Product Sourcing

3 Product Options for New Businesses

When it comes to choosing your product remember this. The success of your business will not be entirely based on the product you choose to sell. Many people make the mistake of thinking they need to find the hottest product or the latest gadget

More important than what you choose to market is how you market the product you choose. Remember the pet rock? This guy made a million dollars selling a rock.

People buy all kinds of products. You might as well choose something you are excited about. Consider what your interests are. What do you like to collect? What are your hobbies? Start with something you enjoy and you will have more success at it.

You have three options when it comes to sourcing the products you decide to offer.

First you can make your own product. You may decide to turn a hobby you have into a business. Many people make their own product, such as candles, jewelry, pottery, soap or any number of other items. One main benefit is you can usually enjoy a higher profit margin on products you make yourself. One drawback is that your profits may be limited by the time you can devote to manufacturing.

Another option is purchasing bulk wholesale. This would require locating a manufacturer, wholesaler or distributor and purchasing a product in large lots. One benefit is that your will usually be able to negotiate a better price on each item when purchased in larger quantities. The negative is that you have to come up with the money in advance then stock and ship the products yourself.

Probably the best option for a new business is choosing a product supplied by a drop-ship supplier. How drop-shipping works is this. A customer orders a product from you, usually by phone, mail or your website. When you receive the order and their payment, you order the product from your drop-ship supplier and pay them your wholesale price. They will then ship the product directly to your customer as if they were your company. The difference between the price you charge your customer and the price you pay your supplier is your profit margin.