Amazon drives nearly 60% of e-commerce sales today. It has become the top choice for online entrepreneurs. Still, many fail to profit as competition rises. Success often depends on learning how to source products to sell on Amazon effectively.
Product sourcing means selecting the right items to sell through Amazon FBA or Amazon Seller Central. It is the backbone of success because sourcing choices directly influence inventory flow and profit margins. These choices also shape the long-term growth and stability of every Amazon seller.
In this guide, you will see sourcing models like wholesale, private label, dropshipping, and retail arbitrage. A clear roadmap will explain how each model works so you can sell on Amazon successfully.
What is Product Sourcing?
Product sourcing means finding the right items that can bring profit when sold through Amazon.
It is not just buying in bulk. It’s a careful process where sellers look at costs, margins, and market demand before placing any order. A good sourcing decision always begins before a single unit is bought.
If you want to grow your store without losing money, you must understand a few important sourcing terms:
- COGS is the total cost to produce or buy one unit, including materials, labor, and supplier costs.
- Landed Cost includes COGS plus shipping, taxes, and any fees to bring the product to your warehouse.
- MOQ stands for minimum order quantity. It tells you the smallest number of items a supplier will sell.
- BSR means Best Sellers Rank. It shows how well a product performs inside its Amazon category.
Key Factors to Check Before Sourcing
Many new sellers make the mistake of picking items without checking a few key factors. That’s when profits vanish, and listings sit without sales. Before you move forward, make sure your product checks every box on this list.
- Profit Margin Check: You must have enough margin after all costs. Subtract COGS, shipping, storage, and Amazon referral fees. A healthy product leaves at least 30% profit. Less than that puts your business at risk.
- Demand Validation: Check if buyers are searching for the product. Use Amazon search results, BSR data, and keyword tools. Products with steady demand bring repeat orders. Low demand often leads to stuck inventory.
- Competition Review: Look at how many sellers already list the product. Study pricing, reviews, and brand strength. If top results have few reviews or weak listings, you may have a good chance to compete.
- Compliance and Restrictions: Some categories need approval or safety documents. Always check Amazon’s restricted categories list before ordering. Products that need certifications can delay launch or even block your listing.
- ROI and Storage Cost Check: Factor in Amazon FBA storage fees and long-term holding costs. Products that move slowly hurt your ROI. Make sure your item sells fast enough to avoid extra fees.
How to Source Products to Sell on Amazon?
Before you pick a product, you need to choose a sourcing model that fits your goals. Each model works differently, with its own pros, risks, and startup costs.
Some give fast results. Others need time, but grow into strong businesses. The key is knowing which model matches your budget, time, and comfort level.
Here are the main sourcing methods real Amazon sellers use to build and grow their stores.
1. Retail Arbitrage
Many sellers begin with this method because it feels familiar. You shop local stores, spot deals, and flip items on Amazon. This method works best when you learn how to compare retail prices with what buyers pay online. Small wins stack up quickly if done right.
Pros:
Here are a few reasons sellers start with retail arbitrage before trying other methods:
- Low startup costs make it great for first-time sellers
- Fast way to learn what sells well on Amazon
- No need to contact suppliers or order in bulk
Cons:
There are a few downsides that may limit growth over time:
- Finding good deals takes time and effort
- Inventory is limited and often one-time
- Not easy to scale into a full business
Starter Steps: Start with discount stores in your area. Use the Amazon Seller app to scan products on the shelf. Check profit, rank, and seller restrictions before adding anything to your cart.
2. Online Arbitrage
This model is like retail arbitrage, but you find your deals on websites instead of local stores. Sellers buy discounted items from online retailers and list them on Amazon for a higher price. It works well if you enjoy research and want to source products without leaving home.
Pros:
These are the advantages that make online arbitrage a flexible option for many sellers:
- No travel needed, everything is done from your laptop
- Easy to scale with software and daily deal tracking
- You can source from multiple online stores at once
Cons:
Watch for these issues that can affect your time, profits, and product access:
- High competition for popular items
- Prices change fast, so profit windows can close quickly
- Some sites may cancel bulk orders or limit shipping
Starter Steps: Begin with deal sites and clearance sections on trusted retail websites. Use tools like Keepa or RevSeller to check product history, profit margin, and rank. Only buy products that meet your margin and demand checks.
3. Wholesale
Wholesale means buying bulk products directly from brands or authorized distributors at discounted rates. Then you resell them on Amazon at retail prices. This model focuses on building relationships with suppliers and getting access to brand-name goods that already have proven demand.
Pros:
These benefits make wholesale a strong model for sellers who want stability and scale:
- Consistent access to inventory and popular brand names
- Products already have demand and proven Amazon sales history
- Easier to restock the same item over time
Cons:
There are some challenges that make wholesaling harder for beginners with low budgets:
- Requires a higher upfront investment compared to arbitrage
- You may need business licenses and brand approval
- Harder to get accepted by suppliers without a sales history
Starter Steps: Set up a business entity and get your reseller certificate. Then contact brand distributors and apply for wholesale accounts. Use Amazon tools to check each product’s rank, price stability, and average monthly sales before placing orders.
4. Private Label
Private label means creating your own branded version of a product that already has steady demand. You work with a manufacturer to produce it under your brand name, often with custom packaging, colors, or features. This model gives you full control over pricing, branding, and marketing.
Pros:
Private label is popular because it offers long-term brand growth and full ownership:
- You build a brand that buyers remember and return to
- No direct price wars with identical listings
- More room for higher profit margins with branding
Cons:
There are challenges that come with launching and managing a private label product:
- Higher startup costs for product design, packaging, and inventory
- More risk if your product doesn’t sell well
- Requires branding, reviews, and strong marketing to succeed
Starter Steps: Pick a product with steady demand and weak competition. Check reviews for improvement ideas. Use platforms like Alibaba to find suppliers, request samples, and negotiate pricing. Focus on making your listing strong with photos, clear copy, and good SEO before launch.
5. Dropshipping
Dropshipping allows you to sell products on Amazon without keeping inventory. When a customer places an order, the supplier ships the item directly to them. You never touch the product, which makes it easier to start with low risk and less money.
Pros:
Many beginners choose dropshipping because of its low barrier to entry:
- No need to buy or store products in advance
- Lower startup cost compared to wholesale or private label
- You can test many products without a bulk investment
Cons:
This model also has some risks that sellers must manage carefully:
- You have less control over shipping speed and packaging
- Customer service can suffer if suppliers make mistakes
- Amazon has strict rules around dropshipping practices
Starter Steps: Find a reliable supplier that offers fast and trackable shipping. Make sure they do not include their branding in the package. Follow Amazon’s dropshipping policy closely to avoid account issues. Start with a few products and monitor feedback carefully.
6. Handmade and Unique Goods
This sourcing model is perfect for creators who enjoy making things by hand. Sellers craft their own items, such as jewelry, candles, soap, or home decor, and list them through Amazon’s Handmade program. These products often stand out because they cannot be found in mass stores.
Pros:
Handmade works well for sellers who want to showcase skill and offer one-of-a-kind items:
- Low startup cost if you already own tools or materials
- Less competition with unique, custom-made products
- Access to Amazon Handmade’s special storefront
Cons:
There are a few limits that make handmade a slower model to scale:
- Time-consuming since each product is made by hand
- Hard to handle large order volume alone
- Requires steady quality and fast turnaround times
Starter Steps: Apply for the Amazon Handmade program and get approved. Take clear product photos and write honest descriptions. Focus on high-quality materials and consistent shipping to earn customer trust and grow your brand.
7. Print on Demand
Print on demand lets you sell custom-designed products without holding any inventory. You create a design, upload it to a platform, and the supplier prints and ships the product only after a customer places an order. Common items include shirts, mugs, phone cases, and tote bags.
Pros:
This model works well for creative sellers who want to focus on design, not inventory:
- No upfront cost for inventory or production
- Easy to test new ideas and products
- Products are made only after a customer orders
Cons:
There are some limits that make scaling harder without strong branding:
- Lower profit margins due to printing and handling fees
- Less control over packaging, print quality, and shipping time
- Returns or complaints can happen if the quality is inconsistent
Starter Steps: Create a free seller account on platforms like Printful or Merch by Amazon. Upload your designs and connect to your Amazon store. Focus on trending niches and simple, bold artwork to stand out in search results.
8. Liquidation/Closeouts
This model involves buying leftover, returned, or unsold inventory from retailers, manufacturers, or liquidation brokers at deep discounts. Sellers resell these items on Amazon for profit. It works best for those who can handle mixed inventory and move fast on bulk deals.
Pros:
Liquidation is useful for sellers looking to buy large amounts of inventory at low cost:
- Very low price per unit
- Good for finding brand-name items at a discount
- Quick way to test product variety and resale potential
Cons:
There are real risks that come with liquidation if not done carefully:
- Products may be damaged, used, or unsellable
- Inventory is often mixed and cannot be restocked
- Some items may fall under restricted categories
Starter Steps: Work with trusted liquidation sites or brokers. Always request a manifest or sample if possible. Check Amazon’s restricted categories list and inspect every item before listing. Avoid electronics or items with expiration dates unless you have approval.
Where to Actually Find Products and Suppliers
After choosing a sourcing model, your next step is finding suppliers. Some use directories, others visit trade shows. Your best option depends on product type, shipping needs, budget, and how much control you want over production.
The table below shows where Amazon sellers actually find products and suppliers today.
| Source | Type | Best For |
|---|---|---|
|
Alibaba |
Directory |
Overseas bulk manufacturing
|
|
Global Sources
|
Directory |
Verified Asian suppliers
|
|
Thomasnet |
Directory |
US-based manufacturers and suppliers
|
|
Canton Fair
|
Trade Show
|
Sourcing new products from China
|
|
ASD Market Week
|
Trade Show
|
Finding US wholesale products
|
|
Sourcing Agents
|
Service |
Hands-off overseas sourcing
|
|
Product Opportunity Explorer
|
Amazon Tool
|
Researching demand and gaps on Amazon
|
How to Contact and Work with Suppliers
Once you’ve found possible suppliers, don’t rush into buying. How you contact and work with them decides everything. Clear outreach, smart questions, and early trust can help avoid delays, scams, and poor product quality. Here’s a proven step-by-step approach.
Step 1: Shortlist the Right Suppliers
Search for suppliers with a long history, clear product listings, and real business information. Check if they’ve worked with international buyers. Avoid suppliers who reply too slowly or don’t provide clear answers. A good supplier usually responds within one business day. They should understand your product, pricing range, and delivery country.
Step 2: Send a Clear First Message
Your first message sets the tone. Say who you are, what you need, and how many units you want. Also include your target shipping country and estimated timeline. Don’t ask twenty questions at once. Keep your message short and organized so it’s easy to reply. Use bullet points if needed.
Step 3: Ask Smart Questions Early
After the reply, ask about MOQ, lead time, payment terms, shipping methods, and pricing for different quantities. Also, ask if they support custom packaging or labeling. If your product falls under a restricted category, ask for certificates or safety documents. This protects you from Amazon compliance issues.
Step 4: Request a Sample Before Ordering Bulk
Never skip the sample step. You need to feel the product quality and test the packaging before a big order. Samples also help you check how reliable the supplier’s timeline is. If they delay the sample, they may delay future orders too.
Step 5: Negotiate Without Acting Pushy
Negotiation works better when it’s friendly and clear. Ask if there’s a price break for larger orders. If you reorder later, they may offer better terms. Don’t just demand discounts. Show them you’re serious and plan to grow the order size.
Step 6: Use Secure Payment and Stay in Touch
Stick with safe payment platforms like PayPal, TransferWise, or Alibaba’s Trade Assurance. Avoid sending money directly to personal accounts. Keep your communication inside the platform. After your order, update the supplier with reviews or reorder plans. A long-term relationship saves time and avoids problems later.
How to Evaluate and Choose Suppliers
Working with a supplier is only the start. You still need to figure out which one deserves your trust. Some may offer fast replies but deliver low-quality goods. Others may sound expensive, but they follow rules and ship on time. That’s why smart sellers use a simple scorecard to compare options before placing an order.
Before you place any bulk order, go through this checklist and look for both good signs and red flags.
- Check for certifications like ISO, CE, or FCC based on your product category.
- Ask about their AQL defect rate for past orders.
- Confirm the average lead time for orders and sample production.
- Look at their response time and clarity in communication.
- Ask for photos or videos of the factory or previous orders.
- See if the supplier has passed recent factory audits.
- Check if they offer Trade Assurance or similar buyer protection.
- Watch for red flags like refusing to answer questions or pushing you to order fast.
Calculating Profitability Before You Commit
A product might look like a winner, but unless the math works, it can quietly drain your profits. Before placing any order, you need to understand your full cost per unit and calculate your actual return. This starts with your landed cost, which tells you the true expense of getting one product ready to sell.
Landed cost includes more than just what the supplier charges. You need to add product cost, freight, customs fees, and any extra handling charges. For example, if your product cost is $3, and shipping plus customs adds $2, then your landed cost is:
$3 + $2 = $5
Now add Amazon’s selling fees. If you’re using FBA, there are two key fees: the referral fee and the FBA fee. The referral fee is usually 15% of your selling price. If you sell the product for $20, that’s:
$20 × 15% = $3
Let’s say the FBA fee is $4. So your total Amazon fees become:
$3 + $4 = $7
To find your net profit per sale, subtract both the landed cost and Amazon fees from your selling price:
$20 – $5 – $7 = $8 profit per unit
Now calculate your Return on Investment (ROI) using this formula:
ROI = (Profit ÷ Landed Cost) × 100
In this case:
($8 ÷ $5) × 100 = 160% ROI
Most experienced Amazon sellers aim for at least 100% ROI to stay safe after returns, ads, or slow-moving stock. Anything below that can quickly eat into your margin and make scaling harder.
Always run this calculation before placing any bulk order. It helps you spot hidden costs early and focus only on high-return products that grow your business.
Compliance and Amazon Policy Essentials
Even if your product is profitable, it means nothing if Amazon blocks your listing. That’s why understanding Amazon’s rules is just as important as picking the right product. Compliance keeps your account safe and protects your long-term growth.
Here’s a simple breakdown of what you must know before sourcing anything.
- Restricted Categories: These need Amazon’s approval before you list a single unit. Grocery, toys, supplements, and beauty are examples. Each one has its own rule page and documents. You’ll need invoices and, in some cases, lab testing or safety paperwork.
- Invoice Requirements: Amazon checks invoices to stop fake and unsafe items from being sold. Invoices must come from your supplier and show the full name, address, and clear product details. Do not submit a screenshot or pro forma invoice. Always use real business paperwork.
- Hazmat Rules: Hazardous materials need extra approval before shipping to FBA. Batteries, sprays, and flammable goods fall into this category. You may need to fill out a hazmat form or submit an SDS (Safety Data Sheet) before Amazon will accept the item.
- Prop 65 and EPR: These are legal requirements tied to product safety and recycling. If you sell in the U.S. or Europe, your product may need a Prop 65 warning or EPR registration. These rules cover toxins, labeling, and recycling duties. Always check your market’s rules before importing.
- IP and Trademark Rights: You cannot copy other brands, even without logos. Listing a product with similar packaging, wording, or design can still trigger a violation. Always avoid products that are “inspired by” major brands or sold without brand permission.
Logistics and FBA Prep (Beginner-Friendly)
After you pick a product and check Amazon’s rules, your next step is shipping it the right way. Many new sellers feel lost here, but it’s not hard if you follow a few basics.
First, decide how to move your goods. Air shipping is faster and takes around seven to ten days. It costs more but works well for small or light products. Sea shipping is slower but cheaper for large or heavy shipments. Most sellers choose sea for big orders and air for small tests.
Next, understand Incoterms. These are shipping terms that explain who handles each part of the shipping process. EXW means you handle everything once the goods leave the factory. FOB includes loading and port delivery. CIF also adds insurance. Beginners usually pick FOB because it splits the job with the supplier fairly.
Now check your packaging. Amazon wants strong boxes that are sealed, labeled, and stacked safely. If you send pallets, follow Amazon’s size and weight limits to avoid extra fees. A mistake here can lead to delays or rejected shipments.
Every product needs a special barcode called an FNSKU. It helps Amazon track your product inside their system. You can ask the supplier to print this, or label it yourself before shipping to Amazon. Also, use the right HS code for customs. This tells customs what your product is and avoids delays.
To make things easier, you can work with a freight forwarder. They help with booking, paperwork, customs, and getting your goods into the Amazon warehouse. If you get this part right, your product will arrive safely and be ready to sell.
Step-by-Step Checklist to Source Products Successfully
Now that your shipping setup is sorted, you can start the full product sourcing process with clarity.
- Research product ideas using Amazon, keyword tools, and customer reviews.
- Validate demand and competition before contacting any supplier.
- Shortlist three to five reliable suppliers after checking reviews, product range, and business history.
- Request samples from at least two suppliers to test quality, packaging, and speed.
- Calculate landed cost and ROI before placing any test order.
- Place a small test order and list it with clear photos, pricing, and strong keywords.
- Scale slowly after testing. Only reorder when your product shows steady sales and strong reviews.
Frequently Asked Questions(FAQs)
Even after following every step, you might still have a few questions. Here are common things new sellers often ask before they get started.
Yes, you can work with multiple suppliers. This helps reduce risk, compare quality, and avoid delays. Just make sure each supplier understands your quality standards and delivery timeline before placing your orders.
No, you don’t need a license to browse or message suppliers. But many ask for business details before quoting serious prices or accepting orders. Having a license builds trust and unlocks better supplier deals.
If your sample or order arrives wrong, contact the supplier immediately with photos and details. Most will replace it or offer a refund. Always confirm every detail in writing before production to avoid future mistakes.
Start small. A test order between $300 to $800 is common. This lets you check product quality, demand, and feedback without taking too much risk upfront. Only scale after proving the product sells well.
No. Amazon FBA is not meant for long-term storage. They charge monthly and long-term storage fees. You should only send inventory when you’re ready to sell or start a launch campaign with PPC.
Struggling to Source and Scale? Brand’s Bro Helps You Sell Smarter on Amazon
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If campaigns feel stuck, we’ll rebuild strategy and creativity together. From keyword-rich listings to PPC launches and storefront branding, we align every piece carefully. This ensures your products move faster and profit margins grow stronger.
More suppliers are not the answer. Strong systems that turn sourcing into sustainable revenue are. Brand’s Bro makes the difference.
