Amazon FBA Product Sourcing Ultimate Guide

What is Amazon Product Sourcing?

Often, sellers become overwhelmed while deciding the most profitable products for Amazon product sourcing. All-scale sellers who are successful in a competitive marketplace like Amazon have their product sourcing for Amazon FBA Business. The brief definition of Amazon Product Sourcing is “finding products of good quality from reputable and trusted suppliers at a low price to sell on Amazon at a higher price”. It is essential to rely on public-acclaimed and authorized source items because not all sellers can produce their own products.

Amazon FBA Product Sourcing Inventory Options

It is not wise to buy any random product and jump into competition in a giant eCommerce platform like Amazon. Even the most brilliant sellers can be financially damaged. Many new and unique ways, sources, and platforms are emerging to make an unimaginable profit in the age of eCommerce. These are very helpful for the online arbitrage sourcing list. Indeed, product research gives you the best insight into customer preference, marketplace trends, and future prospect analysis.

Here, there are the most common inventory sourcing methods for Amazon.

Online Arbitrage

One of the easiest ways to start selling on Amazon is online arbitrage which plenty of profitable businesses are built based on. The act of buying discounted products online and reselling them on a marketplace like Amazon for a profit is known as Online Arbitrage.

The best advantage of online arbitrage is that it is convenient, and you can do it from your desk at home. You don’t even require touching the products but pay for shipping and other costs as each item is sold. Indeed, when the price difference is more considerable in two marketplaces, you can gain higher profit. Overall, for newbies who don’t have a large budget, online arbitrage is the low-risk business model to get started.

Retail Arbitrage

Another business model to sell on Amazon is retail arbitrage. It is a simple concept behind this complex phrase. Basically, the process of purchasing inventory at a low price from brick-and-mortar retail stores and then reselling them on Amazon as an online marketplace at a decent markup is defined as retail arbitrage. Although this method is simple, it is not easy. You have to look for discounted products and reliable shops and put a lot of time and effort into becoming successful. Searching through different marketplaces is essential to compare the cost of certain products.

Dropshipping

Dropshipping might seem complicated at first, but it’s actually one of the less time-consuming methods. In this method, sellers take orders on behalf of a distributor, manufacturer, or supplier, as they don’t put the products in warehouses before selling.

Generally, after a customer puts order and buys the product, sellers start by asking suppliers to fulfil the sales. The ordered items are then shipped directly to the buyers. Unlike the traditional retail model, dropshipping doesn’t demand as much capital. So it is trendy among entrepreneurs.

Read More: Amazon FBA or Dropshipping?

Wholesale

Wholesale makes profits for a seller, just like online and retail arbitrage. But there is a difference. When you do wholesale, you buy in bulk. When you buy branded products directly from producers or manufacturers in large quantities, your wholesale journey starts. In this business model of product sourcing for Amazon, the sellers can buy the goods in bulk, which are offered at discounted prices. After listing them as single items, you can gain profit. Consider that in wholesale; there is no intermediary. You are known as a supplier and:

• Take charge of all your stock.
• Have control over your inventory
• Fulfil every order yourself (unlike Dropshipping)

there are upsides to this model, the first being the opportunity to build a strong supplier network. No matter what you decide for the future of your business, the network can always help you scale it.

Private Label

Last but not least, there is the private label method. Selling as a private label means going through the products on Amazon which are highly in demand. Then, getting and labelling them as they are yours (for example, rebranding a skincare line, notebooks, etc.) Choosing a good product is critical, and it will be very lucrative. This method also means putting effort and building a new brand, which means you should know about simple and basic rules of branding. However, it is worth it because you will differ from your competitors and have a bigger chance of standing out. The new brand can help you sell more and make more money.

 Important Amazon FBA Product Sourcing Metrics

now that you have read about the meaning of FBA business, it’s important to know about what makes it profitable. How should a seller know if they’re making enough profits to keep the business going? What should be considered when discussing the sourcing options for an FBA business? Here are some essential Amazon FBA sourcing metrics:

Profit margins

No matter the method, you are required to make a profit. To keep a business going, the time and energy you should spend on it should be worth it. Try to choose the products that are sure to give you profit. Search, read reviews and go through price histories. Products with small profit margins are risky and can hurt your business.

competition

one important thing you need to consider in product sourcing is the competition. Some products are highly in demand, and while this is good, it means many people are choosing to sell them. Sometimes a product has high competition, but not many people want to buy it. Be careful about this category when you source niche products. Many suggest that for newbies, products with medium competition and medium demand are ideal.

Demand Levels

product demands rise and fall in time. Sometimes a celebrity endorses a makeup brand, and suddenly, everyone wants it. Another example is the months leading to Christmas. Times when people want to buy gifts and decorations. High-demand products are great for FBA business owners but don’t forget that there is also competition. Leverage demand and competition to succeed.

Costs and expenses

remember that FBA is not free. Amazon charges a small amount based on the weight and volume of the package you are sending. That is why you need to make sure the product will stay profitable in time, and you won’t need to expand the budget when it’s not the time yet.

seasonal sales

some products are seasonal, and while you can make significant profits by selling them at that particular time of the year, other times can be pretty challenging. Before sourcing a large number of products, make sure none of them is irrelevant.

How to Find Profitable Products to Sell on Amazon FBA

You can figure out which products are the most profitable items on Amazon FBA by following the below steps:

1. Look for top products through keywords

The search result is the best way to determine what sells the most on Amazon. You can see the search result by entering the random keywords or specific products you want to sell.

A reasonable volume can reassure you about the future prospects of the product. So, it is good that the monthly search volume will be at least 100,000 to consider that product.

2. Durable Items

Nonbreakable and durable products are the best choices for beginners. Any damage during shipment can cause negative reviews from your customers on your first attempt. So it is better to select items with the minimum challenge.

3. Check shipping and dimensions cost for your products

Go with the products which have less weight and small size. It helps you to reduce shipping costs.

4. Choose products with a Bestseller rank (BSR)

The Bestseller rank gives you information about how well a product is selling on Amazon currently. An item can have more than one BSR since many products sell in multiple categories on Amazon.

5. Learn from the Experts

The ones who are already successful on Amazon can be your inspiration. Read their stories and learn from their failures. It is helpful to read the books written by successful sellers and learn their strategies.

How to Check the competition for Amazon’s Products?

As much effort as you are putting into your FBA business, you are not the only one doing it. as a seller; one needs to know about their competition to succeed. Here are some simple ways to gather information about your competitor sellers and products:

• Search for similar products and read the comments and reviews. This gives you an idea about the seller’s shipping and sale process.
• Examine the prices and find out who is selling cheaper or more expensive compared to you.
• Check your competitor’s storefronts and find out about their terms and conditions. by clicking their name, you will also have access to the brands and products they sell

Best Tools for Sourcing Products to Sell on Amazon

Choosing the right software to help you with your Amazon FBA Business is crucial for success. These tools and software can help you to find online arbitrage leads.

Below, the five best of these helpful tools are listed:

• Helium 10

This tool allows sellers to scale their businesses exponentially. It can identify trends, optimize product listings and keywords ranking, and spy on competitors. It also gets hijacker alerts for your listing.

• Keepa

Keepa is a chrome extension that has great data on all Amazon products and their histories. Price history charts, real-time prices and price drop alerts are the most valuable data that you can have with this tool. Keepa is relatively expensive and not suitable for all sellers.

• Jungle Scout

It is another Amazon product research tool. It is available as both a web app and a chrome extension. By using this tool, sellers can find product rank, revenue, real-time sales data, and Amazon keyword research.

• Revseller

Revseller is a chrome extension to help you make faster and more informed product decisions. It provides you with price history data, sales rank, category, ROI and profit margin, number of FBA and MFN Sellers, etc. This tool is available on the Amazon.com and Amazon.ca marketplaces and has a 30-day free trial.

• Tactical Arbitrage

This software is for online arbitrage and helps you to find profitable products. It is a Chrome extension. By using product reviews, it can analyze size and color data. It also has an ROI calculator.

There are some other Chrome extensions that can be pretty comprehensive and functional for sellers. Read the complete list of these extensions in this article: Best Chrome Extension for Amazon Sellers. 

Important Tips for Successful Product Sourcing for Amazon FBA

E-commerce sales on Amazon increased drastically during the Pandemic, and it is expected to expand in the coming years. The following critical tips can affect your success in product sourcing for Amazon FBA.

1. Profitability Evaluation

You have to calculate the sourcing and shipping costs of every product you want to sell on Amazon. Selling selected products will be profitable only if your expenses are lower than Amazon’s selling price.

2. Research Product Trends

If you want to predict future sourcing needs, it is necessary to have continuous research on Amazon product trends. Keeping your inventory closely aligned with bestselling products is a good idea. This decision can reduce your unnecessary costs of storing, packaging, and shipping the products.

3. Find a reliable supplier

Providing high-quality products and delivering them on time makes a supplier reliable. This is critical for an Amazon FBA business. You should validate the legitimacy of your suppliers, regardless of where they are located.

4. Diversify your sourcing suppliers

Suppliers’ diversity is essential for succeeding your business on Amazon.

To product quality and assess costs and logistical advantages, try reaching out to multiple suppliers as you start your product search. Always some unforeseen circumstances can cause delays on your first selected supplier. So, it is wise to have more than one sourcing choice.

How OABeans Helps You with Sourcing Products

Whether a newbie or a professional, you must spend many hours a day finding profitable products and high-quality leads. Generally, reaching the best sourcing method is hard for newbies. Even professionals want to spend less time finding products and diversifying sourcing methods.

OABeans is a products sourcing service for Amazon FBA. Actually, this popular service provider helps sellers find the best online arbitrage deals by providing a sourcing leads list. You can scale your FBA business with these daily, weekly, or monthly leads, which are hassle-free and time-effective. So sellers can focus on managing their business. Besides, it will tell you the amount of money you can earn from online arbitrage. The OABeans sourcing list for selling on Amazon has some criteria:

1. The leads are checked for being gated or ungated
2. The profit margin and ROI are specified
3. The price history during the past 30-days and 90-days is monitored
4. The average of the products ranking is 1% Best Seller Rank
5. The various suppliers are checked both manually and using search software
6. The leads don’t include dangerous and hazmat products
7. The leads are checked for IP complaint
8. It doesn’t send a lead that Amazon is selling at the moment
9. All listed products have standard size
10. The number of people receiving the same OABeans list is limited.

Final Thought

Sourcing products for selling on Amazon is not a complicated process. In this post, several well-researched tips on Amazon product sourcing have been compiled for you in one place. Here is the information that helps you be confident to choose your own way of product sourcing for Amazon. There are particular methods to find profitable products, like using product searching tools. Besides, some expert companies as OABeans, provide high-quality leads for sellers.

FAQs