Day 3: Farming Leads
One of the biggest objections and failure points for people doing wholesale is that they feel like there simply are no companies that are profitable.
Let me be clear, there are a lot of companies that have very little to no margin for Amazon sellers.
However, there are also great companies with great margins that are waiting for the right seller to come along and help them.
If you focus on trying to source items that sell a lot of units per month, then you will have to go through a lot more unprofitable lists.
The reason for that is that Amazon is a supply and demand driven platform. The lower the sales rank, the more Amazon sellers will be interested in selling that product. The more sellers, in general, the more price erosion a product will see.
There is nothing wrong with looking for items with high volume, however, it can cause you to always be looking for the next lead. You will find a product and place an order and you will find you experience some of the same pricing you did when you were shopping in retail stores.
We can help you get accounts that move more units per month. However, for now, let’s learn to crawl before we run.
For this exercise, I want you to focus on companies that are smaller. That means companies with fewer than 50 products (for apparel, shoes, and grocery you can go wider). The more products a company is producing, the more money they must have to keep all of those products in stock. So we are going to use the number of products a company has to identify companies that are younger and less likely to have a “NO AMAZON SELLERS” policy or that are already or will shortly be over-saturated.
I promise you can go back to bigger companies after you get your first 10 lists. I just want you to get some quick wins. You aren’t going to necessarily buy from these companies.
I just want you to get your email and call scripts just right. So that when you have the opportunity for your dream wholesale account you can be confident and make a great first impression.
Sometimes a product has a bad sales rank because the listing is bad. Opening up your criteria to include these products (products that generally have a higher sales rank) can help you find the diamonds in the rough. This is also how you get away from the herd. So just try this idea on and trust us for a few days.
Go to the trade show that you found yesterday
(If you joined the challenge late or are behind in the work you can use one of the following shows: Fancy Food Show, Toy Fair New York,or ASD Las Vegas)
Next I am going to have you go through the list and separate qualified vs unqualified leads. This qualification process is centered around finding high-profit items. If you want to focus on low margin, high volume items you simply would switch points three and four below.
Go through the exhibitors one by one. Pick three random products from their website and look for the following:
Is this something I can sell on Amazon?
Is Amazon selling the products?*
Does this have a low retail value (under $15) or is it a generic item?*
Are the items are selling at or above MSRP (Manufacturer Suggested Retail Price) on Amazon?
Do the items I spot check come within 5% of my target sales rank? (If you are just getting started start by looking for items in the top 10-15% of its category). You can use this chart for sales rank percentages. Use this for the sales rank chart as a rough guide.
Are there less than 10 sellers on this item?
Academy Members- There are additional videos in the Wholesale 3.0 Course
As you go through this process I want you to keep track of all of the companies that meet this qualification process. You can use a simple spreadsheet or you can use ASANA like I am in the video. (ASANA is a free tool with a premium option)
For each company that meets your qualifications capture the company name, phone number, and email address.
Your assignment today is to find at least 25 leads. Today might take you a little closer to an hour- so if you need to split this up into a second day- do it! I purposely scheduled this so you have the weekend to get caught up and ready to go on your first lessons. (If you have time go for gold and gather even more lists!)