How to Source Products to Sell Online

Product sourcing is simply finding the products that you want to sell. At first it can feel overwhelming because you could sell just about anything…

But it’s also really exciting because you could sell just about anything!

If you’ve got analysis paralysis, take a deep breath. Product sourcing is a step-by-step process and our research will take you through where to go and how to get there.

The first step is figuring out what to sell online. A great starting point is to think about these questions:

• What type of business are you and where are you located?
• Who’s your target audience and how will you add value or solve their problem in a way your competition doesn’t?
• How much storage will you need?
• How will you ship your products?
• Is there a demand for the product? 

The answers will help you zero in on practical products that’ll help you meet your goals.

The second step is to ensure your website is ready to sell products. A business license and website set up before queries is essential, because any reputable supplier will want proof of business from you.

If you don’t yet have a website, don’t panic! Nine times out of 10 people find setting up an online store is easier than they thought, especially with high-quality ecommerce website builders that can save you time and money.

The third step is to prepare your questions for all the suppliers you’ll contact:

• Who are their current customers?
• Do they actually make the products or do they subcontract?
• When can they send samples?
• What are the order turnaround times? Is there a minimum order?
• What are the shipping and per unit costs? Any hidden fees?
• What is their return policy, especially for flawed products?
• What are their ethical policies?

The answers will help you determine logistics and their reliability.

And keep shopping around! Compare vendors and prices. Do your pricing strategy for each option. And always negotiate – you’ve got many supplier choices, and your supplier knows that.

We recently interviewed Ben Schein, founder of Ovo Electric Bikes, who had some comforting words on his own experience of reaching out to potential suppliers:

“Reaching out was definitely intimidating at first, but then you realize all companies exist because they want to sell their products, so they’re always much more welcoming than you think they will be. There were definitely some no thank yous and no replies, but I heard back from almost all of the manufacturers I reached out to!“

You can read our full interview with Ovo Electric Bikes for more helpful insights from Ben!

The next step is looking at your product sourcing options. Ready? Here we go!

DIY product sourcing appeals to hobbyists and smaller businesses. The products have got uniqueness built right in! If you love working with your hands, and you’ve got time, DIY products could be the way to go.

On the downside, you might struggle to meet a big order. With smaller supply orders you’ll probably pay a higher rate for materials. There’s storage and assembly space to consider. And because DIY products take time to make, they must be sold at a higher price than mass-produced goods.

Where you find source materials depends on what you’re making. But you have plenty of choice, including mass production suppliers, second-hand and recycled material suppliers, and smaller businesses and flea markets, etc.

DIY product pricing strategy works differently because you have to add your own salary and the branding and packaging on top. Even paying yourself a tiny rate can make a “reasonable” price challenging! Fortunately, if you choose a good niche with undeniable skill, you’ll be able to charge that premium price because unique products made with love are appealing.

Every day we consume products from well-known manufacturers like Kelogg, Shermin-Williams, and Ford, and there are benefits to using them. They eliminate the DIY stresses of scalability and packaging. The products can often be customized, and manufacturers know about compliance with product regulations.

But, you’ll pay for everything up front and may face set-up fees. It might take them months to make that first order. And they could make similar products for your competitors.

If the manufacturer is making a product you designed, be certain your IP is legally protected. And consider licensing your product so they do all the work while you collect royalties on each unit sold.

If manufacturers appeal to you, American manufacturers provide better working conditions, quality control, and ease of accessibility. Try dedicated manufacturer search engines including Maker’s Row and Thomas Net.

Or you could approach the factories directly. An existing product will have the manufacturer and location listed right on the label. Easy as pie!

Still hesitant? Consider hiring a sourcing consultant who will bring you into their network of qualified manufacturers. Though you pay for them upfront, they often save time and money in the long run.

Wholesalers bulk buy and sell. They give you a reduced price-per-unit and in return you do the work they don’t want to do – splitting inventory into individual orders and shipping.

There is risk involved. You pay for all the products upfront, and there are no guarantees you’ll sell all the products on. Bulk-buying means you’ll probably need more storage space, increasing your costs.

Start with online marketplaces like Alibaba, enter your desired product, and they’ll give you international manufacturer options with price transparency. Shopify’s wholesale marketplace Handshake gives a more stylish array of products.

Whichever direction you go, consider white or private labeling.

With white labeling the wholesaler brands the product with your label, and in private labeling you customize the wholesaler’s product before they slap your label on. Even if you don’t choose either of these a wholesaler can often add branding and packaging, so it’s best to ask.

Dropshipping is arguably the least painful way of sourcing products for your online store. You’re the marketer and curator of products and your supplier handles the manufacturing, packaging, storage, and direct shipping. It’s scalable, easy to get started fast, and there’s little money upfront.

However, because dropshipping is so easy there’s a lot of competition. Profit margins can be smaller. And if there’s supply chain problems, you get the backlash from customers since you’re the face of the product. Dropshipping requires a lot of time tracking your target customers and adjusting the new products you offer.

We’ve got a helpful article on how to find dropshipping suppliers. Always check reviews of suppliers first. Dropshippers have subscription fees, so check on those alongside product price and customization options (which avoids your rivals selling the exact same products).

Trade shows are good because you physically handle the products before anything else. You can also check supply options and compare products and prices in real time. Negotiating is easier because the competition is right in the next booth, and reps want to return home having closed deals.

But don’t get caught up in the moment and place an order without doing your research on the company and market prices!

It’s best to research the trade show first, looking for one with a good reputation that’s nice and broad. Two very popular ones are the Magic Las Vegas trade show, a fashion trade show with 70,000 attendees and 4,000 exhibitors, and the Global Pet Expo which boasts 15,000 attendees.

The Trade Fair Dates website can give you a heads’ up on trade fairs held all over the world.