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How to Source Products to Sell on Amazon FBA? [Full Guide 2021]

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Every year, more than one million new sellers join Amazon but not all of them can make an impressive net profit. But what is the difference between a successful and failed business? For finding the answer we should check the different products and different ways to source them.
a man is selling products on amazon

Table of Contents

You need to choose your business model and products up to your goals and plans for the future. But whatever your business model is, finding goods with lower prices and higher quality is one of your goals for sure.

In this article, we break down different ways of sourcing that help to make more profit in your business.

1. Online Arbitrage

It is a good business model for new sellers. In online arbitrage, you source your products from online shops like Bestbuy, Target, Walmart, etc but there are different ways how to find. The most reasonable way to source products online, is by subscribing to a online arbitrage sourcing list.

Read More: Four different methods for sourcing products that every online arbitrager should know

online arbitrage sourcing

This sourcing method is very beneficial for newbies. They can start their business with a small investment and buy products.

On the con side, you should have a plan if you want to have a consistent profit. For example, you should know how many goods you need to source to ensure the benefit. Also, you should be aware of shipment costs. There are plenty of tools which give you enough details so they can help you to decide.

Read More: 11 Useful Chrome Extensions for Online Arbitrage

2. Retail Arbitrage

In this business model, you are looking for discounted products in retail stores like Walgreens, Costco and …. Also, Liquidation and surplus stores are good choices for retail arbitragers because everything they sell is discounted.

retail arbitrage sourcing product

Another way for sourcing discounted products is buying from auctions, garage sales, and thrift stores.

This business model seems easy. All you need is to find discounts and clearances and you don’t need a lot of money upfront. But it is very time-consuming and like online arbitrage, you should consider all the costs like shipment or storing and selling volume carefully. The other downside of retail arbitrage, compared to online arbitrage, is the scale capacity. In retail arbitrage your business is limited to your local shops.

Read More: Online Arbitrage vs Retail Arbitrage

3. Drop Shipping

First, you sell something, and then you buy it from a retailer or a wholesaler! This is a “drop shipping” business in simple words. You sell something without actually having it. Here you rely on a wholesaler or retailer to ship the products to the customers.

If you don’t want the hassles of managing inventory, this option is right for you. It is a low-risk business because you buy something when you have sold it. The supplier remains invisible to the customer.

Drop-Shipping-on-Amazon

It has pros and cons. On the pro side, it has no risk; first you sell then you buy. But on the con side, if the supplier missed shipment, you will receive bad reviews. Because the customer only knows you! Also, the delivery time usually is long, so its harder to convince your customers to buy from you and wait to recive their item.

4. Wholesale

When you are working with the wholesale model, you purchase goods in bulk directly from the manufacturer/brand owner and sell on Amazon.

Even after you established a good business relationship with the manufacturers, you can negotiate for lower prices and buy the products with better deals.

When you want to resell a brand as a wholesaler, you should go through the Amazon category approval process to be an authorized seller. Otherwise, your account can be suspended.

It’s easy to source products from wholesale suppliers online via wholesale marketplaces like Alibaba, Thomasnet, and others. If you are looking for more wholesale suppliers it’s enough to search on the internet.

5. Private Label

It is a good idea to sell your products under your brand. Privet label suppliers make products and label and package them under your brand. This means you have control over product quality, tagging, packaging, and so on.

Here you directly buy your goods in bulk and for a discount from marketplaces overseas. Many Amazon seller sources their products from marketplaces like Alibaba where they can find many manufacturers and purchase their goods in bulk and with lower price.

If you are looking for a private label supplier, you can have a quick search on the internet to find a supplier in your desired category.

Don’t forget that if you found a very good deal that doesn’t seem real, it is probably a scam. Counterfeit is unfortunately one of the important issues in the global marketplaces.

Final Thoughts

Amazon is offering many different business models and you can choose one of them based on your abilities and goals.  You can be an online arbitrager and source your products only online or you can be a private labeling vendor and ask the manufacture to label the products under your brand.

No matter how scaled or simple your business is, it is important to know different ways of supplying and choose the great ones so you can have a consistent and profitable business.

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