How to Source Your Amazon Business with Leaf Sourcing
Need to find products to expand your catalog and sell on Amazon? Learn the leaf sourcing strategy to 10x your product sourcing and sales!
If you're an Amazon seller, you're constantly looking for new profitable products that you can add to your Amazon catalogs. To maximize your product scouting, you should try to utilize multiple methods of product research to help expand your width and coverage. In doing so, you'll gain access and knowledge of profitable products and suppliers to put your Amazon business over the top. One of the most productive and efficient strategies that every Amazon FBA seller should know is leaf sourcing.
In this blog, we'll be introducing you to the methods of leaf sourcing and why you should integrate this strategy into your daily standard operating procedures for your Amazon FBA or FBM businesses.
What is Leaf Source Good For?
For starters, what is leaf sourcing and what is it good for? Leaf sourcing is the method of finding one profitable product then using that first product to find other similar products with identical or similar profit potential.
This may seem a bit complicated at first, but we'll go into more details on how leaf sourcing looks below. If you want a quick example, check out the picture we included above. Starting from Product #1, we'll find its product page on Amazon and then scroll down to the suggested products Amazon provides you. From there, we'll examine all of these recommended products to see if any would be viable options to source.
Leaf sourcing is one of the best strategies to quickly and efficiently scout thousands of products with high-profit potential. After an hour of product sourcing, sellers who efficiently use the leaf sourcing strategy will have a long list of hundreds to thousands of prospective products they can source and add to their Amazon catalogs and begin selling!
Leaf Source Benefits
Leaf sourcing provides a ton of benefits for any seller at any level of experience. First, leaf sourcing is quite easy. While it may take some time and is extremely manual, leaf sourcing when done correctly can lead to hundreds or thousands of prospective profits in a matter of hours. It also provides easy filtering to remove potentially negative or poor-performing products.
The second is that this process can be automated quite simply. If you are a more experienced Amazon FBA seller, you could delegate this task to a Virtual Assistant or employee to take over the responsibilities. Leaf sourcing is easy to do and even easier to teach. Not to mention, all of the time you saved delegating leaf sourcing to someone else saves you time that you can then reinvest into other jobs and responsibilities.
The third is that this process is free! Leaf sourcing can be done by anyone and anytime. All you need is a computer or laptop and internet access to scout products on Amazon. Simply go onto Amazon.com, find your first product, and then start leaf sourcing right away.
With these benefits in mind, let go right into how to use leaf sourcing!
Step 1: Picking Your Initial Product
The first step is to find your initial product. This first product serves as your starting point and represents the "base" of the tree for leaf sourcing. When selecting your initial product, we recommend the following criteria:
The Product is NOT sold and shipped by Amazon. If the product is sold and shipped by Amazon, dump it and find a different product that isn't.
The product should have 3 or more sellers. If the product has less than 3, it probably is a private label product that you won't be able to source.
The product's selling price is at least $20 or more. Products sold for less than $20 usually don't provide enough profits after you pay for the cost of goods, FBA fees, service fees, etc., so it is best to pick a product sold higher than $20.
With these 3 criteria in mind, pick your initial product to start leaf sourcing. For our example, we'll be using this product:
Portable Blender, Personal Size Blender Smoothies and Shakes, Mini Blender 4000mAh USB Rechargeable with Six Blades, Handheld Blender Sports, Travel, Gym (Blue)
As you can see from the figure, this product meets all of our requirements. While the product is shipped from Amazon, the product is sold by Aoozi US and is most likely another FBA seller. The product has 4 offers from different sellers, meeting the 3 seller minimum. And lastly, the product is sold for $29.99, which meets our third requirement and will most likely be profitable if we source and sell this product in our store.
Step 2: Checking for Similar Products
Next, we'll stay on this product page but scroll down to the bottom where Amazon has a row of recommended products labeled, "Customers who searched for "blender" ultimately bought."
This row of recommended products is a potential gold mine of similar products with similar sales prices and profit margins. Amazon does the work collecting all of these alternative products, now it is your job to go through each of these products using the same criteria as before.
We'll look through this row for products not sold and shipped by Amazon, with 3 or more sellers, and that sell for at least $20. As we look through more and more products, the products that fit these 3 criteria can then be added to your list of potential products you can source.
In just 20 minutes, we used our first product from Aoozi US and found 2 other similar products that meet all of our criteria. Now, we have a list of 3 potential products.
Step 3: Creating a Product Tree
By this point, you should have your initial product and a couple of other similar products. While you're at a good place, leaf sourcing doesn't stop here. You continue leaf sourcing by looking at the similar products recommended under the new products you just found!
Our initial product, (referred to as Product #1) was used to find two other products (Product #2 and Product #3 respectively). With leaf sourcing, you can now use Product #2 and Product #3 to find even MORE potential products.
For our example, you take Product #2, for us it was the NutriBullet NBR-0601 Nutrient Extractor, 600W, Gray, scroll down the product page to the recommended products, and repeat Steps 1 and 2. We look through the new row of "Customers who searched for "blender" ultimately bought" and find potential products that fulfill the same 3 criteria we used earlier.
We repeat this process for Product #3 as well. You can keep going even past Product #2 and Product #3 by finding more products then leaf sourcing the new products for Product #4 to infinity.
As you can see, the initial product serves as the base of the tree, each new product is a branch, and these branches lead to even more products. Leaf sourcing provides an endless stream of similar products that you could spend years and even lifetimes exploring. In just a few hours, you turned a single product into an entire product tree filled with plentiful products that you can then use to expand your catalogs.
Source Now, Sell Later
Leaf sourcing should be one of the first strategies you implement and conduct if you hope to get your Amazon business off the ground. By scouting profitable products, you get access to a bounty of options to source your Amazon FBA or FBM business that you can sell and grow over time.
We want to emphasize that this is just one method of product scouting and is the first step. While leaf sourcing is beneficial, it is not the fastest and most efficient method to scout products.
If you want to speed up product scouting, check out Sellgo's Chrome Extension and Profit Finder tools where you can conduct leaf source multiple products at once, automate bulk calculations, and export all the profitable products to a spreadsheet. Not only does this give you the power of leaf sourcing, but it optimizes the entire process to allow you to source and sell products 10x faster!