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How To Effectively Source Suppliers For Your Online Store

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  • Post last modified:December 22, 2023

Sourcing products to sell online can be a challenge. It is a big decision that can significantly impact how your store is run, your profit margins, and your ability to expand.

With so many factors to consider when starting and running an online store, from finding cost-effective and reliable shipping methods to securing the appropriate packaging and strapping for your products, finding the ideal supplier is essential to mitigating unnecessary product issues.

What is Product Sourcing?

Product sourcing is when a business secures the necessary stock to sell. This can be done through various avenues, all with advantages and disadvantages.

Your chosen product, available funds, and the supply/demand within your chosen retail industry primarily influence the route you decide on.

Your first step is deciding what you want to sell. If you are unsure what it may be, a great starting point is considering the following points:

Where are you located, and what type of business do you want?
Who is your intended target audience?
What do your storage and shipping options look like?
Is there an actual demand for the product that will generate profitable business?

Your second step is creating a functioning website ready to sell products.

A secured business license and a professional website are essential, as any reputable supplier will want proof of your business’s legitimacy.

You can choose to build the website yourself or hire a professional.

Finally, you must prepare a list of questions for all the suppliers you contact. Your questions should help you determine the logistics of partnering with them and their reliability.

This can be done by asking about their current clients, establishing whether they make the products or subcontract, turnaround times, minimum shipping sizes and costs, return policies, and ethical business practices.

Types of Product Sourcing

When looking for suppliers to stock your online store, there are five main ways to choose from, each with unique advantages that appeal to different business owners and retail markets.

DIY Products & Services

In 2020, the DIY handicraft market was valued at $647 billion. The industry ranges from artisans crafting beautiful handmade jewelry to establishing ateliers weaving authentic Persian rugs.

By delving into the DIY world, you are guaranteed one-of-a-kind creations unique to the maker, carrying their trademark styles.

You can better control the quality of your products and maintain direct control over your inventory.

However, you may encounter higher costs due to the raw materials used and potentially lengthy supply delays should your supplier experience unforeseen issues. You are also at risk of limiting your scaling potential.


Dropshipping is a product sourcing method where another vendor completely fulfills a custom order.

You only list their inventory on your website and make sales. Your dropshipping partner is responsible for everything after the sale, including packaging, shipping, and delivery.

Using the dropshipping method, you can access a far more extensive selection of new products with low costs and an accelerated process of starting a new business.

You also have no inventory risks or the hassle of managing excess inventory.

However, there is a lower profit margin, meaning you must sell many products to make a decent profit.

You also have added competition with other businesses looking to source the same products, with limited control of the product quality and a more complicated return policy for customers.



In today’s online world, you can access local marketplaces in person or global sites online.

Vintage or pre-loved items, artisan goods, art and decor, and other handmade goods are all available.

The advantage to marketplace sourcing is that you are typically not required to order a minimum quantity, with a fast and easy way to access diverse and unique items worldwide.

But marketplaces will generally charge you retail prices instead of wholesale costs, with limited stock availability, unpredictable shipping times, and added commitment to restocking your inventory.

Manufacturers & Wholesalers

When working with manufacturers or wholesalers, you hire a third party to provide the product.

Manufacturers can offer custom-produced goods specific to your requirements or sell you standard stock with added customization.

Wholesalers will simply supply you with the inventory they have sourced elsewhere.

When choosing this route, you are offered more assistance with production and supply.

You can include more items, carry more brands, and easily access niche products or customized ideas.

However, you will be met with a higher start-up cost, potentially costly inventory risks, and more paperwork and contract negotiations.

Trade Shows

Trade shows are designed to connect suppliers and distributors to business owners. They are an excellent place to meet new suppliers looking to branch into different markets and allows you to meet potential new suppliers face-to-face.

By attending established and reputable tradeshows, you can meet a host of suppliers all at once, with the ability to see and feel products in person.

You will generally have first access to new and innovative products before they hit the mainstream market, with the advantage of beginning negotiations relatively quickly.

The disadvantages to attending trade shows are that you may have extra travel time and costs to contend with and potentially meet suppliers only interested in working with larger, more established brands.

Trade Shows

Ensure Reliability

When looking for e-commerce suppliers, the best place to start is with an online search. Browse through wholesale directories, check various online marketplaces, and approach individual small business owners and artisans that reflect products and business ethics that match your own.

The most important thing is to conduct efficient and in-depth research about your potential business partner.

Establish a list of questions you would like to ask that will allow you to better understand their business model, how they conduct business, and transparency within their supply chain.

Request client references to ensure they are a registered, solvent company that has had credit checks and third-party audits.

By conducting the necessary research, you can ensure your brand, reputation, and client base are well-protected.

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