can avoid breakable products
00:06:34 00:06:38 avoid those as well
00:06:36 00:06:40 now the third mistake that new wholesale
00:06:38 00:06:41 sellers make is treating buying from
00:06:40 00:06:44 suppliers like
00:06:41 00:06:44 every other online transaction for
00:06:44 00:06:46 example
00:06:44 00:06:48 if you shop on amazon and let's be real
00:06:46 00:06:50 who doesn't then you'll obviously
00:06:48 00:06:53 understand that the customer has
00:06:50 00:06:55 all the power you can return anything
00:06:53 00:06:57 you want on amazon for free
00:06:55 00:06:59 you can for example complain and get
00:06:57 00:07:00 refunded to amazon right
00:06:59 00:07:02 you can claim lost packages and get
00:07:00 00:07:02 refunded even when they've been
00:07:02 00:07:05 delivered
00:07:02 00:07:05 you can literally insert almost anything
00:07:05 00:07:07 there
00:07:05 00:07:09 and if you're an amazon customer you can
00:07:07 00:07:10 get away with it right
00:07:09 00:07:12 and this means as customers were
00:07:10 00:07:13 conditioned to feel like we're in the
00:07:12 00:07:15 power position
00:07:13 00:07:17 and and because of this we take our
00:07:15 00:07:19 relationships with sellers for granted
00:07:17 00:07:21 and with stores for granted right
00:07:19 00:07:22 after all the customer is always right
00:07:21 00:07:24 right
00:07:22 00:07:25 we've all heard that saying right and so
00:07:24 00:07:27 it's not just amazon it's a bunch of
00:07:25 00:07:28 different things that and
00:07:27 00:07:30 a bunch of different retail and
00:07:28 00:07:33 e-commerce sites that function this way
00:07:30 00:07:34 and so we all are kind of conditioned to
00:07:33 00:07:36 be this way right hey we're the customer
00:07:34 00:07:39 we have the power
00:07:36 00:07:40 but do not approach buying wholesale
00:07:39 00:07:42 like this okay
00:07:40 00:07:43 buying wholesale products is less about
00:07:42 00:07:46 using wholesale companies
00:07:43 00:07:48 as you know our store or sellers and
00:07:46 00:07:48 approaching it as a simple business
00:07:48 00:07:50 transaction
00:07:48 00:07:52 just like you would purchase something
00:07:50 00:07:53 on amazon for example
00:07:52 00:07:55 because it's more about forming
00:07:53 00:07:56 relationships more about
00:07:55 00:07:59 building rapport with companies in your
00:07:56 00:08:01 specific sales reps and establishing
00:07:59 00:08:03 long-term connections okay
00:08:01 00:08:04 by doing all these things and focusing
00:08:03 00:08:06 more on these things it will result in a
00:08:04 00:08:07 better buying experience for you
00:08:06 00:08:09 long-term
00:08:07 00:08:11 and cheaper prices and better future
00:08:09 00:08:13 deals obviously which benefits
00:08:11 00:08:14 your business okay if you instead
00:08:13 00:08:16 approach wholesale transactions like
00:08:14 00:08:18 every other purchase
00:08:16 00:08:20 you won't do your business any long-term
00:08:18 00:08:20 favors because you won't be building any
00:08:20 00:08:22 trust
00:08:20 00:08:24 any rapport with that specific company
00:08:22 00:08:26 and they will be less likely to
00:08:24 00:08:28 do you favors or drop prices and
00:08:26 00:08:31 continue working with you
00:08:28 00:08:32 in the future or giving you exclusive
00:08:31 00:08:35 products or exclusive deals so
00:08:32 00:08:36 remember these things these are three
00:08:35 00:08:39 mistakes that new
00:08:36 00:08:39 wholesale sellers make