One of the most critical business decisions you will make as an entrepreneur in the 21st century is finding the right suppliers for your e-commerce store. An e-commerce business will work to your advantage if you choose the right partners and nurture relationships with people/organizations that provide the things your customers want.

In order to deliver exactly what the customer wants, you must have a reliable provider in terms of payment methods, delivery options, and product supply. When your goal is to be competitive in terms of quality and price you must have an ace up your sleeve—the “perfect” product selection.

Learning About Distribution Channels

The first step to finding the suppliers that match your needs is to understand distribution channels. Every industry has its peculiarities, so the supply chain for one industry may be vastly different to another. You must endeavor to learn how the products your customers are looking for reach the retailer from the source—the manufacturer. Once you’ve got this aspect of the business figured out, then it’s time to find the right wholesale supplier for your e-commerce startup.

Buying directly from the manufacturer is one of the ways to secure products for your online store. Many small manufacturers are more than willing to sell directly to you. However, this is not the standard for all types of products. Some industries require an exclusive distributor or importer.

A product manufactured in another country may have a sole distributor. If it’s not possible for you to transact with the manufacturer directly due to exclusivity, then you might have to deal with the exclusive distributor. When the exclusive distributor chooses to sell to smaller wholesalers or regional distributors instead of retailers, then you’ll have to go through the middleman to get the complete array of products for your inventory.

The goal of most startups is to have the capability to move up the supply chain. When they can afford to buy a greater volume, they can buy directly from the exclusive distributor or manufacturer, and procure the products at lower prices.

Thinking About Product Sourcing

Retailers use a combination of methods to source products that they can sell in turn. One of the most popular ways to source a product is to find a direct manufacturer or wholesaler and go through the supply chain. Another type of product sourcing is to hire a drop shipper (We’ll discuss this in more detail shortly). Then, there’s the option of crafting the products yourself. Selecting the right option for your e-commerce site depends on your business plan.

You have to be ready to invest a great deal at the onset when opting to hire a partner or manufacturer. You must be ready to deal with the potential pitfalls of having a partner produce the product that you sell, where you’re not involved in the production process. Opting to make the product yourself is only an option if you have the capability and resources to do so.

Having full control of the product from production to sales can pay off handsomely. Nevertheless, you must be ready to invest your time, be aware of limitations, and work hard to remain competitive.

Sourcing products through a drop shipper is somewhat different. In this method, your e-commerce website serves as the conduit by which you sell products purchased from a vendor. The arrangements usually include shipping so that the customer will receive their order directly from the vendor. The method frees you from inventory and packaging requirements.

This may be the best method to employ if you want to expand your product catalogue quickly, but the competition can be fierce because the products you sell are not exclusive to your site. You must think about other ways to gain an edge over your competitors.

Finding Potential Suppliers

It’s quite easy to find prominent manufacturers making original products. You can usually find their contact details on their websites. Spend a few hours on Google, and you’ll have a long list of possible suppliers and distributors to reach out to.  You can also find them in trade shows. Attending these events offers numerous opportunities for networking and interacting with the manufacturers themselves.

Still, you must realize that not all suppliers are actively engaged in search engine optimization. The best products to sell may be produced by a company that is not listed on any digital databases. The most competitive products may not have the online presence that gives them prominence in social media.

If you are not as web-savvy as you think you might even miss the most cost-effective options. After all, it will depend on the keywords you use. Perhaps, it might be a good idea not to rely solely on a web search. Talk with key players in the industry. Make friends with other entrepreneurs within the niche. Relying on word-of-mouth is an age-old tradition that has its own advantages.

Choosing between domestic and international suppliers

Is it cheaper to source your products from local manufacturers than buying from overseas? There is no absolute answer to that question. It’s not always cheaper to buy wholesale from manufacturers abroad. It largely depends on the type of product you wish to buy and sell.

Domestic sourcing has one primary advantage: There is no need to learn a new language or risk miscommunication due to the language barrier. You can verify the reputation of the manufacturer at little to no cost. Shipping is less costly and faster, too. Yet, potentially high manufacturing costs for certain products can be a huge disadvantage.

International sourcing may be the best option for some products if the cost-effectiveness is the main criteria. After all, you have the luxury of choosing from a long list of options. However, the labor and manufacturing standards may not be at par with yours. Shipping and customs clearance might take time, and they may be glitches in payment security.

Once again, your e-commerce store’s operational process and product line will define whether to source your products locally or abroad.

Conclusion

Running an online business is wrought with challenges, but it’s also full of great opportunities. You have to make good on your promise to provide great products for your customers. It is your singular responsibility to find the right suppliers for your e-commerce store.