Selling on Amazon is crazy.
There is so much to learn and do, and becoming skilled at it is like anything – it takes practice and time. Over the course of these last few weeks, my wife and I have been spending a good amount of time product sourcing as we’ve started our Amazon business. I just wanted to talk about what we’ve learned and how you might benefit from it.
We went ahead and created a little guide, based on our research of product sourcing and experiences thus far, that includes a bunch of sites we’ve visited to source. We are going to keep updating this list, but click here to check it out. We also wrote down what we look for in products before we purchase them, so we hope that helps you out too.
What I’d first like to do is breakdown the different methods or ways of selling products on Amazon. Then, I’ll jump into details on how my wife and I sourced our first 5 products that were sent into Amazon. I’ll make sure and provide some tips and tricks to give you practical advice.
The three basic models are Arbitrage, Wholesaling, and Private Label.
Arbitrage is the art of finding products that are being sold at a higher price on Amazon.com than they are at other retailers. Retailers could be physical stores like Walmart and Target or online based retailers like Jet.com. Either way, the convenience of shopping on Amazon has created a massive arbitrage opportunity for those willing to seek out the deals.
Now, many beginning sellers on Amazon go straight to the clearance section of their favorite store and begin sourcing. Though this may generate a good return on investment, it is time consuming, hard to automate and scale, and is highly competitive.
I prefer finding replenish-able products that I can order time after time or find while grocery shopping each week. This method is more time consuming up front, but saves time on the back end. This is the mindset that my wife and I use when we source products.
The second method of selling products on Amazon is wholesaling. Wholesaling is purchasing products in bulk from a legitimate distributor and then selling those products at a markup.
Wholesaling is basically just a step above arbitrage; once you find a product at Walmart that sells consistently and provides a good ROI, you go out and find a distributor for it. This increases margins and your inventory capacity, allowing you to compete at a high level and stay in the buy box.
The third method of selling products on Amazon is private labeling. Private Labeling is essentially creating your own product and brand, and is a reasonable step to take after successfully finding wholesalers for your top selling products.
Sellers typically work with suppliers they identify on alibaba.com, selling products ranging from headphones to smartphone cases to pillows. Private Labeling is the most time consuming and requires the largest up-front investment. With that cost, however, comes higher margins and increased sales.
Now, for me and my wife, we started by looking around our apartment. We used the Amazon Seller Central app to scan a bunch of different products, mainly books, until we found items we wanted to list. We had a stack of 6 old textbooks that we opted to sell, as well as a few other novels that we didn’t really enjoy reading.
I also will scan products while we are out grocery shopping or picking something up from Walmart on our way home from work. We’ve also gone to a local thrift shop and found some board games in great condition.
Lastly, we’ve gone online to websites such as jet.com and scanned hundreds of product’s pictures. This method allows us to scan tons of products in a short period of time (we found 3 profitable products with low sales ranks and low competition in about 30 minutes). The downside, though, is that I think it’s more fun to go out to a store and physically hold the products while scanning them.
If you want a complete list of websites that are good for product sourcing, as well as the criteria we use to find profitable products, click here. I’ll be updating this list of websites every month, along with helpful tips and tricks to keep in mind while sourcing.
I hope you found this article to be of value to you! I’d love to hear your comments, thoughts, and questions. You can connect with Project ePreneur on Instagram and Facebook, or you can email us at firstname.lastname@example.org.