Do You Have Your Product Sourcing Process Ready?


Product sourcing is the process of locating and choosing goods for your online shop or company. It entails looking for manufacturers or suppliers to provide the needed goods at reasonable pricing. To navigate the market, find trustworthy suppliers, negotiate prices and conditions, and guarantee product quality and delivery, product sourcing takes expertise and experience.

On the other hand, popular or in high demand items are ones that are now among customers. These goods often correspond with prevailing consumer trends, market tendencies, or seasonal needs. Market research, consumer behavior tracking, industry trend analysis, and up-to-date market knowledge are all necessary to identify trending items.

According to the statement, beginning with dropshipping might be a practical e-commerce strategy for newcomers. With the dropshipping business concept, you may sell things without keeping inventory on hand. Instead, you work with suppliers who ship and store merchandise. It enables you to launch an online store with reduced startup expenses and simplified operations.

Beginners may obtain real-world experience running an online business, comprehending client demands, and creating marketing strategies by beginning with dropshipping. They can move on to product procurement, which gives them greater control over inventories and maybe larger profit margins, after they are comfortable with the e-commerce process.

While dropshipping might be an easy entry point for newcomers, it also presents some unique difficulties. These include locating trustworthy dropshipping suppliers, controlling shipment timeline expectations from customers, and maybe dealing with more competition as a result of dropshipping enterprises’ relatively low entrance barrier.

The statement emphasizes the value of expertise, experience, and steady company expansion and, as a whole, offers good guidance for those just starting out in e-commerce. However, to secure long-term success in the cutthroat e-commerce environment, it’s critical to keep learning, adjust to market changes, and seek expert counsel or mentoring.

Where should you start your product sourcing?

The process is generally the same for all product sourcing, regardless of the category you are interested in. While it begins with searching for a product to sell, there are additional considerations to keep in mind. Finding a reliable supplier, ensuring excellent quality, and prioritizing profitability are crucial factors in the process.

Stages of Product Sourcing:

  1. Research on a Target Product:

Before contacting anyone, conduct thorough research on your desired product. Platforms like Alibaba and AliExpress can provide insights into the prices of similar products. Focus on researching top products and sub-top products, avoiding inferior goods that may impact your brand. Make a list of products and their prices, specifying the desired specifications, branding elements, colors, and packaging design. Keep in mind that these details may change based on availability and price when placing an order.

  1. Contacting Wholesalers:

Contacting wholesalers is an advantageous step to avoid the need for product development, which can be time-consuming and costly. Wholesale channels offer a wide range of products similar to what you are seeking, and they may even provide higher-quality options with lower investment requirements. Building good relationships with wholesalers can provide valuable insights into market trends and innovative products. However, it’s important to be aware that wholesalers typically sell in bulk to other buyers, potentially increasing competition in buying and selling the products.

  1. Working with a Manufacturer:

Collaborating directly with manufacturers can result in cost savings as you eliminate intermediaries. Manufacturers are also likely to offer better prices. However, it’s important to consider manufacturers’ minimum order quantities (MOQs). If you are a small business, meeting these MOQs can be challenging.

  1. Visiting Trade Shows, Conferences, and Exhibitions:

Attending trade shows, conferences, and exhibitions is another effective way to source products. These events provide opportunities to stay updated on new technologies, products, and services. By offering new products or trends, you gain a competitive advantage. Interacting with manufacturers and vendors at these shows allows you to gain insights and build relationships. Additionally, experiencing and testing new products firsthand can enhance your understanding and decision-making.

By following these stages of product sourcing, you can navigate the process effectively and increase the chances of finding the right products for your business.

What does it mean to "source" a product?

Product sourcing requires time and expertise to be successful. It is essential to have a thorough comprehension of the product you wish to source and its potential profitability before beginning the process. An error at this juncture can have serious consequences for your business. In addition, you must consider market demands, minimum order quantities (MOQs), product quality, supplier effectiveness, shipping costs, and tariffs. Here is a summary of the fundamentals:


Market Demands:

Verify that there is sufficient market demand for your products. This should align with your chosen target market. Scaling your business and introducing new products may be challenging without enough demand.


Identify trendy products that can boost your business. However, not all trendy products may be suitable for your store, so it’s important to select the ones that align with your business concept carefully.

To help guide your product sourcing, ask yourself questions such as:


  • What product best represents my business?
  • What are the needs of my ideal customer?
  • What would my customers like to see in my store?
  • Which products are selling well on other e-commerce platforms?
  • Which trendy product is best for my store?
  • How can I make a product trendy?
  • Can my ideal customer afford the product?
  • Do I have the budget to purchase my preferred product?
  • What other products can I upsell alongside a specific product?

These questions will assist you in making informed decisions while sourcing products. For small businesses, finding products with a proven sales track record is crucial. A simple Google search can help you identify popular or best-selling products.

Make a Savvy Budget:

Begin by researching the prices of the products you intend to source. Check the selling prices on major e-commerce platforms. Additionally, factor in potential tariffs if you are importing the product. Estimate the expenses associated with shipping the product to your desired location. Adjustments or expense reductions may be necessary if your estimated costs exceed 40% to 50% of the retail price.

Budget Wisely:

Once you have a list of potential products, research your competitors’ pricing. This will help you estimate your expenses and establish a budget before contacting suppliers or initiating the product-sourcing process. A general rule of thumb is to estimate the cost at around half the retail price.

Consider the following three basic budgets:

  • Product Sourcing Budget: Set a budget to facilitate negotiations and cost management. Being mindful of your budget during negotiations allows you to identify suppliers that align with your desired quality and price range. Keep in mind that good quality usually comes with a reasonable budget. Avoid setting unrealistic expectations by understanding the pricing range for similar products.
  • Shipping or Transportation Budget: Allocate a budget for transporting the goods to your desired location, whether it’s a warehouse or your own premises. Manufacturers typically do not provide free shipping, so research moving companies, trucking companies, and postal services to determine the most cost-effective option. Explore possibilities for sharing containers or transportation costs with other vendors.
  • Tariff or Taxes Budget: If you are sourcing products overseas, you will likely encounter tariffs at the port of entry. If you do not have a resale certificate, you may also need to pay taxes. Be prepared to allocate a budget to cover these expenses.

Contact Suppliers:

Once you have your product list and budget in place, it’s time to reach out to suppliers. You can find suppliers through platforms like Alibaba, trade shows, conferences, and warehouses, or by referring to guides on how to source products without inventory. If you’re struggling to find a vendor, consider contacting your local Chamber of Commerce.

For small businesses with limited budgets, look for suppliers that:

  • Are easy to work with
  • Understand the needs of small businesses and accept limited order quantities
  • Maintain good communication and respond promptly
  • Provide suggestions for similar products with good profit potential and quality
  • Offer installment plans for product purchases
  • Provide discounts for prepayment or offer delivery discounts after a certain number of products

If your budget doesn’t allow you to purchase a specific product you desire, consider starting with dropshipping. Once you’ve saved enough money, you can source the product and begin building your brand. Remember that there are always options for success.

Request Samples:

Before making a significant purchase, testing the product’s quality is essential. This applies even to dropshipping, as you are responsible for the quality of products sold under your brand. Requesting samples helps ensure a return on investment and allows you to evaluate the product’s suitability for your business. Remember to budget for sample costs and shipping expenses.

Requesting samples is a common practice, as it helps protect investments and ensure customer satisfaction. If the product is your own creation, it’s important to verify the materials used by the manufacturers.

By following these steps, you can navigate the product sourcing process effectively and make informed decisions for your business.

Assessing potential suppliers through samples is generally a sound practice. Timely handling and delivery of samples indicate reliability, while delays may suggest the supplier is sourcing the product rather than having it readily available. In such cases, it’s advisable to find a more dependable supplier. When deciding between trade shows or visiting suppliers directly, considering the cost-saving benefits of avoiding shipping expenses against the investment required for tickets and travel is crucial. For small businesses, prioritizing cost-saving initially allows for future investment in developing products under their own brand. Requesting multiple samples enables product testing in-store, influencer collaboration, or pre-sales, serving as a valuable strategy to identify winning products. It’s worth noting that some suppliers may initially claim to send only one sample, but stating that you have multiple businesses to send samples to can often result in obtaining multiple samples. Being savvy and making informed decisions in product sourcing is vital for achieving business goals while staying within budget constraints.

You are the buyer; you have the power to Better Terms.

As the buyer, you hold the power to negotiate better terms with suppliers, even if you are a small business. It’s important to recognize that not all vendors receive the same prices, and suppliers often offer special deals to different buyers. Learning effective negotiation strategies can help you secure better prices, improved quality, favorable shipping terms, and more.

 The first strategy is not to be afraid.

Don’t hesitate to negotiate. Remember, you have the purchasing power as the one with the money. Suppliers understand the significance of small businesses in keeping their operations running since larger corporations often have their own suppliers and manufacturing capabilities.

    Learn how to Communicate

Effective communication plays a key role in negotiation success. Learn the language of business and present yourself confidently. Attending trade shows, conventions, and exhibits can provide valuable insights into effective communication techniques. Observe how experienced vendors dress, present themselves, and engage in conversations. Demonstrating knowledge and conducting yourself professionally earns the respect of suppliers.

Change Professions, know you are the supplier

Put yourself in the supplier’s shoes. Consider what you would like to hear and see if you were the supplier, and then present your business accordingly. Suppliers are interested in selling products but ultimately win the negotiation game if they can exceed expectations. Show that your business is profitable without revealing specific numbers, and be prepared to discuss your research and experience to support your negotiating position.

    Reach a Mutual Place of Benefit

Strive for a mutually beneficial outcome. If you’re new to negotiation or lack knowledge of numbers, focus on finding a middle ground where both you and the supplier can benefit. While price is important, explore other aspects open to negotiation, such as installment payments, shipping prices, packaging, warranties, future discounts, and bulk discounts.

Have a Supplier List Ready

Maintain a list of multiple suppliers. Avoid relying on just one supplier. Making suppliers compete against each other can be advantageous. Compare not only prices but also the range of services offered by each supplier. Don’t hesitate to show quotes from other suppliers as evidence of your serious intent.

Focus Groups  

Utilize focus groups to gather valuable feedback. Avoid using family members as they may not provide objective opinions. Instead, select a group of strangers to evaluate the product, including aspects like price, packaging, instructions, and overall satisfaction. This feedback allows you to make necessary improvements and adjustments.

Review Your Suppliers 

Regularly review supplier performance and keep a list of pros and cons. If any significant issues arise, it may be time to consider working with another supplier. Address concerns promptly and communicate with the supplier to resolve any problems. Waiting until after the product is obtained may be too late to negotiate better terms or address issues.

Maintain backup options by keeping a list of other potential suppliers. Companies often close or merge, so having alternative suppliers readily available is beneficial. Remember to prioritize building long-lasting relationships with suppliers to avoid repeating the entire sourcing process.

Ultimately, always make decisions that are in the best interest of your business.

This guide gave you the basics for product sourcing. Of course, you will learn more about it as you start sourcing. You may even have better tips or outcomes. Just be aware of each step, keep your evidence of communication, request estimates, verify each supplier, stay alert for new products, and don’t just limit to one product. There may be others better than the one you are focused on. Do your research before ordering any product, ask for samples, and verify with a focus group.   

Latest Posts

What is Off-Page SEO?

What is Off-Page SEO? Off-page SEO describes the techniques used to raise a website’s search engine ranks and broaden its online presence. It aims to

Read More »