Sourcing Products for Your Online Store

Friday, June 19th, 2009 at 6:31 am

Many people start an online business as a way of supplementing the income they earn from their full-time job. The internet has made starting any sort of business much easier but it is not completely without its problems.

Even if you are currently running an online store you still need to put in a lot of effort to maximise profits.

You will first need to decide which products you want to sell. Once you have decided what it is you want to sell you will then need to source the products. There are a few main options that you have available to you and we’ll quickly run through each of these before looking at why you might want to bulk buy wholesale.

Dropshippers

A drop shipper is a type of wholesale company where you can order individual products. These products don’t need to be handled by you and the orders are dispatched by the dropshipper. When your customers place an order on your ebay store or website, all you need to do is pass that order on to your dropshipper and provide them with your customers shipping details.

A big advantage of dropshipping is that the shipping and warehousing of products is handled by the drop shipper. A very important point to remember is that using good dropshippers will not hit your cash flow, as you don’t pay for the goods until you have received payment from your customer.

If you do choose a dropshipper then it’s essential that you choose a dropshipper you can trust. It’s important to understand that the dropshipper will be representing your business. If your customer experiences delays in receiving their products then your business could suffer. Finding the right dropshipper could considerably boost the chances of business success.

Importing

Another option would be to source the products from china or wherever they are made by yourself. This is a more complicated option when you are just starting out and would normally only be used by well established businesses.

You will also need to take care of shipping, transport and storage. Import duty is another factor to consider along with a host of required legislation.

Wholesale

Another more common option would be to bulk buy products from wholesale sources. These wholesalers are normally importers themselves which means you can get good prices without the hassle of importing. Many wholesalers also allow you to buy in smaller quantities, which will help with your cash flow.

Bulk buying products is the best way to save money and increase your profit margins. Drop shipping takes away a lot of hastle with product sourcing but you do pay a premium. A dropshippers prices will always be more expensive than a wholesalers because you are also paying for the service.

The only thing that you will need to consider when bulk buying products is that you will have to pay money up front and also store the stock until it is sold. Warehousing space to store your products and up front investment are the major considerations.

One of the biggest problems that many small businesses have with dropshipping is the lack of control. It’s often difficult to find out accurate stock levels from your drop shipper and this could lead to an unhappy customer if a high selling stock item is sold out.

Your reputation also hangs in the balance because if the dropshipper does anything wrong then it will be you that lose business. If you use a regular wholesaler then you can be in complete control of the whole process.