What Is Product Sourcing?
Product sourcing or the process of sourcing products is finding the right products that you want to sell through your business, whether it is online, retail brick and mortar or even QVC(21st-century mail order). Finding products to sell is not that difficult, but finding the right products will make or break your business.
Many different variables must first be considered and taken into account as part of the decision making process. Is there a demand for the product? Can you buy it at a low enough price to recoup your expenses and cost and make a profit?
How much is the minimum order? How long will it take to sell it all, and when should you reorder? Multiple other significant factors need to be considered. The effort must be made to do the proper due diligence and research.
Your opinion or preference is not enough to base a decision on that will tie up thousands of dollars in inventory.
What Financial Factors Are Considered When Sourcing Products?
You will need to figure out your expenses, marketing, and costs to arrive at a minimum selling price. Then evaluate the current market conditions to ensure that it will support your sale price.
Now add 15% for additional costs that you might have overlooked.
Can your projected sales price still support it?
How much do you need to make to cover your expenses and overhead?
Be realistic. If you need to clear 2000$ in profit, how many units do you need to sell to achieve that goal?
Exactly what method will you use to launch and market your product to achieve that goal, and what is the cost. These are all things that need to be considered before you place your order. Do yourself a favor and write it all out.
How Do I Arrive At An Initial Order?
Prepare For Product Sourcing Success
These are just a few variables that you need to consider before placing an order for your products. Whether you are a reseller, drop shipping, doing arbitrage, selling handmade products, or creating your products and brand, each method has its pros and cons and certain built-in costs. The different Amazon business models offer a variety of starting points for any seller.
Many sellers set themselves up to struggle and fail by neglecting these vital considerations. Whether you are starting a new business or adding additional products to an existing business, product selection is key to your success. The decisions that you make now will have a direct impact on your future success.
Define Your Business And Purpose
Before you arrive at this point, the best thing you can do for yourself is to set your business upright. Have you established a Mission Statement and Vision for your business? What does your company stand for?
What are you trying to accomplish? What makes your business different from the next?
"By failing to prepare, you are preparing to fail "
Why should someone buy from you instead of your competitor? What makes your business unique? Have you worked through understanding what your unique selling proposition is yet?
I could go on and on about the importance of creating a business plan and how it could easily be the lifeline that your business needs when times are rough. Or I can discuss the vital creation of buyer personas and their importance. The point is that you must adequately prepare and plan.
Set Obtainable Goals With A Path To Get There
Give your business the best chance of success. Set 90-day, 12-month and 36-month goals. Ensure that all business decisions satisfy at least 2 of them. This will keep you on the path, even in the most hectic moments.
You can start your business with none of these, but I guarantee, if you do these vital steps, you will benefit from additional sales and less stress down the road. It is worth every bit of effort that you put into it. One of the significant benefits of proper planning is a clearer path. Another is a better understanding of the different options that may be available.
I think we can all agree that time and experience is a huge advantage in almost any field. When you lack time and experience, you can mitigate that by ensuring that you understand your options and consider alternative plans.
Product Sourcing Success Requires Options And Choices
With product sourcing, you can create options for yourself by finding multiple suppliers or manufacturers for the same product. This is a significant advantage when negotiating items like price, quality, and production times. An alternative method of creating additional options is using a sourcing agent or a sourcing system.
Take a moment to consider the following questions. If you agree with some of these questions, then creating additional options for yourself by finding additional suppliers or product sourcing outlets will benefit you.
- 1Is sourcing products and negotiating the best possible deal difficult?
- 2Does it seem impossible to compete with the low pricing of new foreign sellers?
- 3Do you feel like you have no choice but to accept whatever your manufacturer does?
- 4Are your profits being squeezed by low margins due to competitive pricing or unforeseen expenses?
- 5Do you think this would be easier if you had more and better sourcing options?
Manufacturing Capability Distribution
This article provides you with options and choices of where to source your products around the world. During the turmoil of 2020, we feel it is evident that relying on the currently popular methods and sources may not be reliable moving forward.
In 1980, China accounted for less than 3% of the world's manufacturing. The Central American drug wars and later an agreement signed with Bill Clinton changed all of that.
During the COVID pandemic, businesses large and small were caught unprepared by the shutdowns in China and had long forgotten the importance of flexibility and alternative plans.
As a world, we were crippled by our excessive reliance on China as the leading supplier. As a country whose leaders are bent on world domination and have a long history of oppressive, even deadly control, we find this reliance on China inadequate for our business interests.
As of July 2020, there are 200 countries on Earth. Who and where is the other 65% coming from? That is the real question here. This article will relieve some of your frustrations and provide you with multiple resources to find new and different sources for your products. Our goal is to provide a resource to enable you to find numerous sources for your products.
This will give you leverage and negotiating power with manufacturers. If you venture away from the traditional sourcing methods, you should also find that creating unique products becomes more comfortable. You won't be competing with millions of sellers using the same resource.
First, we must review the current popular methods and why they put you at a disadvantage.
Popular Product Sourcing Methods 2022?
The most popular methods currently taught involve a seller browsing through Alibaba.com or Aliexpress.com until they locate items that they want to sell. Using software like Helium10 of Jungle Scout, they run some numbers against current sales of the product until they think they have a winner.
This method is flawed right out of the gate. No software can ensure success due to the multitude of variables not taken into account. Information such as listing quality, the competitor's traffic sources, or the seller's ability to craft a message that motivates the purchase.
Where Do Big Brands Get Their Products?
Are you curious where your big brand competitors are sourcing their products? Check out ImportYeti. It is a search engine that searches 60 million U.S. Customs sea shipment records instantly for free!
As eCommerce marketplaces get saturated, the need to offer a unique product that stands apart from competitors becomes more critical.
Why Does A Product Need To Standout?
Would you rather be one of many, selling the same product as everyone else on a listing? Or would you want to be selling to people that want and are willing to pay extra for an upgrade or perceived value? This is the approach followed by successful sellers seeking products that become sustainable, long term successes. The ability to stand out and separate from the competitors is extremely important. But the ability to set yourself apart with features that your user actually values and wants is the most important.
This is not hard to do, but it needs to be dealt with and tested before production, not after receiving your first 5k shipment. The easiest way to set this up is through proper research, testing, and decision-making before launch.
Why Should Someone Buy Your Product?
This is an extension of creating your unique selling proposition for your business. Your product mix will determine if they are the same. Fed-Ex is my favorite example of creating a unique selling proposition.
Their creation of the tagline 'When it absolutely, positively has to be there overnight,' and the subsequent marketing was perfect.
As a new competitor in a very competitive industry, it allowed them to overcome and crush the most significant player in the field. They achieved this even though their prices were much higher than the industry leader. Think about that for a minute!
How much money would you create by spending an extra 10 or 15% per unit during production, producing a product that is easily better than the competitors? Then you must position it as the new standard of excellence and market it at full price to premium buyers?
Do you think you would do much better in the long run following this method instead of doing full price rebates and 2 for 1's like everyone else? That additional investment at production is minimal compared to the amount of money you shell back out with rebates.
Setting your product as the new standard means you have no competition. They have to raise their performance to compete with you. That strategy is for a different article.
Finding Suppliers And Manufacturers
This article will focus on finding manufacturers and suppliers for your online business using simple methods from different countries.
Most new sellers approach it with the wrong mindset. They learn to use the same resource as millions of other sellers. Doing so in a culturally diverse country with a traditional sharing economy and expecting business to be conducted following western principles.
This couldn't be further from reality. Don't make the mistake of assuming that they will conduct business following western etiquette. You are in their country, you are expected to conduct business and behave according to their customs. Sellers do not realize how it makes them stand out as amateurs, which immediately puts them at a disadvantage.
Sellers need to do their homework before doing business across cultural lines with anyone. Supplier relationship management and the bond that you develop with your suppliers is a critical piece to your success.
New sellers, especially, will benefit from the preparation. Their lack of experience will also benefit significantly from finding multiple suppliers for each product. This will lessen some of the sting and mistakes usually made by a new seller and puts any seller in a better negotiating position.
Why Should I Have Multiple Sources For Products?
Multiple suppliers keep you from being at the mercy of a single supplier dictating the terms. Your priority needs to be getting the products consumers want, available for sale. The best guarantee means having more than one supplier providing the same products.
This is an excellent position to be in because having multiple-suppliers can provide benefits including:
---The ability to negotiate prices from a better place. Lower prices mean additional profits. No single supplier can hold you hostage and force you to accept their terms. You can compare notes between what they tell you also. Many times they will blame someone else for their pricing citing the cost of raw materials, etc... This will enable you to stay one step ahead of them.
---A more stable supply chain. If a supplier cannot get the necessary materials for the product, it can cause delays, increased logistics costs, or worse. Multiple suppliers create a situation where you should never run out. Think of it as an insurance policy and a way to take some of the stress out of procurement..
---When you have multiple suppliers, quality control becomes much more straightforward. You can also compare the quality of both suppliers and negotiate to increase the quality to match.
At the absolute very least, always have multiple product supplier options when you are first negotiating with suppliers. It puts you in a position of leverage and makes the supplier rise to your concerns and more readily meet your expectations. Suppliers get very complacent when they know you have no place else to go.
How Do I Find Suppliers & Manufacturers?
Africa Imports- Africa Imports is a US-based company that offers the largest selection anywhere of African and Afrocentric products at wholesale prices. They offer African clothing, jewelry, accessories, oils, soaps, personal care products, fabrics, musical instruments, and African art.
Times Directories - Industry directory in Asia. There are a lot of smaller countries in Asia that manufacture products. Many do it at a much lower labor expense than in China. This has been the case for over 3 years now. Use this directory to find suppliers in multiple Asian countries.
Dragon Sourcing - Over the years, Brazil sourcing has expanded its position as a competitive sourcing destination. The rising interest can be attributed to a number of key country dimensions including a long period of political stability and economic growth, lower labor costs, economies of scale generated by the size of its large domestic market, shorter lead times and transportation costs to the US which are much cheaper when compared to Asian countries.
Alibaba - Alibaba is the most popular product sourcing resources used by Amazon sellers. The chances of creating a truly unique product using Alibaba is not very easy because of the number of people using it and because China is a sharing economy. Protect yourself from fake intermediaries. Make sure any suppler you contact has Gold, Assessed, and Trade Assurance badges.
AliExpess - AliExpress(owned by Alibaba) is the eBay of China. It enables you to purchase smaller amounts directly from Chinese sellers. Aliexpress is also a drop shipping platform. Like Alibaba, the quality and reputation of the seller and product can be questionable.
DHGate - DHgate has an online payment system that pays the seller once the buyer has received the goods. Escrow systems benefit foreign buyers. Generally has smaller MOQs (Minimum order quantities), but sometimes it is at a higher price.
1688 - Also owned by Alibaba, 1688 is in Chinese for Chinese buyers. It is an excellent place to do additional research but understand product quality guidelines are lower in China; often, the price and product are inferior.
Doba - Doba has several similarities to Alibaba but is focused explicitly on drop shipping. Doba is unique in that it allows drop shippers to be able to stock your store with products. When an order comes in, you place the order using your buyer's shipping address. Doba handles the payments and transactions but gives you the difference between the cost and sale price.
Czech Trade Operated by National trade promotion agency of the Ministry of Industry and Trade. Click on Head Office, then on Czech Exporters Directory, you will find a database searchable by product category, or use this shortcut link to the search page: http://www.czechtrade.us/search.php
The numbers below represent the 1st five months of 2020. You will notice that we already have over a 100 billion dollar trade deficit, which is low due to COVID. It should be closer to 175b, and even that number is down by 30b that the tariffs have impacted.
The more significant takeaway from these numbers should be that we get products from many different countries, not only China and not only the ones on this list.
Top 15 Countries -US Imp/Exp
Imp % of TTL
Trade $ +/-
Top 15 TTL
Estonia Exports - Product search does not nominate any category headings for you, so you have to enter any category that might interest you. Patience is needed. It will probably be more comfortable to email the Chamber of Commerce at [email protected] and ask for a print copy of the 154-page export directory.
Zentrada - Zentrada is a wholesale and buyer network featuring EU-wide availability of consumer goods. They have offices throughout Europe and are Europe's leading platform in B2B wholesale transactions for consumer goods.
UBI France - A French government site. They have a lot to learn about making a site user friendly, but if you persevere, you can find some outstanding products, many of which will be unique to you if you choose to import them.
Jungle Scout (supplier database) - This was built for FBA sellers. It is also a useful tool to reverse engineer other products to find out where they are coming from. Jungle scout has many different tools and is a paid tool. The link above will get you a 50% discount.
Global Sources - Global Sources has built a trustworthy B2B wholesaler product sourcing platform and has been a significant player for the last 49 years. Their primary business model enables the world to access Asian products through trade-shows, marketplaces, apps, and magazines. They organize multiple sourcing shows in various niches regularly and can strengthen your strategic sourcing
Mfg - MFG is a marketplace that makes it easy for buyers of custom parts to discover manufacturers quickly. MFG simplifies finding a manufacturing partner by offering sourcing professionals the most detailed database of custom manufacturing facilities in the US and globally.
Export Bureau - Global Manufacturers Export Directory
Sourcify - Sourcify connects you with manufacturers and suppliers through their global manufacturing platform. They maintain offices in China, Vietnam, India, Pakistan, and America, partnering with influencers who want to boost their brand.
Supply Wheel - A marketplace for 10,000 global manufactures to help sellers with their manufacturing needs. One of the few sourcing resources that include food and beverage manufacturers along with US supplement manufacturers.
Closeout Fortune Dollar Days - Another US-based wholesale and closeout seller. They have a full online catalog and offer dropshipping.
All Time Trading - All Time Trading is an NYC based wholesaler with warehouses around the country. They are online wholesalers for everyday general merchandise, apparel closeout deals, and seasonal bulk products. We make it easy to find just about anything you're looking for right here on our website.
Export Gate Greece - You will need to register before you can use the product search.
Trade India - Trade India is a full-service sourcing portal for Manufacturers in India with global abilities. They have over 2200 categories, so the selection is excellent.
IndiaMART - IndiaMART is an online B2B marketplace connecting suppliers with buyers. They provide a platform for Small & Medium Enterprises (SMEs), large enterprises, and individuals. This is geared more towards Sellers in India
Please share this post so others can also get access to this valuable resource!
Indiasourcing.net - India Sourcing Network is a platform that provides e-commerce sellers and importers everything they need to source private label products from India. The platform features vetted manufacturers that are export-experienced, and a curated list of service providers such as sourcing agencies, freight forwarders, QC companies and more. They offer educational resources about India sourcing best practices, including free guides, webinars, live virtual workshops and a free collaborative Facebook community featuring subject experts and experienced sellers.
Jim Trade - Jim Trade facilitates global trade, focusing on India by providing information to international buyers along with integrated marketing services. Jim Trade delivers the complete and up to date information on Indian products and suppliers for buyers.
Ethical Sourcing - Ethical Sourcing is an end to end development and sourcing company.
Italy Exports - Kitchenware, Housewares, Hardware, Tools, Food, and Giftware
Malaysia Trade - Click on For Foreign Buyers. Then you can search for products by clicking on Malaysia Products Directory in the menu in the left-hand column of the page. It is also worth looking at the Malaysia Export Exhibition Centre (MEEC) at the bottom of that menu. There are 500 permanent exhibitors at the Centre.
Mexico - Latin America
Product sourcing in Mexico and Latin America is very underrated and often overlooked. When I started in eCommerce, everything still Hecho En Mexico on it. The drugs wars pushed manufacturing to Asia fast. Now manufacturing is coming back and it will be much bigger. Labor in Mexico is cheaper than in China.
Latin America offers textiles with bright, rich colors, coffee beans and other regional items that sell very well. The shipping expense increase won't be out of control for products coming from Mexico or Latin America like it is from Asia in 2020-21. Sourcing products here should be quite appealing to more sellers as they realize that at the moment China is a terrible option.
The Central American Group - The Central American Group provides the environmentally friendly manufacturing infrastructure that is required to run a successful manufacturing operation.
Exporta has built the largest Supplier network exclusively focused on manufacturers from Latin America. Among our supplier network, you will find producers from Colombia, Peru, Ecuador, Argentina, and Mexico. This includes local suppliers, industrial-sized manufacturers, and small & medium businesses.
Mextend - We are manufacturers' representatives and sales agents for the packaging, plastics, food, industrial, and consumer goods industry, for the mexican market
MRO Sourcing - SDI manages the purchasing process for both the products and services purchased from Mexican suppliers, as well as, the products that require procurement
Naps International - Naps helps businesses source products and raw materials for manufacture in Mexico.
Latin Sourcing - Central America / Latin America Manufacturing, Import & Export, Sourcing.
YellowPages Nepal - Nepal's business directory.
EC21 - A Korean B2B marketplace, EC21 has over 2 million member companies, & 7 million products in its database. EC21 was created to connect international buyers to Korean companies. While Korea is still its primary focus, you can use EC21 to find a supplier in other countries. EC21 is the largest resource for locating Korean Manufacturers in the world.
Taiwan Trade - Product sourcing list from Taiwan
Turkish Makers - Turkish manufacturers have a fresh approach to design and innovation. That is nice because it is possible to find products or styles of products not available elsewhere. Click on the category, then on a subcategory. The listings are bland, but it is worth being patient and checking out most of them. When you click on a supplier's name, there will usually be very little information. The company advertisement link only shows a JPG picture, but that can be informative. In addition to an image featuring one or more of their products, sometimes it reveals a website name or email address.
MX Wholesale - MX Wholesale is a massive wholesaler of consumer merchandise located in the UK.
The Wholesaler - The Wholesaler UK is an online directory for retailers who are looking for stock to resell. Each category contains hundreds of verified genuine wholesale suppliers that hold stock in the UK in quantities suitable for purchase to resell.
Makers Row - This is a membership-based directory of US-based manufactures. There are approximately 1500 listed. I've had personal experience finding manufacturers there and experience with clients listed as manufacturers. Makers row started focused on the fashion industry but has since expanded.
There are quite a bit of resources available to help you learn how to negotiate and deal with manufacturers on Makers Row.
Kole Imports - Kole Imports is a US-based import and closeout wholesaler. They also offer FBA prep services and are entirely TOS. Prices are meager, and you can order small quantities as well. Many times you can get good prices on liquidation merchandise and use it for bundling or to set your listing apart.
SourcingUSA - We Focus Exclusively on U.S. manufacturing. We listened when product developers told us they were struggling to find domestic manufacturers.
Thomasnet - Another great source of US manufacturers. Thomasnet has come a long way over the years and has upped its game in the last few years. Lots of tools, guides, and advice available onsite.
VietnamAZ - VietnamAZ is a trade site for American companies wanting to do business in Vietnam. They help match suppliers and buyers.
Customs Import Records - Global
Do you have a difficult time finding suppliers in the country of your choice? The list below includes Import/Export companies that maintain databases based on Port documents. This is a fantastic way to find suppliers or verify that a supplier is established based on the company's volume of records. Working backwards, you can follow the supply chain back to the manufacturer.
Importyeti - Find any companies suppliers FREE - Search 70 million U.S. customs sea shipment records instantly
Port Examiner - Free records search
Panjiva - Paid search, use google to search site:panjiva.com+ "productcategory" This will search for Panjiva's paid section and provide you information without paying the high membership fee
Import Genius - Paid
52WMB - Paid
When using this method, you will be looking at the bill of lading for shipments. You will be looking for suppliers in different countries. When you find ones of interest, look at the bill of lading summary and see that they have had multiple exports in your product category.
For example, dog supplies, I would choose to contact a factory that has had 20+ different export instances over one that had only 3.
PRO TIP: Are you frustrated and having a really hard time finding a product or a place to start? Sometimes, a small win is what you need to get going. Here is a quick, easy, painless way to start fast. Go to your local 99 cents store. Pick a niche. Buy 5 of each off the different items that they carry. List them for 4.99 each. Watch them closely. Set up basic PPC. The ones that sell the fastest, buy more and consider sourcing them in bulk. The ones that don't sell can run out and be done.
Private Sourcing Agents
If you're inexperienced, having trouble or short on time, sourcing agents may be the right solution. A sourcing agent can expedite the sourcing of products or suppliers from a specific market.
You need to clearly explain your product and requirements to your agent. They will search the desired location for manufacturers that can fill your needs. Once they have found suppliers for you, they will contact you with their results. If it is a foreign country, they will know the language and help you navigate the laws and rules of the land.
Once you have chosen suppliers, the agent can help you negotiate the specific details of your needs. The sourcing agent can also assist in ensuring the safe delivery of the prepared product by all standards.
It is essential that you not just close your eyes and choose the first agent that you find. I would seek recommendations from people that I know in the industry and don't be afraid to ask the agent many questions about their experience and contacts.
AGS Vietnam - Almenide Global Sourcing (AGS) is a leading sourcing agency based in Ho Chi Minh City, Vietnam. They work as product sourcing agents who help their clients find, select, and bargain their products.
Dragon Sourcing - Dragon sourcing is a procurement service provider that helps clients import goods and services from expanding, low-cost, and developing markets like Brazil, China, India, Turkey, Mexico, and Vietnam.
Kaizen Sourcing - We are a Sourcing Company based in China and help you source products only from the actual manufacturers
Vietnam B2B Direct - Vietnam B2B Direct is the perfect solution for your sourcing needs of products and manufacturers in Vietnam.
Vietnam Makers - They are a marketing company that represents Vietnamese manufacturers
Are Tradeshows A Good Place To Source Products Or Suppliers?
Here is a method that works very well and helps weed out the crappy manufacturers. The best trade-shows occur in Germany. They are not cheap to exhibit at either. A manufacturer that displays at a German trade-show is investing in appearing, eliminating many questionable manufacturers.
So how does that benefit you as an American seller? Search Google for your category + "german tradeshow". Locate several of the trade-shows that are relevant in Germany. Navigate to the show's website and search the exhibitor list for your product type. This is an excellent source for worldwide manufacturers.
10Times is also an excellent search engine that can be used to source trade-shows around the world
Using the information gathered, sometimes it includes contact info, sometimes it doesn't, you can reach out on the different manufacturers.
At Ecommerce Optimizer, we have been selling and involved with Amazon sellers for over 20 years. Check out our complete Dominate Amazon Products Series of articles for additional Amazon tips and strategy. It includes our very popular article showcasing how to Sell On Amazon Europe.
We have a background with traditional websites and a variety of marketplaces worldwide. Check out our Sell On Walmart article. Or maybe you are ready for a different kind of platform made up entirely of your target audience using our list of Niche Marketplaces. In addition, we also have our FREE Pinterest Traffic Domination Workshop, as well as several other workshops.
We focus on helping sellers diversify and grow. This strategy reduces your dependence on any 1 platform while exponentially growing the available audience. Most clients choose the 1 on 1 Coaching and Consulting with our Founder Joe Reichsfeld. Let us help you make 2022 your best year ever!
Is Drop Shipping In 2022 Still Worth It?
Yes, it is. It can be a little tricky, but the low bar of entry and the minimal upfront expenses make it an easy way to get into eCommerce.
With drop shipping, you, as the seller would list an item for sale on your site but not carry an actual inventory. When the item sells, you process the order and send a request to the supplier. The supplier then ships the package using only your packing slips and all identifying information that only refers to your business. The package is sent directly to the buyer.
There is a right way and a wrong way to go about drop shipping. The wrong way is to deal with suppliers in far off places with extremely long delivery cycles that you have no direct relationship with. We live in an instant gratification world.
Almost anything can be found somewhere online and received within several days if you are willing to pay the additional cost of rapid shipping. Sites with 3 to 4 weeks delivery times significantly reduce their potential audience size due to shipping times. Still, this can be a very successful business model.
PRO TIP: This article will be a work in progress. As we find additional or better resources, they will be added and/or replaced. I would bookmark it as a resource(Control+D) because it will only get better with time.
A Better Method?
A better model for a drop shipping business is to find suppliers with inventory that can be delivered where you need it quickly. It is imperative that you develop a relationship with your suppliers. Hence, they understand the sense of urgency necessary and can also meet the different shipping standards that you need to meet.
There are still millions of products with poor representation on the Internet. I find it very easy to find local companies willing to dropship and willing to do whatever it takes to meet the needed standards of performance. Any person reading this can do some research and find companies within 100 miles of their location(probably much closer) with poor representation on the Internet that would be willing to dropship.
The challenge comes from making enough effort to find suppliers to work with where you can make a suitable amount of profit yourself. Larger ticket items like jewelry, certain electronics, art, TV's offer the seller the chance of making a much more substantial amount, making drop shipping more attractive for those products.
Marketing Drop Shipped Products
A significant benefit of the lack of inventory and the burden involved is that it frees you up to focus on marketing, engagement, and customer service. You are an order processor, but creating and maintaining the listings is on you as well as marketing and driving traffic to the listings.
Some suppliers will go as far as coop(contribute $) the marketing expenses with you because they understand that every sale that you make benefits them. Always ask a supplier to contribute to the marketing expenses either through reduced prices or a set % issued to you separately.
I've seen larger sellers create massive catalogs and require the supplier to contribute to be listed. One company that I am aware of charges suppliers $2500 a year to appear in the catalog.
The fees cover the entire production and printing of the catalog, and suppliers willingly contribute because of the sales orders received year after year. Catalog sales are a dying endeavor but still thrives in some categories.
I have sold several million dollars of jewelry through my own web business, and that was 100% dropship with an agreement where I split the sales price 50-50 with the maker.
Most people that say it is not possible either haven't tried it or didn't take the time to ensure they had the right agreements in place.
Can I Drop Ship Using Amazon?
Drop shipping on one of the marketplaces can be quite precarious because of shipper mistakes can cost you your account. Ask any of the Amazon mentors, and they will tell you to stay away from it with a ten-foot pole.
The mentors fail to tell you that drop shipping is alive and flourishing all day long on Amazon.
Every day vendors dropship items for Amazon orders directly from their warehouses. Manufacturers dropship for resellers all day long as well. The difference is that all of these are US based shipments, originating in the US, and the relationships between companies are pretty solid.
They fail to mention drop shipping because they cannot teach it at scale for their business model.
Drop shipping on Amazon is not the right choice for most sellers because sellers tend to think in too grand of a scale and would get entangled with overseas suppliers where they are at the supplier's mercy. Buyers are just generally not willing to wait for 2 to 4 weeks for the delivery of a product.
Amazon does not restrict it and has the following requirements.
Examples of dropshipping that is not permitted:
Is drop shipping on Amazon easy? Not always, having the right agreements and supplier relationships are key. Is drop shipping on Amazon worth it? Absolutely, if and only if you can get things set up correctly to ensure success. Would I recommend drop shipping to a new seller? Not unless they already have experience with this elsewhere that includes eCommerce.
Can I Drop Ship Using Shopify?
Drop shipping is an entirely different business model. Drop shipping on Shopify is quickly done since it is your site and store. Two different business models can be followed on Shopify. The first is using Shopify apps created by drop shipping websites that pre-vet potential suppliers for you. This makes setting up a drop shipping business via Shopify an exercise that can be up and running within hours.
Listed below are numerous Shopify apps that are used to source and add dropship items to your store quickly:
SuppliersData - this company is US based, has over 3000 US based companies willing to drop ship for you. It is not saturated with sellers yet. They have a $19. monthly fee, but I'd consider signing up for a month to see what they have to offer and whether or not you can supplement your product offering without increasing your overhead. Drop shipping is viable provided you use viable companies that aren't on a 3 week delivery model.
A benefit of using the system is that it puts millions of products at your fingertips with companies that have been pre-vetted. A con is that it puts you right back to get the same products like millions of other sellers and have very little chance of being unique.
A different method that I prefer is the method I mentioned earlier under the heading A Better Method. Does that make it a better approach? No, it doesn't. It is human nature that we prefer things that we are familiar with. I have had great success with sourcing dropship products locally and setting up significant agreements, so of course, I prefer this method.
How Do Current Events affect Sourcing Products?
In particular, during the recent COVID pandemic, millions of businesses sat closed with no sales. I know of multiple sellers who established relationships with these businesses with a simple phone call and were able to get agreements and products online.
One way to get better pricing from small mom and pop retailers is to offer them a cut of the profits. This gives them more skin in the game and makes their ability to ship on time and to expectations more critical.
When I set out to write this article, the goal was to provide you with a list of sourcing solutions that could source from more than just China. Having multiple options and choices gives you much more leverage if used the right way. If you are nothing more than a buyer to your supplier, and they know you have no other options, it is human nature not to give you the best deal that they can.
Things To Consider
Additional items sellers often overlook are raw materials and capability. A manufacturer that deals with steel products may not have the capacity to do the injection molding for your product. It may be in your best interest to source that elsewhere and have it shipped for assembly. Additionally, they might not be able to get a reasonable price on the raw materials for things they rarely use.
Product cost should be your most significant expense. Acknowledge that and make whatever extra effort is needed to ensure that you get the best value and quality for the right price. Spending a little extra on manufacturing or for inspections may save thousands of dollars down the road. It is worth every bit of extra effort.
We see sellers often, that backed themselves against the wall. Rather than throw in the towel on a product before ordering and restarting the process, they ignore substantial red flags and proceed, only to regret it later. Don't be that seller.
We've all been there. We have all thought we had a great product at some point only to realize at the last minute that the numbers don't work out. It is better to be embarrassed and lose the time and a small amount of money invested than to move forward with an order that you are not sure will work.
Business is business; you must look out for your own. Don't worry about anything others think. Do what is right for your business.
Jumpstart Your Business Planning & Strategy Skillset
If you are a new seller and lack business experience, or even if you have the experience, this is for you. Sun Tzu is known as having written the most significant military treatise ever, The Art Of War, in 650 BCE., and has been praised by military leaders throughout time. Leaders from the first Chinese Emperor, Napolean, Norman Schwartzkopf, and Colin Powell, have studied his teachings.
It is one of Jeff Bezos's favorite books and has been called the Amazon Business plan. Many think it is a war strategy book, and while it has plenty of that in it. The underlying strategy is that the best leader wins the battles without ever or before stepping into a struggle.
When you apply the principles to business, it will change your understanding and approach and make it easier to remove emotion from your decision making. Over the years, many books have been written applying the principles to different facets of a business.
While I recommend The Art of War for all sellers, if you have a hard time relating the principles to business, I recommend Sun Tzu Strategies for Marketing: 12 Essential Principles for Winning the War for Customers. Reading either or both will help you become a better businessperson, make those tough decisions more manageable, and help you understand how and why Amazon operates as it does.
My Experience with Sourcing Products
Creating this article reminded me that there are incredible, exotic products in different areas around the world. Take Honduras, for example, The colorful textiles that they are known for will make many of the muted colors that we see everyday seem very dull. Their exports of unfinished textiles increased 1600% last year alone and made up a large portion of their total exports.
Sometimes it makes sense to source raw materials from the country of origin. That doesn't always mean the final product should come from that same country. This is one example where a sourcing agent that can be of great value with coordinating the procurement and movement of raw materials.
When I expanded my first retail eCommerce business, I added a brick and mortar showroom because I was selling custom southwest furniture and art and figured if I was going to stockpile any of it I mind as well have a public showroom to increase sales. That was my first mistake, but that is for a different article.
I realized quickly that I could also sell the cheaper catalog furniture all day long from my store. I would buy a type of pine wood in South America, have it shipped to Indonesia where the dining room table and chairs would actually be made and then shipped here to the US.
I could have that done for far less than just the cost of the raw wood alone here in the US. The quality of the lumber being imported couldn't touch the old-growth Ponderosa Pine that we used for custom projects. That was fine for the non-custom orders, but the custom ones had to be made here.
We often see many sellers not doing their due diligence and taking shortcuts such as not spending the time researching if they are even getting the best price. They run with the first and only manufacturer that they come across, which leaves them at a considerable disadvantage with little to no leverage.
Conclusion: Sourcing Products Worldwide Is Not An Impossible Task
The bottom line with any supplier, manufacturer or business that you work with is developing good relationships. Particularly in situations where there are cultural differences present. Think about it. How does it make you feel when someone inquires about how you or your family are doing? Or when someone takes the time to understand how their actions affect your business?
Extend that courtesy to your suppliers and manufacturers. That will make you stand apart from most of the other foreign sellers. If you have a good relationship, take it one step further. Ask them what materials are the easiest for them to work with or that they already have in-house. Then come up with products that make use of those materials but also have demand and an audience for sales.
Any effort that a supplier sees you take to work with them and make things easier is usually met with better pricing or other concessions, not always, but often.
This list should give you a nice set of options for sourcing products as well as a better understanding of how all of the parts of the puzzle fit together. If you made it this far, thank you for taking the time to read this and stay with me through it. What did you think? Did I miss anyone? Any sourcing secrets or pros that you care to share? If so, add them to the comments below and I will most likely add them to the list.