Sources Project
The following are tips that will help you in developing strategies that will help you meet the objectives above. There’s no doubt that you will find strategies of your own that work for you, but these are meant to get you started.
1. Keep sourcing new inventory.
Complacency can be the downfall of any retail business. While there may come a time that you are doing well with the products you are selling, you can’t adopt the attitude that it will stay that way. You have to continue looking for new products that will be appealing to your customers to stay relevant – and profitable.
2. Do your research.
It’s obvious that not every product you think will be a huge seller will actually turn out to be. So, it’s important that when you find something that seems appealing and priced at what you can afford, you do some market research to see if it will be a hit with your customers.
3. Follow successful models.
Competition for online retailers is stiff, so you want to sell products that are unique and profitable to your business. But that doesn’t mean that you can’t follow other successful sellers’ business models to be successful yourself. Try ordering a product from one of your competitors. Check the packaging to see who sourced the product. There’s nothing wrong with this kind of competitor research. You don’t have to re-invent the wheel.
4. Check offline sources too.
Just because you are running an online business, it doesn’t mean that you have to do all of your sourcing online. As your business grows, you should consider visiting trade shows where you can meet product manufacturers and establish real-life relationships that will help you with product sourcing.
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5. Look at local manufacturers.
A lot of ecommerce sellers look to China for sourcing because of its reputation as a huge manufacturing locale. But it’s also in your best interest to check out manufacturers that are closer to home. There are some reputable suppliers in the U.S. that are worth considering. The lack of the language barrier will make communication faster and disputes easier to resolve.
6. Consider dropshipping.
Dropshipping is a convenient way for ecommerce business owners to sell products without having to handle storage of inventory and packaging and shipping. When your customer makes a purchase, your manufacturer will ship the product directly to them, so you never have to handle the item. While the dropshipping strategy of order fulfillment is quick and easy, you will have lower profit margins. Still, it’s a strategy worth considering.
7. Cut out the middle-man.
The more steps there are in the distribution chain, the higher the price you will pay for your products. When it’s possible, go directly to the source for purchasing (or as close as you can get). This will help keep your costs down, and your margins higher.
8. Set your own trends.
It may seem like a great idea to sell products that are trendy and selling well for other retailers – and in some cases, it is. However, keep in mind that by the time a product becomes a trend there will likely be a ton of competition out there trying to make a profit from it. Deciding whether you should jump on the bandwagon or not has to be considered carefully. You could get stuck with inventory that doesn’t sell as well when the trend dies down.
9. Don’t always buy in bulk.
Yes, you will get a better price on products when you buy them in bulk, but that’s not a strategy that works in every case. You will end up spending more upfront, and if the product is not a fast seller, you could have your money tied up for a long time. Ecommerce inventory management software can help alleviate the need to buy in bulk by updating you to low inventory, helping you run leaner.
10. Know what your plan B is.
It’s important in any industry to have contingency plans, and ecommerce is no exception. It’s always a good idea to have backup strategies in place for times where your best-laid plans don’t pan out. What if your number one supplier goes out of business? What if your manufacturer raises their prices making it unprofitable for you to continue your relationship with them? Consider these and other scenarios and have a plan for what to do if they happen. You may never need to go to plan B, but if you do, you’ll be glad you were prepared for it.
