Helping You with Your Amazon FBA Business

Selling Shoes vs. Wholesale Items

A year ago in January, I wrote these two blog posts about my start into wholesale:

Since writing those two posts, I opened 9 wholesale accounts.  Granted, that’s not very many new accounts, but I didn’t spend very much time on it because my primary focus was on selling shoes.  Also I also spent time on this blog and Print on Demand (POD) products.

Today (January 2018), I’m figuring out what to focus on this year.  I’m not so sure if I want to continue with shoes with the same intensity that I did last year.  Right now I’m divided between shoes and making bundles that are made up of wholesale products.

This blog post is dedicated to comparing selling shoes and wholesale items.

The Wholesale Formula is Now Open!  Click Here to go to the Enrollment Page! 

Shoes vs. Wholesale

Each section in my comparison will have a winner (shoes or wholesale).  Each winner will get a score of 1.  At the end, I’ll add up the points and see whether shoes or wholesale scored the most points!

Please keep in mind that during this analysis, the information that I provide is based on my experiences only.  There are always exceptions to anything that I say and that other people will have their own experiences and opinions.

Which gives higher per-item profits?

My average shoe profits have dropped from $32.00 to $14.05.  However, this is still higher than the $2.35 average profit that I earned on my wholesale items.

Winner – Shoes – 1 point  

Of course, other Sellers have wholesale items with higher per-item profits.  Again, the answers are based on my personal experiences only.

Which gives higher overall profits?

This depends on your volume.  With any product, the more you buy and sell, the more you’ll make.

Winner – Tied. 

Which requires more upfront work?

With both shoes and wholesale items, you’ll need to do research to make sure that the products meet your buying criteria.

However, wholesale does take more initial work up front since you’ll need to email and/or call suppliers to get approved for an account.   Also even though it’s not required, it’s recommended that you have a business email address and website to increase your approval rate.

With shoes, you don’t need to worry about your email address or having a website.  You just go to the store and buy the shoes.

Winner – Shoes – 1 point

Which is better if you don’t want to talk on the phone?

I admit, I don’t like talking on the phone.  So buying shoes is a good fit for my personality because I don’t have to call anyone and convince them to sell their shoes to me.

At some point though with wholesale, you will talk to someone on the phone.  I have had 4 wholesale companies call me after they received my initial email.

And they don’t always call at convenient times.  Once I was shaking because my blood sugar was low and I just pulled into a parking lot to eat lunch.   As I started eating, a rep from a wholesale company called.  *** I was not expecting this!  

I can say though that I did pretty well talking to that person.  I wasn’t nervous and I answered his questions honestly and told him why he should sell his products to me.  I was approved for the account.

I also did well with talking to the other wholesale companies.  So even though I would rather hide behind emails, I know that I can sound confident and charming if I need to do so.

Winner – Shoes – 1 point

Which is easier to replenish?

Wholesale items.  When you need more, you just place an order.

With shoes, there’s no guarantee that what you buy today will be available tomorrow.  If you buy ten profitable Reeboks from DSW Shoes today, you probably won’t be able to reorder those same exact shoes from DSW next week.

Winner – Wholesale – 1 point

Remember those journals in the Find Fast Selling & Low Competition Products post?  I just ordered more of them two days ago.

Which is easier/quicker to prep?

Shoes aren’t hard to prep, but you have to make sure that you have a right and left shoe and that they’re the correct size.  Also, there may be clearance and price stickers on the shoe box that need to be removed.

With my wholesale items, I’ve never had to remove any stickers.  However, I’ll have to polybag my wholesale journals next week and I had to bubble wrap my wholesale signs.

Winner – Tied.  It really depends on the item.

What about receiving damaged goods?

I have never received a damaged wholesale item.  In fact, every wholesale item that I ever ordered was delivered to me in super-pristine condition.

Shoes are another story.  It’s common to receive shoes from online companies with damaged shoe boxes.  Some of my shoe boxes were so bad that I had to return the shoes to the store or sell them on eBay.

Winner – Wholesale – 1 point

Which costs more to purchase?

I pay more for a pair of shoes than I do for individual wholesale items:

  • I typically pay between $10 and $50 on each pair of shoes
  • My wholesale products range in price from 10 cents to $13.50

However, wholesalers typically require minimum order amounts.  Don’t be surprised if you have to pay a minimum of $200 or more per order.

Winner – Shoes – 1 point

Though shoes cost more, there isn’t a minimum order amount if you buy them retail or online arbitrage.

What about quantity limits?

With shoes, you’re limited to the stock on hand.  Sometimes I’m only able to buy one pair of a specific shoe style & size.

With shoes, even if the shoe store has plenty of stock, you may get flagged as a reseller and get your account banned if you place a large order.

With wholesale, the company will welcome your large orders.

Winner – Wholesale – 1 point

Which costs more to ship?

From the supplier to you – 

When you buy shoes online, you normally need to spend $50 to $200 to qualify for free shipping.  Very easy to do with shoes.  Last year, I paid less than $15 total on shipping charges for shoes.

With wholesale, you’re more likely to pay for shipping unless you negotiate free shipping or if you meet the supplier’s minimum free shipping amount.  In my limited experience, I usually had to buy at least $200 worth of products to qualify for free shipping.  I have one supplier that requires a $1000 minimum purchase to qualify for free shipping.

Winner – Shoes – 1 point

From you to Amazon – 

You are limited on how many shoe boxes will fit in a shipping box. You’re not going to be able to fit twenty size 12 men’s shoes in a large Home Depot box.

With your wholesale products, it does depend on the size and weight of the items.  I tend to buy smaller items and once I shipped 108 wholesale units in a small box to Amazon.

Winner – Wholesale – 1 point

Wholesale won because you can choose to purchase only small items.

Which costs more in sales tax?

With shoes, you may be charged sales tax if the store doesn’t accept your Reseller Permit.  If you buy online, you can get around this by shipping your shoes to a prep center that’s located in a state that doesn’t charge sales tax.

With wholesale, you should never pay any sales tax as long as you submit your Reseller Permit to them.

Winner – Wholesale – 1 point

What about brand restrictions, counterfeit claims and IP claims?

Wholesale is definitely safer because you’re approved to sell the wholesaler’s products and because they supply you with real invoices.  I’m not saying that nothing could go wrong with wholesale, but the risks are much smaller than with shoes.

With shoes, I have eight pairs of U.S. Polo Assn. shoes sitting in my closet because the brand became restricted after I sent them to Amazon.

I’ve also received a couple of messages from shoe manufacturers asking me to quit selling their brands.

So far I haven’t had any counterfeit claims with shoes.  But if I do, I only have retail and online order receipts to submit to Amazon.

Winner – Wholesale – 1 point

What about customer returns?

Shoes have a higher chance of getting returned because people will buy the wrong size or not like the style.

You can still get returns on wholesale items, but the % is smaller.  I have never had any of my wholesale items returned by the customer.

Winner – Wholesale – 1 point

What about Amazon and other Sellers coming in and lowering the price?

I’ve had this happen to both my shoe and wholesale listings.

I do have one wholesaler that requires their Sellers to sign a MAP agreement.  So far all of the Sellers have honored the MAP agreement and the price never drops.

With shoes though, I have a better chance of surviving price drops.  I have lowered prices by $30 and still earned a profit.  With my lower-profit wholesale items, dropping the price by even $1.00 hurts.

Winner – Tied

Unless there’s a MAP agreement that is honored by Sellers and enforced by the Wholesaler, price drops can occur with any product.

What about creating bundles to help reduce competition?

It’s much easier to mix wholesale products together to create a competition-proof bundle.  One reason is because the wholesale items are easily replenished.

Another way to look at it – do you want to take the time to bundle a pair of running shoes with a pair of running socks (if that’s even allowed) if you won’t be able to buy those same shoes next week?

Winner – Wholesale – 1 point

And The Winner Is:

It’s time to add up the points and see which one won!

  1. Which gives higher per-item profits? Winner – Shoes – 1 point  
  2. Which gives higher overall profits? Winner – Tied. 
  3. Which requires more upfront work? Winner – Shoes – 1 point  
  4. Which is better if you don’t want to talk on the phone? Winner: Shoes – 1 point  
  5. Which is easier to replenish? Winner – Wholesale – 1 point
  6. Which is easier/quicker to prep? Winner – Tied.  It really depends on the item.
  7. What about receiving damaged goods? Winner – Wholesale – 1 point
  8. Which costs more to purchase? Winner – Shoes – 1 point
  9. What about quantity limits? Winner – Wholesale – 1 point
  10. Which costs more to ship? Winner – Tied.   Shoes won from the store to you, wholesale won from you to Amazon
  11. Which costs more in sales tax? Winner – Wholesale – 1 point
  12. What about brand restrictions, counterfeit claims and IP claims? Winner – Wholesale – 1 point
  13. What about customer returns? Winner – Wholesale – 1 point
  14. What about Amazon and other Sellers coming in and lowering the price? Winner – Tied
  15. What about creating bundles to help reduce competition? Winner – Wholesale – 1 point

Score:

  • Wholesale – 7 points
  • Shoes – 4 points
  • Tied – 4 points

Wholesale Wins!

Remember, this was just a quick analysis based on my own experiences.  Decide what criteria is important to you and decide what fits your business model.  Even though I focused on wholesale and shoes in this blog post, you can do a similiar analysis on any product, category or sourcing method.

Even though shoes lost this contest, they have been good to me and I did make a lot of money off of them last year.  Therefore, selling shoes isn’t a bad thing.

If you want to learn more about shoes, here are a few shoe posts that I wrote:

Increase Your Profits & Save Time by Selling Shoes

Shoes: Which Brands and Sizes Sell

How To Do an Amazon to Amazon Shoe Flip

If you want to learn about wholesale, then sign up for the free Wholesale Workshop (starts Jan 22)!

The Wholesale Formula is now open!    Click Here to go to their enrollment page!   

2018 Goals

In my last post, Celebrate Your Amazon FBA Accomplishments!, I said that I would give you a list of my 2018 goals.  Here they are:

  1. Have 10 competition-free bundles that are made up of wholesale items and CreateSpace products by October 1, 2018.
  2. Have 1,000 POD products listed on different selling platforms by October 1, 2018.

Have a great day and as always, I welcome your questions or comments.

{ 4 comments… add one }
  • Melissa February 9, 2018, 8:07 pm

    Hi Diana!

    This question is a little off topic to this blog post, but since I’ve been reading your blog for a while, and you’ve provide such good advice, I thought I would see if you could help me on this. If I create a bundle with three different categories of products, do I have to be ungated in all three categories, or just the category of my main product? I looked on Amazon’s Bundling Guidelines, but it didn’t say. Thanks for your help!

    Reply
    • Diana February 9, 2018, 10:30 pm

      Hi Melissa,
      You need to be ungated in all of the categories. Another way to look at it is that you need to be approved to sell each of your bundle products individually before you bundle them together. Hope that helps!

      Diana

      Reply
      • Melissa February 11, 2018, 11:33 pm

        That absolutely helps. Thanks so much!

        Reply
        • Diana February 12, 2018, 1:59 am

          Great! Glad it helped!!

          Diana

          Reply

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About Diana


I am working towards creating a full-time income by selling on Amazon. It's a lot of work but very fun! If you're interested in selling on Amazon, be sure to follow my blog as I'll be providing you with lots of tips!

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