To put it simply, product sourcing is the process of finding products that you can sell through your business. The source of products may be either domestic or international.
It is important for you to ensure that your business is up and running before you begin to source for products. Otherwise, you will be stuck with products that you cannot sell. Some of the things that you should do beforehand include:
· Registering your business company
· Getting all your business documentation in order
· Determining your niche business and market, etc.
Where to Source for Business Products
You can source your products either from wholesale suppliers or directly from the manufacturers. It all depends on what works for you best.
1. Product Sourcing From Manufacturers
Product sourcing from manufacturers is not going to be easy. You will have to prove beyond reasonable doubt that you can maintain the demand. Otherwise, it will not be economically viable for the manufacturers to have a business relationship with you.
It will also be difficult for you to source for products directly from the manufacturers because you would need plenty of capital and storage facility space. However, if you can convince manufacturers of your desired business products to go into business with you, the cheaper buying prices will be great for your bottom line.
2. Product Sourcing From Wholesale Suppliers
Product sourcing from wholesale suppliers is a much easier way of stocking your business. Wholesale suppliers are more likely to provide you with a steady supply of relatively large business stock for prices that are lower than the market average.
Sourcing your products from wholesale suppliers will require lower capital because the volume you can order can be much lower than what is required by manufacturers. The slight drop in profits if you opt for this sourcing method is therefore worth it, if your business is not a large-scale one.
The Dos and Don’ts of Product Sourcing
There are things that you should take serious note of when sourcing for your business products. Caution is always a good thing in business after all.
1. Do verify your product sources.
It is important for you to do enough research on your wholesale supplier or manufacturer of choice. The company you choose to do business with domestically or internationally must be legitimately registered and should have a verified physical address. That way, you will have some form of assurance that the products you order will actually be genuine.
2. Do have backup suppliers.
You should always have a plan B, and even C when doing product sourcing. Things happen. For that reason, you need plenty of backups if your major product sources cannot deliver what you need on time. You cannot afford to disappoint your business clients.
3. Do not do business with irrelevant middlemen.
Always undercut the irrelevant intermediaries. Middlemen will significantly reduce your profit margins. It is possible that their only aim is to make money on products that they have not had any part in creating. For that reason, you should go straight to the source, or as close to the source as possible if you want to make lots of money.
Product sourcing is an important business operation that is central to your success as an entrepreneur. You should therefore take time to iron out all the relevant details of this business process before you launch your business.