Day 5: Sourcing (Part II)
Yesterday, we looked at Manual Sourcing, which involved finding the profitable ASINs from the online retailers directly, and today, we will be talking about the alternative, “opposite”, method; Reverse Manual Sourcing.
What is Reverse Sourcing?
In manual sourcing, you go to the site/ store and find profitable ASINs.
However, with reverse sourcing, you start at a specific ASIN and then follow it back to the site it came from. The goal of reverse sourcing is to take a profitable ASIN and find the source site and possibly more profitable ASINs.
Think about it like you're a cat following a mouse to its nest.
You could be content with just catching the one mouse, or you could follow the one mouse and find out where you can catch mice in the future and turn into a fat cat real quick.
You could’ve eaten that first mouse, but instead, you follow him to his hole and find all of the mice!
Now, just switch out “mice” with leads and “cats” with sellers.
That is essentially the logic behind reverse sourcing! since you were willing to pass up the easy lead that everyone else has jumped onto, you go where others weren’t and find the motherload!
Starting on Amazon
As the phrase reverse sourcing suggests, we are gonna start at Amazon and find good ASINs to manually source. We are going to go onto Amazon, and like a hipster at Target, we’re gonna walk through the categories and let Amazon tell us what we want.
Note: When you find an ASIN that interests you, make sure to save the product details page to a new tab for later.
Note: For the sake of this lesson, let's assume this can of potatoes is a great lead.
Now that we found an ASIN we like, it’s time to find out where we can find it!
Here, this is a “by any means necessary” sort of objective. Any way that you can think of is valid.
And by “Any Means Necessary” what I really mean is “Google The Heck Out of It”.
Google Is Your Friend
In this case, just like many other lifestyle applications: google is your best friend for research.
When you find a website that sells that product, find the best deal that gets you the most margin, and that is really all there is to it!
The real power of reverse sourcing comes after thousands of ASINs, that is when you will be able to sniff the profitable ones like a Great White Shark smells blood.
Note: When you are reverse sourcing, always verify that the products are a match. That means that everything matches the ASIN.
Rabbit Trail Methods
Like I said in yesterday’s session, Rabbit Trails are one of the most important tools to sourcing leads
You can use various techniques to find valuable variants
- Look at the “Customers also bought” section
- Explore the ASINs brand page
- Chase keywords in the Amazon.com search bar
- Anything you can think of that you think might work? Try it out!
Even Ben Franklin had to fly a kite in a thunderstorm to learn about the properties of electricty.
There are millions of ways that you can chase ASINs and find valuable rabbit trails, the key is that you do it thoroughly and consistently.
ASIN Hunting With Keepa
One important thing to remember: You don’t always need the best selling product!
Sometimes it’s better to chase the next best thing. That means finding similar products or even profitable variants if you are lucky.
The best tool for that? You guessed it: Keepa!
Use the sales rank chart within Keepa to find the ranking of items that are similar to those hot items that you already know about.
You can also use Rev ROI to calculate gains for the sale of a specific item. REVROI Factors in weight, quantity, shipping costs, etc. Follow the Google Rabbit Trails. You can even use the Data category of Keepa to find different types of items; it lets you get real surgical results with your search.
Sales Gazer
SalesGazer is an effective way to look at deals from your favorite retailers to source from without annihilating your inbox with spam.
This way you can see all of those deals without turning your email address into a coupon-dumpster and waking up to 1000 unread messages.
I find this incredibly useful as it lets me separate my work from my personal emails, and I can sort of “put it away” when I am not sourcing.
It lets me enjoy all the benefits of being on coupon newsletters without the clutter and hassle of receiving spam from all these retailers.
Flipp
Flipp is a one stop shop for all your major local retailers.It shows all the weekly deals, which is a great way to figure out what's on sale without visiting every store.
It is great for both online and local retail arbitrage. Just use the search bar to find specific items and see if you can track down any deals.
Day 5 Q+A
Any tips for Google shopping?
There are a few extensions that can block given websites on the google search page. That way, you can save yourself lots of time by not needing to see meaningless retailers.
Any way to find full price replens that are still profitable?
Unfortunately, I don't think there is a way to make a perfect system. It is more of a fruit of time.
What are you looking for in an interesting product?
Look at deals like you would as a shopper, and you will develop that gut instinct needed to sniff out worthwhile products.
I have gotten letters from companies who want me to stop reselling. What should I do?
Always share the letters with your attorney if you have one. Unless the letter you receive is from an attorney, they’re just trying to intimidate you.
How do you verify that a sketchy looking store isn’t a scam?
I use trustPilot. I also check their social media accounts and see how legit they are. If they have a phone number, I might call them and see if they actually answer the phone.
Will you get different stores on search and shopping?
Sometimes, it is a great idea to look at both. Only costs you like 10 extra seconds of sourcing.
How do you keep track of recalls and expiration dates?
First, make sure you are insured. If, God forbid, anything happened to a customer who bouight something from your storefront, a savvy lawyer might rope you into the lawsuit and make you liable to damages. You want to be protected if that happens.
Also, just keep an eye on the news using Google alerts.
Why aren’t UPCs reliable?
Just because that can be made by anyone, and anyone can make mistakes, but images rarely lie.
What is the success rate for sourcing?
Honestly? A little over 1%, which is why a lot of people switch to Tactical Arbitrage. However, we embrace the suck and know that is just a part of the business.
How do you deal with order cancellations?
Let’s be honest, they suck and they happen. However I don’t let it phase me. Some tips include things such as changing your IP Address and using a VPN. Also, just find the businesses that do not cancel orders a lot.
Also, a lot of these businesses only care about it when you buy their loss-leaders: discounted items meant to bring customers in their store. If you can find full price items that you can buy in bulk, most of these major retailers could care less.
Why are negative values in Keepa a good thing?
Because negative implies that it is “falling” to the #1 spot.
What is your purchase criteria?
3 dollars profit and 33% ROI and a good sales velocity. I also don’t let those thresholds prevent me from trying out ASINs if I think there is value there.
I would set some soft guidelines that aren’t too ambitious. Also, make sure you avoid spending more than 3%-5% of your capital to test a new ASIN.
How do you keep track of your receipts?
I use a ScanSnap IX 500 and save it to my google drive.
If the Zombies came, how would you continue your OA business?
OA? I’m going full Mad Max if the zombies ever show up haha.
How do you manage restocking your giant replen lists?
A lot of time behind the desk. Outsource when it becomes unmanageable.
I tend to get emotionally attached to my replens; I get disappointed when they fail. Any Advice?
You should be emotionally invested in your business, but not your inventory. If the numbers don’t make sense, we have an obligation to get rid of it for the good of your business.
How do you determine if a product is on a downturn?
You need to read the charts and see if there are any patterns.
How deep have you ever gone on a product?
Most I have ever bought at once is ~300 units.
Should I hop onto a listing held by Amazon?
You can try, but I usually steer away from them.