It can be a taxing chore looking for products that you can sell at a profit. Additionally, the task of finding the best suppliers and ensuring consistent quality are in themselves, tough cookies
What is Product Sourcing
Basically, product sourcing is what you do to find profitable products to sell. It involves finding reliable manufacturers and suppliers that can provide you with quality items at competitive prices.
Think of it as finding a store where you can buy great products at low prices that you can then sell somewhere else for a profit.
It is, however, easier said than done.
To be good at product sourcing, you’ll need to have research skills to find reputable suppliers with a good track records and pricing, and negotiating skills to get the best possible deal to help you get great margins.
How to Source Products
You are not limited to one, and can even mix and match these methods.
Create your own. You come up with your products and sell them. The good thing about this is that you will have products to sell that are uniquely yours.
However, the challenge with this is that you will need to find your own raw materials and a warehouse to store them. If you have the needed resources to scale with this method, then you’re set to go!
Dropshipping. You list the products on your website and once a buyer pays for an order, the supplier sends the item from their warehouse directly to your customer. You don’t stock, package, or deliver the products yourself.
The catch is, you have no control over the way the products are delivered and you have significantly bigger competition from other stores selling the same products from the same supplier.
Wholesale. Look for a reliable manufacturer who can provide you with quality products at a lower wholesale price. You can even have them manufacture the designs you created yourself!
However, you will need a bigger budget to purchase from wholesalers since they normally have a bigger Minimum Order Quantity (MOQ) for orders.
How to succeed in product sourcing
Do market research
First off, you need to know everything there is to know about your product and the target market you wish to sell to.
Product Analytics. What are the figures from your stores telling you? Is there room for growth or would you be better off selling alternative products?
Market Demand. What feedback are you getting from channels like social media? What is your audience interested in and what products are they actually buying?
Search Trends. What are people looking for when they perform Google searches and how can you take advantage of these?
Find potential suppliers
There are a ton of possible suppliers that you can find online. However, you need to consider these factors before settling on one or two.
- Track record
- Payment methods
- Delivery performance
- Trade shows attended
- Responsiveness to inquiries and requests
- Manufacturing capabilities
There may be other factors not included in this list that may come up when you personally do your research. The bottom line is that you need to feel secure with the arrangement you’ll have with your supplier.
And oh, try to find more than one supplier to ensure that you never run out of stocks once you start scaling.