Everything You Need To Know About Product Sourcing
Updated: August 23rd, 2021
There’s no question, it’s a great time to be selling products online. In fact, according to eMarketer, global ecommerce sales are projected to surpass $4 trillion! It doesn’t matter what channel you used to start your business, a multichannel strategy is exactly what you need to capitalize on the global ecommerce explosion for product sourcing.
You have products you want to sell. The more channels you can sell on, the more buyers you can reach. Equally important, the more buyers you can reach, the more opportunities for sales. This is where a 3PL company can help you expand your business. Thill is one of the top rated 3PLs in the United States.
Here’s the deal, it’s not enough to just be on multiple selling channels. You already know that. Your products need to connect with your customers, this is why product sourcing is important.
What Is Product Sourcing?
In simple terms, product sourcing refers to finding the products you want to sell in your store, purchasing them from a supplier, and then reselling those same products. If you’re a retailer, no matter if you own a brick and mortar store, your online only, or you do both, product sourcing is a vital pillar to your business.
In present time, there’s a huge amount of opportunities for buyers to source new products. It doesn’t matter what level your business is at, suppliers of all types are going to be ready and willing to get their products on store shelves and online ecommerce, which can feel overwhelming if you’re a buyer. That’s a lot of pressure, but it’s exactly why buyers must understand where they are sourcing their products from, and how that decision can affect their business.
Product Sourcing Concept
The concept of product sourcing is one all online sellers need to understand. In fact, it’s like you’ve been sourcing products already without realizing it. Every successful online seller knows the importance of product sourcing. If you want to build a powerful ecommerce business and brand, you need renewable product sources. Period.
Genuine wholesale providers have a wide range of products to choose from, you need to get to know these platforms well.
It won’t take much research to find that there’s a wide range of wholesalers out there that do have trending products. You can use the online platforms above to start your search.
According to Harvard, 80 percent of product launches fail. When you’re product sourcing, you’re going to lose more times than you win. However, it only takes one trending product to make a lot of sales and grow a powerful brand.
Validating Your Idea
Once you’ve found your trending products, it’s time to see what you can do.
You need to give your products time so you can validate what works and what doesn’t. Don’t forget to ask for customer feedback, you should never overlook customer experience. Product feedback can help you make important decisions later to improve your brand.
Furthermore, this is also a time you want to revisit your brand and evaluate your performance up to now. Who are your current competitors? What selling strategies are your competitors using?
Implementing Multichannel Strategies
If you’re not using the Amazon marketplace, you need to. Amazon is the largest marketplace in the world and it’s a multichannel strategy that puts your products directly in front of buyers. On top of that, Amazon is still the fastest growing marketplace too. It’s a decision that just makes sense.
Selling on Amazon comes with a ton of great benefits, too many to list honestly.
- True marketplace of buyers
- Immediate access to buyers
- Still the largest marketplace and fastest growing
- High converting product landing pages
- Can influence sales using SEO
- Can influence sales using paid ads
- Great platform for feedback
Product Sourcing Strategies
Below, we’ll give you a few product sourcing strategies to help you get started or to enhance your online brand.
- Dropshipping – This is when wholesale suppliers hold the products you sell online and they handle the fulfillment.
- Bulk Wholesale – This is when you buy large quantities of product from the wholesale supplier (often $500 or more). In this scenario, you’re in charge of warehousing products and shipping them.
- Importing – This is when you buy products overseas from manufacturers, where the production is cheaper but shipping can be expensive.
- Small Bulk – This refers to buying small quantities from wholesale supplies (usually under $500). You would be in charge of warehousing and shipping.
- Liquidation – This is when manufacturers have excessive merchandise, usually sold for less than wholesale price. There’s a number of different places you can buy product in lots such as this.
To summarize, all of these product sourcing techniques have pros and cons. As an online seller, it’s up to you to figure out which product sourcing strategies work best for your business.
How To Be Successful With Product Sourcing
If there was an “one fits all” answer, everyone would be successful at sourcing products. Even so, here’s a few things you want to keep in mind.
(1) Research, Research, And More Research
First and most important, retailers need to understand the product. Market research is essential to success; if you’re sourcing products without doing the research, you’ll find yourself failing more than succeeding. Always make sure you do your due diligence.
(2) Samples Or Reviews
This is a great idea, it gives you the opportunity to try a product before you make a big investment. If they don’t have samples, you can always ask to get a free product if you give it a fair review. You get a free product and you get to use it up and close, that’s a great way to get to know a product.
(3) Using Multiple Suppliers
The more suppliers you can do business with, the better. You can learn a lot if you’re paying close attention.
- Is the supplier fair on their pricing?
- Is the supplier timely with products?
- Does the supplier have your best interest at heart?
- Did the product meet your goals?
These fine point details can either make or break a buyer-supplier relationship. Even if a buyer chooses not to build a relationship with a supplier, constructive feedback can be helpful to everyone involved.
Sourcing products for retail isn’t always an easy, straightforward process, and even after a retail buyer has found a great supplier and established a strong relationship, the work doesn’t end there.
Product sourcing doesn’t stop once the product is sourced, maintaining the quality and integrity of the product is essential, as well as strengthening the relationship with the supplier.