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Starting an eCommerce business on Amazon can be exciting and rewarding, but inventory sourcing remains one of the biggest challenges.  So, just how do you source products for Amazon? While it can be broken down into rather simple steps, it’s a complex process that involves research, analysis, and time. And, no matter how good you are at sourcing, you’re not always going to win. 

Whether you’re just starting out or looking to expand your product line, finding reliable suppliers that can provide the products you need at the right price is vital. Read on as we explore several different ways to source inventory for Amazon and share strategies that can help you find the right products to sell and build a successful eCommerce business.

What is product sourcing for Amazon?

Product sourcing for Amazon involves finding and acquiring products to sell on the Amazon marketplace. Steps of product sourcing can include the following:

  • Researching and identifying products with profit potential
  • Negotiating with suppliers
  • Managing inventory
  • Logistics

Sellers can source products in a variety of ways, including manufacturing their products, dropshipping, or wholesale buying. Amazon product sourcing is a crucial step in the process of starting a business on the platform. It requires research, knowledge of the market, and networking skills to find the best products at the best prices. And by sourcing products effectively, sellers can increase profits and grow their business on Amazon.

How do you source products for Amazon?

There are several ways to source products for Amazon, depending on your specific business needs and goals. Here are some of the most common methods:

  • Purchasing from manufacturers: One common method of product sourcing for Amazon is to work directly with manufacturers to purchase products at wholesale prices. There are two ways to go about this:
  • Overseas supply: This involves working with a manufacturer or distributor based in another country to acquire products for your Amazon store or listing. This approach can be beneficial because it typically offers a wider variety of products at lower costs. However, it can also be more complex and time-consuming, as you’ll need to navigate international shipping and customs regulations.
  • Find a domestic supplier: You can also research and reach out to manufacturers or distributors within your country. This sourcing method reduces shipping times and costs, as well as ensures compliance with regulations and laws. Consumers may be more willing to purchase if they know your product is made and sourced in the USA, but it can drive costs up. 
  • Buying products from wholesalers: Wholesalers sell products in bulk to retailers at a discounted price. This method allows sellers to purchase a large number of products at once, and then resell them on Amazon.
  •  Selling handmade goods: This approach is ideal for entrepreneurs who create their own products and want to sell them on Amazon. If you’re an artist, designer, or craftsperson, selling handmade goods on Amazon is a great way to reach a global audience and turn your passion into a profitable business. However, you may have better luck on marketplaces that favor custom work such as Etsy.
  • Liquidation: Some sellers also choose to source products from other retailers, such as liquidation companies or clearance sales. But this method can make it more difficult to find products in large quantities and the condition of the products may vary.

Regardless of how products are sourced, sellers can take advantage of  Fulfillment by Amazon (FBA). Under this program, sellers can send their products to Amazon’s warehouses to store and ship the products to customers on their behalf. This can help reduce overhead costs as well as expedite shipping times. It can also help save on labor. 

Tips for finding the best products to sell on Amazon

Selling on Amazon can be lucrative, but it all begins with finding the right products to sell. With so many options and competitors, it can be hard to know where to start. Here are some tips to help you find the best products to sell on Amazon:

  • Low competition: One of the most important factors to consider when finding products to sell on Amazon is the level of competition. It can be difficult to compete with established sellers who have been in the market for a long time. Find categories with relatively few sellers, or search for products that don’t have a lot of similar items listed. You can also look up products in niche categories or identify unique features of a product that sets it apart from others.
  • Best sellers rank: Another important metric to consider is the Best Sellers Rank (BSR) of a product. This ranking is based on the sales of a product and is a good indicator of its popularity. When searching for products, look for categories with at least three results with a BSR. This will give you an idea of which products are selling well and which are not.
  • Request samples: before making a large purchase, it’s always a good idea to request samples of the product. You can test them out and see if they are of high quality and a good fit for your target market. It also gives you a chance to take pictures and make videos of the product to use in your listing.
  • Understand and calculate all your fees: Before selling on Amazon, understand and calculate all the associated fees. This includes Amazon’s referral fees, fulfillment fees, and other charges. Doing this ensures that your profit margins are sufficient and that you are not losing money on your sales.
  • Choose the best shipping method: Shipping costs can make or break your profits on Amazon. Choose the best shipping method that’ll keep your costs low while ensuring fast and reliable delivery to your customers. Consider using Fulfillment by Amazon (FBA) for your products as it offers several benefits such as discounted shipping rates, and improved visibility for your products.
  • Pick products that cross-sell well: When looking for products to sell on Amazon, pick those that cross-sell well with other products. This helps increase your sales and profits. For example, if you sell kitchen appliances, you can also sell related items such as kitchen utensils, cookware, and even recipe books.
  • Pay attention to Amazon customer reviews: Amazon customer reviews are a great way to gauge the popularity and quality of a product. You can identify products that are in high demand and have a high satisfaction rate among buyers. This can help you make informed decisions when selecting products to sell on Amazon. Reviews can also help you determine areas of improvement for existing products.
  • Price negotiation: Once you have found a product you’ll be selling, always negotiate the price with the supplier. Consider requesting a discount or asking for a better deal. Negotiating with suppliers increases your chances of getting a better deal on the products you are interested in, which helps improve your profit margin.
  • Alibaba: Alibaba is a popular platform for connecting with suppliers. Suppliers on Alibaba can make custom products or prefabricated products. Alibaba can be confusing to navigate so do some research. Consider getting a mentor that’s familiar with the site.
  • Use product data: There are applications that can be downloaded to help sellers identify what products are selling well and where there may be opportunity.

How Kickfurther can help

Amazon sellers may be able to cut costs on fulfillment, storage, and hosting a platform – but they will need plenty of funds for inventory. And, that’s where Kickfurther comes in. Kickfurther can help Amazon sellers access affordable inventory funding. As the world’s first online inventory funding platform, Kickfurther enables small businesses to access funds that they are unable to acquire through traditional sources. 

Kickfurther funds up to 100% of your inventory costs on flexible payment terms that you customize and control. With Kickfurther, you can fund your entire order(s) each time you need more inventory and put your existing capital to work growing your business without adding debt or giving up equity.

Why Kickfurther? 

No immediate repayments: You don’t pay back until your new inventory order begins selling. You set your repayment schedule based on what works best for your cash flow. 

Non-dilutive: Kickfurther doesn’t take equity in exchange for funding.

Not a debt: Kickfurther is not a loan, so it does not put debt on your books. Debt financing options can sometimes further constrain your working capital and access to capital, or even lower your business’s valuation if you are looking at venture capital or a sale.

Quick access: You need capital when your supplier payments are due. Kickfurther can fund your entire order(s) each time you need more inventory.

Kickfurther puts you in control of your business while delivering the costliest asset for most CPG brands. And by funding your largest expense (inventory), you can free up existing capital to grow your business wherever you need it – product development, advertising, adding headcount, etc.

Closing thoughts 

Sourcing inventory for Amazon can be seamless with the right strategies and tools. Whether you choose to work with a supplier, dropship, or even consider retail arbitrage, do your research and find the best option for your business. The key to success on Amazon is having a steady stream of profitable products to sell. With the right approach, you can find and source the inventory you need to grow your business and achieve success on the platform.

Interested in getting funded at Kickfurther? Here are 3 easy steps to get started:

#1. Create a free business account

#2. Complete the online application 

#3. Review a potential deal with one of our account reps & get funded in minutes

Learn more about Amazon inventory financing options with Kickfurther.

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