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In this post I’ll be delving into the four main ways of sourcing products to sell online through Amazon or a similar retail platform, and briefly discussing the pros and cons of each. These main methods of sourcing are:
Each method comes with its benefits and disadvantages. However if you are a growing business it is likely that you could be using a combination of all four, so it is important to have all the information you need in order to weigh up your options.
Retail Arbitrage, put simply, is good old fashioned shopping. Getting yourself out onto the highstreet to find shops selling products cheap, so that you can turn a profit on them. Typically this involves going from shop to shop, finding potential products and using a scanning app to compare the price of the product you have found with other retailers and Amazon. This means you can see whether it can be found cheaper elsewhere, and whether it can be sold through Amazon for a profit. If you are starting out it may be difficult to tell whether something is worth snapping up to sell online, however the seasoned vendor will gain an intuition for the kind of products that do and don’t do well. While you may be able to find some great deals in the sales, this kind of sourcing takes time and energy, and a willingness to trawl through every shop in town to bag a deal.
Online arbitrage is much the same as retail arbitrage, however this time your shopping takes place in the virtual rather than physical highstreet. There are many apps and sites that you can use to compare products for you. However it is useful to have a basic understanding of what kind of product is likely to sell well. If you have something in mind it saves you trawling through products at random in the hope of finding something worth buying.
If you are a registered company then wholesale is a great way to gain access to bulk goods at a cheap price. To do this you need to build up a relationship with wholesalers willing to sell their products to you, and in doing so create a network where you have steady access to products that you can sell for a profit through Amazon. Generally, the larger your company the more willing wholesale companies will be to do business with you. You should be prepared to fill out paperwork, provide references, and to have credit checks performed before a company will give you credit for ordering products. However this kind of strategy is self-perpetuating as new contacts will open doors with other wholesale companies. This method is reliable, as you are not counting on finding cheap products in a sale which will only be available for a limited time. If there is a specific product that sells very well for you on Amazon, this is a good way to ensure you will always have it in stock without losing the profit. However it takes time and commitment to find and build a relationship with wholesale vendors, this won’t happen overnight!
Selling your own private label products takes a considerable investment in both time and money, as here you are building up a brand from scratch. To do this you need to identify a generic product on amazon that sells well, this could be anything from t-shirts to water bottles. After you have decided on the kind of product you want to sell, you need to find a supplier, who allows for private labelling and is willing to add your name and logo to the product. You also need to design yourself a logo and perhaps a website, or hire someone to do these things for you. Once you have received your products, make sure they are listed clearly and attractively on Amazon, to increase the likelihood of sales. You could even temporarily reduce the selling price in order to draw customers in. If you are willing to invest the time and money into this strategy it could see you cornering the market in your chosen product and earning a decent profit. However you must be willing to put the initial work in in order to reap the benefits.
So this is a brief outline of the methods you can use to source products for your online retail business, I hope you have found it useful! Watch this space as I will shortly be expanding on each of these four strategies to give you a more in-depth guide on how to go about them. For now, good luck and happy selling!