Amazon’s retail e-commerce sales were $444.76 billion in 2023 and are projected to reach $540.29 billion by 2025, highlighting a massive opportunity for sellers. However, standing out in this competitive market requires effective sourcing strategies.
For those looking to source products to sell on Amazon, choosing profitable items and reliable suppliers is just as crucial as marketing and customer service. As the world’s largest online marketplace, Amazon offers sellers access to millions of buyers, but informed sourcing decisions are essential.
Successful product sourcing involves selecting the appropriate business model, conducting thorough product research, identifying trustworthy suppliers, and efficiently managing logistics. Sellers must also stay ahead of market trends, leverage analytical tools, and optimize supply chains to maximize profits.
This guide covers key aspects of Amazon product sourcing, including various business models, research strategies, supplier selection, and shipping logistics. Whether you're a new or experienced seller, these insights will streamline your sourcing process and set you up for success.
Check the Business Model
Before sourcing products to sell on Amazon, it's crucial to determine which business model suits your goals and budget. Each model offers different advantages and challenges.
1. Online Arbitrage
Involves purchasing discounted products from online retailers and reselling them on Amazon.
Requires research to identify profitable items with a strong resale margin.
Tools like Keepa, Tactical Arbitrage, and AMZScout help analyze pricing trends and demand.
2. Retail Arbitrage
Similar to online arbitrage but involves purchasing discounted products from physical retail stores.
Can be a great way to start with minimal investment but requires manual effort.
3. Private Label
Involves creating your own brand by sourcing generic products and customizing them with unique branding and packaging.
Offers higher profit margins and brand control but requires more capital and marketing effort.
Sourcing platforms: Alibaba, Global Sources, IndiaMart.
Involves buying bulk products directly from distributors or manufacturers and selling them at a markup.
Requires a higher upfront investment but provides stable inventory and revenue.
Works well for selling established brand-name products.
5. Dropshipping
Selling products directly from a supplier without holding inventory.
Cost-effective for new sellers, but lower profit margins and reliance on supplier reliability are challenges.
Platforms: Spocket, Oberlo, Printify.
Choosing the right model will determine how you source and manage products on Amazon.
Learn About Products
To ensure success on Amazon, selecting the right products is crucial. Researching top-selling products and using analytical tools can help sellers make profitable decisions.
1. Use Online Tools for Product Research
Several tools assist in identifying high-demand and low-competition products:
Jungle Scout – Provides product sales estimates and competition analysis.
Helium 10 – Offers extensive Amazon analytics for product trends and keyword research.
Google Trends – Shows demand trends over time for various product categories.
AMZScout – Helps track product profitability and sales history.
2. Identify Profitable and Convenient Products
Key factors to consider when selecting products:
Profit Margins – Aim for a 30%+ margin to cover Amazon fees and marketing costs.
Market Demand – Ensure steady sales by choosing trending items with proven demand.
Competition Level – Opt for products with moderate competition for better visibility.
Once you've sourced your products, optimizing Amazon listings is essential:
Use high-quality images that showcase product features.
Write optimized titles with relevant keywords.
Create detailed descriptions with engaging content.
Offer competitive pricing to attract buyers.
Identify Suppliers
Finding reliable suppliers ensures product quality, timely delivery, and long-term success. Consider various supplier options when sourcing products to sell on Amazon.
1. Manufacturers
Best for private-label sellers looking to create custom products.
Direct sourcing minimizes costs but requires larger order volumes.
Sourcing platforms: Alibaba, Global Sources, IndiaMart.
2. Wholesalers & Distributors
Suitable for sellers reselling established brands.
Offers bulk pricing with low minimum order quantities.
Ideal for sellers who don’t want to hold inventory.
The supplier handles order fulfillment and shipping.
Platforms: AliExpress, Spocket, Oberlo.
SourceReady
A technology-driven platform specializing in AI-powered product sourcing and supplier engagement.
Provides access to a vast database of over 500,000 suppliers across multiple industries.
Offers data-driven insights to streamline the sourcing process.
Vetting suppliers, reading reviews, and requesting samples before committing to bulk orders is essential to ensure product quality and supplier reliability. Read Understanding Different Types of Suppliers to understand more about types of suppliers.
Look After Shipping
Shipping plays a vital role in ensuring smooth product delivery and customer satisfaction. Choosing the right fulfillment method and managing logistics efficiently can enhance your business.
1. Choose the Right Fulfillment Method
Amazon offers two primary fulfillment options:
Fulfillment by Amazon (FBA) – Amazon handles storage, packaging, and shipping for a fee. It allows for Prime eligibility and reduces seller workload. Watch How to Sell On Amazon FBA in 5 Minutes to learn more.
Fulfillment by Merchant (FBM) – Sellers store and ship products independently. This offers more control but requires efficient logistics management.
2. Understand Import & Export Regulations
Products sourced internationally must comply with customs and import duties.
Ensure proper HS codes and necessary documentation are in place.
Hiring a freight forwarder can simplify customs clearance and transportation.
3. Optimize Packaging & Shipping Costs
Use cost-effective packaging that minimizes dimensional weight fees.
Work with third-party logistics (3PL) providers for storage and fulfillment solutions.
Ensure safe and secure packaging to prevent damage during transit.
A well-managed shipping strategy ensures timely deliveries, reduces returns, and leads to positive customer reviews, contributing to long-term success on Amazon.
Conclusion
Sourcing products to sell on Amazon is a critical step in building a profitable e-commerce business. Sellers can enhance their chances of success by selecting the right business model, conducting thorough product research, and partnering with reliable suppliers. Platforms like SourceReady simplify supplier discovery, ensuring access to high-quality products with competitive pricing.
Managing logistics efficiently, optimizing listings, and staying updated on market trends further contribute to a seamless selling experience. Whether you’re a beginner or an experienced seller, following a strategic sourcing plan is essential to maximize profitability and minimize risks.
Ready to start your Amazon journey? Begin researching profitable products, connect with trusted suppliers, and optimize your shipping strategy today!
FAQ
1. How do I stay competitive in a crowded Amazon marketplace?
Differentiate by offering unique value (branding, bundling products), optimizing listings with SEO, leveraging Amazon ads, and maintaining high customer ratings.
2. Can I sell on Amazon without holding inventory?
Yes, through dropshipping or print-on-demand models. However, Amazon has strict dropshipping policies, and maintaining supplier reliability is crucial.
3. What is the best business model for selling on Amazon?
The best business model depends on your budget, experience, and goals. Private label offers high margins and brand control, wholesale ensures stability, arbitrage (online and retail) has lower entry barriers, and dropshipping requires minimal upfront investment but has lower profit margins.
Head of Marketing
Judy Chen
Graduating from USC with a background in business and marketing, Judy Chen has spent over a decade working in e-commerce, specializing in sourcing and supplier management. Her experience includes developing strategies to optimize supplier relationships and streamline procurement processes for growing businesses. As SourceReady’s blog writer, Judy leverages her deep understanding of sourcing challenges to create insightful content that helps readers navigate the complexities of global supply chains.
