Every new seller is stuck on one question “How to source products or from where to source products to sell on Amazon.”
Product sourcing is an important factor if you want to run a successful business, especially on Amazon. To run a smooth business on Amazon, you need a consistent supplier that gives you high-quality products at a discounted price.
Now hundreds of sellers sell the same product but make different profits and sales. Have you ever wondered why?
This is because they all have different sourcing methods; some are making greater profits through whole sourcing, while some are getting low-profit margins because of dropshipping.
Every sourcing method has its advantages and disadvantages; therefore, to help you select the right one for your business, we develop an Amazon sourcing guide that explains how to source products to sell on Amazon. But before that, let’s have a short overview.
What is Amazon Product Sourcing?
Sourcing products from any third party and selling them on Amazon is Amazon product sourcing. Now, this third party can be a wholesaler, manufacturer, or drop shipper, depending on your business and which sourcing method you will choose.
Here are some of the common ways to source products to sell on Amazon.
Retail Arbitrage Product Sourcing
Retail arbitrage and online arbitrage work in the same way. You usually buy products from traditional brick-and-mortar shops, stores, and outlets and resell them at your own higher price. This is a great way of making a huge profit product, but it is not as easy as you think. You have to go to many different markets, compare the prices, and find the least price.
It’s all about sourcing the most discounted or clearance deals in the local market. But one thing that is very important about sourcing is that you must understand the demand and competing prices.
- You can source unique products as not everyone has access to the same local market
- Risk of loss
- You cannot do consistent business
- Time consuming
Dropship or print-on-demand (POD) is the same sourcing method. In which you source the product when any customer places an order. This great sourcing method does not require much investment; you only have to pay when you make a sale. The sellers who use the dropship sourcing method are usually third-party sellers on Amazon.
In this sourcing method, you have to worry about the product demand or competition. People also drop-ship the products from other marketplaces like eBay and Walmart to sell on Amazon.
- No investment is required
- Less profit
- Less control
- Your account might get suspended because of copyright infringement
Wholesale is a very popular method of Product sourcing for Amazon that almost every seller uses. It’s a method of buying a large volume of stock directly from the manufacturer or brand owner and selling it on Amazon.
Many sellers still don’t know how to find FBA wholesale distributors?
Many wholesalers market places like Alibaba, Thomasnet, AliExpress, 1688, and others help you find the best suppliers for Amazon FBA. They offer you a product sample, and once you approve the sample, they will send the items in bulk with custom packaging that includes your shipping label and a logo. Wholesale is considered the most profitable option if you want to earn millions of revenue annually.
- You can test the products first before committing to huge factory order
- Less work
- Offers a wide range of selection
- Better profit margin
- Need a large budget to start a business
- Difficult to get approved by owners
- Can’t customize the product
Private labels are quite popular on Amazon now. Amazon owns more than 100 private label brands that operate in almost every category, including food and beverages, automotive, clothing, and electronics.
In private labeling sourcing, products are directly sourced from the manufacturer and sell it under their private label or brand. In a private label, you have an option to change the product design and sell it using your brand name. You have complete control over product quality, labeling, and packaging in this method. Private labeling is also known as white labeling.
- Less work
- Best sales margin
- Full control
- Customize your products
- Shipping cost
- Minimum order quantity
The method you choose to source products to sell on Amazon depends on the scale of your business and how much you can invest. However, if you are still confused about how to source products to sell on Amazon, you can hire our employee or virtual assistant to give you the best sourcing services according to your business.
If you still have any questions, feel free to ask. We will be happy to help you.