247: How To Automate Your Amazon Wholesale Business With Trent Dyrsmid

Podcast: Download (Duration: 44:18 — 51.0MB)

Amazon wholesale means buying products from US manufacturers at wholesale prices and reselling them on Amazon. Because you are selling products that already have proven sales velocity, the question is never whether they will sell, only whether they will sell profitably.

Trent Dyrsmid reached over $100,000 a month within five months of starting and did just under $1.1 million in his first year. He runs an Amazon business, a software company called Flowster, and Brightideas.co, and sold his first company for seven figures in 2008 after it twice made Canada’s Profit 100 fastest-growing list.

Below is how the wholesale model works, why brands agree to let you sell their products, and the SOP system that let Trent step out of daily operations entirely for a year.

Key takeaways

• Trent operates on roughly 20% gross margin, which works because revenue per employee is very high in this model.
• Wholesale carries far less risk than private label, since you buy products with established sales velocity rather than betting on a new listing.
• Time to market is a week or two versus months for private label.
• The biggest pain brands have on Amazon is unauthorized sellers violating MAP pricing, and solving that is how you win accounts.
• Splitting the buy box costs a brand only about 10% of net profit, because they still sell you the goods wholesale.
• Trent’s team sent 200 to 300 outreach emails a week with a hit rate under 2%.
• Virtual assistants in the Philippines at $3 an hour did the research grunt work, driven entirely by documented SOPs.
• He now has 70 to 80 SOPs covering everything from PPC to HR to Amazon account health.

How Trent Dyrsmid got into Amazon wholesale

Trent quit a job paying close to $200,000 a year in 2001, in his twenties, because the work bored him. His observation is that money stops being fulfilling on its own after a while.

He sold his house, cashed in everything, and started the company that became one of Canada’s fastest growing. After selling it he focused on making a living online so he could stay location independent.

Roughly two and a half years before this interview, friends he had interviewed on his show convinced him to try Amazon private label. He was running a digital marketing agency with his wife and wanted a product business, since products scale more easily than services.

Private label went badly for four or five months. He picked products that were too competitive, hit $25,000 to $30,000 a month in revenue, and spent so much on PPC and promotions chasing sales velocity that he made no profit at all.

That frustration coincided with his agency’s largest client signaling they would not renew.

The pivot came from interviewing two people doing Amazon wholesale. One traveled constantly to trade shows, which did not appeal to a father with kids. The second did it with no travel at all, and that was the model Trent wanted.

Amazon wholesale vs private label

Trent’s framing is that wholesale is simple without being easy. You use software tools to find products with established sales velocity, then try to buy them at a price that leaves you a margin.

Private label requires product research, samples, factory conversations, ordering, shipping, listing creation, and photography before you sell anything. Wholesale can have inventory in Amazon’s warehouse a week or two after your first phone call.

The obvious objection is that you do not own the brand and vendors come and go. Trent’s answer is that you own the business and the relationships, pointing to Netrush doing over $100 million a year without owning any brands.

It is a traditional wholesale business, structurally similar to how Target carries other people’s brands.

How to avoid the race to the bottom on the buy box

Trent solves competition on the buy box by targeting suppliers who have already restricted their authorized sellers. Ideally he is the only seller, or the brand is one seller and he is the other with nobody else.

When that holds there is no race to the bottom, because you know exactly what share of the buy box you will get and your margins hold.

Those were genuine problems when he started, when margins were thinner. The business model change removed them.

He still pursues brands with multiple sellers, on the theory that most of those brands would be better off with fewer and simply have not thought it through.

Estimating your share of the buy box

The math is deliberately crude. If a product sells at $19.99 with three sellers at that price and you become the fourth, assume you get 25% of the buy box.

Combine that with sales velocity and your target margin to estimate monthly profit per product.

Why brands let third party sellers on their listings

Amazon is typically only 10% to 15% of a brand’s total sales, because their real business is brick-and-mortar distribution. That makes Amazon close to a nuisance, and it generates a specific problem they cannot solve themselves.

That problem is unauthorized sellers and MAP violations. MAP is minimum advertised price.

Trent’s example makes the stakes clear. A brand sells widgets to Walmart, Walmart is 40% of their revenue, MAP is $19.99, and the product appears on Amazon at $18.50. Walmart is not happy, and the brand is under real pressure.

Brands can get Amazon under control with the right policies, and many either do not understand how or lack the resources. Solving that is the biggest value Trent offers.

At a recent trade show he spoke with a $200 million sunglasses brand whose number one problem was exactly this. Their position was that fixing it would earn him authorization to sell.

The economics from the brand’s side

Splitting the buy box with Trent reduces a brand’s net profit by only about 10%. The reason is that on the half he sells, the brand still sells him the goods wholesale, and he pays the Amazon fees they would otherwise pay, while operating on 20% gross margin.

Half the buy box at 20% margin costs them 10%.

The reasons a brand accepts that trade are risk mitigation and expertise. If they are the sole seller and their account gets suspended, or they run out of inventory, or their BSR suffers, they have no backstop.

Trent also brings deeper Amazon expertise and more dedicated resources than most brands have internally.

Some brands avoid selling on Amazon themselves entirely, because they consider themselves wholesalers and do not want retail partners seeing them compete directly.

How a brand can hand you the entire buy box

Trent’s largest account started with an even buy box split. He later proposed that the brand step out entirely and he would do extra work for them with the additional profit.

The mechanism is pricing. The product sat at $20, the brand raised their own price to $26, and Amazon’s algorithm stopped rotating them in, giving Trent effectively 100% of the buy box.

How to land your first wholesale brand accounts

Start small and prove yourself on one or two products before asking for anything larger. Trent describes a brand owner doing $200,000 a month as sole seller who was overwhelmed and letting things slip.

Rather than asking him to sign an exclusivity contract on his entire line on day one, which is a big decision with a long sales cycle, Trent proposes a test order to verify the volumes his tools estimated, then enough inventory for 60 to 90 days.

During that window he runs PPC campaigns, optimizes the listing, responds to negative product reviews, and builds bundles. Where there are unauthorized sellers, he works to reduce them and restore MAP pricing.

Do that well on a couple of products and the contract conversation becomes a much easier yes.

What to target when you are starting from nothing

In the beginning, Trent would carry a brand for as little as $300 a month in profit from one product, or $400 a month across a couple of products from the same brand.

He is explicit that these are arbitrary rules of thumb rather than correct numbers.

The logic is that a small account requires almost no labor after the relationship exists, since you are only placing reorders. Assemble five or ten of those and you have $3,000 to $4,000 a month in gross profit, which is manageable part time alongside a job.

Early on he landed products purely over email without ever speaking to anyone, buying whenever the numbers worked, with no exclusivity.

Moving from a product focus to a brand focus

Trent now focuses on brands rather than individual products, and that shift required cash flow, credibility, resources, and a team.

Too many individual products becomes hard to manage. You get races to the bottom, products churn, and if you have promised brands you will do things, the commitments outrun your margin and your headcount.

He studied Netrush and other fast-growing third party sellers doing $80 to $100 million, saw they carried much larger brands, and pointed his outreach at bigger targets.

The pitch itself did not change. You still have to show a brand you will solve their problems and add value.

What changed was credibility: one very large brand name in the fitness niche, store reviews, revenue, a team, and their own building.

How to work trade shows for wholesale accounts

The silver bullet at a trade show is having a name to drop. The number one question Trent was asked across 40 conversations at the Outdoor Retailer show was who he was already working with in that niche.

His answer was nobody yet, because it was a new category for him, and he came away with only one or two active discussions from 40 companies.

His preparation was thorough regardless. A virtual assistant went through the full exhibitor list, determined each company’s Amazon revenue, ranked them, and Trent visited everyone in his sweet spot.

Now that he holds a major name in health and nutrition, he plans to work that niche’s shows using it as social proof.

The outreach system behind $100K a month in five months

Trent reached $100,000 a month by sending thousands of emails to prospective brands. His hit rate was under 2%.

That sounds simple and contains an enormous amount of work: finding competitive sellers, extracting their storefronts into spreadsheets, running math on every product, identifying the right contact and email address at each company, loading it all into HubSpot, and sending.

His approach was to design and document the system before doing any of the labor himself, then hire virtual assistants in the Philippines at $3 an hour to execute it.

That produced 200 to 300 new product leads every week with essentially no labor from him and a small amount from one employee. All he handled was the replies.

The actual sourcing workflow

One VA builds a list of competitive third party sellers, on the logic that if they can carry a product profitably, so can you.

A second SOP covers extracting that seller’s entire catalog into a spreadsheet using a tool called Price Checker 2. A given seller might have 100 products or 3,000.

The spreadsheet template runs the profit math on every row automatically as data is pasted in. One piece stays manual: a VA checks how many sellers are contending for the buy box on each product, because Trent found no good way to automate it, and at $3 an hour he does not mind paying for it.

That produces a lead list. Another VA finds each contact via LinkedIn and an email-finding tool called Snovio, then imports them into HubSpot, and GMass sends the emails.

Trent calls this pure carpet bombing with no creativity in the emails themselves. He is careful to say it is one arrow in the quiver rather than the only way to source.

The reason volume matters is that some brands have already decided they want a third party seller. You only find them by sending enough emails.

Replies are never outsourced. Once you are in a conversation, processes guide the team, and a person handles it.

Where judgment still matters

Trent does not try to document intuition, because the product sourcing agent develops it over time.

When a brand replies “we don’t want any more Amazon sellers,” which is very common, that is when the deeper analysis starts: total brand revenue, year over year sales, recent quarter performance, distribution across products, listing quality, keyword rankings, market share against competitors, and social media presence.

That assessment determines how aggressively to pursue changing their mind.

His largest fitness account came from exactly that. He called, got the standard no, asked his usual questions, got the answers he expected, explained how he would solve their problems, and was approved 18 minutes into the call.

How to build SOPs that run your business without you

Trent had no day-to-day role in his Amazon business for over a year because of documented systems and his team. He is temporarily back in an active role only because his sourcing employee left.

The starting point was not complicated. He wrote a Google Doc listing the steps to find a competitive seller, with screenshots and large red arrows, and that was one SOP. Then he added another, and another.

He now has 70 to 80 SOPs covering product sourcing, PPC campaign management, shipping and receiving, purchasing, inventory management, listing optimization, HR, and Amazon account health.

The office joke is that you cannot even break wind without an SOP for it.

Why Google Docs stops working

At scale, each SOP behaves like a mini project run repeatedly, and a pile of documents provides no coordination. Trent’s team built their own software, Flowster, to solve it.

The software makes each SOP function like a Trello card: assign members, set due dates, assign individual steps within a 15-step SOP to different people with their own deadlines, and send automatic alerts telling each person what they have been assigned and when it is due.

That is what turns a fragmented pile of documents into a system.

How to manage a wholesale product portfolio

The pruning rule depends on whether you are product focused or brand focused.

Product focused, Trent would drop anything making less than roughly $200 a month, because there is still labor in monitoring it, reordering, and carrying inventory.

Brand focused, the only question is total profit from that brand. If a brand has two dozen products and the 80/20 rule applies, he keeps the slow movers in stock anyway, because carrying the full line was part of the relationship commitment.

The cost stays small by keeping quantities small. A weak product might mean holding 12 units rather than 400.

Team size

The business runs on roughly two full-time equivalents: Trent’s wife as COO at about 25 hours a week, someone handling inventory management and reorders, and a third person splitting time with his other business.

Growing it requires a third person dedicated to sourcing, because attrition is constant. Two people to run it, three to grow it.

You can find Trent at Brightideas.co and his SOP software at Flowster.app.

Frequently asked questions

What is Amazon wholesale?

Buying products from US manufacturers at wholesale prices and reselling them on Amazon. Unlike private label, you sell products that already have established sales velocity, so the risk is whether they sell profitably rather than whether they sell at all.

Is wholesale less risky than private label on Amazon?

Substantially. Private label minimum orders run $2,000 to $3,000 with real risk of picking a product that never sells, while wholesale products have proven demand and can reach Amazon’s warehouse within a week or two of your first call.

What margin do Amazon wholesale sellers make?

Trent Dyrsmid operates at roughly 20% gross margin. That works because revenue per employee is high in this model, with his business running on about two full-time equivalents.

How do you avoid competing on price in Amazon wholesale?

Target brands that have already restricted their authorized sellers, ideally where you are the only seller or the brand is the only other one. That eliminates the race to the bottom and makes your share of the buy box predictable.

Why would a brand let you sell their products on Amazon?

Splitting the buy box costs them only about 10% of net profit since they still sell you the goods wholesale, and in exchange they get risk mitigation against suspensions or stockouts plus your Amazon expertise. The larger draw is help removing unauthorized sellers who violate MAP pricing.

What is MAP and why does it matter to brands?

MAP is minimum advertised price. When unauthorized Amazon sellers undercut it, the brand’s brick-and-mortar retail partners, who often represent far more revenue than Amazon does, become unhappy, which creates serious pressure on the brand.

How do you find wholesale brands to approach?

Trent’s team identified competitive third party sellers, extracted their catalogs into spreadsheets, ran profit math on every product, found contacts via LinkedIn, and sent 200 to 300 emails a week at a hit rate under 2%. Trade shows work too, and mainly once you have an existing brand name to reference.

How do you start writing SOPs for your business?

Begin with a single Google Doc listing the steps for one repeated task, with screenshots and arrows, then add another for the next task. Trent grew from that to 70 to 80 SOPs and eventually needed dedicated software to assign steps, owners, and due dates.