Given the technological breakthrough in global logistics, supply chains, and online communications and payment methods, eCommerce has been gaining popularity. It’s expected to account for nearly a quarter of retail sales worldwide by 2025. If you’re planning to make a fresh start in online retail, too, it’s good to know that product sourcing is one of the major challenges. What makes this part of the process such a tricky endeavor?
First of all, think of the stringent competition. Over 26 million eCommerce sites are struggling to attract the attention of more than 2.14 billion online shoppers globally. This imposes the urgent demand for building an appealing eCommerce website and offering potential buyers the best products of high quality and at a competitive price. This may be harder than expected. Why?
An OpenText survey reports that nine out of ten customers expect and require that the goods they buy are responsibly and sustainably sourced. What’s more, 83% would readily pay more for ethically produced items. The trend is particularly dominating among young buyers. Nearly two-thirds of 18–25-year-olds definitely and irrevocably refuse to make any purchases from a company accused of sourcing from unethical manufacturers and suppliers.
Even so, eCommerce is a business option that offers chances for making substantial profits. In 2021 in the U.S. only, online sales generated a revenue of about $768 billion, which is expected to surpass $1.3 trillion by 2025.
Tempted to tap into this impressive potential? You’re at the right place, so just keep on reading.
We’ll discuss how to source products and where to buy products to sell online. We’ll also reveal the steps to sourcing a product that will help you make online sales work for you.
Ready to get started with the nuts and bolts? Let’s dive in.
What is Product Sourcing?
Product sourcing is the process of searching for and acquiring products to sell online. It can be done by either buying or manufacturing the goods.
The process of sourcing goods to sell online aims to ensure their availability in quantities that are sufficient to meet customer demand.
Another important aspect is how to find products that are high quality and cost-effective, so you can stay competitive while maintaining profitability.
Many companies rely on their suppliers to source products for them. This means creating partnerships with suppliers who share your values and priorities and helping them understand yours.
A good understanding of the principles and phases of product sourcing will enable you to avoid falling into pitfalls, such as failing to set quality standards, payment risks, and lack of transparency. You’ll also be able to select and build relationships with the right suppliers.
Having discussed the basics, let’s dig deeper into the details.
How to Source Products to Sell Online
There are a few different strategies you can source products to sell online:
Online Marketplaces
If you’re wondering where and how to source products to sell on Amazon, your website, online store, or any other eCommerce platform, this is the easiest and most straightforward sourcing method.
You can search for products on Alibaba, AliExpress, GlobalSource, and other online marketplaces and find the items that will best meet your customers’ demands. The downside is that sourcing from these sites may involve risks of scams and additional expenses like commissions, which add on top of shipping costs.
Wholesalers
The best way to get low prices is to buy products in bulk directly from a wholesaler or distributor. They don’t charge any commission and they usually ship directly from their warehouse.
The downside is that it takes time because you have to contact them first, discuss prices, and then wait for them to send you samples before placing an order.
Dropshippers
You don’t have to deal with any of the above challenges if you find dropshipping suppliers, who allow you to buy products without keeping inventory — you pay the supplier when customers place orders, and the supplier ships directly to them.
This is an easy way to get started selling without having to invest in inventory upfront. However, it’s important to choose suppliers carefully because there can be high fees associated with dropshipping contracts or late payments that could bite into your profits.
Manufacturers
Are you just starting out with a great idea for a product that may sell well? If you don’t have the resources or expertise to manufacture the product yourself, consider partnering with someone who does – this could be a local company or someone overseas. Working with a manufacturer is the most cost-effective way to get your business up and running without investing in production facilities and the workforce to run them.
A manufacturer will take your design and bring it to life for you. They’ll handle all aspects of production and fulfillment. The best strategy is to partner with a manufacturer within your industry who already has experience making products similar to yours. Just make sure that you find a reliable supplier who can produce high-quality goods at an affordable price and deliver them on time.
The downside is that it takes time (and sometimes money) to find the right partner and negotiate terms that work for both parties.
Trade Shows
Trade shows are an excellent way to find new vendors, as well as test-drive products before buying them wholesale. Also, this is an indispensable opportunity to talk directly with manufacturers, which facilitates negotiating prices and terms.
Attend trade shows and networking events in your industry. You’ll meet other entrepreneurs who might be able to help you find suppliers, contribute with some fresh niche eCommerce ideas, or collaborate with you on projects down the line.
Handcrafted or Homemade Products
Handcrafted products are popular right now because they have an artisanal quality that most mass-produced items just don’t have anymore. Opting for such products would allow you to reach the part of potential customers that value creativity and craftsmanship and would readily invest more in purchasing a masterfully crafted unique handmade item.
Handmade products can be made using any material — wood or metal, paper or fabric. The main thing they all have in common is that they’re not mass produced using machines or assembly lines like most modern products. You can reach out to local craftsmen or search globally.
Potential drawbacks of this method are the relatively higher prices and limited quantities of production.
Print-on-demand Suppliers
This is an easy and low-risk method of sourcing custom products to sell online. It blends features of dropshipping and manufacturing sourcing – you partner with a supplier of white-label products, such as T-shirts, caps, or backpacks. You develop the design and the supplier customizes the items.
You sell them on a per-order basis, which means that you don’t purchase inventory and products in bulk and you pay for the cost of the product only after your customer has already bought it. In addition, the supplier is responsible for order fulfillment and shipping. This means that the burden is taken off your shoulders and you only have to take care of coming up with great design ideas and marketing them to new customers.
The downsides of this strategy are the low margins due to the more costly products as compared with buying them in bulk, limited range and diversity of products, and restricted control over the shipping process.
Yet, if you’re looking for a quick way to get started with a product idea, POD products are definitely worth considering.
Ready to Master Product Sourcing?
The world of eCommerce is vast and filled with potential for success, but navigating the complexities of product sourcing can be challenging. You can find the best products with the right strategy and understanding of various sourcing methods to sell online that align with your brand values and customer expectations.
By carefully selecting and building relationships with the right suppliers, you can secure high-quality products at competitive prices and ensure they are sourced responsibly and sustainably. As eCommerce grows, leveraging these sourcing methods will be essential to maintaining a competitive edge and creating a thriving online retail business.
