Product sourcing is the process of searching, purchasing, and managing the supply of goods or services through an entity for yourself or your business.
Product sourcing starts with searching for trustworthy manufacturers, distributors, or suppliers through online marketplaces or locally from whom you can source profitable products. It also involves discussing factors such as cost, profit margin, and delivery dates with these sourcing companies.
All of this is done to make sure you have niche products at lower costs(or appropriate or profitable costs) that not only satisfy your end customers but also increase your profit margin, making you a potential partner with suppliers in the long run.
Where Can You Source Products From?
Manufacturers
Businesses that make products in bulk for the purpose of selling them to retail businesses, wholesalers, and distributors are known as manufacturers.
Manufacturing companies are the topmost priority for businesses to source products from in bulk because they are very cost-efficient for acquiring these products. Manufacturers are also the first entity in the supply chain that you contact to get a product.
If you have your own product requirements, it is important to find a suitable manufacturer that can meet them.
Wholesalers
Wholesalers are intermediaries between manufacturers and businesses(retailers or the end customer) that sell the manufacturer’s products straight to the customers.
Wholesalers make a profit by buying products in bulk from manufacturers. They do this because they know the demand and supply of a particular product and, therefore, buy it in bulk(from manufacturers) for a reasonable price.
Trade Shows
Although the use of tradeshows as a means of product sourcing has declined in recent years, they continue to be affordable and an important source for customers who want to research products and ultimately purchase them.
Arguably, one of the best things about Trade shows is that they give customers and buyers a chance to communicate face-to-face, get product information, view the product in person, and build relationships with dropshipping suppliers. Additionally, and again, another positive thing about trade shows is that they give retailers a chance to learn about the new trends in successful product sourcing so that they are knowledgeable about the most in-demand items for their end customers.
Online Marketplaces
Another way to source products is through an online store or marketplace. Everything seems to be online these days, so why not take advantage of this fact?
When it comes to online stores, there are two options for retail business or wholesalers:
-Sourcing from websites of reliable suppliers
-Online marketplace of multiple suppliers(dropshipping supplier or private label).
But the thing here is that trying to select the ideal product for your business just by browsing websites is extremely exhausting. Dozens of matches can be found against a single product search.
But there’s a way around this as well. And yes, that is through online product search and sourcing platforms like Konnecktii or Rangeme. Through such platforms and markets, retailers and businesses can enter particular search parameters for a product they are looking for. The results are high-quality products that show up from multiple suppliers in the marketplace. Many platforms have exceptional sellers that supply best-selling products to sell online businesses. You’ll definitely find a match against your requirements through these platforms.
How Do You Source a Product?
Conduct Product Research
Imagine this: you are working on bringing a new product concept to the market. Or maybe you just want to evaluate and improve an existing product that isn’t doing much but has the potential to be an effective product.
Now, the work you’re putting into this research is a great risk. Because if it goes wrong, you might lose funding and even your valuable time. However, if everything goes smoothly, you might just find a financially strong and effective product or service in your hands. This product, after all, could yield heavy returns on your investment.
But how do you make sure everything goes smoothly?
To efficiently source products, you must carry out in-depth product and market research. To ensure that the product you source meets the needs of your target market, first examine market demand and determine the latest trends. Then, scrutinize your competitors to identify market gaps to gain a competitive advantage.
Identify Potential Suppliers
Before sourcing products for your business, you must first identify the potential suppliers in the market that meet your demands.
Supplier sourcing, also known as procurement sourcing, is a process that involves finding, comparing, and scanning the top suppliers you want to work with. And before finalizing which supplier you want to work with, keep in mind the following important factors:
- High-quality products
- Cost
- Raw materials manufacturing and the timeline for delivery of the products.
- Minimum order quantities.
- Inventory managementInterstingly, business-to-business channels such as Yellow Pages, e-commerce directories, and social sites like LinkedIn are a few other means of finding suppliers. Platforms such as Konnecktii help end customers find their preferred manufacturers through online searches.
Furthermore, you can go for word of mouth, which is also a helpful means of finding trustworthy vendors. But make sure to verify their authenticity and transparency first.
Request Samples, Compare Quality and Price
The next crucial step in the product sourcing process is to get product samples from your raw material suppliers or vendors.
Most vendors will provide you with free or discounted samples to evaluate the suppliers’ skills, the product’s quality, and functionality and see if it meets your needs. This also gives you a chance to evaluate the communication with the vendor and to see how fast they can complete an order.
When you receive samples, do the following evaluation:
-Note the advantages and disadvantages of each product while comparing samples.
-Compare these to the notes you made throughout your product study.
-Is there a particular item that stands out and meets the needs of your customers?
Do a Trial Run
Requesting samples or placing a trial run is a great way to assess the product before agreeing to large volumes or bulk orders. This helps you evaluate the products from the customer’s point of view and assess the product’s durability and quality.
A trial run also provides information about the supplier’s trustworthiness, including customer service and shipping schedules.
You can make well-informed decisions with real-world trial runs that will lower future risks and provide you with a competitive edge in the market. The best thing about this is that you can build strong supplier relationships.
Evaluate Suppliers, Negotiate Contracts
After trial runs, you can negotiate with your preferred suppliers and sign a contract with them. But with this, you need to keep in mind that no supplier is perfect. It’s quite possible that you won’t notice their flaws until you’ve been doing business with them for some time. This is why it’s crucial to keep an eye on how well your vendors are operating.
Examine necessary supplier performance measures like:
1. OTIF(On time in full)
2. Average sales cycle time
3. Rate of defects
4. Availability of the product
5. Cycle time for purchase orders
You can use these parameters to see which vendors are more effective than others.
Additionally, after doing business with a supplier for some time, you can use your experience and information to bargain for better terms that will lower your operating expenses.
Frequently Asked Questions About Product Sourcing
Is Product Sourcing the Same as Procurement?
Sourcing and procurement are two aspects of product sourcing. They both are business operations that are done in order to buy products or services. However, here’s the little difference between them: Finding goods or services outside of your business is known as sourcing.
Procurement involves negotiating contracts and obtaining deals for profitable product demand. By combining these two procedures, you can increase productivity and reduce costs for your products and business.
What is a Good Question to Ask Your Suppliers?
What safety indicators are there to guarantee reliable product quality and prompt delivery?
We take pleasure in knowing manufacturers listed on our directory site have participated in the canton fair, China’s biggest trading show, which means we only have genuine manufacturers listed on our website.
Are You a Trading Company or a Manufacturer?
We are a directory site and an online business (supplier-provider business) offering a wide range manufacturers. Our database has over 20,000 manufacturers in China that have showcased their products at the Canton Fair, which is Asia’s biggest trading show.
Through our platform, companies and individuals can connect with various manufacturers.
You need to enter your parameters for a potential supplier, and our platform will provide various manufacturers that match your query.
What is Your Experience in Creating Similar Products?
We have listed over 20,000 manufacturers selling unique products on our platform that adhere to the exact quality requirements their clients want. For example, on our platform, vendors, wholesalers, and even customers can categorically search for manufacturers in China. When you enter a query, our database helps you find several perfect matches that meet your requirements.
How Do You Ensure Quality Control?
In this regard, we start by making sure the manufacturers on our platform are verified, and we fulfil the necessary quality requirements on our end. Konnekii has verified manufacturers on its platforms that have exhibited their skills at the Canton trade show.
Alternatively, you can visit the manufacturer’s website to see how they operate and what standards they follow. These manufacturers employ standards such as ISO 9001 to ensure accountability and consistency.
Are There Any Regulatory Requirements We Need to Be Aware Of?
Yes, there are regulatory requirements you need to be aware of. And these requirements depend country to country. For example, in some specific markets like USA, products may need to comply with FDA approval, especially if you are sourcing medicines or life saving products. We are familiar with these regulations and can ensure our products meet the necessary standards.
We can also provide documentation, such as compliance certificates or quality reports, to support regulatory approval. If you have specific markets or certifications in mind, we’re happy to help guide you through the process.
