It’s no secret that Amazon is one of the most popular Ecommerce platforms on the planet, and we’ve written extensively about the many pros and cons of sourcing for Amazon here on our blog. However, with so many sellers flocking to Amazon every day, it can be hard to succeed when competing against more than 2 million other brands.
Whether you’re interested in selling on Amazon or simply adding to your current Ecommerce operation, sourcing products from China has become a trendy way to make extra money and diversify your business offerings.
There are many benefits to using Amazon as a platform, but it also has drawbacks. In this post, we’ll go over some of the pros and cons of amazon product sourcing so that you can decide whether or not it’s right for you.
What is Sourcing for Amazon?
When shopping on Amazon, you can source items from third-party sellers. It means that things are not manufactured by Amazon but rather by sellers who are independent businesses.
Sellers can take full advantage of the capabilities of the Marketplace’s logistics by utilizing either Amazon FBA Product Sourcing or Fulfillment by Amazon, both of which are provided by Amazon. By enrolling in this program, sellers can send their merchandise to be stored at one of Amazon’s fulfillment centers. When an order is placed through the platform, Amazon will choose, pack, and ship the products straight to the consumer without further cost to the customer.
When sellers decide to source their products through Amazon FBA, they can avoid the headache of obtaining their own storage space, constructing a fulfillment facility, and dealing with customer care issues. Since not all sellers manufacture their products, Amazon FBA merchants can focus on acquiring quality inventory for better costs.
Why Sourcing For Amazon Is Not Such A Bad Thing?
When it comes to sourcing products for your Amazon store, there is little to no harm in doing so. Sourcing from outside the platform can help you stay competitive and keep up with trends. Here are three reasons why product sourcing for amazon is not such a bad thing:
1. You can Be Up-to-Date on Trends
When you source products from outside of Amazon, you can explore new brands and product lines that may be more relevant to your specific needs. It can give you an edge over other sellers who rely exclusively on Amazon’s Marketplace selection.
2. You can Keep Up with Changes in the Marketplace
You are not confined by the company’s policies and guidelines when you source products outside of online and amazon sourcing. As a result, you can take advantage of new product releases and modifications to Marketplace listings that may benefit your business.
3. You have More Control Over Shipping and Delivery
You have more flexibility regarding shipping and delivery times when you source products from outside of reliable product sourcing. It allows you to accommodate customers’ needs better while minimizing disruptions in their workflow.
How to Sourcing for Amazon?
There is one question that everyone asks how to source products for Ecommerce? When sourcing products for your Ecommerce store, it’s essential to be mindful of how products can be sourced. Here are three main ways to source products for your online store:
1. Shop Direct from the Manufacturer
It is the most traditional way to source products for your Ecommerce business. When you shop directly from the manufacturer, you’re guaranteed a high-quality product and the freedom to customize your order as you see fit. However, this route can be expensive and time-consuming, so it’s best to use it when you have a specific product in mind that you know will meet your standards.
2. Use an Online Marketplace
Many online marketplaces offer a wide selection of quality products at a fraction of the cost of shopping from a manufacturer. This option is excellent if you need a large quantity of a specific product or want to try it before you buy. Just be sure to read reviews and compare prices before making a purchase, as there may be cheaper options available if you search carefully enough.
3. Augment your Inventory with Third-party Sellers
If shopping from manufacturers isn’t an option or you don’t have any particular requirements for the product, using third-party sellers can be a good alternative. This approach allows you to outsource some of the work involved in running your business while still benefiting from access to high-quality products. Research and find reliable sellers who offer good customer service and fast shipping.
When can you Stop Sourcing for Amazon?
There is no definitive answer to this question, as it largely depends on your business and individual needs. However, some general tips to consider include the following:
- When can you stop sourcing for Amazon entirely?
- How do you decide which suppliers are best for your business?
- What are the benefits of sourcing independently?
- What are some common pitfalls to avoid when sourcing for Amazon?
Pros and Cons of Sourcing for Amazon
Regarding sourcing products for Amazon, there are many pros and cons. Here are the top benefits of sourcing for Amazon:
Pros of Sourcing for Amazon
1. Low Costs
Saving a lot of money is one of the most important advantages of sourcing products for Amazon. Due to the fact that the things are offered through the online Marketplace, customers can also obtain discounts since there are no delivery fees to worry about.
2. Convenience
Convenience is a significant advantage of product sourcing for Amazon. Customers can order products online and have them delivered right to their door. Additionally, they won’t have to worry about waiting in line or locating a store that sells the item they’re looking for.
3. Variety
Finding a wide variety of merchandise to buy is yet another important advantage of sourcing for Amazon. Everything is included, from food to clothing to devices. The website definitely has something for everyone!
4. Product Quality Control
The fact that customers may be sure products will be quality-controlled is one of the biggest advantages of purchasing things for Amazon.com. It means they can shop with confidence knowing that their purchases will live up to your standards.
5. Customer Service
You will have access to first-rate customer assistance if you source for Amazon. They can get in touch with the business and ask for assistance in fixing the problem if something falls short of your expectations.
6. Returns
The inconvenience of returning a product they don’t want or need is one of the top main complaints about online purchasing. This is not a problem with Amazon; just get into account and follow the simple return process instructions. Amazon will refund money if there is anything wrong with the order (such as the delivery of the incorrect item).
7. Variety of Brands
Finding a large range of brands is one of the great advantages of sourcing for Amazon. Along with well-known names, it also features lesser-known brands. It implies that customers will definitely discover something they enjoy!
8. Easy to Navigate
The ease of use of Amazon’s website is one of the many advantages of sourcing for them. It implies that they won’t have any trouble using the website or locating the information they’re looking for.
9. Secure Shopping
One of the many advantages of sourcing for Amazon is that it has an easy-to-use website. It implies that using the website and discovering what they’re seeking for won’t be difficult for them.
10. Replacements
If something does not live up to your expectations, they can easily return it and get a replacement when they source for Amazon. It implies that they won’t have to bother about interacting with a store or handling their own returns.
11. Fast Shipping
Another significant advantage of shopping on Amazon is that shipments typically arrive within two days, much faster than most other online retailers. Plus, if an item doesn’t arrive in time for your scheduled delivery date, Amazon offers a no-questions-asked return policy so that customers can get their purchase replaced or refunded without any hassle.
Cons of Sourcing for Amazon
Thinking about sourcing products for Amazon, think hard before doing it. Here are some cons of sourcing for Amazon:
1. You may be Getting less than you Expect
When you source Amazon products, you often deal with third-party sellers not affiliated with Amazon. They may have different product specifications, prices, and shipping times. If you’re unfamiliar with these sellers, it’s easy to order the wrong item or receive a defective one.
2. You won’t know what you’re Getting
When you source products for Amazon, you have to trust the seller. They are not required to list all of their product information, so it’s possible that they don’t include essential details like dimensions and weight. If something goes wrong with your purchase (for example, if the item is defective), you won’t be able to get a refund or exchange it.
3. It can be Expensive
Sourcing products for Amazon can be expensive if you’re looking for high-quality items in stock and ready for delivery. Additional fees may be associated with third-party sellers (like payment processing fees).
4. Limited Inventory
One downside of sourcing for Amazon is that items in stock may be limited, so you may have to wait a little longer than usual for your order to arrive. It isn’t a problem, as most items are available for immediate shipping.
5. The Cost
FBA is a wonderfully helpful service, but using it will save you some cash. It’s possible that some folks don’t currently have the means to spend that money. In addition, because of the way the fees are calculated, this service is not ideal for low-cost things. Therefore, you will want to be informed about the products you enroll in. You’ll be happy to know that Amazon has a helpful FBA calculator that will assist you in determining whether or not this would be a profitable move.
6. Increases in the Number and Frequency of Returns
It is due, in part, to the liberal return policy that Amazon offers. Even though this may affect the company’s bottom line, Amazon handles the processing, so it’s not the world’s end. Amazon required that returns be sent to them first, and you were responsible for making the necessary arrangements to have them subsequently sent on to you. However, Amazon is making adjustments that will enable returns to be sent directly back to your facility.
7. Long-Term Storage Fees
You may expect to pay a higher price for items that sit longer. Long-term storage fees aren’t the end of the world, but you must incorporate them into your continuing budget to ensure that FBA makes financial sense for your business goals. Although they aren’t the end of the world, long-term storage fees are.
They don’t want to store things that aren’t actively for sale either, and if they do, they’ll charge you for it and also modify your metrics in a way that’s not favorable. Nevertheless, you can examine all of this information in your seller panel and make arrangements for things to be delivered back to your facility.
8. Product Prep Standards
Before you send any of your products to Amazon, you must ensure that they have been appropriately prepared. This preparation must include how they are packaged, the application of accurate labeling, and the shipment of the products by the FBA inventory warehousing guidelines. There are a few of the particulars that can be challenging.
9. Tax on Sales
You may be unsure of the appropriate tax rate to apply if your company is based in one state but maintains inventory in a different form. You are in luck since there are tools that can help automate the many other tax scenarios and rules, which can assist you in determining what to charge, and Amazon can manage most of this for you.
10. Payment for Amazon FBA Fees
You cannot put off what you owe Amazon. There is no grace period. You cannot use the proceeds from the subsequent sale to pay for the one that came before it. Before making any payment to you, Amazon will first deduct any fees due to them. What happens if you don’t have enough money to pay the fees? You will be required to pay off the outstanding sum using a credit card, which you must furnish.
Final Words
As an Ecommerce business, it is essential to know the pros and cons of sourcing products for sale on Amazon. For businesses that rely heavily on Amazon as their primary sales channel, it is essential to understand how to optimize your product listings and pricing to stand out from the competition. However, certain risks are also associated with selling products through Amazon, such as higher shipping costs and potentially fraudulent activity. Ensure you have a strategy to minimize these risks while making a profit.