Expand your Amazon FBA business and increase earnings with bulk buying and bulk shipping products to sell on Amazon.
At some point, your Amazon business will begin to pick up and you’ll be selling out your inventory very quickly and you may see your profits begin to plateau. To expand or surpass the plateau, some sellers will expand their businesses by growing their inventory and their stock. Instead of buying a couple of products from a manufacturer, they start looking towards more advanced strategies such as bulk buying and bulk shipping. Bulk buying, also known as “mass buying” is the process of buying mass quantities of a single product at a lower price and then reselling the large quantities for a profit. Instead of small quantities, sellers order large shipments, whether it be pallets or truckloads, to be shipped to Amazon FBA for selling. For sellers hitting a profit plateau, bulk buying and bulk shipping are great opportunities to scale your business.
These advanced strategies for Amazon FBA can become extremely risky due to the commitment and high capital required to buying truckloads of merchandise. But, if sellers can execute bulk shipping correctly, it can lead to massive profits and financial growth.
If you are reading this blog, you’re most likely an established Amazon FBA seller and are looking for new opportunities to expand your e-commerce business. If that is the case, you are in the right place! In this guide, we’ll be going over some advanced Amazon strategies regarding buying and shipping bulk products and how you can leverage this opportunity to massive business growth.
Price Negotiation with Suppliers
Before you can even consider bulk buying and bulk shipping products to Amazon FBA, you have to communicate with your current wholesale or private label supplier or manufacturer to see if they can meet your manufacturing demands. Depending on the number of products, discuss the opportunity with your supplier to see if bulk buying and bulk shipping is even possible or worth pursuing.
You want to inquire about the manufacturing timeline and potential price points. When it comes to supplying larger quantities of products,
- How long will it take to produce?
- What methods of shipping does your supplier provide?
- Does your provider have a minimum order quantity (MOQ) for mass buying?
Next is discussing price points. This is where you should negotiate with your supplier regarding the cost of goods. If you are buying more products,
- What is the lowest price you can get per unit?
- What is the recommended selling price?
- How profitable would it be?
- Do you have enough capital to meet their minimum requirements?
- Can you sell enough stock to maximize your earnings?
While you should be respectful and try to maintain a strong and transparent relationship with your manufacturer, it is vital to remember the amount of risk you are taking in bulk buying. As a seller, you are fronting a ton of capital and taking on a lot of risk by greatly increasing your normal inventory order. You want to ensure you are getting the lowest prices for your bulk order so you can maximize your profit margins and return on investments (ROI).
Shipping from Supplier to Amazon FBA
Eventually, you and your supplier will agree on the negotiations and you can then move forward to the shipping and delivery logistics with bulk orders. After you put in a large order for any product, you have two options depending on what your business can handle.
Option 1: Sending the products to your location (home, garage, warehouse, etc.) for you to inspect and ship to Amazon
For option 1, the process is quite simple. Once the shipment arrives, you can decide what to do with the inventory. Some sellers inspect the products then ship the whole pallet to Amazon. Other sellers may take their time, hold some stock and send some off to sell. This option will have added benefits like being able to do quality assurance before the products are sold, lowers potential storage fees by having less stock at Amazon’s warehouses, and provides more agency to sellers who have control over their inventory.
Option 2: Working a deal with your supplier to directly ship to an Amazon Fulfillment Center
If you choose option 2, the process is a bit more complicated but will be less work for sellers in the long run. Sellers can work out a deal with their suppliers to directly send all of the stock to FBA centers for the seller. This option requires a lot more communication and cooperation with your supplier since they will need to package the products based on Amazon’s requirements, apply labels to the products, and send them off to Amazon. As a seller, this option is less work since they will not have to interact with any physical merchandise, but can also lead to more risk, especially if you are shipping products overseas. With more established suppliers, many of them already have a program for FBA sellers, so make sure to inquire if your supplier has a similar program.
Small Delivery Parcel (SDP)
When shipping to Amazon from a supplier, you have a couple of different shipping options that vary in price depending on the quantity, amount, size, and weight of your products. For smaller packages, most sellers rely on “Small Delivery Parcel” or “SDP.” SDP is provided by most delivery carriers including FedEx and UPS, which also offer Amazon exclusive discounts. To use SDP, you have to abide by the following requirements:
- All packages must be less than 150 pounds in total
- Each box cannot weigh over 50 pounds
- Boxes must be less than 25 inches for the size, length, and width
If eligible, your products can be sent by SDP from the supplier. Make sure to negotiate with your manufacturer regarding the shipping price or delivery service and determine which would be the best option for your business needs.
Less Than Container Load (LTL)
Some products and packages may be too heavy or too large to fit under the constraints of SDP. An alternative for sellers shipping large quantities of products is using “less than a container load” or “less than a truckload” also known as “LTL.” From the name, you can infer that this shipping method utilizes large freight trucks to deliver these products.
Do not worry, you do not have to fill up an entire freight truck! LTL means that you will be using a freight truck that is delivering multiple products from various sellers. A single seller uses a portion of the entire freight truck, and by having a ton of sellers join in, these small portions will fill up the entire freight for shipment. For sellers, this is the best alternative method to SDP to ship large amounts of stock.
As always. Amazon has a ton of shipping instructions and packages requirements that all sellers and their suppliers must follow when shipping to an Amazon FBA center. A single LTL shipment cannot have more than 5,000 boxes, anything over will require multiple shipments. Most if not all LTL shipments utilize wooden pallets which are 40 inches x 48 inches. All of your products must fit within the dimensions of the pallet. For tall products or multiple boxes, Amazon may require additional pallets or “double stacking” every 48 inches of height. Boxes of packages that can be placed on pallets shrink-wrapped, and shipped to the Amazon Fulfillment Center indicated in a seller’s Seller Central account.
With Amazon, there will also be pallet label requirements. Ensure that all four sides of the pallets have a secure, visible, and easily accessible barcode label that can be quickly scanned. The labels should have all of the usual information including the shipping address, sending address, ASIN or product identifier, and SKUs. For more information on how to label and ship products, you can check out our guide on Amazon Shipping 101. In addition to the usual information, Amazon also requests shippers to include a label regarding the pallet weight and how to handle the products at the FBA centers.
- For product boxes that weigh over 50 pounds, labels should state “Team Lift.”
- For product boxes over 100 pounds, labels should state “Mech Lift.”
- For product boxes with multiple SKUs or ASINs, labels should state “Mixed SKU.”
- For products that have multiple products sold together under a single SKU, labels should state “Sold As Set.”
Photo provided by Amazon at https://sellercentral.amazon.com/gp/help/external/200978400
This information is extremely vital for the Amazon FBA workers to quickly and safely store their products. Remember to communicate with your supplier or manufacturer who is sending in your products to ensure they are upholding Amazon’s shipping and labeling guidelines.
A couple of suppliers may refuse to label products or may not offer that service, if that is the case, you can still ship the products to Amazon but will have to pay for Amazon to label the products for you through their Labeling Service. This method is perfectly fine and safe, but all sellers using this option should take note of the cost and how it can impact their profitability.
Bill of Lading (BOL)
The next step for shipping LTL and product pallets is the Bill of Lading or “BOLs.” BOLs are shipping receipts that the sender obtains and signs once a shipment is picked up by the freight truck company or carrier. This document is usually provided by Amazon, and should include the following information:
- ASINs or product identifiers
- Seller’s name and legal name
- Sending address (either your address or your supplier’s address)
- Carrier name and their standard carrier alpha code (SCAC)
- Carrier’s shipping reference number (PRO#)
- Shipment information such as the number of pallets, boxes, products
- Freight and shipping costs
For shipments that are a full truckload (FTL), you will also be required to include the trailer and seal number and SLC or “shipper load and count,” along with the information we listed above. After the shipment is picked up, the BOL will need to be signed by the sender (whether it be the seller or the manufacturer). Amazon will send BOLs to the seller’s email. If your supplier is sending in the shipment, quickly get in touch with the sender and provide them with the BOL to sign upon pick-up. You can also upload the BOL and additional information on Amazon’s web form through Seller Central.
Please note that failure to provide and sign the BOL can lead to the refusal of packages and products by Amazon. For more information on shipping LTL or FTL, you can refer here: https://sellercentral.amazon.com/gp/help/external/200978400.
Selecting a Freight Class
The last thing we want to note about bulk buying and particularly bulk shipping is the cost of shipping LTL or through a freight shipping company. Freight classes are based on the amount of space you take up in a single freight container. Simply put, the more space your products take up, the more you will be charged. Some freight companies can charge as little as $50 for smaller packages while some can spike to around $500 if you take up an entire freight.
Make sure to work closely with your manufacturer or whoever is shipping your products to find the best solution for your business. For international manufacturers, it is also important to remember the shipping times can be greatly extended when crossing into international countries and their borders. We discuss this a bit in our article on 5 Mistakes to Avoid Before Product Sourcing, but sellers buying products from overseas manufacturers should beware of time-sensitive products such as seasonal products or perishable products. Some freight shipments can be stuck in customs and border security limbo, which .could turn time-sensitive products into negative profits. Be extra cautious when selecting a freight class!
How to Grow Your Amazon FBA Business
High risk comes high reward. This saying is not only true in life but is a core ideology for Amazon FBA businesses. Once you start plateauing, you need to start looking into more advanced Amazon strategies such as bulk buying and bulk shipping. By executing these advanced strategies, you can exponentially grow your Amazon FBA business and you’ll see your profit growth as a reward.
For more advanced strategies and tactics to grow your business, check out Sellgo.com and our other advanced strategies in our blogs!