10 Top Product Sourcing Strategies
Here are 10 top product sourcing strategies to help you thinkoutside the box and brainstorm your product planning:
You can read more about drop shipping in our article Drop Ship Wholesale Companies–Must Know Tips. Basically, though, a drop ship supplier stocks all the products and handles shipping and handling. In other words, the drop shipper is in charge of all fulfillment duties. When you make a sale, you purchase the item from the drop shipper and it ships the item to your customer under your business name.
A true wholesale business is a business authorized to purchase goods directly from a manufacturer for sale and distribution to retail businesses. When you purchase items from a true wholesaler, you generally buy in bulk and get discounts based on the quantity of your purchase. You stock your inventory and handle all fulfillment tasks.
This is where you design, manufacture and distribute (or hire a distributor) you own products. This may sound far fetched, but with the great advances in technology over the years you can purchase the software, computers, and machinery necessary to mass produce goods and fairly low cost. There is a great article in the April 2011 edition of Wired magazine on the open source movement and DIY technology which shows how you can get started. For inspiration, see Instructables.com. One example provided in the Wired article is of a person who designed and manufactured his own bicycle sprocket. He was able to do this using open source software and now relatively inexpensive computerized manufacturing technology.
• Local Products
Seek out product sourcing from local and regional producers. This won’t work for every niche, but this will guarantee you a unique range of products. Here you are starting locally and marketing globally. This requires that you take the initiative to contact local artisans, crafts people, and manufacture to reach a product sourcing agreements.
• Third-Party Fulfillment
By third-party-fulfillment, I not just mean drop shipping, though that is a part of it. What I’m talking about here is the use of services such as Cafe Press that provide the raw product, such as coffee mugs, t-shirts, pens, poster paper, and so forth. You provide the graphics and other content that finishes the product. When you make a sale, the fulfillment service sends your item out to your customer under your business name.
• Multiple Product Sources
Depending on your overall marketing plan and business strategy, you may not want to limit yourself to just one source of product supply. You may want to combine both drop shippers and wholesalers and use several product suppliers within both those categories. You may find that your particular niche will have manufacturers who will sell directly to you instead of requiring you to purchase through a wholesale distributor.
• Ready-Made Store
There are businesses, such as Dropship Direct, Dropship Design, Mega Goods, Doba, and Inventory Source who offer you a pre-loaded store solution to product sourcing. For this to work, you generally pay a monthly fee for a pre-made website stocked with thousands of products. This is not a strategy we recommend you pursuing without careful business planning. This can work, but just because you have a store stocked with thousands of items is not an indicator or success. You still have to map out a marketing plan.
• Tight Niche Focus
When thinking online ecommerce, it is not necessary to try to compete with Amazon or eBay or Overstock. You may have often heard the advice to “think niche.” Give this due consideration. For ecommerce marketing, what we mean is to “drill” deeply but narrowing into your niche product line. For example, if you have a site on bicycles, consider targeting bicycle tires. And within the niche of bicycle tires, you may to narrow that to specialty racing bicycle tires. And then you offer as many quality products for that niche as possible. In some niches, you may find that there are only a half a dozen of so quality products sought after by your buyers. This strategy works well when your ecommerce strategy involves running multiple stores where there is a lot of distance in relationship between the product niches.
• Wide Niche Focus
This sort of strategy requires longer range planning. Generally, the wider the product selection, the more difficult it is to target a potential buyer population. However, if you are planning a large site that you want to develop into a sort authority site for your product line, this could work. Returning to our example bicycle niche, instead of focusing on specialty bicycle racing tires, you would expand the niche to include racing bicycle parts and accessories. However, because this is a large niche with many sub-niches, as you build your site, you must address each of your major sub-niches.
• Target Specific Population Group
This important product sourcing strategy requires targeting a specific demographic. Demographics really means finding out information on people. When we talk about zeroing in on a particular demographic for the purposes of ecommerce, we mean researching information concerning economic level, social level, education level, age level, occupation, and vocation. In general we are seeking information on habits and behaviors that allow people to be grouped into different kinds of categories for marketing analysis. One example of targetinga specific demographic would be the selling of baseball equipment to Latino children between the ages of 10 to 15. Or, for example, you might want to research the shopping habits of Afro-American women who do most of their Internet buying using smart phones.
Source from: proproductsourcing