Ecommerce Storefront - Product Sourcing

An ecommerce storefront depends on a unique variety of products to be successful. Since a start up online store can’t really compete with the “big boys” like Target and WalMart, a successful e-store would want to stick to their chosen niche market and offer customers the products they identify with that area of interest.

Product sourcing is a very important part of developing your online business. It’s not as simple as contacting a wholesaler and setting up an account because most of them don't want to do business with a small account.

If you’re just starting out, these methods of product sourcing will save you money and help you grow your business wisely.

4 Ways to Stock Your Online Store

Dropshipping – This is ideal for beginners who don’t have a lot of money (or space) to invest in a huge inventory of products. Basically, you take the orders from the customer and then your dropshipping company packs and ships the order to your customer. The customer sees you as a big company and you are saved the cost and inconvenience of having to stock and ship the merchandise.

Light bulk wholesalers This is where you invest in inventory and ship it to your customers yourself. Your wholesaler will accept lower minimum orders and you’ll get better profit margins because you won’t have to pay that dropshipping fee.

However, you will have increased shipping and handling costs and you’ll have to find a place to store your inventory which can also cost you. So make sure you factor all this into the price you charge your customer.

Bulk Wholesaling At this point, you're investing in large volumes of inventory so your wholesaler is requiring higher minimum orders. Profit levels will rise as a result but so are costs. Once again, make sure your business can support investing on this level so you don’t wind up with a garage full of widgets that you can’t get rid of.

Liquidation/Overstock These are items that are used as “loss leaders” on your site to get people to visit your site and buy the more expensive products. Expect about 15% of this inventory to be unusable. But you’ll get these items very cheaply and it’s a way to offer your customers value on their way to buying the profitable merchandise. (These items are not from a renewable source. Once they’re gone, they’re gone. )

Most ecommerce experts agree that you should have a mixture of these 4 types of product suppliers to have a successful ecommerce storefront. Make sure you introduce these product sources in stages that your business’ bank account can handle.

Beware the Scammers!

There are companies that can supply you with a list of product source companies that are legitimate wholesalers. Using this service can save you time and trouble in establishing your online storefront.

Here are other tips and resources that will help you avoid get rich quick scams.