Various Sourcing Methods
Various sourcing methods provide a lot of benefits
Various sourcing methods provide a lot of benefits. The kind or source you will be taking on depends on the phase of your business or the budget which you have.
So, how are you going to select the most excellent business options? It is a good idea to take advantage of various companies to source stocks from. This way, you can steer clear of shortages if ever one supplier runs out of stocks on peak seasons.
From the name itself, drop shippers accumulate all stocks on site and process them. They also do the packaging and posting of individual orders while you are focused on making sales. Drop shipping are highly beneficial since your stocks are not stored on site, packaging and postage are handled well. Since you are only paying for the stocks sold out, you won't have to worry about holding the stocks for long. With drop shipping, minimum orders are not obligatory. Thus, a bigger amount of cash is no longer necessary.
On the other hand, it can be costly to have someone process and post your orders. Usually, you should already expect a $2-5 handling fee aside from the cost per item. So, your profit margins must be good or the additional costs might have an impact on your business. Also, when you aren't taking bulk orders, the price of each unit will be higher.
In sum, many sellers still adhere to drop shippers.
Buying bulk orders direct from the manufacturer entails bigger savings since each unit is sold at extremely low prices. These items are distributed to various retail stores and sellers. This is a good way of taking on medium level purchases. This way, you can purchase goods at very low prices on every unit directly from wholesalers. In turn, you become profitable. Whenever you have already created an account with a wholesaler, you now have consistent and long-term supplies.
However, buying from wholesalers require minimum orders which cost approximately $100-$300US. This procedure is geared towards preventing people from buying single units. Liquidation Sales/Clearance
Whenever a store wants to move, they clear out some stocks and assets. As a company goes bankrupt, their assets are liquidized so they can settle all their debts. Taking on liquidation sales are always an advantage since that the items are still in excellent quality or they almost look new and they are all easy-on-the-budget. You can even ask for the sales inventory so you can see upfront which items interest you. However, you just can't foresee when these items are held up because consistent long-term supplies of stocks may not be offered at all.
At the end of a season or financial year, clearance sales are conducted so stores can clear out their old stocks, returns, and damaged goods. Similar to liquidation sales, clearance sales entail lower prices. However, in clearance sales, you might be purchasing by the pallet load, and so you don't really know what's inside. As a result, you may end up with damage items, worn out clothes and all other items which the store finds it hard to sell.
Liquidation and clearance sales are good sources of stocks. However, you'll be spending $1,000 or more without a guarantee that the stocks will sell.
Manufacturers Looking at the supply chain, manufacturers are the ones creating the products. Thus, they may give you the right prices. On the other hand, they are no longer responsible about distribution. Thus, minimum orders are really high. In turn, you'll be making bulk orders as much as 1,000+ units or even by the container load. This is definitely not a good option for beginners. Successful sellers who have been in the import business for so many years find making purchases direct from manufacturers as this is already a reasonable way of spending on bulk orders.
Generally, it's always a good idea to mix and match your suppliers so you can get a great deal of stocks for your business. If ever you have stocks left which you can no longer sell, you can just put it up in eBay. Sellers have already taken advantage of this method so they can steer clear of old and dead stocks.
About the Author
Brendan Elias and Alex Ryan have been teaching business owners how to start their own importing business from scratch, and import goods without the headache or hassle. Brendan has been featured in the Sydney Morning Herald, Live National TV on the Kerrie Ann Show, Financial Review and many more. If you would like free access to a video training series on importing from china then check out http://www.ChinaImportFormula.com.au
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