It’s no surprise that more than 2.05 billion people, which amounts to 25% of the world’s population, go online to purchase products.
The emergence of the global ecommerce industry has taken the modern business world by storm. Not only does it overcome geographical limitations and eliminate travel costs for entrepreneurs. It also provides customers with the exclusive opportunity to compare, purchase, and acquire an item of their choice without ever having to step out of their house.
But there’s one thing ecommerce sellers often find difficult – choosing, procuring, and inventorying products.
Despite the benefits of market viability, specialised niche, and competitive advantage, sourcing these products across different business channels can be an arduous process. You need to ensure not to compromise quality, volume, demand, and price.
Here are four specific ways to source products for your thriving ecommerce business – plus, how to know which one works for your business.
One of the most common methods of sourcing products for your yourself. DIY-ing gives you greater control over your product quality, brand value, and estimated price. It also reduces your dependence on external suppliers, allowing you to lower production costs and innovate over time.
Making products on your own also has a set of practical limitations. The product creation process can be time-consuming and restricted by the availability of skills and resources. Plus, the burden of transportation, shipment, and delivery falls on your shoulders, making scalability a gruelling proposition.
Sourcing your own products may be more suitable for businesspersons that carry a specific skillset or expertise, like jewellers, craftsmen, and hobbyists.
If you think making your own product is too much of a hassle, you can hire a manufacturer to do so on your behalf.
You’ll need to conduct thorough research to select a credible manufacturer from either domestic regions or overseas. Hiring an overseas manufacturer from production-rich countries like Taiwan, Bangladesh, or India should cost much less.
Opting for a manufacturer allows you to retain the same level of quality and price control as making goods on your own. It also lowers your per-unit cost, increasing your potential profit margin.
On one hand, manufacturing products would need you to make huge capital investments. You will need to maintain large inventories, create multiple prototypes, and boost physical infrastructure.
Manufacturing works well for an ecommerce business with an existing product market, a permanent customer base, and a recognised brand identity.
If you want to kickstart your inventory right away, you can get goods from wholesalers and resell them online. Wholesalers usually keep products from a variety of brand lines and sell them at a discounted price.
From a business perspective, such purchases tend to be low risk. You neither have to worry about brand establishment nor fulfil any number of minimum orders.
Sourcing products wholesale may also harbour several disadvantages. As you end up selling products of other brands, you have no choice but to play by their rules. Innovation, quality, and price control take a back seat. You won’t be able to stand out in the crowd. You may also have to deal with multiple supply partners at the same time, making the process of order management a challenge.
Wholesale sourcing can fit your business model only if you prefer to get running quickly through already established brands. If you want to create new products while keeping strict quality control, this method might not work for you.
Considered to be one of the best ways of sourcing products for your ecommerce business, dropshipping can be a potent tool for product acquisition and demand fulfilment.
You only need to take orders from your customers and forward them to your dropship suppliers. These suppliers then ship and deliver the order on your behalf, relieving you from the pressure of maintaining large-scale inventories and incurring needless storage charges.
Yet despite advantages -- like low startup costs, large product varieties, and streamlined sales processes -- dropshipping increases your competition. With similar product lines offered, dropshipping turns brand differentiation a tad bit tougher. You‘re dependent on the dropshipper to supply your product, so you can expect to experience longer delivery times.
The inherent strength of the dropship model makes it suitable for businesses that intend to minimise their startup costs and maximise their delivery options.
The model you select will end up defining your entire business strategy and shaping the future of your digital business.
Regardless of what you settle with, make sure to find legitimate suppliers, manufacturers, and vendors with credibility and experience to minimise risk as much as possible. Research and verify their profile with trade publications, industry associations, and online directories. Exercising such diligence will go a long way in helping you strengthen your foothold in the ecommerce landscape.
To gain better insights into the ways and means of ecommerce, click here.
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