Learn about product sourcer and how to get started？
Every e-commerce business must source products from somewhere, and product sourcer is an essential component of this process. Companies need inventory to sell, and product procurement is the way they find products to stock on their shelves.
As a business leader, you understand the importance of product sourcer, but you also know it’s not as simple as finding suppliers, buying products, and selling them to customers at a profit.
In this article, you will review the practical meaning and significance of product procurement, as well as some best practices to consider.
What is Product Sourcer?
Product sourcer is the process through which a company locates and acquires inventory that is in demand and can be sold to customers at a favorable price from reputable suppliers. Typical sources include manufacturers, wholesalers, artisans, and other creators and manufacturers of products.
The steps involved in the product sourcer process include:
- Researching Products
- Finding Suppliers
- Calculating and Comparing Prices
- Negotiating with Suppliers
Where Can You Procure Products?
In the e-commerce industry, you can purchase almost any product with just a click of a mouse. Trying to figure out where to procure products can be daunting, with an overwhelming amount of information and choices. Here are some good starting points:
If you’re selling established products, this is a good place to start. Wholesalers often sell products they’ve purchased from others. They typically offer discounted prices for bulk orders, but your initial costs may be high due to the bulk purchase. Before deciding to buy from a wholesaler, make sure you have the demand.
With this option, you can go directly to the source and acquire your products from where they are actually made. Working directly with manufacturers can save you money, but costs can still be high as you may need to place large orders. Procuring from manufacturers is an excellent opportunity to get customized products that fit your business.
If you run a small business, you always have the opportunity to create your own products. This is a good choice for small batches or products that have a handmade feel. One potential issue with DIY is that you may not be able to produce items as quickly as bulk suppliers, and demand may exceed supply.
While technically part of product procurement since you’re getting products from suppliers, you never actually see the products. Sellers handle all post-purchase matters. If you want to avoid many of the hassles of product procurement, dropshipping is a good option.
Best Practices for Product Procurement
The purpose of product sourcer is to find the best products at reasonable prices and have a consistent and reliable supplier to ensure your store stays well-stocked. Let’s review some best practices for product procurement:
Research Your Products and Vet Your Suppliers:
One of the most critical steps in product procurement is research. Before making bulk purchases, ensure there’s demand for the product. Make sure the products you acquire can be produced to your company’s standards. You need to research potential suppliers too. Ensure they are legitimate, registered, and reliable. You don’t want to receive counterfeit, low-quality, or delayed products.
Working through intermediaries or “middlemen” might seem easy, but all they do is cut into your profit margin. Get as close to the source of the product as possible.
Have a Backup Plan:
Having a backup supplier to contact in case of issues is crucial. Even if you have a good relationship with your primary supplier, always be prepared for the worst.
There may be a business in your industry selling similar products, and they might have an effective product procurement process. It’s perfectly acceptable to replicate a successful procurement model that already exists.
Getting Started with Product Sourcer:
Product procurement is an essential part of e-commerce, and the procurement process itself is vital.
Once you’ve established the process and sources and have obtained the necessary products, you’ll need a way to sell them. It all starts with an excellent e-commerce platform.
Supplyia Commerce is a world-leading digital commerce solution designed for merchants and brands. With Supplyia, you can create engaging sourcing, inspection, shopping experiences for all types of product sourcer, regardless of your business size or type.