Whether it’s a single item or an entire line, if your company sells products then you know the importance of inventory. The right products entice customers, and those customers build a business. Without either, there’s no business.
It would be wonderful if a source.products website existed that solves all potential issues with sourcing a product. Until that magical website becomes a reality, these are some essential product sourcing tips that will give your business a competitive advantage.
What is product sourcing?
Product sourcing sounds deceptively simple. After all, it’s just as the name says, right? Sourcing products. Well, the real product sourcing definition is a little more complex.
Once you have established your brand’s identity, it is essential to reinforce that identity by providing products that resonate with your consumers. Product sourcing (or “product sorcing,” as our internet-trained, flying fingers often type it) is all about finding the right suppliers to deliver those goods to your business for your customers.
From identifying suppliers to negotiating deals and managing logistics, identifying and securing the products source is the cornerstone to your specific link in the supply chain.
How to source products
There are many diverse types of product sourcing, and each has its benefits and drawbacks.
Domestic sourcing
Sourcing products from within the United States (assuming you’re based in the U.S.) is beneficial because it often takes less time for products to reach you and the rules and regulations around shipping are (typically) familiar. Additionally, your customers may react positively to a prominent “Made in the U.S.A.” stamp on your inventory. That’s because domestic product sourcing helps support local economies and the environment by reducing carbon footprints.
However, domestic products often have high costs due to higher wages and strict labor regulations in the U.S. In addition, environmental, safety and other regulatory requirements can also raise the cost of domestically sourced products.
International sourcing
International product sourcing often offers a broader selection of products at competitive prices. Global markets can also provide opportunities for a business to expand its customer base beyond the current geographical boundaries.
The potential downsides of international sourcing include complications like language barriers, cultural nuances and longer shipping times. To navigate these complexities businesses must vet potential suppliers rigorously. It is also essential to leverage technology to communicate and build relationships.
Drop shipping
Drop shipping is exclusively the domain of online retailers. Businesses that utilize drop shipping do not keep stock on hand. Instead, they take orders from customers and then send those orders to another company that ships the products directly to the buyer.
Because it eliminates the need for an upfront inventory investment, drop shipping allows businesses to test new product ideas and launch online stores quickly. However, it also poses challenges in terms of quality control and fulfillment efficiency. Businesses must carefully vet their drop shipping suppliers to ensure they are reliable and can deliver a quality product.
Private labeling
Private labeling is when a retailer places its branding on products that are produced by an outside manufacturer or many manufacturers. By partnering with manufacturers, businesses can offer products that are tailored to their target audience, build brand loyalty and gain an edge over their competition.
The potential downside of private labeling is the upfront investments, which can be significant. Moreover, businesses must invest in targeted marketing to create a distinct identity for their consumers. From product design and packaging to pricing and distribution, every aspect of the private label process needs to be carefully considered.
How to source a product: effective strategies
Define your product targets
Who are your customers? What do they want? How can you deliver it to them efficiently and affordably? These are all questions you must answer before even beginning the search for a product supplier.
Once you know the product line you want to create, you must establish a baseline for the supplier of those products, including quality standards, price points, target market preferences and scalability potential. While your immediate needs are most pressing, be sure to include your long-term goals (for your business and your potential customer’s behavior). This can be achieved by conducting market research and analyzing consumer behavior to anticipate future demand.
Research suppliers
The next step is to find your ideal suppliers.
When researching suppliers, online directories, trade publications, industry forums and personal referrals are your best friends. It’s important to remember that, while the least expensive supplier may be an enticing option, it’s not always the correct choice. Instead of searching for the best price (fine, instead of only searching for the best price), be sure to also consider these factors: supplier reputation, track record, production capacity and ethical practices. By putting in the initial research and effort, you’re more likely to find the right suppliers for your business and build long-lasting, trusted relationships.
Plan for disruptions
Once your business is up and running, you want to make sure it remains that way. The supply chain is a finely tuned system where every aspect is linked. That means an issue with one part of the supply chain will likely cause problems and delays along the entire system.
While supply chain disruptions are regrettably inevitable, their impact can be mitigated with careful planning and preparation. Start by conducting a risk assessment to see if you can identify any weaknesses along the supply chain and find ways to strengthen or circumvent them. Create relationships with a variety of suppliers, so you always have a backup when necessary. Also, if possible, try to have a little extra inventory on hand to provide a little buffer when an issue arises.
How to find a wholesaler
As you begin your research into product suppliers (wholesalers), you will likely discover more avenues that are specific to your industry and needs. However, these are some great places to begin your search.
Online marketplaces and B2B platforms
Online marketplaces and B2B platforms offer a wealth of opportunities for businesses to connect with suppliers. Most digital platforms allow you to refine your search using filters, such as by product offerings or best reviewed. Also, most suppliers have a presence on these platforms, from established players to niche solutions, so you have a wealth of options at your fingertips.
Trade shows, expos and industry events
Live events are a great way to connect with wholesale suppliers and gain insights into new products and emerging trends. From large-scale trade shows that cover multiple industries to niche exhibitions focused on specific sectors, you can find several annual events that suit your needs. The displays at these shows are informative, but much of the real action happens at networking events where you can discover potential suppliers face-to-face.
Industry associations and chambers of commerce
From local chambers of commerce to global trade associations, membership has its benefits. When you join an association you gain access to its member directories, specialized supplier databases, regular networking opportunities and a reservoir of educational resources. They are invaluable resources for businesses seeking to connect with suppliers and stay informed about industry trends.
Once you are secure in your product sourcing, another essential link in the supply chain is the warehousing of that inventory. That’s where Texas Motive Solutions can help. We can ensure that our top-of-the-line forklift batteries and accessories keep your warehouse running at peak efficiency.
Additionally, we offer a complimentary forklift fleet performance analysis that can optimize the performance of your forklift fleet. Please reach out to (888) 316-2459 or fill out this form and learn about our services to discover everything that we can do for you.
