How To Negotiate Prices With Amazon FBA Wholesale Suppliers

As an Amazon seller, finding the right suppliers is one of the most critical factors affecting your success. Negotiating prices with wholesale suppliers is a crucial skill that can help you maximize your profit margins. However, dealing with Amazon FBA wholesale suppliers can be challenging, especially if you are new to the industry. In this post, we will help you prepare for negotiation to do it like a pro and provide some tips and tricks on negotiating prices with Amazon wholesalers.

Related: Amazon Wholesale: All You Need To Know In 2023

How to Find Amazon FBA Wholesale Suppliers

What Do You Need to Know Before Negotiating?

When you start negotiating with the wholesale supplier, you must be prepared that this process differs from purchasing from low-tier wholesalers and online or retail arbitrage sourcing. In order to obtain the best possible price for bulk products, you must reach out to the brand owner or manufacturer. That will result in lower costs, prices, and competition, leading to greater profits. However, there are several challenges associated with this approach.

Joining a supplier network is tough

If you’re going to talk to a big brand and ask them to open a wholesale account, that won’t be easy. Big brands rarely sell their products themselves. They typically have a rigid reseller network and are reluctant to add new suppliers. The best potential suppliers often deny your first request to open an account with them. Therefore, it is critical to convince a brand that you will add value to their business and grow their sales.

Wholesalers may refuse to work with Amazon sellers

Suppliers are usually interested in sellers that trade through multiple channels besides Amazon, like other platforms or brick-and-mortar stores. That is because they’re eager to grow their sales and not the number of sellers on Amazon that will, in their opinion, just increase competition, not quantities, and will simply add paperwork by signing agreements and sending invoices back and forth. They usually give the excuse that they don't do business with Amazon sellers. Still, if you see other Amazon sellers selling their products, you will probably be able to persuade them to do business with you.

Be ready to provide references

Suppliers always require references, resale certificates, agreements, and other guarantees simply because they have no idea who you are and may consider dealing with another unknown Amazon seller risky. In addition, you must be ready to do a lot of paperwork, processing agreements, and many other formalities.

You must prove your skills

You need to be ready to prove that you have vast experience in Amazon sales and will be able to sell volumes. That means you must create solid cooperation with a supplier, which takes time. Use your negotiation skills. Never take “no” for an answer. Convince and prove you’re the best candidate to grow the brand’s sales. When you’re in, discuss discounts and better conditions.

How to Prepare for Negotiation?

Preparation is key to a successful negotiation with Amazon wholesale suppliers. Preparing for negotiations requires a combination of research, planning, and communication. You can achieve a favorable agreement that meets your needs by adequately preparing for a negotiation.

Research the supplier

Before negotiating, research the supplier's business and product offerings. Learn about their pricing, terms, and conditions of sale. This information will help you understand their business and what they are willing to offer. Also, make sure that the supplier is reliable and credible. Verify their company registration number, and ascertain they have a physical warehouse. Proving the wholesaler's legitimacy is crucial because you will invest essential money in this business.

Compare price offers

Look for several suppliers that offer the products you want to sell, and compare their prices. That will help you determine the average price for the product and identify the suppliers who provide the best prices.

Know your numbers

Before you start negotiating with suppliers, make sure you know your numbers. Calculate your profit margins, and set a target price that you want to pay for the product. That will give you a clear idea of how much you can afford to pay for the product and how much you can negotiate. Determine at what volume you need the products. Knowing this information will help you negotiate a favorable price and terms of sale.

Set your goals

Outline the key targets for the negotiation. Determine what you want to achieve: a lower price, better payment terms, or a larger order volume. Also, determine your walk-away point where the negotiation is no longer worthwhile.

Be flexible

Be prepared to compromise. Negotiations are often about finding a middle ground that benefits both parties. Be willing to adjust your goals and expectations to reach a mutually beneficial agreement.

Build a relationship

Building a relationship with your suppliers can help you negotiate better prices in the long run. Establish good communication and treat your suppliers with respect. Let them know that you are interested in doing business with them for the long term, and they will be more likely to offer you better prices and deals.

Prepare your bargaining chips

Identify the factors that can give you bargaining power. That may include your order volume, payment terms, or your ability to promote the supplier's products on Amazon.

7 Strategies to Get the Best Price from the Supplier

When you negotiate with the wholesaler, you aim to get the best possible price and deal terms, maximizing your profit. Below, we will describe seven strategies to help you get the best supplier offers.

1. Let suppliers compete

By letting suppliers compete, you can often negotiate better prices and terms. Start by identifying several suppliers that offer the product you want to sell. Reach out to each supplier and ask for a quote on the product you are interested in. Be sure to include the quantity you wish to purchase, which can impact the price. Once you have received quotes from multiple suppliers, start negotiating. Let each supplier know you are receiving quotes from other suppliers and looking for the best possible price. Be respectful but firm in your negotiations, and don't be afraid to ask for discounts or better terms.

2. Look for seasonal discounts

Some suppliers offer end-of-month or end-of-year discounts, which can help you save money on products. Take advantage of these deals, watch them, and negotiate for even better prices. If you plan ahead and stock up on products during the off-season, you can maximize your profit margins when the demand increases.

3. Take advantage of negotiating in bulk

Suppliers are more likely to offer better prices when you buy in bulk. If you plan to buy a large quantity of a product, negotiate for a lower price per unit. That will help you save money and increase your profit margins. Also, remember that wholesalers may offer discounts at different pricing tiers depending on your purchase volumes. You may be able to bargain additional discounts if you ask for them.

4. Consider paying upfront

Some suppliers may offer better prices if you pay upfront, especially if you offer cash payments. If you have the funds to pay for the products upfront, negotiate for a better price. That will help you save money and build trust with your suppliers.

However, you must take specific precautions with full prepayments, especially if you do that in cash. If you’re going to prepay a significant amount of money, be careful to deal only with wholesalers with whom you’ve already been doing business or proven established suppliers.

5. Leverage combined offers

If you encounter resistance from a supplier when negotiating the price of a high-demand product, you can try a different approach. Instead of asking for a lower price, request if they have any other stock, they can offer at a discount as part of the deal. This way, the supplier may have different products they need to sell and are willing to let go at a reduced price if you buy the bestseller at the advertised price. By purchasing these discounted products, you may find a potentially profitable opportunity.

6. Use NET terms

It's important not to overlook the significance of a supplier offering NET terms, as it provides you with free credit. With NET terms, you can potentially order inventory and pay for it only after you have sold it, making it a helpful tool for cash flow management.

In case you are unfamiliar with the concept of NET terms, it provides you with a line of credit from your supplier. Typically, when you place an order, you pay for it at the time of purchase or upon delivery. However, with NET terms, you can delay payment until later. The terms are often denoted as "NET 30" or "NET 60," indicating the number of days you have to settle the payment after placing the order.

However, be cautious as this approach has led to the downfall of many businesses. If you cannot afford to pay for the inventory or if it doesn't sell as quickly as you anticipated, you may face unfavorable consequences. On the other hand, using NET terms wisely can be an effective way to optimize your cash flow.

7. Ask for free shipping

Suppliers may offer free shipping even if it's not explicitly advertised, especially if asked. If they decline, inquire about the purchase threshold required to qualify for free shipping. If you don't intend to spend that much, asking for the minimum purchase amount needed for free shipping is still worthwhile if your request is denied initially.

Final Thoughts

Negotiating prices with Amazon FBA wholesale suppliers is a critical skill that can help you maximize your profit margins. By using negotiation strategies wisely, you can find a compromise that works for both you and the supplier. Remember that building a long-term relationship with your suppliers is essential, and treating them with respect and honesty can go a long way in securing better prices and deals in the future.

In addition, when negotiating, you must know your profit margins and have a clear idea of how much you can afford to pay. Seller Assistant Аpp will help you with this task. This all-in-one extension incorporates all features vital for product research. Seller Assistant App shows your product’s profit, margin, and ROI. It also helps you immediately see if a product has any sales restrictions or previously triggered account health problems. It is an all-in-one extension incorporating features vital for product research. It combines an FBM&FBA profit calculator, Quick View, Stock Checker, and Restrictions Checker in one tool.