Successful retail buyers understand that a well-planned product sourcing strategy is key to their store’s success. With countless suppliers vying for a spot on shelves and online stores, it can be overwhelming to navigate the sourcing process. To make informed decisions, buyers must understand the impact that their sourcing choices have on their business.
This article will cover the basics of product sourcing, including what it means to source a product, six strategic sourcing steps, how to know when to source from a new supplier, and a conclusion on product sourcing. By following these guidelines, buyers can make informed decisions to ensure their store’s success.
Key Takeaways
- Understanding the impact of product sourcing on a business is critical for retail buyers.
- Six strategic sourcing steps can help buyers navigate the sourcing process successfully.
- Knowing when to source from a new supplier is important for maintaining a competitive edge in the market.
What Does It Mean to Source a Product?
Product sourcing refers to the process of finding suitable suppliers, purchasing inventory from them, and reselling the products. There are various methods of product sourcing, including finding a manufacturer for custom products or purchasing third-party goods from a wholesale supplier directly.
Where to Source Products?
Finding the right suppliers for a product can be a daunting task. The sheer number of suppliers worldwide makes it impossible for any single supplier to provide all the products needed by retailers to meet the needs of their customers. Therefore, when looking for multiple product suppliers, it is wise to explore various avenues to source those suppliers and products.
Search Online
The internet is a great place to start when looking for product suppliers. There are two options when searching for a place to source products for a retail business online. While any business worth its salt has an online presence these days, trying to find the right products for a business by searching websites alone is time-consuming and labor-intensive. Thousands of results can be found for a single product search.
Online websites and supplier platforms are excellent sources of products for retailers. Some of the popular online websites include wholesale websites and Supplyia, while online supplier platforms include ThomasNet, Maker’s Row, MFG, Kompass, Council of Manufacturing Associations Member Organizations, and Gobizusa. Online apps for product sourcing are also available, with some of the popular ones being Handshake, Printify, Dripshipper, DSers, Spocket, Syncee, Creative Hub, Printful, My Online Fashion Store, Lulu Direct, Shapeways, and Modalyst.
Attend Trade Shows
Trade shows remain a viable and essential source for buyers to research and source new products, despite declining attendance in recent years. Trade shows give buyers the opportunity to get immediate information, see products firsthand, and build relationships with suppliers. They also allow retail buyers to learn about the latest trends, so they can be sure their shelves are filled with current and future hot products.
Hire Product Sourcing Agent
A product sourcing agent can help find manufacturers to build products, including researching appropriate manufacturers, prices, costs, negotiations, and finding the best price for the products to sell. It is worth noting that it may take up to 1 to 2 months from the initial communication to the final order with a product sourcing company.
6 Strategic Product Sourcing Steps
Sourcing new products can be a daunting task for retailers, but following a strategic sourcing process can make the process run smoothly. Here are six easy-to-understand steps that retailers can take to source new products:
1. Research Your Product
Retailers need to conduct thorough market research to understand the product they are sourcing. Without the necessary research, sourcing products can lead to failure. The research should include understanding the product’s features, benefits, target audience, and competitors.
2. Contact Any Potential Supplier
Before reaching out to a supplier, retailers must know exactly what they need. This involves conducting research on the product and understanding their needs. Retailers can use their contact information from trade shows to reach out to suppliers they’ve met or had contact with.
3. Request a Sample
Requesting a sample is an essential part of the sourcing strategy. It allows retailers to test the product’s quality, get feedback from team members, and see the product up close and personal. Retailers should request a sample when contacting the supplier.
4. Select Suppliers for Trial Orders
Once retailers find a product with potential, they should order a trial run. This can mean trying a certain number of products in the retail chain or testing the product in certain stores. Retailers should set parameters and KPIs around the trial run, including how long the trial runs for, sales ratios, and consumer feedback.
5. Evaluate the Supplier
The supplier’s performance during the trial run is critical in deciding whether to work with them in the long term. Retailers should evaluate the supplier based on the product’s performance, communication, delivery, and price quoted. Constructive feedback helps to understand why the relationship is not moving forward.
6. Keep Other Supplier Options Open
Retailers should keep their supplier selection open as it offers better prices, material insurance, and quality control. Having multiple suppliers for a product ensures that retailers are never without that product, even if one supplier has problems getting the necessary parts or ingredients.
Table 1 summarizes the six strategic product sourcing steps:
Table 1: Six Strategic Product Sourcing Steps
| Step | Description |
|---|---|
| 1. Research Your Product | Conduct thorough market research to understand the product. |
| 2. Contact Any Potential Supplier | Know what you need and reach out to suppliers. |
| 3. Request a Sample | Request a sample when contacting the supplier. |
| 4. Select Suppliers for Trial Orders | Order a trial run and set parameters and KPIs. |
| 5. Evaluate the Supplier | Evaluate the supplier based on the trial run’s performance. |
| 6. Keep Other Supplier Options Open | Keep multiple supplier options open for better prices, material insurance, and quality control. |
Following these six strategic product sourcing steps can help retailers simplify the sourcing process and ensure success in sourcing new products.
How to Determine a Suitable Supplier for Your Business?
As your business expands, it may require a new supplier to meet its changing needs. This could be due to a need for faster shipping times, increased order capacity, or a wider range of products. Therefore, it is essential to evaluate the compatibility of a new supplier to ensure a successful partnership.
One of the critical factors to consider when selecting a supplier is their ability to handle larger order sizes. Manufacturers, wholesalers, and importers are better equipped to meet the demand for larger orders than independent suppliers. It is vital to choose a supplier that can handle your business’s growth and has the capacity to fulfill your orders.
Another reason to seek out a new supplier is if you want to manufacture or customize new products. Suppose you have established a strong brand or identified promising original products. In that case, you may consider moving from off-the-shelf items to custom products or even private-label items. This will require a supplier that can accommodate your specific needs and provide the necessary resources to produce the products you require.
Sourcing products from overseas can be a viable option for businesses, but it requires additional knowledge and expertise. It is crucial to protect intellectual property rights, control product quality, ensure the safety of funds, and ship goods safely. These processes must be repeated every time an order is placed, making it essential to have a reliable and experienced supplier.
To conclude, choosing a supplier that can meet your business’s needs is crucial for success. Whether you require larger order sizes, customized products, or overseas sourcing, it is essential to evaluate a supplier’s compatibility and capacity to ensure a successful partnership.
Product Sourcing Conclusion
Product sourcing is a complex and ongoing process that requires careful attention to detail. Maintaining the quality and integrity of the product is critical to the success of any retail business, and building strong relationships with suppliers is essential. Buyers should always be looking for new supplier relationships and keeping in mind the essential steps that will lead them to success. By following best practices and staying informed about industry trends, buyers can ensure that they are making the best possible decisions for their business. If you need product sourcing services, be sure to seek out a reputable provider who can help you navigate this challenging process.