Outline:

1. Introduction
2. Understanding the Causes of Low Profit Margins in Amazon Wholesale
3.  Strategies to Overcome Low Profit Margins
4.  Increasing Revenue While Maintaining Healthy Margins
5. Leveraging Amazon’s Marketing and Advertising Tools
6. Improve Customer Experience and Brand Loyalty
7. Regularly Analyze and Adjust Your Strategy
8. Conclusion

Introduction

Struggling with razor-thin profit margins in your Amazon wholesale business? You’re not alone. Thousands of UK sellers find themselves working harder for less—caught between soaring Amazon fees, aggressive competition, and unpredictable overheads. But what if there was a smarter, more strategic way to sell on Amazon? At Prime Ecommerce Solutions, we specialize in helping UK-based sellers unlock real, sustainable profits through data-driven product selection, smarter sourcing, and expert market navigation. Whether you’re just starting out or trying to revive a stagnant store, this guide will show you how to overcome low margins and build a high-performing Amazon wholesale business that actually pays off.

What is Amazon Wholesale, and Why Is It So Popular in the UK?

Amazon Wholesale is a growing business model in the UK, where sellers purchase branded products in bulk from authorized distributors or manufacturers and resell them on Amazon. Unlike private label sellers, wholesale sellers don’t need to build a brand from scratch—they simply resell trusted, in-demand products that already have market recognition and built-in customer demand.

But here’s the challenge: while wholesale sounds easy, many UK-based Amazon sellers struggle with low profit margins. The costs of sourcing, storage, FBA fees, VAT, and fierce competition often leave sellers with razor-thin earnings. This is where Prime Ecommerce Solutions comes in. Based in the UK, we offer done-for-you Amazon Wholesale UK Services. From product hunting to supplier sourcing and logistics, we manage it all—so you can focus on growing your store with confidence and clarity.

Let’s explore the reasons behind low margins and how you can overcome them effectively with the right strategies and the right team backing you.

Understanding the Causes of Low Profit Margins in Amazon Wholesale

Selling on Amazon UK through the wholesale model provides numerous opportunities, but keeping strong profit margins can be tough. For many vendors, the problem isn’t a lack of sales, but rather that too much of their earnings is eaten up by hidden or overestimated expenses. We’ve broken down the four most typical causes of low profit margins in Amazon wholesale.

1. Amazon Fees Add Up Quickly

One of the biggest misconceptions about selling on Amazon is the assumption that once your product is listed and selling, the profit rolls in smoothly. In reality, Amazon has a complex fee structure that can take a significant chunk of your revenue.

Here are just a few examples of standard fees UK wholesale sellers face:

• Referral Fees: These range from 8% to 15%, depending on the category, with most products hovering around the 15% mark.
• Fulfilment by Amazon (FBA) Fees: Amazon charges for picking, packing, and shipping your products. These vary by product size and weight.
  Storage Fees: Monthly fees are charged for holding your inventory in Amazon’s fulfilment centres. If items don’t sell fast enough, long-term storage fees can apply.
• Return Processing Fees: For certain categories, Amazon also charges sellers to handle customer returns.

Over time, these relatively little percentages add up, especially when profit margins are already narrow. Sellers who do not include this in their cost calculations frequently find themselves operating at a loss without recognising it.

2. Price Wars Among Sellers

In the Amazon wholesale model, multiple sellers can list the exact same branded product under one ASIN. In the UK, it’s not unusual for 20 or more sellers to compete on a single listing, all vying for the coveted Buy Box.

This intense competition leads to:

• Frequent undercutting of prices.
• A race to the bottom, in which sellers repeatedly cut prices to remain competitive.
• Profit margins are little, especially if you’re not the cheapest or most optimised seller.

Winning the Buy Box frequently entails decreasing your prices to unsustainable levels, especially if your competitors have access to lower-cost sourcing or operate at scale. Sellers that lack a good price strategy and a value-driven listing risk selling high-volume products for small profit.

3. Poor Supplier Deals

Your cost of goods sold (COGS) is the foundation of your profitability. Unfortunately, many new or inexperienced sellers purchase stock from unverified or overpriced suppliers without proper negotiation or due diligence.

Common supplier issues include:

• Paying too much per unit due to a lack of bulk ordering power
• Inconsistent quality or delayed shipping
• Hidden costs such as customs, shipping, or import duties not factored in initially.

These supplier-related problems reduce margins before the product is even listed. When you start with a high purchase price, it is quite tough to compete on pricing—especially in a saturated UK market. That is why Prime Ecommerce Solutions focuses on certified supplier networks and assists UK sellers in sourcing high-ROI products at competitive prices. We eliminate the guesswork and ensure that you are prepared for success from the start.

4. VAT and Regulatory Overheads

UK sellers face unique regulatory challenges compared to many other markets. If these aren’t handled properly, they can quickly become a silent killer of profitability.

Unlike many other markets, UK vendors have specific regulatory obstacles. If not managed correctly, these can easily become a silent killer of profits.

Key considerations include:

• VAT Registration: Businesses with taxable revenue greater than the VAT threshold (£90,000 as of April 2024) must register for and charge VAT correctly. Failure to do so may result in penalties or the need to repay substantial sums suddenly.
• EORI Numbers and Customs Compliance: If you’re importing from outside the UK (particularly after Brexit), you’ll need an EORI number to clear customs. Import fees and delays can drive up costs.
• Packaging and Labelling Regulations: The UK has stringent rules for safety warnings, recycling labels, and packaging standards. Noncompliance may result in product delisting or increased rework expenses.

For sellers who are unfamiliar with these standards, navigating the regulatory landscape can result in unanticipated fees and delays that have a direct impact on profitability.

Common Causes of Low Profit Margins in Amazon Wholesale (UK)

Cause	Description	Impact on Margins
Amazon Fees	Includes referral fees (up to 15%), FBA fees, storage, and return handling	Eats into profits quickly if not accounted for in pricing
Price Wars	Multiple sellers competing on one ASIN lowers prices to win the Buy Box	Results in race-to-the-bottom pricing with thin profit margins
Poor Supplier Deals	Buying from unverified or expensive suppliers increases cost per unit	Reduces ROI before product even goes live
VAT & Regulatory Overheads	UK-specific costs like VAT, EORI, customs, and packaging compliance	Hidden costs that can cause delays and reduce net profit

Prime Ecommerce Solutions offers support for VAT planning, supplier coordination, and compliance assistance—ensuring your store remains not just active, but efficient and profitable in the long term.

Strategies to Overcome Low Profit Margins

At Prime Ecommerce Solutions, we’ve worked closely with Amazon sellers across the UK to turn unsuccessful stores into lucrative ones. Low profit margins are frequently the result of fundamental difficulties such as poor product selection, high supplier costs, or unoptimised listings. Our strategy is based on statistics, industry trends, and practical experience.

Here’s how we can assist you avoid the margin trap:

Choose Profitable Products (Let Us Do It for You!)

A common mistake UK sellers make is choosing products based on guesswork or generic trend lists. This leads to over-saturation or minimal returns. At Prime Ecommerce Solutions, we take product selection seriously.

We use industry-leading research tools like:

• Jungle Scout
• Helium 10
• Keepa

Our experts don’t just look at what’s selling—we analyse sales velocity, seasonality, seller competition, pricing trends, and profit margins. The result? You get hand-picked products with high demand and low competition—perfectly tailored to your business goals and the UK market.

Source Smarter, Not Harder

Profit margins are generated at the source. If you’re overpaying suppliers or depending on high-priced dropshippers, you’re already behind before the product ever reaches Amazon.

That’s why we provide:

• Access to certified wholesale suppliers.
• Exclusive UK and worldwide supplier partnerships.
• Negotiation assistance for better pricing

We cut out the middlemen and help you secure better deals, bulk discounts, and faster delivery options—maximising your ROI from day one.

Focus on Value-Added Listings

In a saturated market, a standout listing can be the difference between a profitable product and a poor performer. We guide our clients to add value beyond the basics, helping them maintain premium pricing and win customer trust.

We offer:

• Bundling strategies (e.g. add-ons, bonus items, gift-ready packaging).
• Listing optimization with SEO-friendly product titles, bullet points, and description.
• A+ Content support to boost conversion rates.

These techniques not only help you sell more, but allow you to justify higher prices and protect your margins—even in competitive categories.

Table: Strategies to Overcome Low Profit Margins in Amazon Wholesale

Strategy	What It Involves	Benefit to Your Business
Choose Profitable Products	Use tools like Jungle Scout, Helium 10, Keepa to find low-competition, high-demand products	Ensures strong ROI and minimizes saturation risks
Source Smarter	Leverage verified UK/international suppliers and negotiate better prices	Cuts costs at the root, improving profit margins instantly
Value-Added Listings	Offer bundles, bonuses, and optimize listings with SEO and A+ Content	Boosts conversion, supports premium pricing, and builds trust

Increasing Revenue While Maintaining Healthy Margins

Cutting costs is one method to retain profit, but there’s another alternative: raise top-line revenue without sacrificing margin. We help UK sellers do exactly that through smart, scalable strategies.

Sell in Bundles or Multi-Packs

One of the quickest ways to increase your Average Order Value (AOV) is by bundling or offering multi-packs. This approach:

• Makes your listing more attractive than single-product competitors
• Reduces fulfilment costs per item
• Decreases competition on bundled listings
• Encourages larger purchases

Prime Ecommerce Solutions assists you in creating and executing bundles based on customer behaviour and market gaps, ensuring your product stands out in crowded listings.

Explore Untapped Niches

Many vendors adhere to saturated markets, such as electronics or beauty, where margins are razor-thin. We assist you delve deeper into Amazon’s UK marketplace to uncover niche sectors that are:

• Growing demand
• Lightly competitive
• Ideal for long-term brand development

Whether it’s eco-friendly home items, pet accessories, or specialised tools, we match your objectives to successful micro-markets that most vendors neglect.

Leverage Multi-Channel Selling

Relying entirely on Amazon restricts your reach and exposes you to policy changes or Buy Box fights. That’s why we help you sell your products via several channels.

• eBay UK

• FaceBook Shop

• TikTok Shop

• Create your own Shopify website

This strategy not only boosts total revenue, but it also broadens your consumer base, minimises competition, and creates a more robust business model.

Prime Ecommerce Solutions’ mission isn’t just to help you survive on Amazon; we want to help you succeed with long-term, data-driven tactics. Whether you’re new to wholesale or want to save a struggling store, our team of professionals is ready to help you increase your margins, scale your sales, and expand your brand in the UK market.

Leveraging Amazon’s Marketing and Advertising Tools

Many Amazon sellers spend money on advertising without seeing a clear return on investment. If you find yourself spending more money on Amazon Ads than you earn, it’s time to modify your strategy. Prime Ecommerce Solutions helps you spend wisely and profitably, ensuring that your adverts drive true growth rather than draining your budget.

Run Optimize PPC Campaigns

Amazon’s Pay-Per-Click (PPC) system is excellent, yet it’s simple to squander money on useless keywords or unsuccessful campaigns. Running effective PPC advertisements necessitates a data-driven approach and meticulous attention to detail.

At Prime Ecommerce Solutions, we can help you:

• Identify high-converting keywords with the potential to generate profitable sales.
• Set realistic budgets based on the expected ROI for each term to keep your ad spend under control.
• Campaigns should be tested and optimised on a constant basis to increase performance over time.

Instead of casting a wide net and hoping for results, we focus on the most effective keywords, guaranteeing that your advertising is seen by customers who are most likely to convert. This method not only increases sales, but it also helps to preserve healthy profit margins by keeping your ad expenditure focused and managed.

Use Promotions Wisely

Coupons, Lightning Deals, and A+ Content can significantly increase your products’ visibility on Amazon. However, many vendors abuse these features, lowering their prices or running specials too frequently.

Here’s how we make effective use of Amazon’s promotional tools:

• Coupons: A great way to attract customers without drastically lowering your price. We target the right products and time your promotions to increase conversions without eating into your profit margin.
• Lightning discounts: These time-sensitive discounts create urgency and boost sales. We assist you in selecting the correct products and setting up Lightning Deals that maximise visibility.
• A+ content: Enhancing your listings with thorough descriptions, high-quality photographs, and comparison tables can boost customer trust, enhance conversions, and justify premium pricing. We optimise your listings so they stand out in competitive niches.

We use these technologies intelligently to guarantee that your promotional efforts are both effective and profitable, allowing you to develop your brand without jeopardising your bottom line.

Improve Customer Experience and Brand Loyalty

In Amazon wholesale, the client remains king. Even if you don’t market your own private label brand, you should prioritise creating an amazing customer experience. A smooth, trustworthy purchasing experience can result in favourable feedback, returning customers, and increased sales—all of which are essential for winning the Buy Box and retaining your Amazon rating.

Automated Strategies for a Seamless Experience

At Prime Ecommerce Solutions, we do more than just sell things; we also help you establish a brand and consumer loyalty. This is especially critical for wholesale merchants, whose businesses rely on standing out and providing great service, even if they don’t market their own brand.

We offer a variety of automation strategies to enhance the customer experience, including:

• Automated follow-up emails after a sale, encouraging customers to leave reviews or giving them useful product tips.
• Inventory management solutions to ensure that you never run out of stock, creating a smooth and reliable experience for customers.
• Customer support automation, ensuring that all inquiries and issues are addressed quickly and efficiently.

By automating these processes, you not only save time but also ensure that your consumers receive consistent, high-quality service, resulting in increased brand loyalty and positive evaluations.

Building Trust and Encouraging Repeat Sales

In addition to automation, we help you create a trustworthy brand presence. You might not control your product’s brand, but you can still:

• Personalise customer interactions to make the shopping experience feel more engaging.

• Provide timely and dependable shipment, with clear tracking and arrival times.
• Respond quickly to consumer enquiries, making them feel valued throughout the buying process.

Customers who know they can rely on your Amazon store for excellent service are more likely to return, write positive comments, and suggest you to others.

Prime Ecommerce Solutions understands the importance of client loyalty and will work with you to develop a customer-centric experience that extends beyond the sale. Whether it’s improving your PPC advertising or automating post-purchase engagement, our techniques ensure that your consumers are satisfied and return for more.

Regularly Analyze and Adjust Your Strategy

Running a successful Amazon wholesale business is not a “set it and forget it” model. It’s a continuing process that involves constant monitoring, data analysis, and adjustments to guarantee your margins stay healthy as you grow. To successfully overcome low profit margins, you must:

Track Everything

In the fast-paced world of Amazon wholesale, knowing your metrics is essential. Without measuring key performance indicators (KPIs), you run the risk of making decisions based on insufficient data. Some of the most significant metrics to track are:

• Net Profit: This is the most crucial metric for measuring your company’s health. Net profit is the amount of money you keep after deducting all expenses, such as product costs, Amazon fees, and advertising. Keeping a close check on this allows you to see where margins are being squeezed and where changes might be made.
• ROI (Return on Investment): It is not enough to only make sales; you must also ensure that your investment is profitable. By periodically reviewing ROI, you can ensure that the money you invest in your Amazon wholesale business is being spent successfully and efficiently.
• ACoS (Advertising Cost of Sale): A high ACoS can reduce your profitability, therefore monitor it and adapt your campaigns accordingly. By keeping ACoS under control, you can ensure that your advertising generates lucrative sales.
• BSR (Best Seller Rank): Tracking your product’s BSR helps you understand how it compares to others in the same category. A lower BSR indicates that your products are selling well; but, if you see a drop, it may be time to adjust your listings or investigate new products.
• Inventory Turnover: Managing inventory is critical to avoiding overstocking and understocking. If you keep surplus merchandise, you’ll spend more in storage expenses. On the other hand, stockouts can result in missed sales opportunities. Understanding your inventory turnover rate helps you maintain a balance between supply and demand, which protects your profit margins.

Without continual monitoring of these data, it is impossible to determine which sections of your business are reducing your margins. Regular analysis provides meaningful insights, allowing you to make data-driven decisions that increase profits over time.

Adapt as You Scale

The UK market changes rapidly. Consumer behavior, product trends, and even Amazon’s policies can shift overnight. To stay ahead, you must adapt your strategy constantly. Here’s how:

• Update Listings: Your product listings need to evolve with the market. This might mean refreshing your product descriptions, adding new images, or updating keywords based on market demand. Prime Ecommerce Solutions helps you optimise listings to ensure they remain competitive and appealing to UK consumers.
• Source Better Products: As you grow, your sourcing approach should change. What worked in the beginning may not be profitable as your firm expands. We assist you in identifying better suppliers, negotiating better agreements, and discovering products that are both in-demand and profitable.
• Adjust Ad Campaigns: The landscape of Amazon ads is continuously evolving. A campaign that performs successfully for a few months may need to be revised as the market changes. By regularly testing, optimising, and refining your ad approach, we ensure that your Amazon PPC ads remain effective, reaching the correct customers without exceeding your budget.

Being adaptable and responsive to changes in the UK market is critical for long-term success. Prime Ecommerce Solutions works with you every step of the way, ensuring that you remain nimble and adaptable as needed.

Let Prime Ecommerce Solutions Power Your Wholesale Success

Overcoming low profit margins does not have to be a lost cause. With the appropriate product selection, a clever sourcing strategy, and experienced advice, you can transform your Amazon wholesale store into a profitable, scalable business.

Prime Ecommerce Solutions does more than just provide guidance; we also work with and for you. Here’s how we can transform your wholesale business:

We Find Profitable Products

We understand that finding the right products is the cornerstone of any successful wholesale business.  At Prime Ecommerce Solutions, we employ innovative algorithms and data to locate high-demand, low-competition products with the highest ROI potential. With our assistance, you’ll never have to guess which products to source—we supply products that are proven to sell and give you the best opportunity at high margins.

We Source Directly from Trusted Suppliers

Finding the correct products is only half of the battle; the next step is to discover suppliers that can deliver them at affordable pricing. We help you avoid intermediaries, negotiate better pricing, and get exclusive arrangements that give you a competitive advantage by connecting you with our wide network of vetted suppliers. By eliminating superfluous markups, you will boost your margins from the beginning.

We Help You Resell Profitably on Amazon

Our team doesn’t just focus on sourcing; we also help you resell economically on Amazon by optimising your listings, conducting effective marketing campaigns, and utilising the latest tools to ensure your product reaches the right buyers at the right price. Whether you’re a seasoned seller or just starting out, we offer specialised tactics to meet your company objectives.

We Provide Ongoing Support, Insights, and Growth Strategies

Moreover, we at Prime Ecommerce Solutions are not only here to assist you start your wholesale on Amazon; we are also devoted to helping you build and scale it. With our continuous support, you’ll receive monthly insights, actionable data, and growth plans to help your business prosper in the long run.

We’re always here to help you adjust to market changes, fine-tune your plan, or deal with unexpected obstacles. With our experienced advice and hands-on support, you’ll be able to boost your profit margins and achieve long-term success on Amazon.

How Prime Ecommerce Solutions Powers Your Amazon Wholesale Success

Service	What We Do	Impact on Your Business
Product Selection	Use data-driven tools to find high-demand, low-competition products	Boosts ROI, reduces risk of overstock or saturation
Direct Sourcing from Trusted Suppliers	Connect you with verified suppliers and negotiate better prices	Improves margins by cutting out middlemen
Profit-Focused Reselling Strategies	Optimize listings, run targeted PPC, and align pricing strategies with buyer behavior	Ensures competitive advantage and higher conversion rates
Ongoing Support & Growth Insights	Provide continuous guidance, data analysis, and strategic planning	Enables long-term scalability and sustainable profitability

Hence, low profit margins might be one of the biggest challenges in Amazon wholesale—but they’re not unbeatable. With the right approach, smart product selection, effective marketing, and expert support, you can turn your store into a consistently profitable business. That’s exactly what we deliver at Prime Ecommerce Solutions. Ultimately, from finding high-ROI products to negotiating directly with trusted suppliers, and from optimizing your listings to scaling your sales, we do more than just advise—we help you win. If you’re ready to stop surviving and start scaling, let Prime Ecommerce Solutions be your trusted partner in growing a successful Amazon wholesale business in the UK market.