From Local Sourcing to Growing a Real Business

Most Internet Sellers start out in business using Local Sourcing techniques. Though this poses certain limitations, particularly a lack of renewable products, local sourcing is a good way to get your feet wet if you plan to start selling on Auctions such as eBay. Some of the more common techniques of Local Sourcing are:

• Attics, Garages and Yard Sales

  This is probably the most common method people use to get started on the Internet and learn their way around. Sell a few things out of the attic and garage and practice selling. It�s a great way to start and make a few extra bucks. It introduces you to online retailing, helps you get used to the sales process, and gives you a confidence boost when you see those first profits coming in.

Most people will then start spending time on the weekends going to yard sales and estate sales, looking for bargains, and then selling THOSE products online.

After a while, though, the attic and garage are cleaned out, and you�ve hit every available yard sale in a 50 mile radius. You�re spending more and more of your time traveling to yard sales, and your profits just don�t pay for your time and gas. It�s time to look for less time-consuming Product Sources.

• Local Merchants

  At this point, many people will move into different Local Sourcing methods. One of those is sourcing through Local Merchants. You can go to retail stores in your town, introduce yourself to the manager, and offer to buy items that are sitting around in the back room that the store hasn�t sold. You can actually develop a good relationship with some of these store managers and owners, and get a pretty good supply of products coming your way.

  You can also do this with Thrift Stores, local discount marts, etc. You can go to Factory Outlet Stores, buy products off the shelves at discount prices, and resell them online. There are many options here, only limited by your imagination. Still, this is a hit-or-miss situation; there won�t always be products available from those sources, and they�ll never be the same products time after time. There�s also the fact that you�re still spending a good deal of time traveling to, and working one on one with, these sources.

• Local Artisans

  This is one of the more creative ways, literally, to source products locally. Pretty much anywhere you live, you can find local people involved in all kinds of craft production. Local Artists� Guilds and Crafting Collectives are often a good source of unique products that sell well online. However, while the products can be unique and your profits are generally good, production is often slow. Hand made items from local artisans take time to produce, and if they do sell well, you will always have a limited supply, which limits your business income.

• Storage Unit Auctions

  This is another popular example of Local Sourcing. You can contact the Self-Storage warehouse facilities in your area, and attend auctions that they hold when people who rent storage units do not pay for those units, defaulting on their ownership of the goods contained within. You get a chance to walk around and PEEK into the storage units being auctioned (you can�t see inside boxes or open any containers) and then you bid on the complete contents of the storage units when the auction begins. Again, while you may gain some unique items, you�re dealing with a ton of work and a limited supply.

  There are other methods of Local Sourcing as well. When you�re first getting started, all of them are good ways to learn, and can become a part of your Product Sourcing, to an extent. But, as you can see, Local Sourcing becomes time and labor intensive, and tends to limit both product selection and availability.

  There are only so many hours in a day. If you spend too many of those hours on your Product Sourcing, you will eventually hit a point where you�ll �max out� the amount of money your business can make in a day, because you�re spending too much time physically acquiring the products you�re selling.

Factory Authorized Wholesale Suppliers

When you�re ready to move beyond the casual seller stage to a point where your online business is your full-time income, you need to start working with legitimate wholesale suppliers.

That doesn�t mean that you can�t still source locally when you have the time. That�s fine, and adds some unique variety to your product selection when you find the good deals. But when you are ready to make the transition from selling online as a hobby to selling online as a steady stream of income- You�ll need an easily renewable source of products that you can sell again�and again�and again.

To grow into a business that is only limited by the number of Buyers in your product market online, you need to make your business operation as lean and mean as possible by streamlining your processes, and that especially includes your Product Sourcing.

Let�s say you�re currently sourcing your products by going to local factory outlet stores, buying products at a discount, and re-selling them on the Internet. In order to do this, you need to drive out to these stores, meet the people in charge so that you can work your best possible deal every time, pick out the products on their shelves that you think are going to sell, then buy the products and get them home. Then you have to take individual pictures of those products. Then, you�ve got to make sure you have the right size and types of shipping materials so you can get them out the door when you make a sale.

Keep in mind that you�re probably holding down a day job at this point too. The time you can spend on your online business is limited. As your business grows you can easily spend more than half your time simply sourcing products locally if you only use Local Sourcing methods.

Remember: You HAVE to spend a good deal of time coming up with new product ideas, researching your market, working on your advertising, improving your Auction Listings and/or Web Store pages, providing timely answers to your customers� emails, and much more. Streamlining your Product Sourcing using multiple methods will afford you the time to grow your business. 

Working with a steady, readily-available source of your main products is the best way to avoid that problem. That steady source is almost always going to be a Factory Authorized Wholesale Supplier.

Why a Wholesale Supplier?

Why not just go straight to the Manufacturer to buy your products? People write to us and ask that question all the time. They figure, correctly, that their prices direct from a Manufacturer will be even better than from a Wholesale Supplier. That�s true, they would be, if a Manufacturer would sell directly to a Retailer.

99% of Manufacturers won�t work directly with retailers and they have good reasons for not wanting to.

Wholesale Supply Companies provide a service that Manufacturers need. Manufacturers are far too busy manufacturing products. They don�t want to have to get involved in distributing them to retailers as well.

Wholesale Suppliers already have large sales forces, warehouse capabilities, local and long distance trucking operations, and distribution networks of retail contacts in place.  

Manufacturers would much rather sell very large quantities of products to a very few existing Wholesale Suppliers and use the Wholesaler�s infrastructure and sales connections to distribute those products.

It�s much more cost-effective for the Manufacturer. This is why Retailers (including Internet Retailers) generally cannot buy from Manufacturers directly.  

For the vast majority of your wholesale purchases as a retailer, you will be dealing with Wholesale Suppliers. Legitimate Wholesale Suppliers are very stable and will supply a steady stream of reliable name brand products for you to sell online.

Exceptions to the Rule

Once in a while, you may find a manufacturer who is willing to sell to you directly, and that�s great, but you need to be careful. Manufacturers who sell directly to Retailers usually HAVE to do their own distribution because they are typically too small to attract the attention of the large Wholesale Supply companies. They are generally very small companies who produce small numbers of specialty items.

Buying directly from these small manufacturers can have its pitfalls. Small companies can rarely keep up with a fast-paced sales season, like the Christmas Holiday. They are more likely to run out of stock, take longer to produce more product and more likely to go out of business suddenly.

It�s great to deal directly with a manufacturer, but be careful if they are a small company. Larger wholesale suppliers are much more stable and reliable.