89% of online shoppers prefer Amazon over any other website, which poses an important point in how to follow through with product sourcing for Amazon. 

To significantly enhance your business’s performance and achieve sustainable growth, you should identify profitable items, establish strong supplier relationships, and optimize your inventory management.

What is Sourcing Products?

Amazon product sourcing is the process of finding and acquiring products to sell on an ecommerce platform like Amazon. 

It involves a systematic approach to identify suitable items, evaluate their profitability, and establish relationships with reliable suppliers. Successful sourcing products to sell on Amazon is essential for building a thriving online business and achieving sustainable growth.

What is Amazon Product Sourcing?

Wholesale products to sell on Amazon specifically focuses on identifying products that are in demand on the Amazon marketplace. 

This involves researching market trends, analyzing competitor products, and evaluating the potential profitability of different items. 

By effectively sourcing products on Amazon, you can increase your sales, improve your product selection, and gain a competitive edge. 

Why Is Amazon Product Sourcing Important?

Sourcing Amazon products is a critical component of a successful Amazon business. 

It allows you to: 

Identify Profitable Products

Look for items that are in high demand and have a potential for high margins. 

By carefully researching market trends, analyzing competitor products, and evaluating customer preferences, you can identify products that are likely to sell well on Amazon. 

Build a Strong Product Portfolio

Offer a diverse range of products to attract a wider customer base and increase your chances of finding successful items. 

A well-curated product portfolio can help  you target different customer segments and meet their needs. 

Establish Reliable Supplier Relationships

Partner with reputable suppliers who can provide high-quality products at competitive prices. 

Building strong relationships with your suppliers can ensure a consistent and reliable supply of products, reducing the risk of stockouts and delays. 

Optimize Your Inventory Management

Avoid stockouts and excess inventory by carefully sourcing products based on demand and sales forecasts. 

Effective inventory management can help you reduce costs, improve cash flow, and minimize the risk of lost sales. 

Enhance Your Brand Reputation

Offer high-quality products that meet or exceed customer expectations. 

By sourcing products that align with your brand values and target audience, you can build a positive reputation and foster customer loyalty. 

Important Amazon FBA Product Sourcing Metrics

To measure the success of your product sourcing efforts, track the following key metrics: 

Sales Volume: Monitor the number of units sold for each product to identify top performers and understand customer demand. 

Conversion Rate: Calculate the percentage of website visitors who make a purchase to assess the effectiveness of your product listings and marketing efforts. 

Average Order Value (AOV): Track the average spending per customer to identify opportunities for upselling and cross-selling. 

Customer Reviews: Analyze customer feedback to understand product satisfaction and identify areas for improvement. 

Profit Margins: Calculate the profit margin for each product to assess its profitability and identify high-margin items. 

Return Rate: Monitor the percentage of returned products to evaluate product quality and customer satisfaction. 

Inventory Turnover Rate: Measure how efficiently you sell your inventory to avoid excess stock and reduce storage costs. 

Customer Acquisition Cost (CAC): Calculate the cost of acquiring new customers to evaluate the effectiveness of your marketing efforts and determine the profitability of your products. 

How to Find Profitable Products to Sell on Amazon FBA

1. Conduct Thorough Market Research

Identify popular categories and emerging trends by analyzing sales data, keyword research, and social media trends. 

Research customer preferences and need to understand what products are in demand. 

Look for gaps in the market where there is a lack of competition or high demand. 

2. Analyze Competitor Products

Identify successful sellers in your target niche and analyze their product offerings. 

Evaluate their product descriptions, pricing strategies, and customer reviews. Look for opportunities to differentiate your products and offer unique value propositions. 

3. Use Amazon Search Tools

Use Amazon’s search features to discover trending products and popular keywords. 

Use Amazon’s Best Sellers Rank (BSR) to identify high-performing products in your niche. Explore Amazon’s related product suggestions to find complementary items. 

4. Consider Your Niche and Expertise

Focus on products that align with your interest or industry knowledge. Use your expertise to source products that you can actively and effectively market and sell. 

5. Evaluate Product Profitability

Calculate potential profit margins by considering sourcing costs, shipping fees, Amazon fees, and selling price. 

Assess the long-term profitability of a product based on its demand, competition, and potential for repeat purchases. 

How to Start Sourcing Products for Amazon

Sourcing the right products is necessary in building a successful Amazon business.

Consider your target market, evaluate the products’ quality and safety, protect your intellectual property, and stay updated on industry trends. 

Step 1: Market Research

Conduct thorough market research to identify profitable product niches and understand customer demand. 

Analyze sales data, competitor products, and trends to identify potential opportunities. Consider your expertise and interests to find a niche that aligns with your passion and knowledge. 

Be sure to identify the profitable niches in the sense of analyzing sales data, keyword research, and social media trends to discover high-demand product categories. 

Research customer needs, preferences, and pain points to identify products that can address their problems. 

Assess the level of competition within your chosen niche to identify opportunities for differentiation. Use your knowledge and experiences to source products that align with your interests and strengths. 

Step 2: Decide on Sourcing Methods

Choose the sourcing method that best suits your business models, budget, and product requirements. Common sourcing methods include:

Wholesale: Purchase products in bulk quantities from manufacturers or distributors at discounted prices. 

Dropshipping: Partner with suppliers who handle inventory and shipping, allowing you to focus on marketing and customer service. 

Private Label: Create your own brand and products by working with manufacturers to design and produce unique items. 

Assess the upfront costs associated with each sourcing method. Determine if you want to handle inventory or outsourcing it to a third-party supplier. 

Evaluate the level of control you have over product quality and customization. Consider the ability of sourcing methods to accommodate future growth and increased sales volume. 

Step 3: Find Suppliers

Once you’ve decided on a sourcing method, start searching for reliable suppliers. Use online marketplaces, supplier directories, trade shows, and networking opportunities to connect with potential suppliers. 

Research and vet suppliers credentials, reputation, and product quality. Order samples to best assess the product quality, packaging, and compliance with standards. 

Negotiate terms by discussing pricing, payment terms, minimum order quantities, and shipping arrangements. 

Establish strong relationships with your supplier for long-term collaboration.