The success of any e-commerce business depends on a few key factors, and product is the important one. You have to make sure that the product is sourced timely and shipped to the buyer if you don’t manufacture them yourself. But product sourcing is no small feat, mind you. You’ll find a ton of different products in each category, and choosing the right one that fits your needs best can be challenging.
To make things easier, we’ve put together this article on how to source products and where to source them from. Before we get down to the nitty-gritty, take a moment to evaluate the quality of the internet service at your home because running an e-commerce store can get pretty hard if your internet isn’t reliable. Also, you’ll need a fast internet connection so you can respond to customer queries in time, source the right products quickly, and keep an eye on your competitors.
Consider switching to Cox Internet because of its high speeds, free nationwide hotspots, and other value-added features that significantly improve your daily usage. Contact Cox customer service to learn more about pricing and availability. All this so you can focus solely on growing your business. With that said, let’s get into how you can source the products. Read on to know more.
Product Sourcing Techniques
Sourcing refers to finding and acquiring products locally or from a B2B platform. This only applies to businesses that don’t manufacture their products and are resellers. You can source products in three ways, which are described below.
Dropshipping
One of the simplest ways to source products is via Dropshipping, which is more of a product fulfillment method that also fulfills the sourcing part. To do this, you’ll have to find the supplier with the right product, and then you can add these products to your store. The customer visits your online store and places an order, which goes straight to the Dropshipping source. They’ll pack up the product and send it directly to the customer. It’s ideal for businesses that don’t want to manage their inventory and would rather focus on other aspects of the business.
However, it’s quite difficult to stand out in the dropshipping business because the entry barrier is low and you’ll find many people doing this. It’s not all bad though, and you can pick a less-crowded niche that appeals to you so you have less competition.
Wholesalers
This one is more of a traditional sourcing method. You look up the sellers and products, buy something in bulk, and get it delivered to your business. It’s significantly different than Dropshipping because you have to maintain and actively monitor your inventory. Any oversight or negligence could either put you in a lot of debt or overstock your inventory, which will need more manpower and space to keep.
If you choose this route, you can always start small and test out the waters first before diving into it. If it all works out and you think there is room for growth, you can expand later by re-investing the money you earned from the business. Another benefit is the low price per unit as most wholesalers offer discounts if you buy in bulk. Plus, you can find some manufacturers that let you put your custom name on their products.
Manufacturers
Alternatively, you can try manufacturing your own product in-house if you think you’re up for it and you’re dealing in a super-specific niche. The first step here is the product design and then building a prototype based on those specifications. You’ll have to source raw materials and process them yourself into finished products. This works best for those who have an original product idea that hasn’t been done before.
If you can’t do everything in-house, you can also work with some manufacturers that offer custom solutions to businesses. But it’s pretty difficult to retain exclusive rights to the product, and someone can easily come up with a better version of your product and work with the same manufacturer, which might hurt your business.
Choosing the Right Product Sourcing Strategy
Consider the following things before choosing any of the above-mentioned product sourcing strategies.
Dropshipping sources
This route is most suited for those who are just starting out and have limited capital. This way, they won’t have to worry about maintaining inventory and handling the packaging and shipping. However, there is a lot of competition in Dropshipping because of lower costs and lenient entry requirements.
Wholesalers
If you’re already a seasoned veteran with a considerable customer base, you can switch to this product-sourcing strategy. Keep in mind that you’ll have to set up the supply chain yourself and handle shipping as well. However, the profit margins in wholesale are generally higher than in dropshipping.
Manufacturers
If you have significant expertise in selling products and an original idea, you can manufacture the product in-house. The initial cost of entry is higher than other sourcing techniques, but so is the profit margin, if you successfully pull it off.
Conclusion
These are the three main product-sourcing techniques that you can use to start an online business or expand your existing one. Make sure to do thorough research when you’re selecting the product, and try out a few samples before buying in bulk. Choosing the right strategy is important, but you can always make adjustments later on if something doesn’t pan out.