"Your Easiest Most Reliable Way to Do Product
Sourcing For Your Online home Business"

By Chris Malta

The idea of product sourcing may seem overwhelming to you as a new business owner, but it’s really very simple. It just means finding products at a wholesale price that you can resell at a retail price.

Whether you’re starting an e-commerce site, eBay business or a physical retail business, you need a steady, reliable source of inventory.

Otherwise, you are going to end up disappointing your customers through lack of product variety, back orders and more.

For the vast majority of retail and e-retail entrepreneurs, the main source of products will be a factory-authorized wholesale supplier.

In this step-by-step guide, we’ll help you through the process. And the first thing to understand about finding product for your business is who wholesale suppliers really are and why you must work with them.

Buying Wholesale Product

Many internet home business owners have the false impression that buying at wholesale means they should be able to source their products directly from the product manufacturer.

A manufacturer’s job is to make products. They are not interested in selling their products a few cases at a time to thousands of retailers.

Wholesale suppliers operate in a service industry consisting of warehouses, sales forces, support and logistics offices, merchandising teams, delivery mechanisms and much more.

The wholesale industry is the infrastructure that bridges the gap between the manufacturer (who makes very large numbers of products) and the retailer (who sells the product one unit at a time to the end consumer).

Wholesalers turn very large numbers of products into smaller, more easily distributable numbers of products.

As a rule, wholesalers are the source from which large manufacturers require you to obtain your products.

Exceptions to the Rule

When sourcing product for your business, you will occasionally find a manufacturer who sells directly to retailers.

There is a reason for this and a potential downside. Wholesale suppliers are very aware of how much money every single square foot of their warehouse space costs them.

Wholesale itself is a low-profit, high-volume industry because wholesalers make their money by selling a lot of products very quickly, fast turnaround on the warehouse floor is critical.

For that reason, wholesalers don’t like to fill their warehouses with products that don’t have much brand awareness or are relatively unknown to consumers.

Those unknown products sit on a wholesaler’s warehouse floor far too long, and the wholesaler isn’t turning a profit on that floor space.

Some small manufacturers of lesser-known products have a hard time getting wholesalers to distribute their products, so they may sell directly to retailers.

As a retailer, you have to be careful if you work directly with small manufacturers. They have a tendency to run out of stock unexpectedly, especially during the holiday season, and can also go out of business with little or no notice.

If you base your product sourcing on direct relationships with small manufacturers, stay in touch with them, make sure you are well-stocked on products that sell well and do your best to forecast large orders well ahead of the holiday buying season.

Factory-Authorized Wholesale Product(s)

When a wholesale supplier is factory-authorized, that means it has been chosen by the manufacturer to have a direct relationship and certain exclusive rights to wholesale that manufacturer’s products.

Becoming authorized as a wholesaler for well-known, brand-name products isn’t easy.

Wholesalers sometimes spend years working toward authorization to sell big brand names.

Most manufacturers will choose only a relatively small, strategically located number of wholesalers to sell their products because it’s more cost-effective for them.

When you’re looking for factory-authorized wholesalers for sourcing particular products, there may not be many choices available.

As a retailer, you must make sure you’re working with genuine, factory-authorized wholesale suppliers. For the vast majority of physical products, brand name or not, that’s as close to a manufacturer-direct relationship as a retailer can get.

Because the factory-authorized wholesaler is connected directly to the manufacturer, that is also where you will get your best pricing.

When it comes down to it, there is only one good way to research genuine wholesale suppliers for your product sourcing needs - Ask the manufacturers.

Contact the manufacturer of the products you want to sell, and simply ask them who their authorized wholesalers are.

They know. They’ll tell you, and you’ll be sure you’re not being scammed.

To Find a Product Sourcing Manufacturer:

• Buy a sample of the product, or look at a display model. Somewhere in the box or on the product you’ll find the name of the manufacturer.
• Call the corporate headquarters of the manufacturer, and ask for the sales department.
• Tell the sales representative you are a retail business owner, you want to sell their products in your store, and you need to know who their factory-authorized wholesale suppliers are.

This product sourcing research process does take a long time, especially if you want to locate drop ship wholesalers and light bulk suppliers who will work with you as an online retailer, which are fairly rare.

If you’re going to do the research yourself, you should start now, and continue doing a little research each day.

Sourcing Success

Startup online retail entrepreneurs who take the time to understand product sourcing have won half the battle before they even begin selling. Take that time, and you’ll be doing the best you can to ensure your success.

Info to Grow

Product sourcing isn't just something you do once and forget about – it's an ongoing process that continues throughout the life of your business. You must take the time to learn what you're doing in this critical process if you truly want to succeed.

• www.WorldWideBrands.com: This site contains several free e-books, a large collection of free articles and videos, a product sourcing newsletter and more.
• www.ProductSourcingShow.com: Home of Product Sourcing Radio, a weekly show dedicated to product sourcing information, interviews, articles, podcasts, audio archives and more

Chris Malta is the host of Product Sourcing Radio, product sourcing editor of The eBay Radio Show, and founder and CEO of WorldWideBrands.com, publishers of OneSource, the World’s Largest Source of qualified, actory-direct eCommerce Wholesalers.