Amazon FBA Product Sourcing: How to Source Winning Products (2023 Update)

Amazon niche

Choosing the right products to sell on Amazon can take some time to figure out. Half the battle is weeding through the stats to find products that are popular, in demand, and profitable enough to consider. The other half is pulling the trigger on those products that you have thoroughly researched and believe are worth pursuing.

This article will outline several tips that you can use to help you with your Amazon product research so you can choose profitable products to sell on Amazon.

Popular Amazon Product Sourcing Metrics to Understand

If you want to find profitable products to sell on Amazon, you need to get familiar with the different product metrics.

1. Profit margins

You need a healthy Amazon profit margin if you want to sell a product successfully. If you cannot make a worthwhile profit margin, the product will not be worth the time it takes for you to sell it.

Time is money and money needs to be earned. Products with low-profit margins are risky because they have a small margin of safety, meaning that you will likely lose money when things go wrong.

Even the best products fail sometimes, get shipped to the wrong address, or fall victim to things out of your control. High-profit margins provide you with a cushion to make the best of a bad situation.

2. Demand levels

Demand levels for specific products can rise and fall. Demand is not just determined by how many people are looking for the product you are sourcing online.

The more popular a product is, the higher the demand will be. But with higher demand usually comes increased competition.

When sourcing products, try to look for products that have reasonable demand levels and enough competition that you can outcompete them.

3. Competition

We mentioned above that a product’s competition level is something you need to consider conducting your initial Amazon research.

Think about it like this…

  • A product with high competition and low demand will be challenging to sell. Certain trendy and niche products may fall into this category.
  • A product with medium competition and medium demand is a great choice because there is still room to compete.
  • A product with low competition and high demand is ideal, but finding a product like this is challenging and requires a lot of high-quality Amazon research.

Determining Your Amazon Competition

1. Sales volume in multiple markets

Not all products sell well in all markets. This is understandable. Some products will sell better in America than Italy, and vice versa. One of the easiest ways to grow your ecommerce business is to leverage the customer base of foreign markets.

A product that you can easily source may have no demand in America, but it may be in huge demand in Europe.

Opportunities like these do exist and you have to be willing to sell internationally if you want to increase your customer base.

2. Look at products reviews

Amazon product reviews heavily influence shoppers when deciding to make a purchase or not. When conducting your Amazon research, take a look at some specific products review scores and see whether it has a positive score.

3. Look at estimated fees

If profit margins are important, so too are a product’s estimated fees. A simple fee estimation will save you a lot of headaches.

You have to consider things like how much it will cost to ship a product, the estimated FBA fees for selling it, how much it will cost you to handle returns and damaged items, and how much you will have to spend to market the product (if required).

A popular, low-profit margin item with high fees is a bad choice because it doesn’t leave you much room for mistakes.

Finding the best ecommerce products takes time and you must be willing to do effective market research into what products are profitable and worth pursuing.

4. Other things to consider

No one can objectively tell you which products will sell the best. That depends on what you find during your product sourcing and Amazon research.

Stick to What You Know

Someone with a deep understanding of cars will be better situated to sell car parts or decals than selling electronics. You should stick to what you know.

One of the best ways to look for product ideas in categories that you are familiar with is to browse different subcategories of major sections. Using the automotive example, a seller could look in subcategories like maintenance & care, automotive tools, parts, interior accessories, exterior accessories, motorcycle & ATV, and other sub-subcategories within those.

It is a lot easier to source and sell products that you are familiar with. You will have a deeper understanding of how they work, their strengths and weaknesses, and your familiarity with them will help you better create product listings that are poised to sell.

Over time, as you start to dominate a specific category, you can look to branch out of it into things that are somewhat similar. If you were focusing on cars, you may branch out to recreational vehicles like motorcycles & ATVs, into car accessories like sound systems or GPS devices, or other related products. This will help you develop a deeper understanding of related products and increase your competitive advantage.

Decide What Metrics are Important for You

There are so many Amazon seller metrics to pour over when it comes to finding the right products to sell on Amazon.

As a seller, you need to decide which ones you think are most important. Some sellers prefer to sell fewer high-profit margin items, taking in more profit per item, while others prefer to focus on volume and choose to sell many low-profit items. Others may base their product choices on shipping costs and estimated fees.

Here’s an interesting way to look at it…

While the profit margin percentage on a high-end product may be lower, you may be able to gain more money in total. This is especially true if you are selling products with a better currency exchange rate (like selling Canadian products in American dollars, which will provide you with an extra 25% profit margin).

There is no wrong way to approach this as it comes down to preference and the type of products you want to sell. Whatever you choose, make sure you take into account the metrics that are most important to you.

If you are a professional seller on Amazon, you should consider selling products with either a high-profit margin or a high price tag. A sale is a sale, no matter how high the price is. Therefore, theoretically, it is exactly as hard to sell a small item as it is to sell a large item or to sell a cheap item as it is to sell an expensive item.

Consider Yourself

Only you can determine which products are best to sell on Amazon. Products sell for different reasons, it is up to you to decide which reasons you want to pursue your ecommerce business.

A few months ago, people were selling Szechuan sauce on Amazon for large prices, thanks to a one-liner joke on a television show. People used to write off Bitcoin as a fad. Now, anyone can create their own cryptocurrency.

There are tons of profitable niches on Amazon, you just have to do a little digging to find them. The easiest way to connect with a market is to feel comfortable in it and to push it forward. Become an authority on an item category, an industry, or even a manufacturing process. Figure out which products you know the most about, which products you feel you can sell the best and your end goals. From there, you will have an idea of the best products to sell on Amazon.

This is a long road. Success generally does not come overnight. Once you choose a product that you can sell to one person, know that you can now sell that same product to more people. In time, you will reach the sales volume and revenue that you desire and grow your ecommerce business.

About Algopix

There are many Amazon tools available for you to use. Amazon themselves provide a few basic tools, but their functionality is often limited. For product sourcing, an Amazon research tool like Algopix is a great choice because it scans both Amazon and eBay.

Using the best Amazon tools available to you will help you sell more products. It is similar to wearing a suit to a job interview, rather than a ratty t-shirt and jeans. Your interviewer will like the first option better because suits are more well-suited (pardon the pun) when it comes to working in an office.

Free trial



Want monthly repricing tips, trends and news direct to your inbox?

See our Privacy Notice for details as to how we use your personal data and your rights.