It's where you buy products from distributors of brand name
name brand, popular name brand products
You buy 'em low and sell them higher
That's kinda the very simple way to explain it
but this is a very highly requested video
I get asked this all the time
Beau, what
Like, what is wholesale again?
Or how is this different than private label?
What you're doing is FBA or, how does it work?
So in this video, I wanna explain to you about what I do
what I like to call as online retail
Some people also refer it as wholesale
and sometimes get the two a little mixed in between
How it's different than the other business models
and answering all your questions about that
So, first off, what is wholesale?
So, what I actually define wholesale is
People kinda get this confused
Wholesale is when you are selling at wholesale, alright?
What I would say
I'm actually a retailer, I'm not a wholesaler
I'm not a distributor
I'm a retailer, so I actually call what I do as online retail
But some people call the business model of what I do wholesale
because we're buying at wholesale and selling it retail
But what people, I would say, usually refer wholesale as
is where you're buying directly from small to medium-sized brands
at wholesale, and then selling it for a little more
So, that's what wholesale really is
What I do specifically, which is very similar
what I call as online retail
is where I'm buying from distributors
what you call middleman, wholesalers, distributors
of big name brand products
Like, the same suppliers that Costco, Walmart
Macy's, GameStop work with
A lot of people will be like, okay Beau, well
wouldn't be buying directly from the source
buying directly from Hasbro, or Mattel, or Apple
All these like, brands that you're selling
wouldn't it just make sense to buy directly from them?
Not always
If you look at Walmart, Costco, Macy's, GameStop
This is why I call it online retail, 'cause I'm doing what
all those big box stores do, like that
is, they don't buy direct from the source of who manufactures it
How the online retail business model works
is, you have manufacturers, also known as brands
So, like Hasbro manufactures their own goods
You know, Mattel, Samsung, Sony, PAW Patrol, Star Wars, Disney
They are the brands who manufacture the goods
and then they sell directly to distributors, or wholesalers
or what I like to call suppliers
So they're the middleman
Now, why does online retail, wholesale need a middleman?
Well it's very simple, right?
The middleman, their goal and objective is to buy
in massive quantities to drive the cost down
Bill Gates explains this in his book
Business @ the Speed of Thought
Why Microsoft had a middleman
help them actually lower their cost and sell more
You know, it's because a supplier doesn't sell just to Amazon sellers
They sell to eBay sellers, they sell to brick and mortar stores
So if they have like, 10,000 units
If they can sell 8,000 to a bunch of brick and mortar stores
like big box stores, like Walmart, Costco
and the rest to Amazon sellers
allows them to buy in massive quantities, drive the cost down
A good example is, I'm actually
was sourcing products from like, this water distributor
And they told me that like
if I would go buy directly from the manufacturer
it would cost me like an extra 5x more
So anyway, that's how it works
You have manufacturers, suppliers
and then you're the Amazon seller buying from those suppliers
So how is it different than private label?
Private label, where most people kinda hear about Amazon
and get it confused with FBA 'cause they think that
FBA equals private label on Amazon
FBA is just a fulfillment method
It's different in the sense that you are
not actually having to create up listings
With private label, you create a listing from scratch
You actually take a product
that may already be sold on Amazon
but you make it a little different so you make up your brand
and try to make it different
In online retail, you're selling products that are already on Amazon
So if it has 400 reviews
you're selling on to that same exact ASIN, and you're just
Your goal that you wanna do is just buy it at a low price
So what I like to say is, in
What I do in online retail, you make money off the buy
So off buying it at a low price
And then in private label, you make money off of
selling it high and, really selling it
So like, getting people to the listing
getting people to buy it, increasing the conversions
running the right marketing ads, getting ranked in SEO
So, that's kinda the main differences
I would say online retail is more of like
you make money on the buy
In private label, you're making money on sell
Because with the name brands, they're sold at the right price
There's MSRP, there's MAP pricing
things that are already structured there
It's just getting at the right price
Because if you can buy it low, then you win
Am I still doing FBA? Yes
FBA is not necessarily a business model
It just stands for Fulfillment by Amazon
where it is a fulfillment of my products
So, you can be doing arbitrage and be doing FBA
You can be doing private label and then be doing FBA
You can be doing wholesale and do FBA
You can do online retail and be doing FBA
The one thing you can't be doing FBA on is dropshipping
Because dropshipping is a fulfillment method
not necessarily a business model
For example, I can work with my suppliers
and my suppliers can dropship for me
But I don't do it because I have to be doing FBM on that
So then, the disadvantage of doing FBM is I'm not doing Prime
So I'm not favoring Amazon's algorithm
Those are the biggest issues, and then the costs are higher
So, I'm still doing FBA
So I buy from my suppliers, this is how it works
I will make an order with some of my suppliers
that can be located in the United States
I don't work with suppliers that are overseas
due to the fact that there's copyright issues
So if I go buy from a Chinese Hasbro supplier
They could legally sell me counterfeits
but I could not legally go sell them online
It's legal for China 'cause they don't have copyright laws
You know, Canada
Canada, for some reason, you guys don't have parities
But, you're not allowed to do that, but you guys have copyright
The European Union, they got copyright
So, I buy from domestic suppliers
And then when I buy from them, I wanna make sure it's scalable
and I'm working on my business
So I will have them ship to an Amazon fulfillment center
So then, Amazon receives them
and then ships directly to my consumers
So, in the private label essence, you typically buy from China
China ships in the US, US in the fulfillment centers
So what's kinda the main thing with this business model?
I know if you're doing dropshipping
the main thing is finding stuff that is
had a different price and getting, kind of arbitraging a little bit
Arbitrage, the main thing in that
is finding the right products that actually
you can buy low, sell high in
And the main thing in online retail
So again, to recap the definition
I see the definition of wholesale as
you're buying directly from small to medium-sized brands
It's fine
And then what I do is just a little branch right off of that
is online retail, where I'm focusing on big name brand products
Like, big ones
Some people can still refer it as wholesale, that's fine
But anyway, the main thing in my business model is suppliers
So, you know, 'cause you can think all day long
Like, what's the best products to go sell
You can learn marketing and ads, listing optimization, that's fine
But at the end of the day, if you don't have the right suppliers
and if you don't have the right products
from those suppliers, then you'll lose
I like to say suppliers first, then product second because
People also say, oh, it's chicken or the egg
Like, okay, well
They're like, Beau, you know, I can't find any good suppliers because
you've been doing this for such a long time
Like, do you understand that I used to
Like, when I started my business, I wasn't doing anything
and I was pretty young
So if like, I can do it at a young age
that gives you no excuse to like, be able to do it yourself
If you're looking to go like, find the right suppliers
and have the right education to your business
Because suppliers are, like the main importance for it
but it's not everything
You still need to understand like, how to look at a product
Like, how to look at the history behind it
because prices can go up and down
So you wanna be in those consistent sources of inventory
Understanding how to communicate with suppliers
I would say it's like, the 80-20 rule where
it's more important on how you actually know how to operate suppliers
Understanding how to get ungated in Amazon because
one big part of, you know, doing wholesale, online retail as well
is that you're gonna be restricted in brands and categories
So, if you're working with the right suppliers
they can actually get you ungated
and approved, unrestricted in those categories
But if you're looking to have the right education
you know, finding the right suppliers
I actually put together a free 4-day training
where you can actually go with all of that
So, it breaks down to 4 days where
You know, day 1, I'm going over the business model
and also product research
You know, day 2, I actually go over about like, finding suppliers
Day 3, I go over about ungating, getting approved
And day 4 is really about scaling and
a bunch of miscellaneous in between there
But anyway, if you're looking to learn about that
you can click the link down below
or you can go to onlineretailmastery.com
to get access to the 4-day training
But if there's any other questions about, you know, online retail
or wholesale, or whatever you have be it
comment them down below and I'll be answering your questions
But, have a good day, and I'll see you in the next video