How to Outsource Products to Sell on Amazon: A Definitive Guide

A graphic showing the different ways to outsource products to sell on amazon, from top-left to bottom-right: products on clearance, liquidation stores, retail arbitrage, dropshipping, private labeling, wholesale suppliers

Last updated on June 29th, 2023

Written by Mohamed Aden

Are you looking for wholesale products to sell on Amazon? Or are you planning on selling smaller quantities? Before you decide on your business model, it’s important to learn how to outsource products to sell on Amazon and weigh your options.

You can choose from retail arbitrage, wholesaling, dropshipping, or private labeling. Amazon sellers have different ways of finding products to sell on Amazon. If you're a new Amazon seller or looking forward to changing the way you outsource, there are many ways to do this.

In this blog post, you'll learn how to find profitable product ideas and where to outsource products to sell on your Amazon business.

Tips for Finding the Best Products to Sell on Amazon

Before you sell a particular product on your Amazon store, ensure you've researched it extensively. Through this, you can see the best products to sell on Amazon.

Check out these tips on how to come up with profitable product ideas:

1. Establish a Criteria

Other sellers on ecommerce websites know what they want to sell on the platform. Meanwhile, some online sellers continuously search for trending products and outsource them through wholesale or a private label.

To help you evaluate if a product idea is something that will sell well on the Amazon marketplace, take a look at this list.

  • Product cost. Find out how much your costs will be in manufacturing or buying a wholesale product.
  • Product quality. Can you secure a reputable supplier that can give you high-quality products to sell?
  • Challenges in shipping products. Will you need specialty fulfillment support like Fulfillment by Amazon (FBA) to ship products? Check if your products are easy to ship and how much the possible shipping costs will be.
  • Competition. Who are your current competitors on your chosen niche product? Look at their prices and customer reviews.
  • Ideal customers. Determine who your ideal customers are and how to reach them on Amazon.

2. Evaluate Product Ideas

Once you understand how product cost and fulfillment significantly impact profitability, you can discover items that meet your criteria. Here are some ways to find best-selling products to sell:

  • Type in a search term on Amazon and select "Sort By: Best Sellers." Check how popular the product is compared to others in that product category.
  • Use Product Opportunity Explorer in Amazon Seller Central to determine the number of users searching for specific keywords on Amazon.
  • Check the trending products on Amazon's Hot New Releases, Movers and Shakers, or Gift Ideas.
A screenshot of the Amazon Hot New Releases page

3. Avoid a Product Category Dominated by Big Brands

Big brands dominate a lot of consumer goods. These brands leverage their big names, marketing, and budget to surpass their competitors, including beginner Amazon sellers.

If you want to sell a product, it's essential to identify a niche market where you can still sell products, and big brands will not overpower your presence.

6 Ways Amazon Sellers Can Outsource Products to Sell

After doing your product research, you must look for manufacturers or suppliers that can supply your own products. You can order the products from a direct supplier or outsource them differently. 

Here are some ways to get wholesale products to sell on Amazon as your inventory. 

An illustration of a shelf with products and a banner reading “clearance sale”

1. Products on Clearance

Who says you can't buy products on clearance aisles and sell them on Amazon? There are a lot of sellers who do it this way. Usually, they find a product on the clearance aisle, or it's heavily discounted in thrift stores or local and online auctions and sell it on Amazon. This is a good stepping stone, especially if you're learning the ropes of selling on the platform.

This way of product acquisition is perfect for beginners because you won't need a large investment. You can sell what you have in the meantime and profit from it. If you'd like to invest the money you've earned from selling products, you can do it again and buy it in bulk. 

You can also opt for higher-priced items like electronics and home appliances. To succeed, remember you must be able to profit off at least 20 percent for every item. This way, your efforts in finding the items and uploading all of these on Amazon will at least be paid off.

An illustration of a surplus store

2. Liquidation Stores

There are numerous liquidation and surplus stores all over the country. So, if you have one near you, you can make the best of it by buying items from these stores and selling them on Amazon. You can usually find discontinued products in these stores. 

The health and beauty product category is big on these products. Take advantage of this particular market by scourging through liquidation stores. The reason behind this is that discontinued items are treated like rare finds. 

If your customer sees that you're selling their favorite item that's not being offered in physical stores or by any other Amazon sellers anymore, then you can expect that person to buy from you. 

You can even sell these products at a higher price because of their decreased supplies.

It's a win-win situation - your customers are happy because you have their favorite products, and your profits for each product sold are higher, too!

An illustration of a handshake surrounded with boxes

3. Retail Arbitrage

This is one of the most common ways of outsourcing products to be sold on Amazon. This involves buying products from retail stores and selling these on Amazon for a profit. You can implement two ways so you can maximize your profits. You can buy from retailers in bulk or price it way higher than the others.

Buying in bulk is the best way to keep your pricing competitive without sacrificing your profits. The only difference with retail arbitrage is that you're outsourcing from retailers, not wholesalers. Due to this, you might not be able to get a substantial discount from buying in bulk. 

However, retail arbitrage on Amazon doesn't require a large upfront investment. It lowers your risk, so you can do this if you're starting out but want to work on more inventory than usual. 

An illustration depicting a delivery truck with an arrow pointing towards a man while the man is shown with an arrow pointing towards the store

4. Dropshipping

Dropshipping is one way to easily sell your products without having to go through the hassle of storing these in your warehouse. If you're working with a large volume of products, this can bring in more sales for you. However, it will also mean that you have to spend more money on storage costs or investing in inventory management software.

You can either address this in two ways. You can either start selling as many products as you can in a short time or opt to choose dropshipping instead. This type of inventory sourcing is best, especially for small to medium-sized companies looking to scale their businesses but don't have the money yet to invest in their own storage. 

An illustration of bottles on the left with a label “no brand” with an arrow pointing towards bottles with a label “your brand”

5. Private Labeling

Private labeling is a form of outsourcing tactic wherein you purchase products directly from a manufacturer. It's similar to direct sourcing in that you source your products straight from the manufacturers. But in this case, suppliers manufacture generic products and then add your labels so you can sell them under your brand.

This approach also involves wholesaling to acquire the materials for your private label products at a reduced cost.

An illustration of stacked boxes

6. Wholesale Suppliers

If you're looking forward to further scaling your business, you can source your inventory through wholesaling. This method involves getting a lot of bulk inventory that you can sell and profit off. Since you're buying it at wholesale price and in bulk, you can get higher profit margins for it. 

For wholesaling, you will spend more on product acquisition. Before you fully immerse yourself into getting wholesale, you should ensure you have enough following and demand. It's risky if you don't have the demand for higher quantities of products yet. But if you already do, then this might be a great match for your business.

Key Takeaway

These are the six easiest and most reliable ways to outsource your products. But of course, deciding on the best selling method should depend on the nature and demand for your business.

Doing product research and stocking your inventory are the first and second steps—the next is to list these products on Amazon. This might be a little tricky, especially for new sellers, but we have the right people for that!

Be an Effective Amazon Seller With Seller Interactive

If you want your products to be noticed on Amazon, you must hit the ground running and ensure you’re doing the best practices from the very start. This is where an Amazon agency like Seller Interactive comes in. These are the professionals you should turn to if you want to sell effectively on the platform. Do you need help in managing your product listings? Book a call with us today. Let us do wonders for your business!

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