6 Common Product Sourcing Questions Answered
If you’ve got a question about your E-Biz, someone else has probably already asked it. Matthew Hedges, customer support manager for product sourcing experts http://www.worldwidebrands.com, and author of The Online Research Guide to Picking Products That Sell, answers the six most common product sourcing questions he gets from customers looking to start an E-Biz:
1. Will suppliers care if I’m a new online retailer working from home? Generally no. Says Hedges, “They want to get their product out to consumers as much as possible, so they’re looking to open new accounts.”
2. How can I convey to a supplier that I’m a serious professional, not a fly-by-night home business? • Before you call or email questions to a supplier, read their web site. The answers are often right in front of you. Wasting their time with questions you could have easily found answers to yourself reflects poorly on you. • When you contact a supplier — get to the point. Wholesale suppliers are busy people. They want to help their retailers but don’t have time to chit-chat. So get to the meat of your question as quickly as possible. • Proofread and spell check your emails. An email full of typos, sentence fragments, and run-ons doesn't convey professionalism. • Be patient. Just because a supplier doesn’t respond to your questions the same day you send them is no reason to get agitated. If they think you’re going to be a demanding customer, chances are they won’t work with you.
3. I found a supplier I want to work with — what’s my first step? Your first step is to check for an online account setup form and fill it out. Real wholesale suppliers need proof you're a legitimate retailer to give you access to their actual wholesale pricing structure and set you up with an account. You'll need a registered business name and tax ID to work with real wholesalers. Obtaining these documents is easy — just contact your local County Clerks Office.
4. I only want to sell popular name brand items — how do I get a supplier? You can’t afford to limit yourself to selling only brands you recognize. Your research should predicate your product line. Many brands you’ve never heard of are very popular within certain demographics.
5. Should I be focusing on “hot sellers” like iPods, gaming consoles, designer clothes, and DVDs? Can I drop ship them? Once everyone knows an item’s hot, the market becomes saturated. The demand is there, but the supply is too. Everyone tries to undercut everyone else, and the profit margins get really slim. Beyond that, the manufacturers of these items set astronomical buying minimums — say $100,000 each contract term. You could mortgage your house to meet the minimum, and your wholesale prices would still be much higher than those of the big chains that get additional discounts for spending millions with suppliers. Finding a supplier who’ll drop ship these items individually is almost impossible. It’s cost-prohibitive for them — especially in clothing where the return rates are usually high. And again, your wholesale rate for one item won’t let you compete with sellers buying in bulk.
6. There’s an item I really want to sell, but I can’t find a supplier who’ll work with me — what now? Keep looking. If after you’ve researched, you still can’t find a supplier for that particular item, don’t give up altogether — just consider other product options. There are millions of products you can sell. Hedges advises, “You can find items that let you compete, but you have to base your product choices off your market research.”