Product sourcing for Amazon plays a vital role in getting a successful business for Amazon sellers. With the rapid development of e-commerce, market competition is becoming increasingly fierce. If you can reduce the cost of Amazon product sourcing, you will obtain more competitive prices in the market.
We studied the working process of the Amazon store operation, which includes several steps as follows: researching the profitable products – establishing a strategy for Amazon sourcing – and concluding an executable marketing plan. This article focuses on the entire workflow – step-by-step takes you to do the best profitable product sourcing for Amazon.
What is Amazon Product Sourcing?
The standard definition of product sourcing for Amazon is finding some high-quality products to sell on Amazon from reliable suppliers at competitive prices. In this way, both the buyer and seller can get profits.
Then there comes the question: how to find reliable suppliers? This question bothers many wholesalers, especially the layman who wants to start a business on Amazon. This article will intensely discuss how to solve this problem and let companies start more quickly.
First, before we start Amazon product sourcing, we must understand what kinds of products we need. That’s a big problem. Most newcomers are confused about what products to sell. So let’s talk about it.
How to Determine Profitable Amazon Products?
Take the LED light strip as an example.
1. Integrate keyword data and analyze the market trend
1.1 Integrating Keyword Data
Step 1: Knowing the multiple names of the products.
On Amazon, one product usually has a variety of names. For example, for LED Strip lights, similar names included led lights for bedroom, led lights strip, led strip lights for bedroom, etc. So before you integrate keywords, remember to find out the most usual calling of the products you want to sell.
Step 2: Knowing the market feat of relative products.
The market feat is closely related to the product search volumes, which you must confirm. After finding the keywords of the product, you can use the keyword tool (merchantwords) to find out how many times they have been searched before. Search volume is the number of monthly searches for this keyword on Amazon. Taping in LED strip lights, we get that these words have been searched 624,400 times. That means this product is quite popular.
Step 3: Counting the number of sales within one keyword
Search Amazon for “LED Strip Lights” and count how many such products are being sold under this keyword. Please note that when searching on Amazon, you should select the product category first. For example, you can see that the category of LED Strip Lights is Tools&Home Improvement. The final search volume is 6000. That means there are 6000 similar products sold on Amazon.
Step 4: Calculate the competition index for this keyword.
The competition index equals the number of searches divided by the number sold for one product. The above four steps can help us get the competition index of the main keywords of products we want to sell.
By the way, through the basic competition research of LED light strips, if you are a novice seller and do not have much capital, after studying the degree of competition, you have to consider whether you have the strength to operate this product. But if you are an expert in this industry and just want to expand your sales on Amazon, you can take the next step.
1.2 Market trend analysis
We can use Google trends to view the market trend of the products we intend to sell. We are also taking the LED lights as an example.
From the above chart, we can conclude that the main search keyword of this product is led light strips. The market is scorching, but the competition index is also on the high side of the competitors. For most new sellers, a product whose competition index is higher than 60 is not a good choice.
2. Multi-dimensional analysis of monopoly, price, review, etc. -this kind of analysis requires the help of various Amazon analysis tools.
This index is used to understand the average sales volume level in market segments and can also judge the monopoly of head goods.
2.2 Price range
Sellers need to determine the price range distribution of this product.
Survey the customer’s evaluation of the use of such products, find out the advantages and disadvantages of the products, and the common problems that exist in the market of such products.
3. Product in-depth investigation.
3.1 Profit Calculation
For the profit analysis of a single product, it is necessary to collect the purchase cost, volume, and weight, calculate the freight to the Amazon warehouse, platform commission, and the proportion of advertising expenses (according to different product categories). All the data above can help us get the profit margin.
Product profit margin = selling price – purchase cost – freight – platform commission – advertising expenses.
3.2 Comparative Analysis of competitors
We are finding 5-10 competitors on the market to analyze their parameters, performance, price, Q&A, comments, etc., comparing with them to explore how to improve our products. To summarize competitor comments and QA, if there is a large amount of data, it is recommended to use the appropriate Amazon tools for analysis.
3.3 Improving & Differentiating the target products
Please focus on the common problems of competitors, improve the quality & price of our products or make differences with the other similar products in circulation on the market.
4. Final product determination
Determine the advantages of products, and the required certification information, find a high-quality supply chain, get competitive prices, and purchase complementary products.
Channels for product sourcing for Amazon
As for new sellers, it is recommended to prioritize domestic suppliers when sourcing products for Amazon. ( The countries where sellers are located. )
The most significant advantage of sourcing from domestic suppliers is the speed of delivery. You can receive your goods and publish them on Amazon quickly. With these kinds of channels, your cost of errors will be reduced, and the speed of product improvement will also be increased. At the same time, the convenience of address can provide a more flexible inventory arrangement to make inventory management easier for new sellers. Let’s talk about some other channels officially.
Sourcing products for Amazon from China
There are significant advantages to dealing with Chinese suppliers. First of all, China is almost the most powerful manufacturing country. Therefore, the products in China will be cheaper, and the minimum order will be lower. This means you can get a lower cost and build your Amazon business on a small scale. At the same time, you will find that products offered in China are easily branded, which is the main factor in most successful cases.
Top 6 Chinese Websites for Amazon Sourcing
Alibaba is one of the world’s largest online commerce suppliers. The company is headquartered in China and has three branch websites-Taobao, Tmall, and Alibaba. All three websites have millions of users. Millions of business people and enterprises are stationed in Alibaba. It’s not hard to find out that most sellers selling on Amazon may have contact with Alibaba.
Unlike Alibaba, AliExpress provides high-quality products at small-batch factory prices. Alibaba tends to deal with people who resell in large quantities.
Made-in-China was founded in 1998 and has a long history of providing B2B services and products. It is regarded as the leading third-party B2B e-commerce platform in China. The company’s vision is to bridge the gap between global buyers and Chinese suppliers. It offers 27 categories of products and 3600 subcategories.
Global Resources promotes trade with the Greater China region. The company’s business mainly exports electronic products, especially mobile electronic products.
Amazon’s dealers offer significant profits. Some people have noticed that the number of well-known brands on Dunhuang does not match other websites, but it is the easiest one to use with timely delivery speed and considerate service.
Ruizhi sourcing is a Chinese sourcing company located in Shenzhen, Guangdong Province. The main service items are product sourcing and product engineering. Product sourcing includes one-stop services such as supplier selection, price negotiation, following up factory production, monitoring product quality, arranging product delivery, etc. Product engineering provides product design, product mold opening, detail adjustment, finished product display, and other product production services from scratch.
Sourcing products for amazon from the USA / Europe
Top 4 United States/Europe Websites for Amazon Product Sourcing
1. Kole Imports
Founded in 1985, Kole Imports is a family-owned business headquartered in Los Angeles and one of the largest direct importers of everyday goods in the United States. They also specialize in wholesale and clearance of all kinds of goods. They import directly from foreign manufacturers and sell them to wholesalers and retailers. In addition to the website, they also participated in trade shows across the United States to show the inventory they provided. Kole Imports is exported to more than 100 countries around the world.
Closeoutfortune is mainly aimed at sellers in the United States, offering wholesale and better prices and a global entity. It provides the largest category of goods available for purchase. It gives potentially high-value goods at the lowest price.
Alltimetrading mainly provides daily goods-small items that we use in large quantities. It also offers clothing, clearance sales, and seasonal commodities. The minimum order quantity for each product is 1 case. Transactions on advertising product sites are sometimes quickly bought out by merchants — so you won’t be charged unless inventory is confirmed. It also means that you should regularly visit the website to ensure you get the best price.
UK wholesalers is a free online catalog that lists only certified UK wholesalers. It was founded in 1999 to help retailers who want to buy and resell. The site listed hundreds of suppliers and organized them by different categories. The most helpful thing about this website is that it provides information about each supplier to see all the information you may need clarification on.
Steps to do product sourcing for Amazon
Step 1. Find reliable suppliers from different channels
To find the products you want to sell, you need to find high-quality product suppliers cause most sellers do not have factories. However, you can retrieve those suppliers from the wholesale website described above.
Find reliable product suppliers, especially product quality and delivery, which are vital to sellers. Returning goods for the reason of low quality by buyers will boost the negative review, and being unable to replenish in time will also have a significant strike on the weight of the Listing. About how to find suppliers, there are related articles published before. In addition, readers can refer to the link.
Step 2. Collect the samples
Obtain samples of products from suppliers to be determined, then compare the quality, price, service, and other aspects of the samples and choose the best one. That’s the meaning of samples.
Step 3. Negotiate with suppliers
Negotiate the price with the supplier according to your demand. The price is lower. The margin is higher.
Step 4. Choose a reliable shipping company
Find the shipping company that is most suitable for the transportation of your products, which can help you solve any problems that may arise in the transportation of goods.
Step 5. Calculate the entire profit
The product’s profit margin is calculated according to the purchase cost from the supplier, the shipping cost of the forwarder, the service cost of the Amazon platform, etc.
7 Best Amazon Operation tools
Google Trends is an application based on search log analysis launched by Google. Analyzing billions of search results tells users how often a keyword is searched in Google and provides related statistics. From the perspective of selection, Google Trend is an essential tool for sellers to analyze the demand of the overall category and track the development trend of the product. We can follow the development trend in Google Trends, compare the popularity of different keywords, and optimize our products and keywords.
It can help Amazon sellers study market opportunities for new products, understand the competitiveness of specific products, and view the sales history of seasonal sales trends.
AMZ Scout is known for its accurate sales estimates, giving sellers services that include product databases, keyword tracking, and competitor analysis, with Basic tracking 20 products, Start Package tracking 40 products, and Business Package tracking 80 products. Users can also log on to the AMZ Scout website and use free estimators and FBA calculators.
Helium10 is a favorite selection tool for Amazon sellers. It is also relatively easy to operate. It can quickly analyze the average sales volume, price, weight, and market competition profile of any product on Amazon. The BLACK BOX in Helium10 is quite suitable. The selection is to select keywords. The goal is to find a product with many searches and relatively low competitiveness. The keywords and all the data come directly from Amazon. You can intuitively see the monthly search volume of each keyword.
4. Jungle Scout
Jungle Scout can help Amazon sellers track products and the number of products sold while assisting sellers in developing products quickly. Jungle Scout is mainly divided into the plug-in and Web versions: the plug-in version can quickly view Amazon’s product list and help product development. The web version tracks product sales and claims to have “the most reliable Amazon sales data.”
AMZSharkK is a new product-focused Amazon selection tool that includes Sales Tracker, Niche Scout, search rankings, and Keyword Explorer. Sellers pay $299 a month but only $10 for the first month.
Unicorn Smasher is a free Chrome extension that grabs all product data on Amazon pages, including product name, link, brand, number of sellers, category, price, review, shipping method, etc., thus helping sellers quickly find products with good sales opportunities.
CamelCamelCamel is a free tool that tracks the prices of specific Amazon products. It also allows sellers to get price updates for the products they want to buy.
For Amazon e-commerce company, it is not easy to choose suitable products and do high-profit business. This requires finding high-quality sources of products and getting competitive prices. Hoping this article on amazon products sourcing can play a primary guiding role for you in all aspects of e-commerce pre-procurement. It’s worth noticing that in e-commerce, everything should proceed from reality, take the product as the core, and start from the fundamental market research.
The result of product selection analysis cost control, product evaluation, supplier management, price negotiation, signing contracts, logistics, warehousing management, inventory control, and supply chain management are all very important. It is hoped that everyone will give full play to their advantages and obtain the most considerable profits in practice. We believe everyone can do the best product sourcing for amazon’s business.
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