What a First Wholesale Order Really Costs
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Ask a new reseller what their inventory costs and they will quote you the unit price from the supplier's stock list. That number is usually somewhere between a third and a half of what the unit actually costs by the time it is sellable.
None of the missing pieces are hidden or unfair. They are just spread across five or six invoices that arrive at different times, so they never appear together on one line. This guide puts them on one line, works through a realistic example, and covers the part that catches people out more often than margin ever does: how long your money is gone for.
The cost stack
Every unit carries these layers before it earns anything.
1. Unit cost
The number on the stock list. The only one most people plan for.
2. The order minimum
Not a per-unit cost, but it sets your exposure. More on MOQs and case packs below.
3. Inbound freight to you or your prep center
Whatever it costs to move the goods from the supplier to wherever they get prepared. On small orders this is often a parcel rate; on pallets it is LTL freight. Ask whether quoted prices are delivered or ex-warehouse — the difference is entirely on you.
4. Prep
Amazon will not accept most inventory as it arrives from a wholesaler. At minimum each unit needs an FNSKU label. Depending on the product it may also need a polybag, a suffocation warning, bubble wrap, or bundling into multipacks. Someone has to do that, and it is per unit.
5. Inbound shipping to Amazon
Prep center to fulfillment center. Usually the cheapest line in the stack, and the easiest to forget.
6. Amazon's fees
The referral fee is a percentage of the sale price — commonly 15% in most categories, though it varies. The FBA fulfillment fee is a flat amount per unit set by size and weight tier. Then monthly storage, which rises sharply in the fourth quarter.
7. Returns, damage, and shrinkage
Some percentage of what you send will come back, get damaged, or go missing. Budgeting nothing for this is the same as assuming it will not happen.
A worked example
A skincare item bought at $6.00 a unit, 240 units, sold at $19.99. These figures are illustrative — fees vary by category, size tier, and season, and Amazon changes them. Use the FBA Revenue Calculator in Seller Central with your own ASIN for real numbers.
| Cost into inventory | Per unit | 240 units |
|---|---|---|
| Unit cost | $6.00 | $1,440 |
| Inbound freight to prep | $0.50 | $120 |
| Prep — FNSKU label and polybag | $0.85 | $204 |
| Shipping into Amazon | $0.35 | $84 |
| Landed cost | $7.70 | $1,848 |
So a $6.00 unit is really a $7.70 unit — about 28% more than the stock list implied. Now the sale side:
| Per unit sold | Amount |
|---|---|
| Sale price | $19.99 |
| Referral fee (15%) | −$3.00 |
| FBA fulfillment fee (small standard) | −$4.25 |
| Storage, ~2 months | −$0.20 |
| Returns and damage allowance (~2%) | −$0.40 |
| Landed cost | −$7.70 |
| Net profit | $4.44 |
That is a 22% net margin and $1,065 of profit on the order — a respectable wholesale result. But notice what happened to the headline: a unit that looked like it had $14 of room between cost and sale price has $4.44 of actual profit. The gap is not a trick. It is freight, prep, and Amazon's cut, all of which are real work being done for you.
Notice also how thin the tolerances are. If the sale price drops to $16.99 because two other sellers arrive on the listing, profit falls to $1.95 a unit — a 56% cut from a 15% price move. Wholesale margins are leveraged against price competition, which is why the listing matters as much as the buy.
MOQ and case packs are not the same thing
Two different constraints that both set a floor on your order.
A minimum order quantity is the smallest order a supplier will accept — sometimes per line item, sometimes across the whole order. It exists because picking, invoicing, and shipping a small order costs the supplier roughly what a large one does.
A case pack is the manufacturer's inner carton: the unit in which the goods physically exist in the warehouse. If a case pack is 48 units, you can order 48 or 96, not 60. Breaking a case means someone opens it and repacks by hand, which many suppliers will not do at all and others charge for.
This matters when you are testing a product. If you want 30 units to trial an ASIN and the case pack is 144, your real minimum is 144 — and your test costs nearly five times what you planned. Ask about the case pack, not just the MOQ, before you build a budget. A supplier willing to be flexible on MOQ turns a first order into a genuine test rather than a bet.
Three ways to handle prep
Do it yourself. Cheapest in cash, most expensive in time. A thermal label printer and polybags cost little; labeling 240 units by hand costs an afternoon. Fine for a first order, and genuinely useful — you will see the condition of what your supplier sent, which you will not if it goes straight to a third party.
A third-party prep center. Commonly around $0.50 to $1.50 a unit for basic labeling and bagging, with bundling and other work priced higher. They receive from your supplier, prep, and forward to Amazon. This is where most sellers end up. Rates vary widely by volume and region — get a written rate card before your goods are on a truck.
Amazon's own prep service. Convenient, generally the most expensive per unit, and it puts unchecked goods into the fulfillment network. If a shipment arrives mislabeled or damaged, nobody looked at it before it became a customer's problem.
For a first order with a new supplier there is a real argument for handling prep yourself or using a prep center you can call, simply so somebody inspects the goods.
The cash cycle is the real constraint
Margin gets all the attention. Cash timing is what actually stops people.
Wholesale is paid up front. From the day the money leaves your account, a typical sequence looks like this:
- Supplier handling and dispatch — a few days
- Freight to your prep center — several days
- Prep — a few days, depending on their queue
- Amazon receiving and check-in — often the longest and least predictable leg
- Sell-through — anywhere from a few weeks to several months
- Amazon disbursement — on its own cycle, after the sale
Realistically, money spent today comes back over a period measured in months, not weeks, and it comes back gradually as units sell. In the example above, $1,848 goes out at once and $2,913 returns in dribs over the sell-through window.
The practical consequence: a seller with $5,000 cannot run $5,000 of inventory continuously. Some of it is always in transit, in prep, in a fulfillment center, or waiting on a disbursement. Plan for the working capital, not just the order.
What to budget for a first order
Beyond the goods themselves:
- Landed cost, not unit cost. Add freight, prep, and inbound shipping before you decide whether the margin works.
- The full case pack, not the quantity you wanted.
- Ungating, if the item needs it. Buy the inventory first, then apply while the invoice is fresh — and make sure the invoice will pass. The fields Amazon checks are specific.
- A returns allowance of a couple of percent of revenue.
- Enough headroom that a slow sell-through does not stop you trading.
How to make a first order lower-risk
- Run the numbers on landed cost before ordering, using the FBA Revenue Calculator for the fee side.
- Ask for the case pack size alongside the MOQ.
- Check the ASIN is open to you before you buy, not after.
- Look at how many sellers are on the listing. Margin that survives one more competitor is margin worth having.
- Get a written prep rate card.
- Order smaller than the economics justify. The unit price on 1,000 is better than on 200, but the information is worth more than the discount on a supplier you have not tested. Vet the supplier properly before scaling.
Where OneStopSKU fits
We keep minimum order quantities flexible precisely because of the case-pack problem above — a first order should be large enough to be a real test and small enough that being wrong is survivable. We will tell you the case pack alongside the MOQ, quote handling times honestly, and invoice with the details an ungating application needs.
If you want landed-cost numbers for specific products before you commit, send us the list and we will quote it properly.