Product Sourcing for Online Selling
Deciding what to sell online comes with the challenge of knowing where to get them. Having a supplier means so much in keeping your online business running. If you haven’t figured out yet how sourcing products to sell works, you have some serious planning to do.
Identifying a reliable supplier is important in helping you ensure the quality of products and easy inventory replenishment. It provides you the security of the availability of products for as long as you need them.
What is product sourcing exactly?
Product sourcing refers to the process of finding the products to sell. It requires the planning of what, where, and how you are acquiring such products.
This phase consists of thorough research about the target market, the niche, costs, price comparisons, supplier hunt, and proper negotiations. Here, you will need strategies to procure products at efficient costs successfully.
There are several methods to choose from in sourcing products to sell. Some business owners combine various ways. However, it’s up to you on which approach will work best for your online business.
What to consider in choosing your products
Depending on what type of product you sell, logistics and sourcing can impact your decision. That’s why you need to ask yourself these questions before deciding what product to sell.
Is it easy to ship?
Fragile products like those that are made of glass and other vulnerable materials can be a bit tricky to sell. They will require too much care upon shipping, which can cost you more since they require secure packaging. Also, big-sized items can cost you more since they have bigger measurements. These are some physical restrictions you want to consider.
Are there several sources?
Think of when a supplier decides to stop its operations, how are you going to continue selling? You must consider the availability of options to keep your business running. This also lets you compare market prices, which can help you pick the best supplier to go for.
Are your products seasonal?
The problem with seasonal and trendy products is that they don’t last in the market. Once they’re not as popular, the sales will cease. You need to be smart in the number of seasonal products you’d want to sell. When consumers lose interest in them, you are going to shoulder the financial loss.
- Are you tapping a niche market?
Niche segments manifest more likeliness to succeed. Serving a particular niche market makes it easy to create awareness and convert customers. The market is not that diluted, making it an excellent market to tap.
Sourcing strategies for your online selling
Here are the effective methods in sourcing the products you want to sell online. You can choose one or combine multiple ways to source your products successfully.
1. Retail arbitrage
Retail arbitrage refers to buying off discounted merchandise from retail stores and reselling them online at a higher price. Any physical stores that offer heavily discounted products can be your source. Be it an outlet store, Walmart, Target, clearance stores, liquidation stores, and more—they offer the best bang for your buck.
However, shopping at retailers can be crucial since discounts are not forever. Even more, some products can never return in stock once they’re gone.
2. Online arbitrage
This strategy works similarly as retail arbitrage except that it’s done through online shopping platforms. E-commerce is continually growing across the globe, with 1.8 billion active online shoppers.
Online sales are more convenient since you are only a few taps away from receiving your inventory. You can scour through popular online marketplaces like Amazon, Alibaba, eBay, Craigslist, Shopify, ThomasNet, FGMarket, Wholesale Central, etc. Having various options makes it easy to compare prices and find suppliers that perfectly match your needs.
3. Manufacturers for Private label
If you want a custom product made just for you, a private label may work best for your business. You don’t have to produce the goods since you will source them from a manufacturer. You can then re-brand the items according to your liking and market it as your own.
The beauty behind having a manufacturer of your products is that it costs less and it has less competition. If you need an extensive guide about setting up a product label, you can find out more in this guide.
In dropshipping, you don’t need to have physical storage of your products. You rely on dropship suppliers to manage everything from storing, packing, and shipping items on your behalf. If you are a total newbie on selling with a lack of physical storage and enough manpower, this could be your perfect option.
There are several dropshipping apps and platforms to choose from. These include Oberlo, Printify, Spocket, Syncee, and more. However, despite dropshipping’s popularity and convenience, it has lesser significant profits since you pay the dropship suppliers for their services.
This sourcing strategy refers to the direct acquisition of products in bulk from a manufacturer. This direct bulk purchase of items from a brand means lesser costs on your end.
Manufacturers offer a much lesser price since you bought goods on a large scale. You minimize paying for the marginal profits from resellers when you directly purchase from the brand. This method allows you to quickly skyrocket your earnings since the more you buy, the more you save and earn profits.
In addition, what will help you save more is by using up some negotiation skills to decrease the upfront costs. You need to work on your persuasion skills to establish a good relationship with a supplier and hopefully get more massive discounts.
6. Trade shows, conferences, and exhibitions
These events are promising avenues to source products that are new to the market. You can use this opportunity to look for goods that show great potential in the consumers. Most of the businesses participating in such events seek retailers that they can supply products to.
To look out for local trade shows, conferences, and exhibitions in your area, keep tabs on your community for upcoming events.
7. Auctions, Thrifts shops, and liquidation stores
These fall under the category of retail arbitrage. However, they are worth the highlight since they offer such promising potential for your business.
Auctions are rare, but you can find unique goods that can sell a triple of your buying price. Similarly, thrift shops have the cheapest items that you can resell for much higher prices. Lastly, liquidation stores offer great discounts because most products for sale are up for discontinuation.
These three avenues will work best for you if you have a good eye for profitable products. You must also accept the stock limitations since most of the products found here are last-stocks.
8. Virtual outsourcing
If you don’t have much time at hand and can afford someone to do the sourcing of products, you can definitely do so with outsourcing. This means hiring a virtual assistant who can scour through the online marketplace for you to find suppliers.
While this can cost you a bit more due to the added manpower, it frees you up from other responsibilities. This is especially beneficial to business owners with a full-time job on the side.
These are among the most popular and effective strategies used in sourcing products to sell for most novice business owners. You don’t have to stick to the conventional ways of sourcing products. As long as you think a particular strategy works for you, that’s good enough to start from.
However, you need to prepare ahead and keep alternatives ready when you see one starting to lose its effectiveness. With that in mind, here are some product sourcing online courses to guide you throughout: