Product Sourcing Ulitmate Guide

Product sourcing is the primary stage in the importation business.

Many businesses try to find high-value products from international markets. Retailers, import-export, e-commerce, and manufacturing businesses need to source profitable products.

But, it is more than just product sourcing for your e-commerce business. Without having the right quality products at competitive rates, you cannot run a successful business.

Thus, we will try to cover the basics of the product sourcing process.

We will also discuss how sourcing companies can help your Shopify store pursue quality products by allocating a dedicated sourcing agent.

What is Product Sourcing?

Simply put, Product Sourcing is a straightforward process to find marketable inventory for your business that you can sell.

Product sourcing is the process is not about where the source is either international or domestic. It is all about making products available for your business all the time.

If you are a new business, keep in mind that your business must be running before sourcing for products.

Otherwise, you cannot sell, and the products might stay unsold in the storage for a long time. Some of the things you must have before product sourcing;

• All business documentation
• You must define your niche business and market accordingly, etc.
• A well-established product sourcing method

Suggested reading: Sourcing vs procurement

The Product Sourcing Process

Sourcing a product is not just searching for the cheapest supplier on Alibaba or any other forum and signing an agreement.

Almost every business person knows this already. Many do not recognize that the sourcing process starts before searching for a supplier.

Here are some of the influencing steps you must consider in this context;

• Try to find the exact practices that can lead to successful sourcing.
• Try to know about all the pieces of the supply chain that fit together for a quality product.
• Figure out how a sourcing agent can benefit you to the maximum extent
• Enlist the merits and demerits of sourcing both domestically and internationally.
• Now to search the multiple suppliers from domestic or international markets.
• Having decided on the supplier, carefully analyze every subprocess from finding a supplier to shipping the products.
• Now you will be able to use each step in making smart management decisions.

The right process can reduce your expenses while improving your efficiency, while the wrong one can lead to delays, unnecessary costs, and frustrations.

Suggested reading: Top 20 us sourcing agents

Types Of Product Sourcing:

You can source your profitable products in many ways. You can apply one source or more at a time. It is up to your requirements, and you are to decide. Well!

Most e-commerce businesses use a combination of the three methods, which are as follow:

1.   DIY Products Or Services

Have you cut your hair, sewed your clothes, and managed your investment? If yes, it is the simplest example of DIY products or services. DIY means “Do It Yourself.”

If explained, DIY means you do a task or make goods yourself instead of buying from a store or an artisan.

The most significant advantage of DIY is that you have no or fewer competitors. On the other hand, you must consider some factors like time management and scalability.

Pros:

• You get to learn a new skill for your handmade products business.
• I have sold many DIY products. It is a low-cost option for small retail businesses. I got MORE PROFITS with less investment.
• Creating your own products can help you be creative to beat other smaller businesses offering the same products.
• Handmade products have a huge demand in the business online with a good profit margin.

Cons:

• A wholesale supplier running e-commerce business often deals in bulk quantities. Thus, it is not suitable for wholesale suppliers. 
• You may need to conduct market research and product research, which is time-consuming.

2.   Working With A Manufacturer 

This option is the best for sellers who do not want to assemble or manufacture their products themselves. 

You can scale your business. Speaking differently, it allows you to add more products to your own brand. Working with a manufacturer allows you to manage your time and do business on a higher level.

On the other hand, you are supposed to make bulk investments.

How Can You Find a Manufacturer to Make Your Product?

Finding reliable suppliers for your own products are very crucial. To find a supplier, you need to figure out your requirements, keeping in mind your target market.

You can follow the below methods to find potential suppliers.

• Find Potential Supplier on Online Marketplace

You can browse different online marketplaces to find potential manufacturers. Alibaba, AliExpress, DHgate, and Global Sources are some of the existing marketplaces.

Research different suppliers with a request for proposal (RFP) document to get their input. Analyze the responses, read reviews, and order samples for an in-person inspection.

Here you can find the best-selling product at a reasonable price.

Suggested reading: Alibaba vs Dhgate

Suggested reading: Aliexpress VS Dhgate

• Attend Trade Shows

Attending trade shows is another method to find reputable suppliers. Trade shows let you discuss many factors with the manufacturer in person.

You can talk about the selection of raw materials, costs involved, quality control, shipping challenges, etc. So it’s always a nice place to mingle in search of new private label products, manufacturers without an online presence or product ideas, new to your target market.

In short, an in-person meeting helps manufacturers understand exactly what specifications you want. This way, you can have complete control over the production.

Suggested reading: Best 30 items on Dhgate

3.   Hiring A Drop Shipper

It is a hands-off product sourcing method. It allows the wholesalers to list goods to sell from a reliable supplier and pay for these when they are sold.

You need not handle the products at all. You can start an online store and access a variety of products.

I am a dropshipper CURRENTLY running a PROFITABLE store. Everything counts on the supplier. I just make sales and TAKE my products. Very easy to do.

The issue with this method is; you have more competition because several wholesalers are selling those products. Further, you will enjoy a lower profit margin.

Suggested reading: Best Dropshipping Agent in China

4.   Working With A Wholesaler

Purchasing products from a wholesaler is a proven model to find trending products.

I have made deals with many WHOLESALERS. The good thing about them is their pricing. You can MAKE bigger profits by just margining your prices effectively.

You can find wholesale Chinese suppliers in trade shows and on eCommerce platforms. Many wholesalers often give great discounts, plus they also have trending products in stock.

Thus, independent retailers who have their retail stores in flea markets can purchase products at once.

In short, you can buy high-quality products from wholesalers at low prices. After that, you can sell products locally at good profit margins.

Where Can You Find Wholesale Products To Sell Online?

If you want to sell your products online for your wholesale business, then there are various forums. These forums provide interaction between buyers and sellers in bulk purchases and sales.

Some of them are trusted and recognized worldwide and are discussed as follows.

• Alibaba.Com

Alibaba Group Holding Limited, recognized as Alibaba, is a Chinese company specialized in e-commerce.

This company provides Business to Business (B2B), Business to Consumer (B2C), Consumer to Consumer (C2C) sales services through web portals. It also offers services such as electronic payment services, cloud computing services, and shopping search engines.

It helps a diverse array of business-related to various sectors around the globe. It falls among the most admired companies by Fortune.

• Salehoo

SaleHoo is an online directory of wholesalers for online retailers, dropship suppliers, and eBay sellers. On this forum, you can find numerous manufacturers, wholesalers, drop shippers for any product you want.

This forum is only for dealing in the wholesale market. So, with its usage, you can grow your business exponentially.

You can search for more than 1.6 million products from over 8000 suppliers.

• Wholesaleforum

You can find more than 125000 registered members on this forum with almost 500 online active users at a time. This forum deals with nearly every kind of profitable product.

Their emphasis is on the security of online sellers, buyers, and their personal data.

E-sources, the largest sourcing company, is used for the verification. You can further find a trend analysis of the products and can discuss it with the suppliers.

• Cellpex

If you are doing an online business in electronic devices and cell phones, then Cellpex is the best option. But you should know that it is a wholesale platform offers these products. 

The layout of this website is very good, and you can search out any device of your choice. It is a niche type wholesale platform and is the best choice for electronic and smartphone merchants.

Suggested reading: Sourcing websites

Suggested reading: Best 20 USA Sourcing Agents

5. Hire a professional sourcing agent

Sourcing Agents are professionals who can create a product sourcing strategy for you. They are the experts in sourcing products.

They also help a small business grow and become more profitable. They can perform duties in various industries and work settings.

What Does A Product Sourcing Agent Do?

A sourcing agent is a specialist in;

• He has vast experience in providing strategic sourcing services.
• He has a strong knowledge of Goods Manufacturing practices.
• He has comprehensive knowledge of Access and SQL Technologies.
• He is familiar with the sourcing and procurement procedures.

Suggested reading: Top 7 China Trade Shows

How to Source Products For Your Business?

Products sourcing is a business in which you consult your clients about what and from where to buy. It may look straightforward for small procurements.

Although it is a profitable business, you are supposed to make some strategic moves.

1. The Market Research:

I always do the MARKET RESEARCH. It helps me find:

• What product is trending?
• How many sales can I generate?
• Is the product suitable for my store or not?

All eCommerce retailers must do adequate research on the existing product. Check factors like the minimum order quantity, how much inventory upfront you need, online demand, etc.

Remember, every successful eCommerce business starts with good research. So, make sure you follow more than one product sourcing method to carry out an in-depth analysis.

2. Identify a Profitable Niche:

In market research, you end up with a list of potential products, buyers, and competitors.

When I am conducting a MARKET RESEARCH, I land the BEST NICHE with the competitive profit. It indicates how much REVENUE I can make by just selling the products.

Businesses work direct when they are looking for niche products, but it’s harder to manage. However, experts recommend focusing on the smallest possible niche to start. Once it works, you can add more categories to your online business.

Suggested reading: The Profitable Products To Import From China

3. Keep your products meeting legal requirements:

You may also need to consider legal formalities before sourcing items. It includes tasks like ensuring product quality, paying customs duties, etc.

Handmade products sold at craft stores usually get discounts in taxes. But every product crossing the border needs to undergo verification and documentation processes.

Many times, sourcing companies handle this task on your behalf. Product sourcing companies often have a separate team to tackle legal processes.

4. Order a sample

Make sure you evaluate manufacturers based on their work ethics and other factors. One such aspect is ordering a product sample. Dropshipping supplier often give a product sample to assess quality.

Some wholesale manufacturers don’t provide this facility. But if they have high minimum order quantities, you should ask for the sample.

You don’t have to face this situation when working with product sourcing companies. They can ensure product quality by visiting factories.

My Tip: I choose 5-10 suppliers. Get SAMPLES from them to TEST the quality. And finally, make a TRADE if I am sure about the QUALITY.

5. Paying Close Attention to Technology:

In the current era, you cannot deny the importance of technology. At least you must have purchasing and procurement management software to handle your sourcing business.

It will help you in many ways and streamline your essential workings of the team.

Suggested reading: Sourcing agent

FAQs

Conclusion:

In this article, we had tried to uncover all the aspects related to product sourcing. We started from the importance and got through the complete product sourcing process.

Further, we discussed the sourcing companies and how these can benefit your wholesale business. Consequently, the more money you invest upfront, the larger your profit margins will be — called ‘economy of scale.’

Hence if you are finding answers to product sourcing-related questions for your online business, you will find this article very valuable.

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