Day 4: Sourcing (Part I)
The first, most straightforward method for finding good products to add to your inventory is to Manually Source them.
But just what is manual sourcing?
What is Manual Sourcing?
Manual sourcing is the process of doing research on individual products to try and find profitable ASINs and good “potential buys”. You can manually source online or even in retail stores, which is retail arbitrage.
There are two major aspects of sourcing
- Never stop researching new brands
- Always take time to go down those Rabbit Trails.
Let’s Talk About Rabbit Trails
Imagine you are trying to find a magical rabbit that lays golden eggs, but every time you see a hole with a magic rabbit inside, you see more tracks. Another Rabbit! Maybe it lays golden eggs, too? Only one way to find out!
You could be content with just the one rabbit, or you could keep following the trails deeper into the forest and find even more nugget poopin’ gold mines,
Applying this gross analogy to ASIN sourcing
As you go down those “rabbit trails” in Amazon, you can indirectly find other profitable ASINs that weren’t in the lead list to begin with.
You could be content with finding one ASIN, or you could look at every variation possible and locate those hidden Gems that, like the magic rabbits, make you consistent sales.
Ok, Back to Manual Sourcing!
With manual sourcing, you are manually running research on products that you encounter outside of Amazon that you think could sell well and then verifying their predicted margins using Keepa.
Ever seen a bottle of shampoo at the pharmacy for $10, but you know it costs $15 on Amazon? Well, if you added that shampoo to your inventory, that is a simple example of manual sourcing.
One of the best buys being replenishables, or Replens.
Replenishables
One major hurdle to maintaining your storefront is the fact that once you sell out of your inventory, you can’t necessarily assume that you can sell that same product forever. Trends and sales conditions might have made your listing a “one hit wonder”.
Replenishables aren’t just groceries or soap. That is why people discredit it; they can’t see long term replenishables.
Replenishables, on the other hand, are items that you can keep in your storefront and know that people will always come back to buy more, whether that is every week, month, year, and so on.
You can replenish your inventory once your listing sells out and know that the demand will always be there.
If it sells to a customer more than once, that is how you’ll know it is a replen. That could be once a week or once every year.
Replens are not just things like food and water, it also involves things like:
- Undergarments (Socks, Underwear, T-Shirts)
- Toiletries
- Tools and Tool Components (Drill Bits, Nails, Rakes, etc.)
- Seasonal gear (holiday decor, hand warmers, etc.)
- Etc.
If it is something that is gonna need to be replaced, then you know it is replenishable. The hard part is to find enough profitable replens, but it is definitely doable.
Using ChatGPT To Find Replens
In case you weren’t aware, AI chatbots have become super sophisticated. They have reached a point where it’s almost reductive to call them chatbots.
ChatGPT is one of the most advanced and popular chatbots out there. Not because you can “talk” to it, but because you can send it any prompt and get a comprehensive and accurate response almost every time.
Note: I’ve heard of college professors who have caught kids using ChatGPT on college Level essays because they were Too Perfect!
Read that article here
You can literally ask ChatGPT for sourcing Ideas and it will generate for you a well written list of leads. It’s that easy!
You can even use it to find competing brands that you can go after. There is no special subscription, no mode you have to activate. Simply ask ChatGPT what you need and wait for a response
Note: ChatGPT is free at the moment, but it receives so much traffic I would be shocked if they never put it behind a paywall. That being said, you wanna get signed up with it ASAP!
Things you should know about Manual Sourcing:
- There is no magic formula for sourcing: I sure wish there was a “secret recipe” to finding the golden leads every time, but the only technique that works is to stick with sourcing until you get your own unique system.
- You will need to set aside at least an hour a day if you want to effectively source. Whether that is at the crack of dawn or right before you go to bed, you need to practice this stuff repeatedly until you are good at it.
- Manual Sourcing isn’t hard to do, but it is tedious. Later in this course, we will discuss ways to get around that grind with things like Tactical Arbitrage.
- Every successful seller on amazon uses Manual Sourcing. That does not mean only manually source, just that you should always sprinkle in manual sourcing to your automatic scans.
Trained sellers will always scan leads better, if less efficiently, than a computer.
There are Two Ways to Manually Source
- Source the online/local sales and flip a good profit periodically
- Make money by flipping full-priced items constantly
Sourcing the Sales
The first major way that you can source is by chasing after the sales and deals that make for easy flips on Amazon. Easy to buy low when there is a sale going on.
Here are some tips to sales sourcing:
- Use sites like raise.com to find the best deal. Belk is another website that is also useful
- Make use of RevROI, a software that helps you determine what return you are going to get for your sale. It’s absolutely critical to commit to getting an ROI, which means you will need to take the time to hunt for deals.
- You can “sales source” on any retail site; don’t limit yourself to the big markets like Target and Walmart! A lot of the money is made by sourcing from low radar shops that have lower competition and restrictions.
- Weight and shipping cost should be factored into your profit calculations.
This is a picture of a tool called RevSeller, that can be used to help quickly determine if a product is worth investing in.
Retail price sourcing
This is the best practice to master in online arbitrage; finding items that will turn a profit for you no matter what. Your job is to find a profitable item and look for valuable variants. The hardest part of retail price sourcing is the act of flipping items and making enough profit for them to be worth it. Whether that Item earns you 100% ROI or 1% ROI, you are still earning money so long as you clear out your inventory.
Always remember, the ultimate key to a successful Amazon Storefront is speed and consistency. The hard part will be finding those items that you can rely on to consistently earn you money.
Go onto a retailer website, start at a category, and look up the stats on Keepa to make sure it is a good buy.
Now that we have found something on Target (doesn’t need to be target;l could be any retailer you any) that has our interest, our job is to hop onto Amazon and look for it’s ASIN.
Now that we’ve found it, we can look at the Keepa Chart and see if it’s worth the investment.
As you can see by the sales rank, it doesn’t have a steady, faster heartbeat, and this item isn’t a replen, so I would pass on it.
Now Let’s Try and Find a Good Example
We found a coffee canister from Target, and it seems pretty promising, so we will search for it on amazon and read the Keepa charts.
As you can see, this is a good example of a successful source using an online retailer.
- It has a really steady Sales Rank heartbeat and it resembles the subcategories
- The Buy Box is really steady
- There are a lot of regular 3rd Party FBA offers
- The rating, new offer and review counts are each really healthy
And that’s the fundamentals of manual sourcing! We will cover reverse sourcing tomorrow.
Day 4 Live Q+A
How can you toggle units in Keepa?You can do that in the product details menu of Keepa.
How do you get the market research tab in ChatGPT?It isn’t a special tab, I just gave Chat GPT a prompt and it did all that for me. That’s why we are
Why skip sponsored products?Usually, they are lower ranking brands that are trying to place themselves in some given keyword.
Do you typically stay on page 1 of Amazon?No, but I’ll rarely look past page 2, since page 3 is where keywords go to die. However, it doesn’t mean the ASIN is bad, you may need to try new keywords.
Does Home sell well?Oh, yeah! A lot of the categories involving households seem to always rank well.
What makes you dislike a product?If it is fragile or perishable. It just leads to
Is Google Lens a good way to source?Yeah! That is a really smart way to find ASINs in the wild and find matches at other retailers. Your sourcing methods are only limited by your imagination. The more ways you figure out how to source, the more unique, low competition ASINs you will encounter.
What is a profitable ASIN in your opinion?It has to meet my desired ROI and Profit Margin.
I have a friend who runs a small RA business and he gives his buyers a minimum ROI, Profit Margin, variation count, etc.
However, they are allowed to buy the product if only one criteria is not met. Have a set rules for yourself so that you can shape your view of what a profitable product looks like. However, don’t make your rules too far fetched and be willing to re-strategize.
Do you buy deals expecting the price to tank?It can really depend on how popular the item is. Some items go on sale very regularly.
What happens if you find a deal but the retailer is out of stock?Unfortunately, that will happen occasionally and it’s out of our hands. What IS in our hands is how well we are gonna manage our inventory. It’s just something to work around?
What do you look for when sourcing a product?When we look at products we want to use Keepa to answer some questions.
- Does it sell?
- What is the sales velocity?
- Is it profitable?
- Is the price gonna tank?
- How much margin can I give myself?
- Is the number of Sellers consistent?
- Are there any variations? Which variations are profitable?
What is the best play? A2A flips or OA sourcing?It depends on which one you feel more comfortable with. You can make a career out of both, even though I focus on OA. However, don’t limit yourself to one or the other if you are good at both.
Can you do A2A flips even when Amazon is in stock?Yes, you just need to find an amazon seller who is selling it for less than Amazon themself.
How do you handle Vory’s Emails?I send them to my attorney and let him write a response. That usually scares them away haha.
How can we keep track of Amazon’s reimbursement procedure?I use a company that charges me a fee, but it is worth it because handling those procedures is a waste of time. By letting a 3rd party handle it, you are able to source which earns you more money in the long run.
Is there a way to see if a brand is gated?I like RevSeller, but ASINGadget also has that feature.
Do PPC campaigns make sense for smaller sellers?I’m a fan of cheap PPC campaigns. I will run campaigns that are no more than 5 cents per click. I also think the PPC reports are pretty useful for gathering keywords.PPC doesn’t work on suppressed buy boxes.
Any refunds that don’t qualify for reimbursement?Yes.
Does Target accept resale certificates?No. They are not very friendly towards resellers, but there is really only so much that they can do. Is it possible to successfully source regularly from Target? Yeah! Just avoid going after their loss leaders.
Do you use your resale cert to avoid sales tax?If I can, but my prep center is in a tax free state, which makes that unnecessary.
Is there a way to figure out retailer sales cycles?Yeah. Just pick a few items and keep track of the inventory across multiple storefronts. In a few months, you will have a pretty comprehensive view of the inventory flow.