Learn about product sourcing and how to get started

Every ecommerce business has to get its wares from somewhere, and product sourcing is an essential part of the process. Companies need to have inventory to sell, and product sourcing is how they find the products that go on the shelves.

As a business leader, you know how important product sourcing is — but you also know it’s not as easy as just finding a supplier, sourcing the product, and then selling it to your customers.

In this article, you’ll find a refresher on what product sourcing actually is, what it entails, and some best practices for doing it better.

What is product sourcing?

Product sourcing is the process of a business finding and acquiring marketable inventory from reputable suppliers to sell to customers at good prices. Typical sources include manufacturers, wholesalers, and artisans, as well as other creators and businesses that make products.

The steps involved in the product sourcing process include:

• Researching the product
• Searching for a vendor
• Calculating and comparing prices
• Negotiating with the supplier

Where can you source products from?

In the ecommerce industry, where access to virtually any product in the world is just a click away, it can be daunting to try and figure out where to source products from. There’s almost too much information and choice. Here are a few good places to start.

1. Wholesalers

This is a good place to start if you’re selling an established product. Wholesalers often sell you products that they sourced from someone else. They’ll usually offer decent prices for large orders, but you could have a high initial cost because you’re buying in bulk. It’s a good idea to make sure that you have the demand before committing to purchasing from a wholesaler.

2. Manufacturers

With this option, you can go right to the source and get products from where they are actually being made. Working directly with the manufacturer can save you money — but since you will probably need a large bulk order, the cost may still be high. Sourcing from a manufacturer is a good opportunity to get custom-made items unique to your business.

3. DIY

If you’re running a smaller business, you always have the opportunity to create your own products yourself. This is a good option for low-count items or products that you want to have a crafted, artisan-made feel. One potential problem with DIY is that you can’t produce items as quickly as a bulk provider can, so demand may outpace supply.

4. Dropshipping

While this is technically product sourcing because you’re getting products from a vendor, you never actually see the product. The vendor takes care of everything after the sale. Dropshipping is a good option if you want to take a lot of the hassle of product sourcing out of the equation.

Product sourcing best practices

The purpose of product sourcing is to find the best products at a reasonable price, as well as to have a consistent and reliable supplier to keep store inventory filled. Let’s review some product sourcing best practices.

Research your products and verify your suppliers

One of the most important steps of product sourcing is research. Make sure there’s demand for a product before purchasing it in bulk. Ensure you’re getting a product that can be produced at your company’s standards.

Not only do you need to research your products, but also your potential suppliers. Make sure they’re legitimate, registered, and reliable. You don’t want to receive counterfeit, poorly made, or delayed products.

Avoid intermediaries

Going through an intermediary, or someone “in the middle” might seem easy at times, but all it does is cut into your profit margins. Get as close to the source of the product as you can.

Have a plan B

It’s crucial to have a backup supplier that you can go to if needed. Problems arise, and you should be prepared for the worst — even if you have a good relationship with your primary supplier.

Imitation is encouraged

Chances are there’s a business in your industry that sells products similar to yours, and they probably have a product sourcing process that works. Copying a successful sourcing model that already exists is completely fine.

Getting started with product sourcing

Product sourcing is an integral part of ecommerce, and the process of product sourcing itself is important.

Once you’ve settled on a process and source and have your desired products, you need a way to sell them. That starts with a great ecommerce platform.

Adobe Commerce is the world’s leading digital commerce solution for merchants and brands. With Commerce, you can build engaging shopping experiences for every type of customer, no matter your business size or type.

Watch the Adobe Commerce overview video to learn more.