Become a Product-Sourcing Pro All out of product sourcing ideas? Check these options out.
By Julie Monahan •
Opinions expressed by Entrepreneur contributors are their own.
When your business has outgrown job lots, retailer overstock andliquidated merchandise, where do you go to find factory-freshproducts with broader customer appeal?
Trade shows, wholesale merchandise marts, drop-shippers,manufacturers and manufacturers' reps are the links betweeneBay sellers and the goods that raise established businesses to thelevel of virtual retailer. While these sources will raise yourout-of-pocket expenses, you gain access to a greater variety ofproducts that help you stand out in a fiercely competitivemarket.
At first glance, drop-shipping seems like the easiest approach.Drop-shippers do the wholesale shopping themselves, store the goodsand ship them at your request to your customers. Some even providethe product descriptions and photos for your eBay listings. But theservice is expensive and may leave you with little, if any, profitafter the sale.
You might get a better deal when the drop-shipper is also themanufacturer. "There are thousands of manufacturers who willdrop-ship for you," says Skip McGrath, an eBay collectibles dealer inAnacortes, Washington, who self-publishes books and e-newslettersfrom his website. McGrath suggests starting your search for thesemanufacturers using business databases such as the Thomas RegisterDirectory. Thomas' listing of U.S. companies is availableonline at www.thomasnet.com.
If you don't find a drop-shipping manufacturer, it'sbetter to avoid this method of supplying your business on eBay."There's not enough profit margin," says MarshaCollier, author of eBay Business All-in-One Desk Reference forDummies. Instead, consider making these suppliers just one part ofyour sourcing strategy. For instance, if a customer asks forsomething related to your product line that you don't carry, adrop-shipper offers a convenient option. This helps keep yourcustomers happy and enhances the flexibility of your business.
Traveling to trade shows and wholesale merchandise marts alsocuts into your profits, but the payoff in new contacts withmanufacturers and wholesalers makes them well worth it. Iftraveling is out of the question, Collier suggests checking yourlocal Yellow Pages for listings of wholesale and retail sources forthe types of products you want to sell.
Some eBay sellers eliminate middlemen like wholesalers anddrop-shippers and buy directly from the manufacturers. The factthat many manufacturers are overseas can make this difficult forbusinesses on a budget, but a few resources have cropped up toclose the gap between continents. These include www.globalsources.com and www.importexporthelp.com, each of which links U.S.buyers with manufacturers in East Asia.
Before taking this step, though, you'll probably need alittle cross-cultural training. "Get a sense of the businessetiquette," says Sun W. Kim, 30, founder of TekGems Inc. (eBayUser ID: TekGems) in San Francisco. "You'll have a muchsmoother relationship."
