Product sourcing are supply chain management techniques applied by retailers seeking the purchase of various merchandise. Establishing a product sourcing system will definitely save retailers a great deal of time and effort. There are several product sourcing solutions available today including:

Drop Shipping
A supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to wholesalers, who then ship the goods directly to the customer. The retailers make their profit on the difference between the wholesale and retail price.

Local Sourcing
A supply chain management technique in which the retailer obtains stock products from garage sales, swap meets, consignment stores, charity events, live auctions, estate sales, etc.. Local sourcing requires very little risk or start-up capital.

Small Bulk & Large Bulk Wholesale
A supply chain management technique in which the retailer obtains stock products in small (approximately 500 items or less) or large quantities. Merchandise is purchased and stocked until resold to consumers.

Liquidation, Closeouts & Overstocks
Supply chain management techniques refering to the process by which a company (or part of a company) is brought to an end because merchandise is not selling well, a relocation, a fire, bankruptcy, going-out-of-business, customer returns, as well as surplus of new merchandise. The assets and property of the company are redistributed and sold.

Overseas Importing
A supply chain management technique refering to the process by which goods are purchased and tranferred across international boundaries or territories.

The strategies explained in this article are for helping retailers create a customized product sourcing solution while developing a profitable niche market. The retailer must first decide which products to sell before locating the appropriate sources.

Deciding What Products to Sell

Remember, just because you really like the product or have lots of experience with it does not mean it will create more sales. Learning what products to sell is heavily influenced by market research. Furthermore, market research is very important in determining your selling success!

Market Research

Researching the market consist of several tasks you will want to perform for greatly improving your success rate. The tasks below should be completed thoroughly for ensuring the best products are chosen to be sold. Additionally, proper market research will provide more information on product pricing, supply & demand, profit potential, finding a niche market and overall risk factor.

Product Pricing

Search online stores such as; Yahoo! Shopping (shopping.yahoo.com), MSN Shopping (shopping.msn.com), Shopping AOL (shopping.aol.com), and Shopping.com to check the latest prices on specific products. Browse the categories if you don’t have any particular products in mind.

Supply & Demand

It is a good idea to check the supply and see how much competition is out there. You can use the same shopping links above to view any possible competitors. Yahoo! Shopping will tell you how many products, in how many stores, are listed on their site. Demand is just the opposite of supply, so you want as much of it as possible. The more demand you have, the more people you will have looking for your products. There are a few different tools for giving you an idea of current product demand. The tools are free and can be found at:

Google Adwords Keyword Tool
https://adwords.google.com/select/KeywordToolExternal

Yahoo! Search Marketing Keyword Tool
http://inventory.overture.com/d/sear...ry/suggestion/

eBay Pulse
http://pulse.ebay.ca

eBay’s “What’s Hot?”
http://pages.ebay.com/sellercentral/whatshot.html

eBay Marketplace Research
http://pages.ebay.com/marketplace_research/index.html

Profit Potential

Basically, your profit potential is the amount your sell the product for less the amount you paid for it. Of course, you will have other business expenses (advertising, shipping, site hosting, etc.)

Finding a Niche

A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. Products with some demand and relatively little supply offer the perfect foundation for creating a niche market. The best approach involves focusing on one niche category (ie; one of the Yahoo! Categories), and offer a wide selection. That way, you can focus on becoming the most specialized resource available in that specific area. For example, instead of offering general sporting goods, offer the widest possible selection of sporting footwear.

Below are a few very helpful tools for improving market research campaigns. The prices for these programs are well worth it for serious Internet entrepreneurs.

Auction Inspector ($39.95 one time fee)
http://www.auctioninspector.com/go.php?aff=harrisguide

Terapeak.com ($25/mth.)
http://www.terapeak.com

SellerPower.com ($20/mth.)
http://www.sellerpower.com

Overall Risk Factor

This should be self-explanatory and almost goes without saying. Basically, the more money you allocate to purchase products from wholesalers, the more amount of risk you are creating for yourself. There is even more risk involved with smaller profit margins.

Deciding Where to Purchase Products

Determining where to purchase products is almost just as tricky as figuring out what products to sell. After the tough decision of what to sell, retailers again face difficulties deciding where to purchase products to sell. Hopefully, you can use one or more of the ideas below to find lots of profitable products for resell!

Trade Magazines, Associations and Shows

Trade Magazines & Publications
[size="1"]TradePub.com – http://www.tradepub.com
Free Trade Magazine Source – http://www.freetrademagazinesource.com

Trade Associations
[size="1"]Consumer Action Handbook - http://www.consumeraction.gov/trade.shtml
Federation of International Trade Associations - http://www.fita.org

Trade Shows
Trade Show News Network – http://www.tsnn.com
Biz Tradeshows - http://www.biztradeshows.com
Trade Shows – http://www.tradeshows.com

Manufacturers

Retailers

Local Library

Global Sources

Garage Sales and Swap Meets

Online Directories of Wholesalers

HarrisGuide.com – http://www.harrisguide.com
Wholesale Central – http://www.wholesalecentral.com
GoWholesale – http://www.gowholesale.com

eBay and Other Online Auction Sites

Yellow and White Pages

YellowPages.com – http://www.yellowpages.com
SwitchBoard – http://www.switchboard.com
Super Pages – http://www.superpages.com
Yellow Book – http://www.yellowbook.com
White Pages – http://www.whitepages.com

Some Final Thoughts…

Competition

Do not forget about your competition. Understand it, especially supply (you can’t compete in a saturated market) and demand (how many people are looking for the product?).

Remember… not every wholesaler will be willing to do business with you. All you can do is be prepared before contacting them. This includes having your business license and tax resale ID. Also, be ready to tell them the size if your business, the start date, full contact information and the products/ services it will offer.

Staying Ahead

Staying ahead is keeping a good eye on your niche market and the trends that go with them. Watching trends involves realizing what is popular and in demand today, while forecasting what will be popular six months or a year down the road.

Online Search Engines

It is very difficult finding true quality wholesalers using search engines. Most search engines are flooded with fake wholesalers and most real wholesalers do not advertise. Search smart if you do decide to use search engines for seeking product suppliers. Do not use generic search terms such as “wholesalers” or “wholesale suppliers”. Instead, use individual product names and model type wherever possible. For example, try searching for “Nike shoes distributor” or “wholesale supplier of Hanes socks”.

Conclusion

You should now know several simple methods of determining what products to sell and how to locate products to sell. There are different ways to go about locating product sources depending on your business type and the products you wish to sell.
No single product sourcing method (drop-shipping, small bulk, etc.) should be used to support your entire business. Using multiple product sourcing methods is the real key to success.

Product sourcing is a continuous practice and not a one-time process. Product demand is constantly changing because what people want now is not necessarily the same as what they will want three to six months from now. The end result of all this research should be one or more products that fit into a niche market - products with some demand and relatively little supply.

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Thomas J. Harris, JR
HarrisGuide.com
Small Retailers Product Sourcing Solution

I think that is a great article for anyone getting into e-commerce. Good job Harrisguide.

Although it was a review for me I did benefit from a few links that you posted in the article. Thanks.

not bad,thanks the information,anyway.

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HongKong Electronics :p Wholesale
Ski || PS2/PS3 || Mp3/mp4
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wow.. Good job... Thanks

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Yes, thanks for the info harrisguide.

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English Chinese Translator | Chinese Translation Services

Very useful information.
We are also a professional Sourcing & Purchasing office for foreign companies worldwide. Please feel free to contact me for any question related !

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This is Justin Yuan from Changsha, China. I like making friends. I'm working with www.bizinchina.cc, which is a professional business service company offering Purchasing, Sales, Sourcing, Company Investigation, Quality Control, Pre-shipment Inspection and other business services etc. We're your ' office' and 'eyes' in China!

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Thanks for sharing this info.

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English Chinese Translator | Chinese Translation Services