Sourcing is the NEW Pink
Hey Good People,
Over the last few months, I decided to travel and begin my sourcing journey out of the country. I thought it was important in my process. I noticed each time, I spoke to someone they were more interested in sourcing than my trip. So I figured, I would take my time and give you all a deep dive into sourcing. Email me if you have additional questions.
WHAT IS PRODUCT SOURCING?
Product sourcing is the process by which a business creates or buys a product to sell. There are a variety of methods or ways sellers source their products. Most sellers use a combination of methods which includes dropshipping, wholesale, print of demand, made-to-order, and custom manufactured.
TYPES OF PRODUCT SOURCING:
You have three primary sourcing options to consider:
- DIY products, Handmade, or DIY services.
- Work with a manufacturer or wholesaler.
- Hire a drop shipper.
No option is better than the other, but there are a variety of factors to keep in mind when determining which works best for your business/ and for your lifestyle. Let’s break each one down.
1. DIY PRODUCTS, HANDMADE, OR DIY SERVICES.
The idea of crafting your own product dates back centuries.
Today, thanks to the internet, you now have a much wider reach for selling handmade goods.
But if you’re thinking about creating your own products, there are some factors to consider.
PERKS AND PITFALLS:
PERK– You have TOTAL CONTROL!
PITFALL– You may be in a new space with a new product. May have to make 1 at a time which may take longer…it’s only you! You only have 2 hands.
Startup costs are typically low, although you’re going to need to put time and energy into your business, which is a sacrifice in and of itself. Remember, you can never get your time back.
You’ll want to make sure you’re always thinking ahead about how you will scale and possibly grow your product line over time in order to stay competitive and offer your customer base something new.
Did You Know– I’m in a US Cobbler Mastery Program & sometimes will go on FB Live and IG Live showing the shoe-making process. My custom-made shoes take much longer than my made-to-order process.
TASKS TO GET STARTED:
- Source materials: You can source from your local flea market, craft stores, estate sales, an established retailer, or even friends and family. Identify your materials, where you’ll get them, and how much they’ll cost.
- Determine how you’ll ship orders: Will you be running to the post office or UPS store yourself, or would hiring a shipping service to be worth saving time and energy?
- Learn what it will take to ship: Give thought to packaging. It can really make or break a product. Also, identify the total cost because if you don’t it can create some serious shipping challenges later on.
- Calculate how long your products take to make: You should know exactly how long it takes to make a product. From day 1 until the product is at your home. Also, give some thought as to whether or not you will make items to order or if you want to keep inventory on hand. Be sure to document any labor costs, whether it’s money spent or time spent. Helpful Tip- Create an excel document and save it onto your cloud drive or click here to get my excel spreadsheet.
- Consider where you’ll store your inventory: Start in your garage or an empty room in your home. When your start to scale, look into alternatives like renting a space, opening a storefront, or using a storage unit. Helpful Tip- Make sure you have business insurance, if not get your business insurance at this time.
- Make a plan for communicating timelines: Your website or landing page should set expectations on how long it takes to craft a product and complete an order. You can do this in places like your product description and shipping and returns policy, plus reiterate in your transactional emails. It’s always better to be transparent and upfront so your shoppers feel confident purchasing from you. For example- We tell you that our shoes are made to order and custom-made. However, we have limited inventory.
2. WORKING WITH A MANUFACTURER OR WHOLESALER.
Working with a manufacturer or wholesaler means you hired a business partner that helps you develop your product. Here are a few great places to start sourcing and work directly with wholesalers or manufacturers.
- MY SITE
- Etsy Wholesale
- Other similar products
- Click the link below or purchase the Wholesale Directory Guide here
Manufacturers are a great option if you aren’t able to make a product yourself. It’s also great when you’re ready to scale your DIY product by hiring someone else to make it for you. Wholesalers don’t make your product. The product is already made and can be used to white label aka private label products. It’s great for branding everyday or unique products.
Helpful Tip– My site has a list of US and Overseas Manufacturers and Wholesalers for clothing, shoes, and accessories. BTW- The Apparel Textile Sourcing will be in Miami on May 28-30, 2019.
Helpful Tip – If you see a product similar to your idea in the store or online you can buy the product and usually find a manufacturing company. Contact them and see if they can make your product. If you didn’t know we make work with overseas and US manufacturing companies.
PERKS AND PITFALLS:
While this gives you the option to pursue your idea or sell popular products without making anything yourself…expect to invest more heavily upfront.
You can still have control over your brand and the quality of your product, plus get a great deal of assistance with production and possibly packaging.
ITEMS TO CONSIDER:
- Finding products: This can be as simple as you and a friend forming a business relationship that makes a product you’d like to sell, an online sourcing site, partnering with an existing company, or taking a business online. Finding the right partner can take some time, but don’t get discouraged.
- Checking references: As with any business, you need to make sure you’re dealing with someone who is legit. Reach out to others who have used the manufacturer or wholesaler, and maybe do a little digging by going on their website or physically visiting. I prefer to go in person and see the place for myself. It’s a good sign if the company you’re researching asks for information that proves that you have a legitimate business, too. Be prepared to provide necessary licenses or tax information.
- Evaluating your options: Be sure to ask questions about each company you’re considering so you can make the best decision.
- What will the total cost be? Take into consideration production, shipping, and potential hidden fees.
- How long will it take for them to make/ship the product?
- What does shipping and inventory management look like? Will you need to ship and store or is that included as part of their service? Is there any additional cost? What are the timelines and conditions? Do you have control over package branding?
- What do the contracts and terms look like? Is there any wiggle room for things your business or customers need? Is there an evaluation period or terms for termination?
- What do support and communication look like? How frequently will you be updated on information like inventory, product changes, or even discounts?
- What are the minimum order quantities? Will you have to commit to a certain number of units or spend a minimum amount?
- Getting a sample: Before you sign on with anyone, make sure their products meet your expectations. While some manufacturers will charge a fee to send you a sample, you can often negotiate a deal to only pay for it if you keep it.
- Picking one: Weigh your options and get going! You want to ensure you’re making a smart decision, but that doesn’t mean you should sit in research mode forever. Worst case, you pivot and go another direction because this is your vision and your business.
Dropshipping is a method of product sourcing that lets you purchase from a vendor and list their products on your online store.
The vendor charges you for the products as they are sold, and typically ships orders on your behalf.
PERKS AND PITFALLS:
PERK– With dropshipping you don’t need to deal with inventory, packaging or fulfilment.
PITFALL– The catch is you will have more competition. Many products are offered by dropshippers. So remember to always stand out from the competition.
Helpful Tip: Offer a complimentary/ free product to go with your main product or faster and free shipping. Click here if you want a drop shipping checklist.
However, most have a wide selection of products from which you can choose. Dropshipping usually gives you a lower profit margin, so you’ll need to sell a lot before making a good profit.
ITEMS TO CONSIDER:
The steps to find a dropshipping supplier or aggregate dropshipper (a dropshipper that works with a variety of dropshippers for you) are nearly the same as those you’d follow for the manufacturing option.
- Find some options
- Check their references
- Evaluate all of your options
- Ask for samples
- Pick one and go with that product
I know this may sound like a lot but don’t get discouraged or give up on your idea just because it doesn’t fit into any of the above scenarios. This is to only serve only as a guide to help you begin your research journey and to help others find profitable and realistic business ideas. I will discuss this on my personal IG TV (@Sunshynpink08) Hope this helps and serves as a resource and as a result bring you money. So your side hustle can become your main!