What is Product Sourcing?
Worldwidebrands, the reliable dropship directory leader, offers FREE preview of their great product. I know from my own experience that many first time visitors get confused as they see some terms they are not sure what their meaning is: Product Sourcing – Light Bulk, General Wholesale/ Large Volume, Liquidation, etc… Well, I hope that this article will help you to get an idea what all these terms mean…
“Product Sourcing” is simply the act of finding and qualifying those rare genuine wholesale suppliers who are willing to work with small, home-based Internet Business Owners. There are 6 Common Methods of Sourcing Products:
1. Local Sourcing: The seller finds products from local sources such as Home, Garage Sales, Thrift Shops & Outlet Stores. Local Sourcing is not a renewable source for product. It’s a time consuming process to find the garage sales, research the product, then there is no guarantee on the profit margin for that product.
2. Drop Ship: A product sourcing method where the supplier will send products one at a time directly to your customer from their warehouse. The seller does not have to maintain an inventory or handle shipping. The seller however does handle the collection of the money from the customer and pays the supplier for the product purchased. Drop Shipping is a renewable source of product. However, the profit margins are not very large. Normally, a wholesaler will charge a drop ship fee to cover the costs of the individual product handling and individual shipping costs.
3. Light Bulk: A product sourcing method where the seller purchases from a wholesaler in quantities less than $500. Such quantities are ideal for storing in a garage or a storage unit. The seller manages all interactions with the customer and the product from collecting the payment to handling the inventory to shipping to the customer. The profit margins are much better with bulk quantities because the wholesalers can offer quantity discounts.
4. General Wholesale/Large Volume: An extension of Light Bulk however the quantity of product is much higher. The larger the quantity purchased directly from the wholesale the higher discounts received by the seller. When a retailer buys in large volumes the supplier will add discounts and different wholesale pricing structures depending on how much money the retailer is willing to spend. This is normal with all suppliers. The more money the retailer spends on inventory results in more discounts. The more discounts on wholesale they get results in better profit margins. Competing in the market place for the best price becomes much easier.
5. Liquidation – A product sourcing method where a seller can source commercial surplus inventory and closeout products through wholesalers. Liquidation is not a constant renewable source but using liquidated products is a great way to upsell and cross sell to a sellers customber base. Using liquidated products as a loss leader is another great method for driving traffic to other auctions and stores. Through OneSource, sellers have the ability to search through the product database of well known and well respected liquidators.
6. Importing – Sourcing products from international countries. Importing can be done individually or through wholesalers that handle the importing procedures. Through OneSource, sellers have the ability to search through the product database of well known importers from China and more.
[tags]product sourcing, drop ship, dropshipping, wholesale[/tags]
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