• March 16, 2018

An Introduction to Product Sourcing

  • By admin

Buying products for resale
Purchasing products to resell for a profit is the age-old strategy of any company’s success. “Buy low, sell high” can be heard throughout marketing sessions worldwide. Retail sourcing used to be as simple as taking a stroll through a good neighborhood on town-wide yard sale day, snagging a ton of steals from folks who just want that stuff out of their house, and slapping a much higher price tag on the item in your store.
With the evolution of world-wide commerce opportunities online and growing complexity in global markets it’s time to consider automation through global sourcing software in order to scale and grow retail private label assortments.

Renewable Product Sources

If your goal is longevity as a successful retailer with repeat customers, you’ll want to work with supplier’s who have capacity, can produce the quality required and can hit agreed upon timeline at the agreed-on price.
There are a number o ways to source and work with suppliers , each having its own set of pros and cons. Pay particular attention to any additional upfront costs associated with the supplier that you will have to pass onto your customer.

  • Volume
    1. You buy in large quantities.
    2. You pay to have the items shipped to your location.
    3. You get a deeply discounted price.
    4. You have to re-ship to your customers
  • Light bulk
    1. You buy in manageable quantities
    2. You pay to have the items shipped to your location
    3. You get a reasonable cost.
    4. You have to re-ship to your customers
  • Drop ship
    1. You never touch the product.
    2. You never incur any shipping charges
    3. You negotiate a wholesale cost with the supplier
    4. The supplier ships the ordered item to the customer

Single Sale Resources

These wholesale purchases are one-shot-deals. It’s not impossible that you may find the same items again in a single sale offer, but you cannot count on it.
Liquidation sales are a prime example of this. Occasionally companies have large quantities of an item they want to move quickly.

  • Your cost will be rock bottom.
  • You can choose to pass on some savings to the customer.
  • You can choose to capitalize on the high profit margin.
  • You cannot promote consistency of in-stock product.

Product sourcing software automatically compiles all the relevant data for your supply chain, allowing you to spend time on more important tasks while still watching your profits grow.

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