Product Sourcing Methods

When you�re dealing with Wholesale Suppliers, you�re getting brand new merchandise that is under warranty. You have an Account Rep who can handle shipping issues, damaged merchandise, returns, product liability questions, and provide images and descriptions of the products you sell. This is invaluable in streamlining your Product Sourcing, bringing the best quality products to your customers and protecting your business from lost income.

It�s also very important to understand that no single Product Sourcing Method should be used to support your entire business. The most successful Sellers on the Internet understand that using Multiple Product Sourcing Methods is the real key to success.

So, let�s talk about common Product Sourcing Methods and how they work.

Light Bulk Wholesaling

A real "Light Bulk Wholesaler" is a legitimate Wholesale Supplier who will sell you SMALL amounts of products at a genuine Wholesale Price, and ship them to you. You store those products in your home, and pack and ship them yourself to your customers who order them from your Auction or Web Site. You charge your customers your Retail Price, and the difference between Wholesale and Retail is your profit.

Light Bulk Wholesaling works great for eBay Sellers because since you are purchasing product in volume (even though its small affordable volumes) you get additional discounts on top of your standard wholesale price. With those discounts, many online retailers will lower their retail cost. This allows you to charge more competitive prices to your online customers. Light Bulk Wholesaling works well, and is a low-cost entry into the world of buying wholesale products in bulk. Supplementing your Product Sourcing with Light Bulk (low minimum order) wholesalers should be a part of your Sourcing efforts especially if you plan to sell in a price driven marketplace like eBay.  

Drop Shipping

A real Wholesale Drop Ship supplier is a legitimate discount Wholesaler who will send products directly to your customers for you, one product at a time, from their warehouse.

You pay a Wholesale Price for the products, one at a time, and charge your customer your Retail Price. The difference between those prices is your profit. You never have to touch the product, or spend money to fill your garage up with products that you might not sell...the Wholesale Dropshipper does that for you.

Drop Shipping works well, but has its limits, which include slimmer profit margins and occasional delivery problems.

Drop Shipping should be a part of your Product Sourcing, but not all of it.

Tip: Avoid any chance of delivery problems when using drop shipping by ordering 1 or 2 of your hottest selling items from the Wholesaler. This will serve as a backup in the event the Wholesaler is out-of-stock on those items. Not only will you always have a backup for your ordering customers, you will also be able to experience what your customers are experiencing when they get an order delivered to them!

Liquidation Buying

When products are liquidated, that means that whoever owns them no longer wants them. In fact, they want to get rid of them so badly that they�re willing to take virtually no profit, or even a financial loss, to do so.

Sometimes, the products being liquidated are brand new, and a manufacturer simply made too many of them. Or, they weren�t that great a seller to begin with, and the manufacturer or wholesaler got stuck with a lot of extras.

In our experience with liquidation, though, brand new products that are still in the box, never having been opened, are more the exception than the rule. So, while Liquidation Buying can be effective, you have to be very careful to be sure what you�re getting.

If you�re careful, Liquidation Buying can be a good supplement to your Product Sourcing efforts, especially since you can use low-cost items you bought at Liquidation prices to entice customers into your Web Store to see your more expensive (and higher profit margin) items.  

Overstock /Closeout Buying

Overstock Merchandise is supposed to be new, in-the-box, never-opened products that have simply been left on the warehouse shelves from the previous season. There are many reasons that manufacturers and wholesalers get stuck with some of last year�s inventory. Mainly, that would be because the manufacturer produced too much product, or the wholesaler bought too much, and the manufacturer wouldn�t take it back. Whichever is the case, we�re still talking about products that didn�t sell for some reason, and that has to be taken into account when you consider buying them and trying to sell them yourself.

Overstock / Closeout Sourcing works well, but it's not a renewable source. Once a product lot is gone, it's gone. If you find a product that sells well, you'll run out of it sooner or later. That's why you need other sourcing methods; so you can find renewable Sources of those products once you identify them.

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