Sourcing Products for Your eCommerce Store
The suppliers or wholesalers that provide products for your online store are an important piece of your business. You want to do your best to provide top-notch products and services to your customers, but without the right suppliers, you will struggle to do so.
Having a good supplier will improve your ability to compete on pricing, allow you to fulfill orders on time, and ensure that you can offer the highest quality products to your customers.
The challenge is finding the right supplier. When it comes to wholesale suppliers alone there are at least 330,000 providers.
Why are there so many suppliers? The simple answer is that online retail is a general term for an industry that sells products ranging from dog whistles to disco balls.
Just like successful eCommerce stores, suppliers choose niches within the eCommerce industry in which they can excel.
This enables individual eCommerce stores and their suppliers to perform well within their niche, but also leaves the supplier and wholesaler industry fragmented and confusing.
Which is why you’ve come looking for help to find the suppliers for your eCommerce store, right?
Well, in this post, we provide all sorts of helpful information about finding and selecting a supplier for your eCommerce business. We’ll cover how you can narrow down your search, what to consider when selecting a supplier, how to communicate with suppliers, and finally where you can find information on available suppliers.
So, let’s dive in.
What do you want to sell?
The first question to ask when trying to find a supplier for your eCommerce store is actually a question about your own business – “What types of products do I want to sell?”
The answer to this question will help inform you of where to start looking, what qualities in a supplier are important to you, and what price ranges you should expect.
How to Handle Sourcing and Fulfillment
The second question to ask is – “How do I want to source products and fulfill customer orders?” Determining how you want to source your products, before looking for suppliers, will help you narrow down the list of suppliers that you will need to research. There are typically three options when it comes to sourcing and fulfilling products.
- Third-party Fulfillment
When you go the self-fulfillment route, you are choosing to do one of two things (1) make and sell the product yourself or (2) outsource the manufacturing and then sell the product yourself.
This method is often employed by startup eCommerce companies; particularly those that have invented a new product or iterated on something that was already in the market.
With self-fulfillment, you will ship the product from your warehouse to your customers directly. This will require that you have a warehouse (or large basement/garage) to store products until they are ready to be shipped.
This method also typically requires that you pay for your product in advance and then carry the inventory until you sell it. This method is usually expensive and comes with financial risks, but it also allows you to have a good amount of control over the process and product.
Another option for fulfilling products is to use a third-party fulfillment service. In this case, you would still be responsible for sourcing the products and perhaps even manufacturing them. But, once they are ready for the consumer, you ship your inventory to someone else’s warehouse and let them fulfill the orders for you.
When choosing to go with this type of arrangement, be sure to fully understand the costs involved with using a third-party fulfillment company and effect this may have on your customers’ experiences.
A third-party can save you a lot of time, but it needs to align with your brand and your budget. The most popular third-party fulfillment service is Fulfillment by Amazon.
Dropshipping is another very popular option for working with suppliers.
Dropshipping is a business model where your store doesn’t hold the inventory it sells. Rather, when a customer buys a product online, it is shipped from a third-party directly to the customer. With a dropshipping model, you would never actually see or handle the products you are selling.
Dropshipping is a great way to get started quickly, with lower upfront costs. There are a number of positive benefits to using a dropshipping model, such as a lower initial investment, the time to market is shorter, reduced overhead costs and your working capital is not tied up in inventory.
Why You Shouldn’t Dropship
There are also a number of negatives to dropshipping, such as lower profit margins, inventory management issues, and relying on the quality of service and care of your third parties. When you use Dropshipping, particularly when you are a startup, it can also be difficult to keep prices low, ensure an amazing customer experience, and gain leverage to reduce costs.
What to Look for in a Wholesaler or Supplier
There are many factors to consider when selecting a wholesaler or supplier. As a small or growing eCommerce store, it’s vital that your suppliers’ interests align with your own. You can ensure that this happens by focusing on each of the items below.
Most suppliers offer products or materials for a specific industry or market niche. It can be extremely beneficial to find suppliers that are experts in your market because they will understand the level of quality you are looking for, the price points that will work for you and can even inform you of pitfalls to watch out for.
A good industry partner can also help you navigate the market and introduce you to other specialists in the space.
Most young eCommerce stores are managed by an individual or a small team. For this reason, efficiency is a big part of creating a successful eCommerce business. Suppliers that are keeping pace with the times should have quality technology integrations that allow you to manage your orders in a seamless manner.
Good technology integrations should be able to fulfill orders automatically, auto-update inventory and prices, and provide reports related to your orders.
It should not be difficult to see exactly what a supplier can offer you. If they don’t have it available on their website, ask for a catalog or a link to their online listings.
You can eliminate a lot of wasted time, by checking that the products or materials you are looking for are offered by a supplier or wholesaler before you schedule a call or send an email.
It’s absolutely critical that your suppliers are able to ship orders on time and deliver those orders on time. To ensure that a supplier is able to do this before signing a contract, ask for referrals to their other customers.
Ask the suppliers you are researching if they will automatically alert you when your order ships and if you will be able to track the order while they are in transit.
Also, be sure to understand what your recourse is if orders are late. Will they provide a full or partial refund? Will they offer a credit for the next shipment?
Volume is often the biggest driver of price, but there are a number of other items that may affect pricing. These items include location, the wholesaler’s upstream suppliers, taxes and tariffs, and currency exchange rates.
Prices that are too high may indicate that the company you’re working with is actually a middle-man and not a wholesaler. In this case, you’ll want to work upstream to find better pricing.
The key point here is to look around and get a good number of quotes before selecting a supplier. You may be surprised by the degree of price differences between wholesalers and suppliers.
Attention to Customer Service
This one may seem obvious but it’s super important. When you select a supplier, they become an integral piece of your business. If you can’t rely on your suppliers, your customers will have a hard time relying on you.
Make sure that your suppliers will value you enough to provide exceptional customer support. Ask for a dedicated contact at the company, someone you can reach out to directly any time questions or issues arise.
Communicating with Wholesalers/Suppliers
Do Your Homework
Learn as much about the company as possible before reaching out to them. You can browse their website, read reviews, and ask around in online forums before reaching out.
Wholesalers and suppliers receive countless requests every day from people with big plans but little ability to follow through. Don’t be one of these people.
Before you reach out, make sure you’ve done your homework about yourself as well. Do your best to know exactly what you’re looking for – the type of material, level of quality, initial quantity, and follow-on order volumes. This will help you to stand out as a serious buyer.
Once you’ve contacted the company, ask for an intro to their other customers. If they are willing to provide you with referrals to their other customers, be sure to follow through. Call or email them right away and ask for their thoughts on working with this particular supplier.
If a supplier will not provide you with referrals, this should be a red flag. Unless they can offer a very good reason for not introducing you to their other customers, consider moving on.
Another great thing to ask for is samples. You don’t want to buy from a supplier sight-unseen. Ask them to send you a small sample of the material or product you are interested in purchasing. If you are looking to source multiple products or services, ask them to include a batch of multiple samples.
Most suppliers will send samples for free but don’t be surprised if they ask you to pay for shipping.
Determine Your Go-to Contact
If possible, go directly to the source. Do some research on the supplier or wholesaler that you are interested in, and see if you can find a decision-maker at the company.
Once you’ve determined who your contact at the company will be, try to get a direct email and phone number to that person. This can save a lot of time and headache when you need to make changes to orders or get answers to questions. The last thing you want is to be passed back and forth between people who are not engaged in helping you.
Ask for Referrals
If you determine that a supplier is not a good fit for you – perhaps they don’t produce exactly what you need or your initial account is too small – then ask them for a referral to a supplier that may be a better fit.
Remember, many suppliers focus on niches. These niches can be based on either a given product category or even a customer size. If you do not align with the supplier’s focus, they may have a shortlist of other suppliers they can provide to you.
Last, of all, don’t hesitate to push back on pricing if you think the supplier can do better. But remember, oftentimes suppliers have more potential customers than they can handle. This means that you will need to provide to them that offering discounts makes sense for them.
Here are some things you can do to incentive your suppliers or wholesalers to offer you discounted pricing.
- Get quotes from multiple suppliers and leverage them against each other
- Show the supplier that you are not as risky as other customers
- Ask for discounts on shipping rather than product
- Order more products on a single purchase order
- Demonstrate that you can help the supplier to expand its business in a new direction
- Explore other ways the supplier can help beyond pricing
How to Find Wholesalers and Suppliers
Now that we’ve covered the groundwork and preparation, it’s time to find a supplier for your eCommerce store.
If you want to source your product locally, there are many places you can begin your search. Try reaching out to your local chamber of commerce or small business development center to see what local options may be available. You can also reach out to other local eCommerce stores and ask them how they source their products or attend a trade show to find suppliers or eCommerce stores to question.
If you aren’t concerned with your suppliers being local, you can go online to find thousands of options for sourcing your products or materials. Here are some options for you to get started. Take a look at each one and decide whether it fits your needs.
This list is not all-inclusive and the presence of a company on this list does not mean Mochi endorses it.
Oberlo is built for eCommerce stores on Shopify. Oberlo allows you to import products from suppliers, fulfill orders automatically, auto update inventory and prices, and customize products.
Thomas Network is a platform designed to help eCommerce stores source products from various suppliers, as well as market their products to their customers.
Jungle Scout is a service that helps eCommerce sellers launch on Amazon. Jungle Scout offers a seller database that lets you research products and suppliers.
SaleHoo is a research tool, supplier directory, and online community for dropshippers, wholesalers, and e-commerce stores.
Alibaba is a company based in China, but listed on the New York Stock Exchange, and is an online marketplace for suppliers to find customers. On Alibaba, you can find millions of raw materials, supplies, and products at various stages in their production.
Global Sources is an online marketplace for finding suppliers. Categories range include auto parts, fashion, electronics, home products, and even machinery and parts. Through the Global Sources marketplace, you can find, research, and even contact suppliers from around the world.
Oberlo is built for eCommerce stores on Shopify. Oberlo allows you to import products from suppliers, fulfill orders automatically, auto-update inventory and prices, and customize products.
Doba is an online service that connects eCommerce sellers with wholesale suppliers. Through Doba you can discover products, research the market viability of those products, manage the flow of data between eCommerce stores and their suppliers, and fulfill customer orders.
Wholesale Central is an online B2B marketplace where eCommerce stores can find wholesale suppliers. The available categories are quite extensive and include automotive, books and media, holiday and seasonal, baby items, pet supplies, and much more.
Bonus Idea - Order From the Competition
In case you still haven’t found your perfect wholesale supplier, here is one more bonus idea. On their blog, Shopify offers an interesting method for finding a supplier for your products.
If you plan to sell a particular product via dropshipping and are having a hard time locating the right supplier, you can order the product from a competitor. When the product arrives, the package will have a return address that is the dropshipper rather than the competitor.
Using this method, you can identify dropshippers who are already supporting eCommerce stores within your industry.
Choosing a Wholesale Supplier for Your eCommerce Store
Now, you should be ready to find, research, and hire a supplier for your eCommerce store.
In this post, we covered helpful information about finding and selecting a supplier for your eCommerce business. As well as tips for narrowing down your search, what to consider when selecting a supplier, how to communicate with suppliers, and finally where you can find information on available suppliers.
Now, we’ll send it over to you to make it happen. If you have any comments or questions please let us know in the comments below.
Best of luck!