The issue of product sourcing is one that every Amazon FBA seller must resolve before shipping to Amazon FBA from China. Product sourcing is essential for the overall success of Amazon sellers, so it need not be taken with levity. If you’re an Amazon FBA seller and looking to learn more about product sourcing from China to Amazon FBA, you will find this post helpful.
The post provides you a concise guide about how to source products from China for Amazon FBA. We will look at the meaning of product sourcing, sourcing methods from China to FBA, tips for effective product sourcing, and how to find the right sourcing agent.
What is Product Sourcing?
Amazon FBA product sourcing means the process of finding or creating products to sell on Amazon. So, basically, to get the product you intend to sell on Amazon, you decide to work with the manufacturer to produce for you or buy in wholesale or retail arbitrage if you are just starting out. This lets us to methods of product sourcing.
Methods of Sourcing Amazon FBA Products From China
There are various methods or ways of sourcing your products from China to Amazon FBA. The type of your product, nature of the market, and competitors are some of the significant factors determining the best methods for your product sourcing from China.
Below are some of the top methods of sourcing products from China
This involves working with China-based manufacturing to create your private label brand, design an original product for you and handle the branding packaging and the listing. You will need to conduct thorough research or seek recommendations from a competent manufacturer to work with. You can either do this yourself or use the service of a third-party product sourcing agent. This method is suitable for an established entrepreneur but may be risky if the product doesn’t sell well.
In this method, you don’t create your product; rather, you buy from a China-based wholesaler then ship to Amazon FBA. This method is ideal for a new entrepreneur. This method lets you start small, build a smooth relationship with the established brand over time, and sell products with pre-existing sale data. However, the product you will be selling won’t be your own brand, and many other online retailers will be selling the same product.
Dropshipping for product sourcing involves listing a product from suppliers and pay for them only when they sell. However, Amazon FBA logistics don’t allow suppliers to send items to your customers on your behalf. Unlike traditional dropshipping, you will have to go through FBA and the product to Amazon.
4. Retail Arbitrage
The retail Arbitrage method involves sending products you find at big box stores in China to Amazon to resell. Retail arbitrage can also be done online, where you get products on and resell on Amazon.
5. Handmade Products
You could also source your products from crafty entrepreneurs that produce handmade products. This method can be very affordable, but you may have issues with scalability.
Tips For Effective Product Sourcing From China For Amazon FBA
After understanding the different product sourcing methods, it’s vital to intimate you with some tips you can apply for effective product sourcing from China to FBA. Irrespective of the product sourcing methods you are using, you need to apply these tips below to make intelligent decisions.
1. Evaluate Your Profit Margins
To avoid making the wrong product sourcing decision, you need to know your real profit margin. The real profit margin includes the cost of the product, shipping from China to Amazon FBA, refunds and unsellable inventory, Amazon PPC cost, Amazon FBA storage, Amazon FBA freight forwarder costs, and other Amazon FBA logistics costs.
2. Study Market Demand
Take your time to study market demand for a product using appropriate metrics meticulously. You can get valuable insights into market demand from social media surveys, social listening, and google trend reports. This will help you know if the product demand is declining or booming. It also lets you know if the product demand is seasonal or demanded year-round.
3. Know Your Competitors
Irrespective of how you intend to source your products from China, it’s important to know your competition. Conduct comparative research to discover how much your competitors sell the product and if you are creating your product, consider the price of similar products. Also, understand how the product price fluctuates. Major factors to consider during your comparative research are price, sale volume, sales rank, customers reviews, seller rank, seller information, and estimated cost.
4. Consider if the Product is Easy to Ship
Another expedient factor to consider to make a smart problem sourcing decision is the nature of the product. What’s the product weight? Is it a perishable product? Lightweight products are easy to transport, have less damage risk, and are cost-effective. You can easily ship the through air freight or express freight.
5. Source For Product That Allows Improvement
Customers’ reviews and feedbacks are very important, so it’s advisable to consider a product that can be adjusted or improved to meet buyers’ needs and requirements. You can study products reviews to know the malleable products.
6. Production Cost and Process
Understanding the cost and process involved in producing certain products will help you make smart product decisions, especially if you plan to work with the manufacturer to create your product. Products like electronics, glass, and complex products require high expertise and quality control procedure. So, if you’re starting at Amazon, it’s you might want to start with less complicated products.
7. Compliance with Country Standards
Before starting your products sourcing process, be sure to understand all the specific standards of the country you will be selling the product. These standards range from safety standards to patent or intellectual property conflict, quality standards, and legal requirements of the country.
How Do I find the Right Sourcing Agent In China?
A product sourcing agent is a third-party professional that liaises between manufacturers and retailers. If you aren’t in China to work with the manufacturer directly, you can select a sourcing agent. Working with a reliable source agent allows you to gain access to ample reputable suppliers contacts.
Here are some of the ways to find the right sourcing agents in China:
1. Consider choosing an agent located near the manufacturing hub. This will save you some cost.
2. Check the agent’s English and Chinese language proficiency to prevent any form of communication gap.
3. Seek reference or past clients reviews of the agent
4. Interview different sourcing agents to gauge their experience, expertise, the scope of their sourcing service, product specialty, relationship with manufacturing agency, and more.
5. After choosing a reliable sourcing agent, be sure to an elaborate contract that includes the transaction scope as well as responsibilities of the parties involved in the contract.
Product sourcing expertise is a never-ending learning process. Whether you’re an experienced Amazon seller or just starting, you need to study the market trend and your competition to optimize your product sourcing process. A solid understanding of product sourcing will enable you to source profitable FBA products, which will result in business success.