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Navigating the Sourcing Maze: 4 Steps to Elevate Your Amazon FBA Business to New Heights

Uncover, understand, and unleash the power of modern product sourcing techniques, transforming challenges into opportunities for sustainable success in the Amazon marketplace

  • October 13, 2023
  • /
  • CANOPY Management
A large container ship in a harbour flanked by a smaller pilot ship

Ecommerce sellers are constantly looking for the next hot product. But, what exactly is the best way to do that? The answer to that question is product sourcing – the process of finding and purchasing goods or services for an ecommerce business. 

How exactly do you source a product for selling online?

For the most part, you have two main options. Make the product yourself, or find a supplier — dropshipper, distributor or wholesaler to provide you with products.

But, where do you start? If you’re not going to build the product yourself, how are you going to find ecommerce suppliers? 

The most obvious way to begin to find ecommerce suppliers is with an online search. Look through wholesale directories, scour online marketplaces, or reach out directly to individual small business owners and artisans.

It’s the first step that online sellers take in order to create their own branded private label product. Private “labeling” refers to the process of buying from manufacturers, branding the product under your own label or brand name, instead of selling them under your own brand name.

Private Label Selling has Exploded

Not surprisingly, over the last decade, Amazon has become ground zero for this kind of transaction. That’s because entrepreneurs selling private label products on Amazon through FBA (Fulfillment by Amazon) are able to marry the power of personal branding with the extensive reach of the Amazon marketplace. 

Private labeling makes it possible for you to control branding, pricing, and marketing; effectively crafting a unique identity amidst the vast sea of products available on Amazon.

As an Amazon FBA seller, private labeling is not just a method of selling, but a strategic approach to carve out a niche in the market, enabling you to create and grow your own brand, independent of the manufacturing entity.

This post is going to detail four important steps that an online entrepreneur like yourself should take to source that ecommerce product.

Now, it’s time to do a little research. 

1. Research Your Niche 

Even though you may have already decided on an Amazon product, it’s important to circumnavigate the niche to get a good idea of what the competition looks like. That’s why your first step should be a thorough investigation of your selling niche. 

It’s sometimes possible to overlook Amazon’s tremendous capabilities. This is never more true than when it comes to the tools that Amazon packages as part of its Amazon storefront. There are many different ways to monitor Amazon’s market landscape including:

Amazon’s Movers and Shakers

The list is particularly relevant because it shows products that are trending right now! 

Having the opportunity to do a deep dive into the products that – according to Amazon’s own data – are the top trending ASINs over the last 24 hours makes this list invaluable. 

Amazon’s Most Wished For

Amazon’s wish lists are virtual shopping lists that show items that an individual or couples have identified as a “wished for” product. It’s a great place to dig into in search of niche product ideas. Amazon says that the list represents the “most popular products ordered as gifts and is updated daily.”

Amazon Product Opportunity Explorer

This tool is available in Amazon Seller Central. Amazon says that “the tool provides insight into Amazon customer search and purchase behavior, which you can use to identify unmet customer demand and opportunities for new products.” Any time that Amazon tells you what’s working on their platform is well worth paying attention to. 

Google Trends, Etsy, Alibaba, AliExpress, and SaaS Tools

When you’re looking at identifying ecommerce trends, don’t stop at Amazon. Google, eBay, Etsy, Alibaba and AliExpress all are great places to see what consumers – and wholesalers – are selling. Last, Software as a Service (SaaS) tools such as Helium 10, AMZScout, and JungleScout all offer variations of tools that can help you research keywords, and browse enormous databases for top-selling products. 

2. Research Your Prospective Supplier

Finding the right Amazon product is only half of the battle. Locating a reliable manufacturer is pivotal as the quality, consistency, and reliability of your products hinge upon this decision. Your brand reputation, customer satisfaction, and, ultimately, your profitability, are interconnected with the standard upheld by your chosen manufacturer.

Just like research into your Amazon product, digging deeper into your prospective manufacturer starts with readily available tools. 

Online Forums and Communities

It always helps to engage in forums and communities where other FBA sellers gather. Websites like Reddit, Quora, or specialized ecommerce forums host a wealth of experiences and advice shared by other sellers, potentially pointing you towards credible manufacturers.

By taking the time to join forums, social media groups, and communities related to FBA selling and engaging in conversations, you’re better able to build relationships that over time, will contribute to your overall ecommerce knowledge base. 

B2B Marketplaces

Leading platforms like Alibaba, Global Sources, Indiamart, and Tradeling cater to a wide range of categories and provide filters to narrow down manufacturers based on your specific needs. Pay attention to reviews, ratings, and transaction history to gauge the reliability and credibility of listed manufacturers.

Industry Trade Shows

Trade shows are also a vital research tool. They provide opportunities to directly interact with manufacturers, assess product quality, and understand their production capabilities, offering a comprehensive perspective that online interactions might not fully convey.

Verification of Supplier Credentials 

Once you’ve started looking at the list of available suppliers, the sheer number quickly becomes overwhelming. Fortunately, sellers are able to conduct an analysis of manufacturers. Verification badges, certifications, and detailed histories become invaluable data points in determining a manufacturer’s legitimacy and reliability. 

For instance, a badge like Alibaba’s Gold Supplier isn’t merely an emblem; it signals a manufacturer’s investment into credibility, often indicative of a higher degree of reliability and authenticity. 

Ask for a Sample

At some point, you absolutely need to see what the supplier is capable of. This isn’t merely a process to assess product quality; it’s a window into the manufacturer’s ability to adhere to specifications, their commitment to quality benchmarks, and importantly, their communication and logistical efficiencies. 

3. Visit the Factory

Experienced Amazon sellers are almost unanimous in declaring that if at all possible, a visit to your prospective supplier checks two important boxes at the same time. It not only gives you a literal peek behind the curtain, because of the personal nature of your visit, it can also dramatically strengthen your negotiating position. 

You’ve actually gotten on a plane and taken the time to physically bridge gaps in understanding; that makes a big difference in a lot of overseas suppliers’ eyes. 

A deep dive into a manufacturer’s quality control processes reveals their commitment to producing products that adhere to stipulated standards. Understanding the intricacies of how products are checked, what parameters are assessed, and how discrepancies are handled provides clarity on the consistency and reliability you can expect in your products.

Visually tracking the journey of a product from inception to packaging unfolds practical insights into the logistical and quality assurances in place. It sheds light on the operational flow and potential bottlenecks that might impact your supply chain.

With the recent – and very welcome – renewed attention to worker conditions, observing the workforce and their working conditions brings to light the ethical considerations of the manufacturer. Ensuring that workers operate in safe, humane, and fair conditions is not only a moral obligation but also impacts the quality and consistency of production. 

Last but not least, by making this – not insignificant – effort, you’ll be able to build relationships and establish trust and understanding. Your supplier well realizes the time and effort involved in travel these days. In terms of multiplying your ecommerce efforts, few activities offer a better return on investment. 

4. The Art and Strategy of Negotiation

Striking a deal that aligns with your financial framework while respecting the manufacturer’s costs and expertise is pivotal in forming a sustainable, mutually beneficial partnership. Price negotiation is not merely a financial transaction but a strategic conversation where the interests, capabilities, and sustainability of both parties are delicately balanced. 

It’s not simply about attaining the lowest possible price, but securing a cost that ensures quality, timeliness, and a healthy working relationship.

Arm Yourself with Market Insights:

Before entering negotiations, it’s crucial that you understand the prevailing market rates for your desired product. Knowledge of the cost breakdown – materials, labor, shipping, and additional fees – can empower you with a realistic expectation and a solid footing during discussions. It facilitates an informed conversation where your proposed pricing is backed by data and contextual understanding.

Communicate Value and Volume:

Highlighting the potential value you bring to the manufacturer through consistent orders, future scalability, and potential long-term partnership can be leveraged in the negotiation process. 

Volume is often a strong negotiating point; providing estimates on order volumes and scaling possibilities allows the manufacturer to assess potential revenue streams, sometimes facilitating more favorable pricing.

Prioritize Transparent Communication:

Be clear about your pricing objectives, but also be willing to listen and understand the manufacturer’s perspective. A negotiation is a two-way street and ensuring that both parties’ expectations and limitations are laid out transparently is key to finding a middle ground that is agreeable and sustainable.

Explore Bundle and Package Deals:

Sometimes, negotiating for reduced per-unit pricing might be challenging due to the manufacturer’s own costs and limitations. In such scenarios, explore possibilities of bundling or package deals, where you might attain cost benefits by combining various products or services.

Respect Quality and Ethical Practices:

While driving a hard bargain is commonplace in negotiations, it’s pivotal to respect the quality and ethical standards adhered to by the manufacturer. Sacrificing quality for cost can be detrimental in the long run, and undermining ethical labor practices for a lower price is not just morally problematic but could also tarnish your brand image.

Craft a Win-Win Agreement:

The end goal should be to craft a pricing agreement that poses a win-win scenario. Consider strategies like graduated pricing, where per-unit costs decrease as order volumes increase, ensuring that the manufacturer also benefits from larger orders.

How Canopy Management Can Help

It’s a long road from product ideation to fulfillment. As Amazon has matured, the skills needed to succeed have grown exponentially. 

Canopy Management is a full-service marketing agency for Amazon and Walmart sellers. Our team consists of former Amazonians, multi-million dollar sellers, and award-winning experts.

Canopy doesn’t merely guide; it transforms your Amazon journey, ensuring each product sourced and each strategy implemented is fully supported by industry-leading, repeatable processes. 

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