Amazon wholesale due diligence checklist: 31 checks before you buy

Most wholesale losses come from a check that was skipped, not from bad luck: a multipack read as a single unit, a brand that files complaints, an MOQ that takes a year to sell. Run through this checklist before every first order. To keep a copy, use your browser’s Print option and save it as a PDF.

1. The match: is it really the same product?

• The barcode is valid. A mistyped UPC or EAN matches the wrong listing; check it with the UPC and EAN validator.
• Brand, size, colour, scent and model on the listing match what the supplier sends.
• The pack quantity matches. A 3-pack listing needs three units per sale; work it out with the multipack calculator.
• The supplier price is per unit, not per case.
• You know which listing you will sell on when the barcode matches more than one. See UPC, EAN and ASIN matching mistakes.

2. Demand: does it sell, and will it keep selling?

• Monthly sales estimated from the sales rank, over 90 days rather than one good week. See how to estimate sales from Best Sellers Rank.
• The product is not seasonal, or you are buying for the right season. See seasonal products.
• Your share of the sales is worth having: roughly the monthly sales divided by the sellers, including you.
• The rating and reviews are steady, not falling.

3. Competition: can you win the Buy Box at a fair price?

• The number of FBA sellers is reasonable and not climbing fast. See how many sellers is too many.
• You know whether Amazon sells the product and how often it holds the Buy Box. See selling on listings where Amazon sells.
• The Buy Box price has been stable over 90 days, with no steady slide. See how to read Keepa charts.
• There are no offers far below the Buy Box that signal a price war. See how to avoid price wars.
• It is not a private label listing where the brand is the only seller.

4. Profit: does it pay at your real cost?

• The referral fee and FBA fee are taken from the current Buy Box price.
• Your landed cost includes shipping to you and to Amazon, prep, labels and any customs. See landed cost for Amazon FBA.
• Profit and ROI meet your targets. Check with the profit and ROI calculator.
• The price can fall before you lose money. See the price floor.
• The supplier price is at or below your maximum buy price; if not, you know the discount to ask for. Use the maximum buy price calculator.

5. Permission and risk: may you sell it?

• Your account can sell the brand and category, or you know what ungating needs. See how to check if you can sell a product.
• The brand has no history of IP complaints against resellers. See how to avoid IP complaints.
• You know if it is a dangerous goods (hazmat) item, which has its own FBA rules and fees.
• Expiry dates, if any, leave enough time to sell through.
• You know the brand’s minimum advertised price policy. See MAP policy for wholesale sellers.

6. The supplier: is the stock genuine and documented?

• The supplier is a real business: a company name, address and phone number you can verify.
• They are the brand or an authorised distributor, not a reseller of unknown stock. See how to vet wholesale suppliers.
• Their invoices show your business, their details and the products, so you can prove where the stock came from if Amazon asks.
• You know the MOQ, case pack, lead time and payment terms before you order.

7. The order: how much, and how much money?

• The first order covers about one to two months of your share, rounded to whole cases.
• If you must buy the MOQ, it sells through in about three months or less.
• The money in this one product stays within the cap you set per product. Work it out with the order quantity calculator.

Doing it for a whole supplier list

Thirty-one checks per product is easy for five products and impossible for five thousand. Wholesale Analyzer runs most of this checklist on every row of a supplier list: the match and multipacks, sales estimates, competition and Amazon’s share, profit at your landed cost, the price floor, eligibility and IP complaint risk, the maximum buy cost and the order quantity. It gives each product a BUY, REVIEW or AVOID decision with the reasons, so you only do the manual checks, such as vetting the supplier, on the products worth buying. See the supplier price list analyzer.