Sourcing, in the present world where millions of suppliers and hundreds of B2B sites are having their online presence, it still sounds a bit adventurous task, and to be honest, it is The right sourcing can make your business achieve greater heights, and if not done correctly, it can get you unexpected setbacks. Starting from trends forecast to study market demand till the time goods are received, it has several stages that must be well studied and researched properly.
What is Product Sourcing?
Product sourcing is the process with two activities; shortlisting the products and purchasing the same from trustworthy source like suppliers or manufacturers. The complexity of the process depends on the type of product you are sourcing, who your target customers are and how competitive your market is?
How to do product sourcing?
Process of finding the best product to sell as per the trends is an exclusive experience for every seller. There are set rules and methods to do product sourcing but the paths are different due to many relevant reasons. Let’s go through this process one by one.
Analyze Market Trends
Demands in the market keep on changing, and it is due to the change in the latest trends and demands by the customers. Make sure you plan your inventory accordingly so as not that your products turn outdated with the change in demand and pattern.
In fact, to survive in the market finding answers to the following questions should be a continuous effort from time to time.
- What kind of products are flourishing in the market?
- Why a certain product fit into your customer’s lifestyle?
- What the market demand?
- What product exactly is to be sourced?
- How much quantity is required to be sourced?
- Are there any potential limitations your product has?
Product Sourcing Research
This involves locating potential direct source suppliers or manufacturers or wholesalers. Verify the company and investigate it thoroughly. You have choice to do general online search, through B2B online selling platforms, trade fairs, manufacturers, wholesalers or directly follow a sourcing expert.
Manufacturers have two options for you; can either showcase their standard stock with some customization as per your requirement or can produce custom goods as per your specifications.
Wholesalers simply show the products from their existing inventory they have sourced themselves or from the inventory from somewhere else. Chances of any customization to the products is nil.
Online Marketplace is an e-commerce website like Amazon where you have choice of selecting the product or services provided by multiple Amazon sellers as third parties It too requires endless efforts to find a product and search a sourcing supplier from the multiple choice you may have.
Product Sourcing Companies helps you to find sources for products in demand at a competitive cost and certain qualities as per your specifications. They have their trusted contacts directly with the factories, manufacturing units etc.
Every source has advantages and disadvantages depending upon the attributes you are looking for in your product. You need to decide if you would like to deal with one source or company rather than many people.
Following points will help you in your decision-making process:
- Would you like to immediate access to a wide selection of inventory?
- How can you compare prices to negotiate bulk purchase discounts?
- Are you getting assistance with production and supply?
- Does the sourcing company have the ability to show you more products?
- Do they have capacity to manage any change in the process?
- What is the start-up cost?
- Are they equipped to guide for paperwork and contract?
- How much they are ready to negotiate?
- What is the minimum order quantity (MOQ) and will you be able to meet that?
Evaluate your supplier on all your requirements.
Do not hesitate to clarify few crucial points while you are in the process of evaluation:Total cost of production.
- Shipping cost.
- Any hidden charges.
- Timelines and conditions to create the product range.
- Timelines and conditions for shipment and delivery.
- Control over packaging.
- Contract and terms with termination clause.
- Negotiation and discount.
- Support and regular flow on information and progress of the order.
- Minimum order quantities (MOQs)
Profit Forecast
Once you have finalized all the points and compared the price, run a profit forecast. It means you are doing projection of your future earnings after considering all the expenses.
Sample Order and Full Order
If you find the sample order to be perfect as per the delivery terms and satisfactory for your requirement, next step is to place your full order.
Wrapping up
This means packaging plays an integral role in the entire supply chain management and sourcing process. It protects products from damage during transit and allows for their efficient distribution.
Final thoughts on Product Sourcing
A lot of advice given in this article is focused on sourcing products, but it’s not limited to that. If you want to make money online in any capacity, you need to market whatever you sell.
It’s not just the profit that comes from winning a bid and making a sale that makes product sourcing worthwhile. It’s also the time that you save in not having to manage an inventory or deal with other hassles of logistics. You require a company providing end-to-end solutions, so that you can focus to expand your business.
If you’re looking for a way to grow your store, product sourcing should be top of your list. It is one of the best ways for a business to keep searching for more products and suppliers to remain competitive in the market.