Product sourcing is a means of online selling utilized by most online sellers, willingly or otherwise. It involves an online seller locating a company selling goods on wholesale and finding a customer for the said goods. When a deal is agreed between the seller and the buyer, the seller doesn’t have to handle the goods as they are transferred directly from the company’s warehouse to the buyer. The money from the buyer goes to the seller who in turn pays the source of the goods.
Put in a basic way, product sourcing is a term used to define when a person finds goods to resell through his/her own business and other links. Product sourcing is a chief part of many online sellers and understanding the sourcing process may be the difference between profits and loses.
Scammers in product sourcing
Locating a real true wholesaler can be difficult due to the huge number of scammers. As such, finding a true wholesaler requires deep research and comprehensive background checks. Scammers will try to convince online sellers that they are the genuine wholesalers. They will then act as a link to the actual wholesaler and then hike the wholesale price in the process. This denies the wholesaler the profit he/she deserves and the end user ends up getting the product at a higher price.
Product sourcing techniques
The secret to running a successful product sourcing is finding a renewable product source. That way, a stable and constant stream of goods is guaranteed. Some of the products sourcing techniques that can be applied include:
- Drop shipping – under this technique, the goods advertised online by a seller are still stored in the wholesaler’s warehouse. The seller negotiates with the buyer and upon reaching a deal, the drop shipper sends the goods to the buyer money flows from the buyer to the seller to the wholesaler.
- Light bulk – the seller purchases the goods from the wholesaler and takes care of warehousing. These purchases are usually in small quantities and once the buyer buys them, the seller takes care of shipping.
- Volume wholesale – this mirrors light bulk product sourcing only that the seller buys the product in bulk
- Importing – in this technique, the online seller locates an overseas producer whose goods are cheap and buys from them before selling them online
- Liquidation – this involves buying from companies that are looking to clear stock, have excess stock or are closing operations at a cheaper price than normal. Sellers can find such kind of goods from B2B auction websites and reclamation centers.