Doing Amazon Wholesale while not living in the UK?

bogdy23

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Hello,

I want to start Amazon UK wholesale. The problem is, do I need a prep center? From what I understood from a mentor who won`t answer any more of my questions, you don`t ship the products directly to Amazon; you need to prep them first. How do I do that IF I`m not from the UK? DO I ship them here, where I live in Romania, and then ship them to Amazon UK?
 
What do you mean by 'prep'?
 
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bogdy23

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What do you mean by 'prep'?
I don`t know exactly what a prep center is. But from what I`ve understood from my research is that you don`t ship from China to the USA or the UK the products directly to Amazon, you put them yourself in a bubble wrap or in a box, and then ship them to Amazon. This is what I mean about the prep center, and I think I know what it means. A center that prepares your products to be shipped to AMAZON
 
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Why not get your supplier to do that?

I believe you can ship direct to Amazon.
 
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bogdy23

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Why not get your supplier to do that?

I believe you can ship direct to Amazon.
I don`t know all of the details, all I know is it's WHOLESALE AMAZON, not private label, and I think not FBA. Which means that Amazon ships the products. I`m really a noob at this stuff.

I believe, but I`m not certain, that if you do FBA, you just buy stuff from Alibaba and ship it to an Amazon warehouse, and then Amazon ships it to the client. But I don`t know for sure, that`s why I`m asking here.

What do you guys think about Dan Maderos from the Wholesale Formula? I`ve read that they are the best. Even Aidan Booth, who has very expensive courses, has teamed up with Dan Maderos in the Amazon e-commerce game.
 
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Why not ask Amazon about the process?
 
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fisicx

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@bogdy23 - you could pay for the training course. Might be expensive but could save you thousands of pounds.
 
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bogdy23

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@bogdy23 - you could pay for the training course. Might be expensive but could save you thousands of pounds.
Hello, I do want to pay for a course. But I`ve asked 3 questions or 4, and the guy said I asked too many and he doesn`t have any more time for me unless I buy a 150$ or 300$ consulting.

A lot of course creators start charging this. I know I ask a lot of questions, but I`m not gonna pay 150$ just to find out that his course will be a good investment or not.

I need to know how big of an investment it would be. I live in Romania, my paycheck is about 500-600$ a month. You can`t tell me, yeah, but that`s separate, and it costs 2000$. "I CLEARLY stated that isn`t in the course" .

I know of Dan Maderos from Wholesale Formula, but he teaches Amazon US, which, with Trump`s stupid war against China, is a no-go for me. That`s why it`s really hard to work for a job I want. I want freedom; this is why I want to become an entrepreneur.
 
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fisicx

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Two minutes on Google to discover you can combine Amazon Wholesale with FBA.

But your problem will be the bulk buying. To get the discounts you will need to spend thousands of dollars with the supplier. And you could easily spend thousands researching, sourcing and importing.

Whilst the barrier to entry is lower it’s not a cheap business model.
 
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But I`ve asked 3 questions or 4, and the guy said I asked too many and he doesn`t have any more time for me unless I buy a 150$ or 300$ consulting
Is that unreasonable? Should he give you advice for free?
 
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bogdy23

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Is that unreasonable? Should he give you advice for free?
Well, yeah, he isn`t telling me how to make money; he just tells me that I should buy his course, and the reasons for which I should buy it.

And how much money will it take in order for me to start? I mean I`m not bitching, I know I`m poor, but paying 150$ for someone to tell me how much money I need and for what in order to start a business is absurd in my opinion
 
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bogdy23

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Two minutes on Google to discover you can combine Amazon Wholesale with FBA.

But your problem will be the bulk buying. To get the discounts you will need to spend thousands of dollars with the supplier. And you could easily spend thousands researching, sourcing and importing.

Whilst the barrier to entry is lower it’s not a cheap business model.
There is a prep center in this wholesale model. The guy is from Germany, he buys stuff like Dallmayr coffee, preps it in his prep center, then ships it, packed, to Amazon, which later on ships it to the customer.

Like I said, I know a little about FBA, but I think this business model is a little different than FBA. I need to know how much a prep center is gonna cost in the UK since I don`t live there.
 
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fisicx

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Thousands. Everything you want to do will cost you thousands.

The coffee guy will be buying pallet loads of coffee every week.
 
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You will need to find these 'prep centres' and ask them!

Again, why can't you buy the goods pre-prepped?
 
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it`s probably because
Don't guess, know!

First thing to do is find the products and what you actually need to do something with!
 
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fisicx

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Yeah but how many? 5000$? 7000$? 10.000$?
Probably $10,000 and more. Suppliers will only want to deal with you if you order large quantities.

Setting up an staffing a prep centre could cost you another $100,000

Then you need a distribution network, marketing along with insurance and compliance and everything else.

It’s an expensive business. And because you are not in the UK your costs will be much higher.
 
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bogdy23

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Probably $10,000 and more. Suppliers will only want to deal with you if you order large quantities.

Setting up an staffing a prep centre could cost you another $100,000

Then you need a distribution network, marketing along with insurance and compliance and everything else.

It’s an expensive business. And because you are not in the UK your costs will be much higher.
I`m not gonna start my onw prep center I`m gonna use one that offers this kind of services
 
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bogdy23

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You will need to find these 'prep centres' and ask them!

Again, why can't you buy the goods pre-prepped?
Ok, so I`ve found out the reason why. The reason is not to have Amazon do it, it`s gonna be more expensive. Also, the guy from Romania who sells the course I want to buy says that the US Amazon is gonna stop this service. I don`t know if it's FBA or just prepping the merch to get shipped.
 
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fisicx

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I`m not gonna start my onw prep center I`m gonna use one that offers this kind of services
And will still cost you a lot of money. And you will need to be here to do the negotiations. You will probably also need a rep in the UK to manage the business.
 
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bogdy23

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And will still cost you a lot of money. And you will need to be here to do the negotiations. You will probably also need a rep in the UK to manage the business.
I don`t believe I need to start my own prep center. I`ve emailed one and am still waiting for an answer. Why negotiate? They have certain prices for certain products. The quantity is 400-1000 products a month. In the beginning, the 100k advice to start a prep center is stupid, if not evil, designed for me to stop pursuing this business because it might be saturated for the UK. And I being from Romania, I can get lower results but still make good money.
 
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fisicx

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But can you get the wholesale discounts with those quantities?
 
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bogdy23

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But can you get the wholesale discounts with those quantities?
I don`t know all the things yet. But from what I've found, there is an Amazon prep calculator for the UK. There it says around 1£ per package. The guy from the course says that he searches for products with a 40% profit margin, so I`m guessing I will have around a 30% profit margin after all costs are deducted, and those 30% will be my profit, which will get corporate tax.

Thank you all for your help,
 
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AmazonGeek

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    Sorry, been away again...

    FBA items need to be ready to pick so they need to be packaged properly and they must have barcodes on them.

    For example, let's say you want to sell widgets on Amazon.co.uk. If the product is already for sale on Amazon then you must find it in the catalogue and add your offer to it (you cannot just create your own listing). If there is a barcode on the product, check it matches the one on the listing. If it does, you are good to go.

    If there is no barcode on the product you can have a 'GTIN exemption'. This will generate an Amazon 'FNSKU' barcode which is unique to you. Print them off, stick them on the individual units and send them in. The important thing is - everything needs a barcode.

    You book the shipment into FBA via Seller Central, which will generate the carton labels. Once in FBA, when you sell a unit, Amazon will know where the carton is (from its label), open it up, pick a unit, scan its barcode and send it to your customer.

    If you are selling your own 'private label' product, you would normally sign up with GS1 and create your own barcodes for each ASIN. Again, it can be a manufacturer barcode, which can be used anywhere, or you can convert it into an FNSKU which is just for Amazon and unique to your account.

    I recommend doing all this yourself, or getting your factory to do it. Give them the barcode image and make sure it is on every unit. You can send products into Amazon and get them to do the barcoding but they charge a fee per unit and your supplier should do it for nothing.

    Re getting products into Amazon there are a few options:

    1 - if you are having them made in China and shipped to Romania first, then consider cutting that part out and shipping straight into Amazon. You can use Amazon Global Logistics for this and it is super cheap. A client of mine has just shipped 8 pallets of poker sets (about 2.5 tonnes) from China directly into Amazon UK for just over £300!
    2 - if they are small and light you can also use a company called SKUdrop, based in Yiwu. Your supplier sends your products there and then you can ship little and often. It is more expensive than AGL but easier to control and a great system (I used it for some of my small stuff)
    3 - If your products are made in Romania then you can't use AGL or SKUdrop but there are plenty of logistics companies that can manage the shipment for you. It will come into the UK port first, and then directly into FBA. However it is more expensive.

    Hope that helps
     
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    AmazonGeek

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    I don`t know exactly what a prep center is. But from what I`ve understood from my research is that you don`t ship from China to the USA or the UK the products directly to Amazon, you put them yourself in a bubble wrap or in a box, and then ship them to Amazon. This is what I mean about the prep center, and I think I know what it means. A center that prepares your products to be shipped to AMAZON
    Not true. Products need prepping ready for Amazon but any good supplier will know how to do this and if you can ship directly in to FBA then you can save a lot of money. In the US they have AWD which allows you to ship into an interim Amazon warehouse with low storage costs and then Amazon will automatically drip feed your stock into FBA when needed. In the UK/EU you can use AGL to ship straight from China directly into Amazon for a crazy low price.
     
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    AmazonGeek

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    This needs the advice of @AmazonGeek
    Yup, but I don't think I will be affordable.

    I run Amazon Academies for the Chamber of Commerce, FSB and multiple regional growth hubs. They pay me a lot of money to come in for a few hours and teach a small group of business what to do.

    In addition, I coach business 121 all over the world, from small enterprises to some of the best-known brands in the world.

    I am NOT cheap (my day rate is just shy of £1000). But... I learnt the hard way over a 15-year period how to do all this and when I sold my first company about 6 years ago I wished I had known at the beginning what I knew by the end (put it this way - I would not be sat here typing this now).

    If you want to sell on Amazon, find someone to teach you (not me though unfortunately as I am blocked out for months). It will take hours and hours (my typical client works with me for 3-6 hours per month for 6-12 months, gradually learning the whole system) but whatever it costs will be eclipsed in the long run by the difference it makes.

    Without proper coaching, at best you will massively underperform; at worst you will do something wrong that will end the business or get you shut down by Amazon for breaking rules you didn't even know existed!

    And as for trying to learn from Chat/Google/Youtube, etc good luck with that one lol! I use chat 100+ times a day and sometimes forget where stuff is on Amazon. 50% of the time it very confidently gives me completely the wrong answer and occasionally that advice would really cause a problem. And Amazon changes so often that a lot of the content on the internet is out of date...but you don't know which content! Finally, trying to learn yourself this way only works if you know what to ask. And you don't know what you don't know!

    Rant over. Good luck anyway :)
     
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    AmazonGeek

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    I don`t know all the things yet. But from what I've found, there is an Amazon prep calculator for the UK. There it says around 1£ per package. The guy from the course says that he searches for products with a 40% profit margin, so I`m guessing I will have around a 30% profit margin after all costs are deducted, and those 30% will be my profit, which will get corporate tax.

    Thank you all for your help,
    Yikes!
    Don't guess any of this. Know your numbers down to the penny...

    e.g.
    Retail price: £12
    VAT: £2 (you will need to be VAT registered in the UK to use FBA)
    Referral fee: 15.3%
    FBA fee: (depends on size and weight so make sure you know what that is)
    Storage fee: (depends on size and weight but is normally small, especially for small items)
    COGS: (work out your 'landed cost' - the price per unit to get it made and into Amazon FBA
    Whatever is left is your profit.

    Work out your profit margin/ROI. For Amazon aim for 100% ROI before PPC costs and 50% after. So if your landed COGS per unit is £5, you want £2.50 profit before PPC and £1.25 after. Any more than that and you almost certainly won't be competitive. Even if you sell reasonably well at a higher ROI, you could sell more by lowering your price. On Amazon it is all about maximising 1) profit per period of time, 2) market share, and 3) ranking position - all at the same time. If you can increase one without affecting the other two then do it (this is unique to Amazon FBA by the way - don't try it anywhere else!)

    If you don't know what all this means then you are not ready. Do your homework, learn all the terminology and do your sums. Or you will end up blowing a load of money and won't know what went wrong.
     
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    AmazonGeek

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    I didn't realise this!
    Not if you are based in the UK. If you have a UK limited company then you can use FBA here. But if you want to use FBA outside of your own country, then you must be VAT registered wherever Amazon is going to store your stock.

    So, I have a client based in Dublin. He had to register for VAT to use FBA in the UK but if he just wanted to use FBA in Ireland (now that it is available) he could do that without being registered.

    Likewise, my own company is based in the UK. When I started up, I could use FBA without being registered (I had to register after a few months when I hit the turnover threshold).

    But to use pan euro FBA you need to be registered in any country where you want Amazon to store your stock, no matter how much you turn over. So I am registered in Germany, France, Italy, Spain, Poland, CZ and Netherlands. I ship everything into Germany via Rotterdam and Amazon distributes it around Europe FOC.
     
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    Thanks - I am just going through setting up a business to use FBA and the VAT issue has not raised its head!
     
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