When I first started selling on Amazon it was just something I was interested in – but wasn’t doing Amazon wholesale selling yet. Over time I became obsessed with the idea, but I still had a day job.

I was a personal trainer, training clients from 5:30 in the morning to 9:00 at night and sometimes even later.

At one point my General Manager and I didn’t see eye to eye and I was “let go”.

Luckily I had already started my Amazon business, but I was doing the typical newbie stuff like Retail Arbitrage and dabbling with Online Arbitrage.

Wholesale – at that point – seemed like something only sellers with deep pockets could do.

In my mind, I’d have to save up for quite some time before I could even start.

After fumbling around for a few months with RA and a bit of OA I jumped full force into wholesale. I realized quickly that I couldn’t – easily – scale RA or OA very well and the work I did this week or even today would never pay dividends as wholesale products would.

I stopped sourcing 100% of my inventory and swore I would only purchase inventory that was wholesale.

Talk about backing yourself into a corner…

 

Whatever you have is enough to get started

When I finally jumped into wholesale full-time I had $1,500 and a credit card. Not exactly balling but I knew I had enough to at least get started. I would figure out the rest as I went and would do whatever it took – problems always have solutions.

I often get asked how much someone needs to get started with wholesale as if whatever number I say will change how much you have. My answer every single time is however much you currently have.

If you have $10,000, great! If you have $500, still great.

The simple fact is that you have what you have and like most of us if you could change that number for the greater you would – but you can’t.

So whatever your number currently is, it’s enough to at least place a test order, make a profit and start scaling your Amazon wholesale inventory.

After growing and solving this issue myself, I have found a few solutions to this problem that can allow you to grow without being restricted by capital.

*Please note that I’m not a financial advisor and these strategies do come with risks, just as starting any business does.

 

4 Steps to get started selling Amazon wholesale with little money

#1 You have what you have – As I stated above, you really can’t change how much money you bring to the table as an investment in your wholesale business.

What you do have is a very clear number as to how much you can spend on inventory every single month.

With this number clearly in your head, you can start adding accounts, knowing what your current max is. Luckily, you still have money to spend.

#2 Don’t take any profits for a while – There are only three ways to grow an Amazon wholesale business – add more money in, take less money out or both.

When you start with less capital you really don’t have a choice in taking out profits. The longer you let your capital compound the quicker you can build that capital into something substantial which can be used to grow a massive Amazon wholesale business.

#3 Use Payability to keep churn high – Something that truly changed how quickly my business was growing is Payability (non-affiliate link). They allow you to request weekly or even daily payouts of your sales to then purchase inventory at a faster rate.

Is it better to compound your money yearly or monthly? Monthly or weekly? Answer: it’s always the shortest amount of time. The quicker you can reinvest your capital into more or new inventory the better.

#4 Be VERY picky in the inventory you purchase – If you have the option to purchase just one product, but you have access to two different ones, which would you pick? The one that’s more profitable correct?

Yet, many sellers never actually think this way. They just see profit and move forward. It’s also not just how much profit you’ll make per unit, but how much profit you’ll make in total per unit for the month.

In other words, you could have a product that makes $20 per unit and moves 30 units per month – which would be $600 in profit – or you could have a product that makes $15 per unit and sells 70 units per month – $1,050 in total profit.

Don’t always think per unit. Sometimes you need to zoom out and really ask how much profit each ASIN will produce in total for the month. Remember, volume matters in our profit equation.

 

How to quickly add money for growth

Once you have inventory that is profitable, it’s your duty to find more capital to spend on that inventory to fully take advantage of it. Let’s say you have $500 to spend on a product but you could spend $1,000 per month profitably on it.

What should you do? Should you wait it out?

Problem = You need another $500 to make more money

Solution = Go find $500!

There’s a number of solutions but I’ll take about three major ones that are somewhat unique to selling on Amazon and for each level of volume as you grow as this issue never goes away it just increases in volume – first, you need an extra $500, next you need another $50,000.

 

Credit Cards

Remember my disclaimer above about not being a financial advisor and all of that jazz? This is where that really comes into play.

The reason I was able to grow so quickly once I figured everything out was through strategically using credit cards. I perfected the strategy even further to reduce risk on top of reduced risk.

Here’s how it works:

Whenever you place a test order with a brand new supplier or brand and you have no idea how it’s going to go, use cash.

BUT, after you’ve placed a test order and you know for a fact the product is profitable and moving quickly, start using other peoples money – in this case, a credit card.

 

It’s a quick way to profitably scale your spending when you have little money. We’re risking our actual cash, but once the product has proved to be worth the effort, we can immediately deploy a much larger amount of money to increase our profits and take full advantage of the products volume.

 

Companies like Kabbage

 

Although not the best interest rates, when you need another $10,000 it’s a decent short-term solution. I kept an account open with an $8,500 line of credit which allowed me to pull the trigger at a moments notice.

If an opportunity arose for a very profitable large order or I needed to restock during the Q4 madness, I had the resources. With these solutions, you always want to run the numbers accounting for the interest.

Luckily, we’re not carrying a balance on any of these solutions – typically paying them off in two to four weeks.

Would I pay 2% to still make 20%? Yep, and I do.

 

Amazon loans and the traditional route

As you grow your business Amazon will take notice. They’ll eventually start offering your loans for inventory growth. Just like Kabbage (non-affiliate link), the interest rates aren’t the best – but still profitable in most cases.

Likewise, you can go the traditional route and look at SBA (Small Business Administration) loans through a local bank, but getting approved is a bit more daunting. They have gotten much simpler over time though!

There are also other – more modern – alternatives like peer-to-peer lending. My biggest concern about using these sources of new capital is the rates. Some wholesale inventory has enough margin to profitably cover the interest or debt payment on the loan you take.

That also means that a lot of inventory doesn’t have a big enough margin.

Regardless of what tool you use to add new capital to your business make sure to run the numbers and ensure you’ll still be profitable.

Strategically use debt to scale inventory with plenty of margin for it to be worth the effort and risk.