How To Source Products To Sell Online [4 Easy Steps]

Before exploring how to source products to sell online, let’s brush up the fundamentals.

We all want that golden ticket– the one product that will sell come rain or shine, despite trends or seasons. It turns out, what stands behind the rumored golden ticket, is actually comprehensive product research and successful product sourcing.

Product sourcing means the process in which a business or seller attains a product to sell.

There are different methods available for sourcing products, and your business’s specific needs should be considered when choosing the right method.

When exploring the best selling online products, it’s crucial to remember to look at the entire process holistically. A seemingly great product will not perform well in the wrong market, and a poor fulfillment solution can impact your bottom line.

The process of sourcing a product entails product research, where and from whom to purchase inventory, shipping, fulfillment methods, marketing, and more. As long as you are a seller with the right tools and reliable data to back up your decisions, you are well on the road to sustaining a successful e-commerce career.


Step #1: Decide On The Sourcing Model

At the outset, it’s really important to decide on the sourcing model. Different models of product sourcing may include working with a wholesaler or manufacturer, drop shipping or DIY products.

Non-Inventory Based (Dropshipping)

In this model, you don’t need to keep the actual stock of the goods you sell. Dropshipping is one of the non-inventory based sourcing models.

Drop shipping is the process in which a seller virtually sells a product before actually buying it from a supplier. Once the item is sold to a consumer, the seller purchases the item from a third party seller or manufacturer and asks that third party to ship the product directly to the customer. If the seller was able to sell the product at a higher price point than it was purchased for, then the seller has made a profit.

There are pros and cons to keep in mind when considering drop shipping as your sourcing methods. On the one hand, you will depend on a third party. Dropshipping implies trusting someone else to ship the product quickly and safely, and because you are not physically handling the product, you cannot be sure the product is in the condition as described on your store page. If it’s not you can receive negative feedback and reviews from unhappy customers.

On the other hand, drop shipping makes logistics more simple. You probably have enough to manage as it is, and you can benefit from no longer needing to oversee the logistical burdens of handling packing and shipping inventory.

Drop shipping may not be a viable sourcing model for Amazon online sellers (due to obvious reasons). On the other hand, if you have your own independent online store or sell online from home, then drop shipping is an option worth considering.


In this model, you need to keep the actual stock of the products you sell. Buying from wholesalers or manufacturers is one of the inventory based sourcing models.

Wholesale refers to the process of purchasing products in bulk, with the intention of packaging or distributing the goods to retailers.

Because the products are sold in bulk to the retailers, the retailers can charge a higher price to customers than they paid for the product from the wholesaler, thereby making a profit. Wholesalers can either specialize in one kind of product, or they can sell a variety of products. Those that do not stock competing products are called distributors.

Buying wholesale is a popular option for many e-commerce sellers.

Whereas many online sellers prefer buying from factories or manufacturers. Though you should note it can take time to build long-lasting relationships with manufacturers.

Step #2: Find Your Products/Product Line Or Category

Once you have decided on the sourcing model, time to shift your focus on products, product line or category. Ideally, you would like to pick a product line that will deliver good:

  • Margin
  • Volume
  • Frequency

A holistic approach to data

Purchasing your products is all well and good, but how can you be sure the product will sell?

Sourcing products means establishing a consistent flow between the product itself to the research, shipping, and fulfillment phases. It’s just not enough to have a great product if you didn’t do the research property and are selling it in the wrong market.

Likewise, you need to ensure your shipping method makes financial sense with your entire process. In short, each stage in the process of selling a product online needs to be backed up by actionable data. Through data, you can feel confident you have made the right, most economical and profitable decisions.

Insights you can act on

Luckily, you do not have to navigate sourcing products alone. With a tool like a sales estimator, you can not only learn how to source products based on actionable insights but also know to evaluate your current status and ensure you’re working with the most profitable sourcing methods.

Gaining access to key data points like the marketplace with the highest profit opportunity, product demand level, expenses, and potential profit can be crucial to the overall success of your business and can help to avoid deadstock.

With this information, you can judge whether or not that supplier that is trying to convince you of a hot product is being truthful or not, eliminating the need to be dependent on others and allowing you to make informed decisions regarding your business.

Know how product performance differs in each marketplace

Sellers can make better sourcing decisions by understanding the market for every product offered. Each marketplace is different, and a product that performs outstandingly in Amazon Germany may have no market at all in Amazon U.S. Using a product research tool means sellers can learn what products are popular and in which marketplace, thus reducing the risk associated with international expansion. Through a more comprehensive understanding of opportunities in different markets, sellers expand their e-commerce business and drive more revenue– which is ultimately the goal of every seller.

Explore fulfillment options

A product research tool like Algopix means you can explore fulfillment options with ease, and without hours of research on your end. Just select the country where your Amazon warehouse is located (the location where you will ship your products from), and insights will be tailored for that specific country for both Amazon and eBay. There is also information provided for shipping carriers which are based on different countries and will deliver estimates for major carriers like USPS, Royal Mail, and Australia Post.

Step #3: Find & Shortlist The Suppliers

Once you have decided on your product line or category, time to find product suppliers for your online store.

As discussed earlier, such suppliers can either be wholesalers or manufacturers.

If you have opted for dropshipping sourcing model, then you can use a free tool like Oberlo to easily find & sell drop shipping products or suppliers.

Alternatively, you can use the following platforms to find manufacturers or suppliers:

Ideally, you should only be working with suppliers who have:

  • Good ratings & reviews
  • Quality certifications
  • An independent R&D team (will help in customization & private labeling)
  • At least 5 years of experience
  • Tie-ups with delivery partners (for cheap logistics rates)

For the inventory-based sourcing model, you can either use the aforesaid platforms or explore your city-side wholesale market. That is where most local retailers get their products from.

Physically visiting & sourcing from wholesale markets means fewer chances of fraud. You can physically see, inspect & buy the products instantly. Not to forget, the logistics turnaround time also reduces to a great extent.

Here is a list of popular wholesale markets in the USA:

Steps #4: Negotiate & Finalize The Deal

Once you have shortlisted the suppliers, it’s important to negotiate the following terms & conditions:

  • Pricing
  • Product quality (Set a benchmark)
  • Shipping time
  • Logistics provider
  • Packaging & branding
  • Payment mode & structure
  • Returns & pilferage

It’s really vital for you to negotiate the aforesaid terms & get it on the papers. Having done that, in case of a dispute, you will be on the safer side.


Sourcing products to sell online is not that difficult as it seems. With the aforesaid step-by-step guide & the right tools, you can do that with ease.

Remember, sourcing products is a process, albeit a very crucial and important one. Sellers need to spend their time wisely in this stage and utilize the right tools that will deliver actionable data insights, without costing an arm and a leg. When product sourcing is done right, sellers can increase their sales volume by analyzing competition, understanding shipping, and fulfillment options and optimizing pricing strategy.

Further recommended read: How To Increase Sales On Amazon

What do you think of the aforesaid steps to source products to sell online?. Please comment below.

This is a guest post by Dani Avitz, an e-commerce expert & COO of Algopix