The difference between a failed and successful Amazon business in 2022 comes down to the products you sell. Hundreds of thousands of sellers join Amazon, but only a fraction surpass the six-figure sales mark every year.
Many sellers lack knowledge of what kind of products to sell and where to source them. You don't need to hit the $1 million sales target in your first month, but selling profitable products is the key to building a successful business. One factor in determining how profitable your products are is your sourcing methods. This article will unlock the best ways of product sourcing for your Amazon business.
Why Does Amazon Product Scouting Matter When Selling on Amazon?
Amazon makes a big deal about sellers with authentic and quality products on the platform. Rightfully so, considering the traffic the marketplace offers. Product scouting on Amazon is key to making customers happy and growing your business.
But, as an Amazon seller, the buck stops with you to comply with Amazon's policies. Customers trust that what they buy from the platform is genuine and that the products reach them in the advertised condition. To succeed on Amazon, you must ensure that your products are genuine, authentic, and in good condition.
Amazon takes drastic measures against sellers who violate product authenticity and quality policies. Amazon will remove certain listings and could even suspend your account or block you from listing new products on the platform. If that happens, Amazon will ask you to submit invoices from your suppliers or provide your supplier contact information to restore your account. It's not a situation any seller, new or experienced, wants to face.
If you don't have a reliable product supplier from the beginning to supply your inventory, your seller account could be at risk. That’s why you must consider where you source your products before you start selling on Amazon.
Local or Overseas Sourcing: Which One Should You Use?
You can either use local or overseas product suppliers for your Amazon business. Sourcing from a local supplier has its advantages, like reducing the transit time and ensuring your products are shipped early. It also helps you keep tabs on product quality and ensure that there are no miscommunications with your supplier.
Sourcing products overseas, like in China, comes at an advantage in terms of cost. Winning the Buy Box on Amazon usually depends on your profit margins, so this is something that you might want to consider. But here's the thing; if your products are coming from overseas, there is no way of guaranteeing that the products are of high quality and authentic. Other factors include product data, shipping times, taxes, and logistics before deciding on an overseas supplier. But at the end of the day, as long as your supplier is reliable, products are authentic, and you make a reasonable profit, it doesn't matter where you source your inventory.
How Do You Find Product Suppliers When Selling on Amazon?
If you have the means and financial muscle, you can manufacture your own products to sell on Amazon. Manufacturing enables you to customize the products and build a reputable brand that stands the test of time. But many Amazon sellers don't have the liberty of doing that and must rely on other product sources.
Here are some of the ways you can source products to sell on Amazon:
#1 Find Retail Products for Sale
If you don't want to deal with manufacturers and suppliers, retail sourcing is the easier way to navigate sourcing products for Amazon. Retail sourcing may involve going to a brick-and-mortar store and finding products on sale or buying from online stores and other online marketplaces such as Alibaba. The secret is to find products in high demand on Amazon, buy them at a lower price, and list them on Amazon to make a profit.
If you are just starting and haven't found a reliable supplier, this can be a great way to launch your e-commerce business. However, there's a downside, especially if you buy from other online e-commerce spaces; there is no way of knowing you're buying genuine. It's your responsibility to ensure that you sell quality and genuine products.
#2 Private Label Product Scouting
Private label selling is one of the best ways of building a successful brand on Amazon because you can sell custom-made products and build brand loyalty. You can also customize the packaging with your logo and brand name. This product scouting method involves contacting the manufacturer and getting it to manufacture the product for you. It will cost you. However, at the end of the day, you are assured of a product you can trust and one that meets Amazon's standards.
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#3 Wholesale Product Sourcing
This method involves buying high-volume products from the brand owner, manufacturer, or licensed wholesale supplier. This is a tried and tested process of sourcing for products because it's easily scalable and has a low entry barrier. Since you will work directly with the already established manufacturers, you won't have to worry about creating new ASINs. At the same time, most products you buy wholesale already have demand and sales rank.
With wholesale selling, you can get better deals and negotiate better terms in the future when you've established a positive relationship with the manufacturer. But the thing is, you have to be careful about violating copyright policies that could get your account suspended. Go through all the necessary approval channels before you start reselling the products. If you are not an authorized reseller, you might get flagged for copyright infringement and have your seller account suspended.
What Are the Best Practices When Sourcing Products To Sell on Amazon?
For many Amazon sellers, the cost of your products is the most important factor to consider. Well, in a way, that's true. After all, you need to make a profit to have a successful Amazon business. But here is the thing; Amazon is built around providing the best customer experience for buyers. Because of that, you also need to consider the quality of the products you sell and the supplier efficiency. So, what are the best practices to follow when choosing product suppliers?
- Pick product suppliers: While sourcing products from many areas is helpful, you must ensure that your supplier is reliable. Don't just go online and buy from the first supplier you come across. The best practice is to set up a physical meeting. However, that's not possible for every seller, especially if your supplier is overseas. A background check will tell you everything you need to know to safeguard yourself from unscrupulous suppliers and counterfeiters. Amazon expects you to source products from legitimate companies, so ensure you perform due diligence.
- Find out how the product is made: The e-commerce space is very competitive. Because of that, you can't afford to make any mistakes in the quality of products you sell. Ensure you have the manufacturer information for all products you sell, especially complex electronics. Figure out every minute detail of whatever you want to sell before you start selling.
- Ask for samples: Don't make the mistake of sourcing products and selling them without gauging their quality. Genuine product suppliers are usually more than ready to provide sample products. A sample will help you determine if the product you are about to sell meets Amazon’s quality standards. Samples also help you ensure the products you choose meet your brand's standards.
- Work out the logistics: Consider the cost of getting products from your supplier, and include any and all freight charges. Sourcing products overseas is different from sourcing products locally. With overseas sourcing, you need to consider the time it takes to manufacture your products and all the charges you may incur. If the charges make sense and you're sure to make a profit, then sourcing overseas can make sense for your business. If you are manufacturing your own products or having another manufacturer handle your production, that can take time. So, be mindful of how long it will take to get your inventory and clear customs.
- Keep your options open: Never settle for just one supplier. Why? Costs and product quality differ from supplier to supplier, so you need to be in touch with more than one company before making a final decision.
Establishing a successful Amazon business takes time and requires a commitment to scaling. One of the things you need to consider before you start selling is where you'll source products.
Above all, the most important thing to consider is quality. Sourcing from a legitimate supplier will go a long way in ensuring that you meet Amazon's standards of product unauthenticity and quality. You can also manufacture your own products if you have the budget.
If you are just learning how to sell on Amazon and have no idea where to start with sourcing products, SmartScout can help. Our software collects millions of data points no other tool can provide, helping you source the best products to increase revenue and keep customers coming back for more. Contact us today for a free demo.