Product sourcing: What small business should know?
The thought of product sourcing may seem overpowering to you as a small business owner. But don’t worry, it is not as difficult as you think.
The concept is simple: source for products at a wholesale price and resells at a retail price.
Whether you are a small business owner just starting out or you are already established, you need a steady supply of products. If not, you may run out of inventory and thus disappoint your customers.
Below are three things you should know about product sourcing for your small business:
- Marketplace research
The first thing you need to know about product sourcing as a small business owner is that you need products that sell. In order to discover products that sell, you need to carry out a research. The product must be the right fit for your buyers.
So, the question is:
How do you know products that sell? Find the answers below:
A. Check out your competitors
Take a look at what other sellers are doing and simply copy their product sourcing strategy. Look at the products they are selling. Do they sell multiple products together? Do the products add value to one another? What brand of product are they selling? Is it popular in your country? Etc. Look for what you can borrow from them to use in developing your own strategy.
B. Don’t look for popular brand products
As a small business owner, you can be tempted to search for branded products that are popular in your country. These kind of products are usually highly competitive and tightly controlled by the manufacturer. The margin also can be low. Look for branded products that are not well known. You will get a good bargain from the manufacturer.
C. Visit trade shows
Selling things online does not mean you should lose touch with the offline world. Visiting a trade show is a great way to discover new products and what people want to buy. You will come across many suppliers with their good products. Trade show happens every year. To discover trade shows you can visit, simply type your “product + trade fair” on Google and you will see some trade shows you can attend.
- Use a product sourcing agent
Dealing with international suppliers you don’t know can be challenging. One, you don’t understand their culture and language. Secondly, you need to know their import and export laws. A product sourcing agent knows where to get the best supplier of your product. It can take you weeks or months to research for the product you will like to sell, but a sourcing agent already know who sells what and they will happily connect you. This will save you lots of time and energy.
A product sourcing agent knows how to help you communicate your idea and product in different cultures and languages. They will help you to do quality checks before the goods leave the factory. This is a very important aspect of product sourcing. If you order for good products and you receive bad products, there is little or nothing you can do about it. A product sourcing agent will help you monitor the products before they are dropshipped.
You also have an upper hand when it comes to saving money. Sitting behind your computer and asking for the price may get you a foreigner’s price, but using a product sourcing agent from a place like China can get you a lower per unit cost. A good sourcing agent you can use in places like China is Lazpanda.
- Avoid buying in bulk
Although buying in bulk can get you a lower price unit, you also need to pay upfront for your products. But what happens when the products do not sell as fast as you planned. This could mean that you will be tying down your capital, which would have been useful in purchasing other types of products.
If you don’t sell fast enough or you don’t even sell at all, it may lead to loss, depending on the number or quantity you ordered.
Instead of buying in bulk, buy in small quantities of say 100-200 unit order to test and see how it performs in the market before ordering in bulk.
Buying smaller quantities like this can also help you to get the products at good prices. This is where you need the help of a sourcing agent as discussed in the point above. A product sourcing agent will help you to search for local supplier market where they can get the best price for the low quantity you want to buy.
Small businesses are changing the way they source for products. They are saving time, money and effort in searching for products on the internet by using product sourcing agents, especially in China where you can get good products at cheap prices.
You would not need to search for product suppliers on your own or buy at a higher cost because you are a foreigner. You will get what you want to sell at top quality too.
How are you sourcing your products? Let’s discuss in the comment section below:
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