What is Product Sourcing and How to Source Your Product?
As a retail buyer, a good product sourcing strategy to stock your shelves is critical to your store’s success. With suppliers large and small ready and waiting to get their products on shelves and online stores, it can be overwhelming for buyers.
Buyers must understand where they are sourcing their products and how this ultimately affects their business.
So, here’s what you need to know about product sourcing.
Table of Contents
What is Product Sourcing?
Product sourcing refers to the process of finding suppliers, purchasing inventory from them, and then reselling it. Common product sourcing methods include finding a manufacturer for custom products or purchasing third-party goods directly from a wholesale supplier.
Where to Source Products?
Finding the right suppliers for your products can be a challenge. The number of suppliers worldwide is vast. For retailers, no single supplier can provide every product you need on your shelves while meeting the demands of your consumers.
So, when considering multiple product suppliers, it makes sense to explore various avenues to source those suppliers and products.
Search Online
These days, it seems everything starts online, and product sourcing is no exception. There are two main options when searching for places to source products for your retail business online.
While any reputable business has an online presence in 2025, trying to find the right products for your business by searching websites alone is time-consuming and labor-intensive. A single product search can yield thousands of results:
Online Websites
Online Supplier Platforms
Online Apps for Product Sourcing
Whether you’re running your first or fifth ecommerce business, explore the following 12 apps to source products for your ecommerce store in 2025:
Technology in Product Sourcing
Although online platforms and apps are valuable, leveraging modern technology—like AI tools and data analytics—can further optimize the sourcing process. Consider the following:
- Use data analytics tools to forecast market demand and identify top-selling products.
- Employ automation software to manage supplier relationships or track order statuses.
For example, tools like Google Trends or Jungle Scout can help buyers analyze product trends, while CRM systems streamline communication with multiple suppliers.
Attend Trade Shows
Although trade show attendance declined in the early 2020s, they remain a viable and valuable resource for buyers to research and source new products in 2025. Trade shows give buyers the opportunity to get immediate information, see products firsthand, and build relationships with suppliers.
Trade shows also allow retail buyers to stay ahead of the latest trends, ensuring their shelves are stocked with current and future high-demand products.
Hire a Product Sourcing Agent
A product sourcing agent can find manufacturers to produce products for you, handling tasks such as researching suitable manufacturers, negotiating prices and costs, and securing the best deals for the products you want to sell.
It’s worth noting that it may take 1 to 2 months from initial communication to final order when working with a product sourcing agent.
Sustainable and Ethical Sourcing
Sustainability and ethical sourcing are increasingly vital in today’s retail landscape, especially for consumers who prioritize environmental and social responsibility.
- Choose suppliers that meet environmental standards.
- Ensure suppliers adhere to labor laws and ethical practices (e.g., no child labor or forced labor).
For instance, with more consumers favoring sustainable products, retail buyers can meet this demand by requiring suppliers to provide certifications like FSC or Fair Trade.
How to Source a New Product?
Sourcing new products can seem overwhelming—it’s not as simple as just finding a great product and putting it in your store. However, there are product sourcing methods retailers can use to streamline the process. In this post, we simplify the traditional 7-step strategic sourcing process into 6 easy-to-understand steps.
This article already covers many key aspects of product sourcing, including its definition, sourcing channels, specific steps, and considerations. However, to make it more comprehensive and practical, additional content can enhance its value for retail buyers and address potential challenges.
1. Research Your Product
First, retailers need to understand their product. Market research is critical to success; sourcing products without thorough research is a recipe for failure.
To align your sourcing strategy with consumer needs, consider:
- Using surveys, social media analysis, or sales data to understand consumer preferences.
- Adjusting sourcing decisions based on consumer demand (e.g., choosing local suppliers for faster delivery).
For example, analyzing posts on X about a product can help buyers gauge its potential market demand before sourcing.
2. Contact Potential Suppliers
Before contacting a supplier, know exactly what you, as a buyer, need. Yes, this includes researching the product, as described above, but it also means understanding what you want from the initial contact with the supplier. Are you seeking information? Samples? A specific product? Knowing this and clarifying your needs ahead of time will help the process run smoothly.
This step is also where buyers can leverage contact information from trade shows to reach out to suppliers they’ve met or connected with.
3. Request a Sample
Would you buy a car without test-driving it?
Of course not. Similarly, as a retail buyer, you shouldn’t stock a product in your store without a sample.
When contacting a supplier, include a request for a sample so you can gather feedback from team members, examine the product up close, and assess how the supplier handles the initial transaction before deciding whether to add it to your inventory. Requesting samples is a key part of your sourcing strategy and an excellent way to test product quality.
4. Select Suppliers for Trial Orders
Once a retail buyer identifies a promising product, order a trial run. This might involve requesting a limited number of products for your retail chain or testing the product in select stores. The buyer may opt to trial only specific items from the supplier’s lineup rather than their entire catalog.
Buyers should establish parameters and KPIs for the trial run, such as its duration, sales ratios, and consumer feedback.
5. Evaluate the Supplier
Whether a buyer decides to work with a supplier and build a long-term relationship depends heavily on the supplier’s performance during the trial run. The parameters set above will help the retail buyer evaluate the supplier effectively. Did the product meet expectations? Did it perform well or fall short? How was it received in the store?
Beyond these questions, retail buyers should assess the supplier relationship. Was communication timely and clear? Did the goods arrive on time with the correct products and quantities? Was the product intact upon arrival? Was the quoted price accurate?
These details can make or break the buyer-supplier relationship. If the buyer opts not to continue with the supplier, providing honest, constructive feedback can clarify why the partnership isn’t moving forward.
6. Keep Other Supplier Options Open
Businesses merge, dissolve, or face supply chain challenges, and product quality can sometimes decline. Therefore, retailers should always keep their supplier options open.
This isn’t necessarily a drawback. Consider the benefits a multi-supplier approach can offer:
- Better prices.
When multiple suppliers are involved, there’s an opportunity to negotiate lower production costs.
- Material insurance.
If one supplier struggles to obtain necessary parts or ingredients, it can lead to delays and increased logistics costs. However, with multiple suppliers, a retailer can ensure product availability.
- Quality control.
Sourcing from multiple suppliers allows retailers to quickly compare the quality of products, ensuring they consistently meet initial specifications.
7. Cost Management in Product Sourcing
The article doesn’t yet detail cost management in the sourcing process, such as balancing procurement costs, shipping fees, and profit margins, or setting a budget to select suitable suppliers.
Retail buyers need to consider the Total Landed Cost, which includes product price, shipping, tariffs, and warehousing fees, to ensure sourcing decisions align with their budget.
Evaluate supplier quotes (e.g., FOB vs. CIF prices), account for hidden costs like tariffs or shipping insurance, and reduce expenses through bulk orders or negotiation.
8. Risk Management
While overseas sourcing mentions issues like intellectual property and quality control, it doesn’t systematically address identifying and managing risks, such as unreliable suppliers, logistics delays, or shifting market demand.
- Verify supplier reliability through background checks (e.g., reviewing business licenses or customer reviews).
- Mitigate risks with contract terms (e.g., breach of contract clauses).
- Handle supply chain disruptions by building a network of backup suppliers.
What You Need to Know When Sourcing a New Supplier
As your business grows, you may outgrow your suppliers. Your needs may evolve during your business’s early years, requiring faster shipping, greater order capacity, or a broader product selection. When this happens, evaluating whether a supplier’s scale aligns with your needs becomes essential.
As mentioned earlier, part of choosing a supplier involves considering the order sizes they can handle. If customer demand increases and you need larger product volumes, manufacturers, wholesalers, and importers may better meet that demand than smaller, independent suppliers.
Another reason to switch suppliers might be the desire to manufacture or customize new products. If you’ve built strong brand loyalty or identified promising original products, you might transition from off-the-shelf items to custom or private-label products.
However, sourcing products from overseas is a different endeavor. Purchasing internationally requires more expertise. You’ll need to understand:
- Protecting intellectual property rights
- Controlling product quality
- Ensuring the safety of funds
- Shipping goods safely
These processes will repeat with every order you place. For more guidance, you can refer to this product sourcing examples post.
Legal and Compliance Considerations
While overseas sourcing covers intellectual property and safety, it doesn’t fully address import regulations, certification requirements, or industry standards.
- Ensure products meet target market safety standards (e.g., CE certification or FDA requirements).
- Manage customs clearance and tax obligations.
For example, when selling electronics in the U.S., buyers must ensure suppliers provide FCC certification to avoid legal risks.
Product Sourcing Conclusion
Product sourcing is not always a simple, straightforward process, and even when a retail buyer finds a reliable supplier and builds a strong relationship, the work doesn’t stop there.
Product sourcing extends beyond the purchase—maintaining product quality and integrity is crucial, as is nurturing the supplier relationship.
To maintain long-term supplier relationships, consider:
- Regular communication and feedback.
- Incentivizing suppliers with loyalty discounts or long-term contracts.
For example, holding quarterly review meetings with suppliers can resolve issues promptly and strengthen trust.
This article provides a solid foundation, but adding topics like cost management, risk control, sustainability, and technology makes it more comprehensive and actionable. These additions help retail buyers tackle real-world challenges effectively.
Buyers should remain proactive in developing new supplier relationships and keep the essential steps outlined here in mind to ensure success. If you need product sourcing services, feel free to reach out to us.
