What is product sourcing? What are the ways in which you can source products online?

Product sourcing is a method a company uses to amass the products it wants to deal in. businesses can source products from different means such as wholesalers, manufacturers, print-on-demand services, or drop shipping suppliers. but if you are a beginner to product sourcing there might be some questions you need to know the answers for- how product sourcing works? Manufacturer, wholesaler, or drop shipping supplier which one is the best option for your company to source from? How will this affect your business?

Your product sourcing strategy serves as your business’ foundation and has a significant impact on your business success. So, to help you to select the right product sourcing strategy here is a product sourcing guide.

There are three common ways in which you can source products:

1. Wholesalers: Wholesalers are businesses that buy goods and services in bulk from the manufacturers and sell them in smaller quantities to both online retailers and brick-and-mortar. Product sourcing from wholesale is far easier to manage than sourcing from manufacturers. Generally, you buy products in bulk from the wholesaler but in smaller quantities than what the wholesaler buys from the manufacturers. It’s still a profitable transaction for your business as you can decide the profit margin on the products. Most wholesalers list their products on websites providing product sourcing as an option which makes it easier to find them online and the product you are looking for. Wholesalers on online platforms make it easy for businesses like yours to grow and expand.

2. Manufacturers: they are factories that make the products from the raw materials. Working directly with a manufacturer is a way to source products if you know the right manufacturer to buy from. You can even look for a manufacturer if you have a unique product idea, it could be a new product that’s not available in the market or a variation of existing ones. But if you are thinking of dealing in new products, it’s important to validate the market demand and be confident that it will be a success. You will also need to manage the design process and create prototypes in partnership with the manufacturer which can be a complicated, lengthy, and expensive process. Manufacturers are more focused on manufacturing than selling due to which they often sell in substantial quantities in four or five figures. This can be challenging to make direct trade relations with manufacturers.

3. Drop-shipping: this isn’t just a way to source products but it is also a method of fulfilling customer demands. In drop-shipping, you partner with a supplier and list their products on your online store. When a customer places an order with you the supplier gets notified. The supplier then ships the order to the customer in your place. There are two ways in which you can do this. First, you strike a direct partnership with the wholesalers who provide drop-shipping services, and second, use an online platform that connects you with drop-shipping suppliers.