{"id":7483,"date":"2021-05-06T12:11:46","date_gmt":"2021-05-06T04:11:46","guid":{"rendered":"https:\/\/newsbites.hktdc.com\/?p=7483"},"modified":"2021-07-14T16:00:19","modified_gmt":"2021-07-14T08:00:19","slug":"product-sourcing-101","status":"publish","type":"post","link":"https:\/\/newsbites.hktdc.com\/tips\/product-sourcing-101\/","title":{"rendered":"A Complete Guide to Product Sourcing: Process Breakdown, How-to & Foolproof Tips"},"content":{"rendered":"\t\t
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Product sourcing. <\/span>It can\u2019t be too different from identifying trending products<\/span><\/a>, finding a supplier, placing orders, and selling them online. Sounds simple enough.\u00a0<\/span><\/p>

If that\u2019s your idea of how to source products, then you\u2019re definitely underestimating the work it takes.<\/span><\/p>

Anyone could source products online. <\/span>But how to source products of good quality at a great price with good profit margins guaranteed<\/span><\/a>? To achieve that, you need to do plenty of research and expect a lot of trial and error.<\/span><\/p>

This is product sourcing 101. In this crash course, we will go through how to source products, share top insiders\u2019 product sourcing tips, and ultimately help minimize your e-commerce errors yet maximize your returns.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Product Sourcing 101: What is product sourcing; where to begin\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Product sourcing is the process by which a business owner finds a good product to sell. It requires identifying reputable and reliable suppliers, as well as trading at good prices. The process of product sourcing involves various stages.\u00a0<\/span><\/p>

From doing research on a target product<\/span><\/a>, considering your budget and evaluating product prices and costs, to negotiating with suppliers for the best deal. Each stage makes a significant impact, and if well-handled, product sourcing can result in pinning down the best-selling products, from reputable suppliers, at great prices that can bring great profit returns.<\/span><\/p>

It is easier said than done. Often in the process of product sourcing, sellers can end up with unreliable suppliers, unknowingly paying hidden costs, misrepresentation or receiving low-quality products. To be ahead of the game, implementing product sourcing strategies is crucial to your e-commerce success.\u00a0<\/span><\/p>

A great place to begin would be supplier outreach: connect with a product sourcing agent with suppliers of great expertise and niches, especially one that is based in China if you are sourcing products from China.\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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1. Connect with a wholesaler<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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By developing a close relationship with an experienced wholesaler, you stand a great chance of discovering unlimited, unique products without having to manufacture the product prototype yourself.<\/span><\/p>

Also, because of the huge quantities of products factories make for a batch, most wholesalers will only produce what they already know for sure would sell well. With this insight, you know there is a market and guaranteed demand for your product. The only downside is that wholesalers, by nature, will only offer products in bulks due to the higher initial production costs. This means that e-commerce sellers will have to pay more upfront and hold greater quantities of the product. This could also invite potential competition from other sellers who source products from the same wholesaler.<\/span><\/p>

HKTDC has a resourceful network of wholesaler connections, readily available for you to reach out. For more information, head over to our <\/span>Sourcing website<\/span><\/a>.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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2. Trade with a manufacturer\n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Working directly with manufacturers cuts out two things: the potential middleman who could be a communications barrier; the additional incurring fees where mediators and transports cost. Trading with a manufacturer will give you a much better price in ordering products. This is often the case for businesses sourcing products from China. However, the catch would be to fulfil the minimum order quantities (MOQ). This could be very challenging for smaller businesses with smaller budgets.<\/span><\/p>

To find one manufacturer that you can reliably trade with at a reasonable price, visit <\/span>HKTDC Sourcing<\/span><\/a> for its ample connections.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\"hktdc-sourcing-product-source-101\"\t\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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3. Attend trade shows\n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Nothing beats sourcing product first-person. Attending trade shows, exhibitions, and conferences are great opportunities to do <\/span>market research and observe trends in the market<\/span><\/a>. More importantly, it is the opportunity to interact and build relationships with manufacturers, wholesalers and other independent retailers. They often have insights and access to unique products that are not yet common in the market.<\/span><\/p>

Take advantage of the opportunity to inspect the product first-handedly. Talk to the seller and supplier to gain an insider\u2019s insight. This way, you can better understand any potential issues, such as the product\u2019s demand. But the catch of trade shows is they do not take place regularly. This approach may not be frequent enough to catch up with market happenings.<\/span><\/p>

For upcoming trade shows, stay tuned to <\/span>HKTDC Events <\/span><\/a>for latest updates.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\"trade-show-sourcing-product-101-hktdc\"\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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What is the process of product sourcing?\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Starting one\u2019s own online business and sourcing what one likes is always exciting. Yet, it is crucial to get this step-by-step procedure right in order to kickstart your business on the right foot.<\/span>\u00a0<\/span><\/p>

From market demands, minimum order quantities, vendors\u2019 output and efficiency, to delivery costs, each of these factors can immensely affect your business. To get ahead for product sourcing success, preparation and doing studies in advance is your safest bet.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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1. Study Trends and Market Demands\n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Before you place a product order, you want to make sure there is enough market demand that could boost your store\u2019s sales and overall growth or particular products that work better for certain types of stores.<\/span><\/p>

Find out what trends in your product category at the moment, and from there, identify your market rivals. This can again be done by cracking <\/span>Google Trends<\/span><\/a>, which we have another guide on.<\/span><\/p>

Ask yourself: What are you really looking for? What would your ideal customer like to see on social media? Would you receive reviews from various platforms? How can you best engage with them? Can what you sell relate to who they are?<\/span><\/p>

Products with proven sales track record and established market demand are safer choices for small companies. Compared to introducing a new product into the market, the former guarantees returns and saves marketing efforts. Thus, better look into what shoppers often choose before sourcing.<\/span><\/p>

Using platforms like Amazon or Internet Search Results could provide great customer insights. Both platforms provide great in-depth analysis and free resources online.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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2. Budget Wisely\n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Once you have compiled a list of potential products, research your competitors\u2019 pricing. This would help estimate your expenses and budget before contacting suppliers or begin product sourcing. In general, you can approximately estimate the cost at half the retail price.<\/span><\/p>

With smaller budgets and a smaller room for storage, a start-up can look for these favourable terms in a supplier:<\/span><\/p>