Sourcing Products to Sell Online
One of the easiest ways to make money online is to buy a bulk load of products and sell them online, right? Many people think that online selling is virtually a license to print money – a fast track to becoming a millionaire. The reality is much different however – selling online is an extremely competitive business – and it all starts with actually sourcing products to sell in the first place.
Do lots of research to find a product or niche
Finding products to sell online might seem easy, but you’ll soon have to face up to the fact that a lot of niches are extremely competitive. Take the game and DVD niche for example – big players in the industry like GAME and Amazon secure huge discounts on the titles they buy in. Their sheer buying power means than unless you have several million to invest in stock – you won’t come anywhere near matching the prices that they buy stock in for, or sell it on for. Be realistic in your search for products – try and locate a niche a little less crowded than the gaming or DVD niche.
Locating suppliers to supply you with the products that you’d like can be quite hard. Here are a few tips though:
- Look on product packaging for the name of a distribution company, or the name of the supplier themselves. Most products will have writing on them that says “supplied & distributed by” – get in touch with this company if you want to buy in bulk.
- Do a Google search for a string of words like “<your product or brand> suppliers uk” or even “<your product or brand> distributors uk”.
- Get in touch with the brand directly and ask them for a list of approved distributors. For example, you might get in touch with Microsoft if you wanted to stock Xbox 360 games – they may then send you a list of the approved suppliers that they use.
Merits of foreign suppliers
Before we go any further in this section, let’s clear one thing up straight away: You will not find genuine branded items like iPhones or Nike trainers on sites like Alibaba. If suppliers claim to be able to offer you this kind of merchandise, run a mile. If you do buy it and they do ship it to the UK the chances are it will be seized at customs and destroyed because 99.9% of items sold on Alibaba that are supposedly branded, are in fact cheap rip offs.
That said, buying unbranded goods from China to rebrand with your own logo, or just sell on as white label, can be very profitable indeed. Be vigilant for scams when buying from China, because there are lots of people out there who will happily take your money but send out no products in return.
Remember certain products like electrical require stringent safety tests before they can be imported or sold in the UK – make sure you have these tests done prior to buying the stock in bulk otherwise it can end up being seized and destroyed at customs if you can’t provide the necessary certifications. Another thing to bear in mind is that all merchandise it subject to 20% VAT on import, as well as the corresponding duty rate.
Some people simply don’t want to endure the hassle involved with sourcing products from overseas. If that’s the case, there are still lots of great domestic suppliers here in the UK who you can source products from to sell on. When sourcing branded stock you’ll find that sourcing domestically is your only option anyway.
Driving prices down
Everyone likes a bargain and that’s true even of business owners. If you want your business to remain competitive it’s important that you take every available opportunity to drive down the cost prices of stock that you’re bringing in. There are many ways to do this, but here are a few ideas:
- Always be on the lookout for new suppliers: In such a competitive industry, finding units of stock a few pence cheaper from a different supplier can really help your profit margins. Always be on the lookout for new suppliers for your stock just in case there is someone out there who can cut you a better deal.
- Order more, pay less: The more stock you order, the cheaper it becomes per unit. If you order in large quantities you’ll find that suppliers will be more receptive to your requests to have a larger discount.
- Be persistent: In business you need a certain amount of “cheek” – if a supplier cuts you down when you ask for a discount, make sure you ask again very soon. Constantly asking for a bigger discount will remind the supplier you’re not happy with the prices you’re paying. Often, suppliers will increase your discount just to shut you up!
- Change shipping methods: Depending on what products you stock and where you’re getting them from, you can drive down the unit cost of stock by changing the shipping method that you use. If you’re bringing in large electronic devices for example if makes sense to bring them in by sea freight – it doesn’t make sense to bring them in by air couriers. Sea freight is around 20% of the price of air courier services – you can make considerable savings by bringing all future stock in by sea.
Sourcing products to sell online gets easier with the more practice and experience you have doing it. One of the best ways to source products is to actually make them yourself! That way you can be sure they’re unique – selling custom made products can be extremely profitable indeed.