What is product sourcing?
Product sourcing is the system of researching, finding and then buying the product that you plan to sell in your business. Many retailers source their products from local and international sources.
Make sure that you do not start sourcing your products before fully establishing your business. Before sourcing, register your company, ensure that you have legalized and accredited your business documentation, and have a business plan firmly in place.
Some retailers source from wholesale suppliers, while others go straight to the manufacturer.
Sourcing your products from the manufacturer
If your business is a new one, it is recommended to cooperate with a wholesale retailer, because with manufacturers you cannot buy small amounts, and a big amount of order might be stocked
in your storage room. The manufacturer will expect you to stick to the same package of order in the future, which means that you will have to induce relatively large sales. You need a lot of capital,
and also stock room for storing the products.
Sourcing your products from wholesalers
If you are opening a new business, it is recommended to source your products from wholesale suppliers. Wholesale suppliers give you an easy way, fair process, and agree on small amounts of
purchase. They tackle the time-consuming and complicated job of finding manufacturers, studying their products, placing orders, and doing quality control. Wholesalers already work with thousands of suppliers, so if you ask for a specific product, you will get the options from a multitude of sources. So, instead of you, as a retailer, doing further research, the wholesale supplier will offer it to you.
Working with wholesalers offers you:
Brand information– Introduction to high quality and trendy products.
Large shipments – Instead of buying small quantities from different sources, you can buy a big quantity from the same wholesaler.
Dropshipping – Dropshipping will let you sell products without having to buy it in advance.
Whenever your customers demand the product, the wholesaler will deliver it to you. This will save you lots of stock.
Easy accounting – Make payments simple by only needing to pay one supplier instead of different ones.
What does wholesale mean?
Wholesale products are the products bought from a distributor or a manufacturer in large quantities and then sold to smaller businesses who in their turn sell it in the market, whether
through retail or online shopping, to the public. The wholesalers cooperate with different manufacturers to assure that they have the trendiest products in different qualities, which makes it very easy for a retailer to choose from, instead of running from one manufacturer to the other.
Make sure your wholesaler is trustworthy
Before making any business deals, you have to ensure that the wholesaler you are cooperating with is legitimate and trustworthy. Note that there are a lot of wholesalers out there who are fake suppliers, and scam their customers only to steal their money. One the other hand, there are a lot
of legitimate wholesalers who give bad business practices, which means they will delay your shipments for so long, sell you cheaper quality than the one advertised, and take forever in refunding you your money. To be on the safe side, there are certain aspects you have to check before making any deals:
1. Address: If the address of the company is reachable for you, you can pass by and check for any sign or advertisement, or a visible office. If the company is in a house, it is not advised to cooperate with them.
2. Phone number: When getting the phone number of the wholesaler, check if it is a landline or a mobile. Most of the time, a mobile number indicates that it is not a real business.
Both cases, try to call the number. Someone should answer with a professional greeting including the company name.
3. Website and social media: Any legitimate business will have its website or at least a social media presence. Ideally, their account or website should be updated. If you see an inactive page, take it as a red flag.
4. Reviews and feedback: Check Google and web forums to find reviews and feedback about the company.
5. Finally, always trust your intuition. If something feels strange or suspicious, just back off. In all cases, it is advised to start working with a supplier in small order, just to test their
quality and accuracy.
Factors you should consider when placing orders
After choosing the right wholesale supplier, some other factors needed to be taken into consideration when placing your orders:
1. The quantity of the order: Note that it is always better to be sold out than to have stock of unsold products. Through trial and error, you will understand the demands of your customers, and order the exact needed amount of products.
2. Storage room: Ensure that you have a storage room where you can stock your products and keep track of inventory.
3. Upcoming holidays: Make sure that you order seasonal products months before the season comes, to assure that the shipment is right on time.
4. Trends: Research and find the trending products, and make sure to include them in your order along with the basic and classic products.